[Senate Hearing 112-590, Part 1]
[From the U.S. Government Publishing Office]


                                                 S. Hrg. 112-590, Pt. 1


DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR 
               2013 AND THE FUTURE YEARS DEFENSE PROGRAM

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

                                HEARINGS

                               before the

                      COMMITTEE ON ARMED SERVICES
                          UNITED STATES SENATE

                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION

                                   ON

                                S. 3254

     TO AUTHORIZE APPROPRIATIONS FOR FISCAL YEAR 2013 FOR MILITARY 
ACTIVITIES OF THE DEPARTMENT OF DEFENSE, FOR MILITARY CONSTRUCTION, AND 
   FOR DEFENSE ACTIVITIES OF THE DEPARTMENT OF ENERGY, TO PRESCRIBE 
   MILITARY PERSONNEL STRENGTHS FOR SUCH FISCAL YEAR, AND FOR OTHER 
                                PURPOSES

                               ----------                              

                                 PART 1

                            MILITARY POSTURE
          U.S. PACIFIC COMMAND AND U.S. TRANSPORTATION COMMAND
             U.S. EUROPEAN COMMAND AND U.S. AFRICA COMMAND
        U.S. CENTRAL COMMAND AND U.S. SPECIAL OPERATIONS COMMAND
                         DEPARTMENT OF THE ARMY
            U.S. SOUTHERN COMMAND AND U.S. NORTHERN COMMAND
                         DEPARTMENT OF THE NAVY
                      DEPARTMENT OF THE AIR FORCE
             U.S. STRATEGIC COMMAND AND U.S. CYBER COMMAND

                               ----------                              

          FEBRUARY 14, 28; MARCH 1, 6, 8, 13, 15, 20, 27, 2012




         Printed for the use of the Committee on Armed Services
    DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL 
         YEAR 2013 AND THE FUTURE YEARS DEFENSE PROGRAM--Part 1

    MILITARY POSTURE  b   U.S. PACIFIC COMMAND AND U.S. TRANSPORTATION 
 COMMAND  b   U.S. EUROPEAN COMMAND AND U.S. AFRICA COMMAND  b   U.S. 
CENTRAL COMMAND AND U.S. SPECIAL OPERATIONS COMMAND  b   DEPARTMENT OF 
  THE ARMY  b   U.S. SOUTHERN COMMAND AND U.S. NORTHERN COMMAND  b   
   DEPARTMENT OF THE NAVY  b   DEPARTMENT OF THE AIR FORCE  b   U.S. 
                STRATEGIC COMMAND AND U.S. CYBER COMMAND




                                                 S. Hrg. 112-590, Pt. 1

 
DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR 
               2013 AND THE FUTURE YEARS DEFENSE PROGRAM

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

                                HEARINGS

                               before the

                      COMMITTEE ON ARMED SERVICES
                          UNITED STATES SENATE

                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION

                                   ON

                                S. 3254

     TO AUTHORIZE APPROPRIATIONS FOR FISCAL YEAR 2013 FOR MILITARY 
ACTIVITIES OF THE DEPARTMENT OF DEFENSE, FOR MILITARY CONSTRUCTION, AND 
   FOR DEFENSE ACTIVITIES OF THE DEPARTMENT OF ENERGY, TO PRESCRIBE 
   MILITARY PERSONNEL STRENGTHS FOR SUCH FISCAL YEAR, AND FOR OTHER 
                                PURPOSES

                               __________

                                 PART 1

                            MILITARY POSTURE
          U.S. PACIFIC COMMAND AND U.S. TRANSPORTATION COMMAND
             U.S. EUROPEAN COMMAND AND U.S. AFRICA COMMAND
        U.S. CENTRAL COMMAND AND U.S. SPECIAL OPERATIONS COMMAND
                         DEPARTMENT OF THE ARMY
            U.S. SOUTHERN COMMAND AND U.S. NORTHERN COMMAND
                         DEPARTMENT OF THE NAVY
                      DEPARTMENT OF THE AIR FORCE
             U.S. STRATEGIC COMMAND AND U.S. CYBER COMMAND

                               __________

          FEBRUARY 14, 28; MARCH 1, 6, 8, 13, 15, 20, 27, 2012

                               __________

         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
76-537                    WASHINGTON : 2013
-----------------------------------------------------------------------
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 202ï¿½09512ï¿½091800, or 866ï¿½09512ï¿½091800 (toll-free). E-mail, [email protected].  
  

                      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

                 Ann E. Sauer, Minority Staff Director

                                  (ii)

  
                            C O N T E N T S

                              ----------                              

                    CHRONOLOGICAL LIST OF WITNESSES
                            Military Posture
                           february 14, 2012

                                                                   Page

.................................................................
Panetta, Hon. Leon, Secretary of Defense; Accompanied by Robert 
  F. Hale, Under Secretary of Defense (Comptroller)..............    12
Dempsey, GEN Martin E., USA, Chairman, Joint Chiefs of Staff.....    26

          U.S. Pacific Command and U.S. Transportation Command
                           february 28, 2012

Willard, ADM Robert F., USN, Commander, U.S. Pacific Command.....   172
Fraser, Gen. William M., III, USAF, Commander, U.S. 
  Transportation Command.........................................   182

             U.S. European Command and U.S. Africa Command
                             march 1, 2012

Stavridis, ADM James G., USN, Commander, U.S. European Command/
  Supreme Allied Commander, Europe...............................   272
Ham, GEN Carter F., USA, Commander, U.S. Africa Command..........   324

        U.S. Central Command and U.S. Special Operations Command
                             march 6, 2012

Mattis, Gen. James N., USMC, Commander, U.S. Central Command.....   394
McRaven, ADM William H. McRaven, USN, Commander, U.S. Special 
  Operations Command.............................................   404

                         Department of the Army
                             march 8, 2012

McHugh, Hon. John M., Secretary of the Army......................   468
Odierno, GEN Raymond T., USA, Chief of Staff of the Army.........   504

            U.S. Southern Command and U.S. Northern Command
                             march 13, 2012

Fraser, Gen. Douglas M., USAF, Commander, U.S. Southern Command..   608
Jacoby, GEN Charles H., Jr., USA, Commander, U.S. Northern 
    Command/Commander, North American Aerospace Defense Command     625

                         Department of the Navy
                             march 15, 2012

Mabus, Hon. Raymond E., Jr., Secretary of the Navy...............   686
Greenert, ADM Jonathan W., USN, Chief of Naval Operations........   703
Amos, Gen. James F., USMC, Commandant of the Marine Corps........   717

                      Department of the Air Force
                             march 20, 2012

Donley, Hon. Michael B., Secretary of the U.S. Air Force.........   842
Schwartz, Gen. Norton A., USAF, Chief of Staff of the U.S. Air 
  Force..........................................................   845

             U.S. Strategic Command and U.S. Cyber Command
                             march 27, 2012

Kehler, Gen. C. Robert, USAF, Commander, U.S. Strategic Defense..   948
Alexander, GEN Keith B., USA, Commander, U.S. Cyber Command, and 
  Director, National Security Agency/Chief, Central Security 
  Service........................................................   962


DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR 
               2013 AND THE FUTURE YEARS DEFENSE PROGRAM

                              ----------                              


                       TUESDAY, FEBRUARY 14, 2012

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

                            MILITARY POSTURE

    The committee met, pursuant to notice, at 9:33 a.m. in room 
SD-G50, Dirksen 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, Graham, Cornyn, and 
Vitter.
    Committee staff members present: Richard D. DeBobes, staff 
director; Leah C. Brewer, nominations and hearings clerk; and 
Travis E. Smith, special assistant.
    Majority staff members present: Jonathan D. Clark, counsel; 
Jonathan S. Epstein, counsel; Richard W. Fieldhouse, 
professional staff member; Jessica L. Kingston, research 
assistant; Michael J. Kuiken, professional staff member; Gerald 
J. Leeling, counsel; Peter K. Levine, general counsel; Thomas 
K. McConnell, professional staff member; William G.P. Monahan, 
counsel; Michael J. Noblet, professional staff member; Roy F. 
Phillips, professional staff member; John H. Quirk V, 
professional staff member; Robie I. Samanta Roy, professional 
staff member; Russell L. Shaffer, counsel; and William K. 
Sutey, professional staff member.
    Minority staff members present: Adam J. Barker, 
professional staff member; Pablo E. Carrillo, minority 
investigative counsel; Paul C. Hutton IV, professional staff 
member; Daniel A. Lerner, professional staff member; Elizabeth 
C. Lopez, research assistant; Lucian L. Niemeyer, professional 
staff member; Christopher J. Paul, professional staff member; 
Michael J. Sistak, research assistant; and Diana G. Tabler, 
professional staff member.
    Staff assistants present: Jennifer R. Knowles, Mariah K. 
McNamara, Brian F. Sebold, and Bradley S. Watson.
    Committee members' assistants present: Jeff Greene, 
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; Jason Rauch, assistant to Senator McCaskill; 
Casey Howard, assistant to Senator Udall; Lindsay Kavanaugh, 
assistant to Senator Begich; Mara Boggs, assistant to Senator 
Manchin; Ethan Saxon, assistant to Senator Blumenthal; Anthony 
Lazarski, assistant to Senator Inhofe; Lenwood Landrum, 
assistant to Senator Sessions; Tyler Stephens and Clyde Taylor 
IV, assistants to Senator Chambliss; Joseph Lai, assistant to 
Senator Wicker; Charles Prosch, assistant to Senator Brown; 
Brad Bowman and John Easton, assistants to Senator Ayotte; Ryan 
Kaldahl, assistant to Senator Collins; Sergio Sarkany, 
assistant to Senator Graham; Dave Hanke, assistant to Senator 
Cornyn; and Charles Brittingham, assistant to Senator Vitter.

       OPENING STATEMENT OF SENATOR CARL LEVIN, CHAIRMAN

    Chairman Levin. Good morning, everybody. The committee this 
morning welcomes the Secretary of Defense, Leon E. Panetta, and 
the Chairman of the Joint Chiefs of Staff, General Martin E. 
Dempsey, USA, for our hearing on the Department of Defense 
(DOD) fiscal year 2013 budget request, the associated Future 
Years Defense Program (FYDP), and the posture of the U.S. Armed 
Forces. The committee also welcomes the Under Secretary of 
Defense (Comptroller), Robert F. Hale, who has joined the 
Secretary and the Chairman at the witness table.
    Let me start by thanking all of you for your continued 
service to our Nation and to the soldiers, sailors, airmen, and 
marines here at home and in harm's way around the globe, and to 
their families. They are truly deserving of the Nation's 
affection and support.
    Your testimony today marks the beginning of the committee's 
review of the fiscal year 2013 budget request for DOD. This 
year's request includes $525 billion for the base budget and 
$88.4 billion for overseas contingency operations (OCO). The 
fiscal year 2013 base budget request is $5 billion less than 
the fiscal year 2012 enacted level of $530 billion, and the OCO 
request is $27 billion less than last year's enacted level of 
$115 billion.
    The fiscal year 2013 budget conforms with the Budget 
Control Act (BCA) that Congress passed last summer. The Senate 
approved the BCA on a bipartisan basis, with 74 Senators voting 
for it. The BCA locked in defense and non-defense discretionary 
spending caps over 10 years. The defense caps reduced projected 
defense spending by nearly half a trillion dollars over 10 
years, and DOD responded with a new strategy and a new program 
to meet the Nation's security challenges and preserve our 
military capabilities.
    The BCA also included language requiring Congress to pass 
legislation with additional far-reaching deficit reductions. If 
Congress does not come up with a deficit reduction package by 
next January, one that locks in another $1.2 trillion in 
deficit reduction over 10 years, then automatic spending cuts, 
called ``sequestration,'' will be imposed on both defense and 
non-defense programs.
    The budget the President sent us yesterday avoids 
sequestration by meeting the $1.2 trillion additional deficit 
reduction target, approximately one-half in further cuts in 
spending and one-half in additional revenues.
    The defense budget request for fiscal year 2013 not only 
conforms to the funding limits of the congressionally-mandated 
BCA, it also reflects the results of DOD's comprehensive and 
inclusive strategic review initiated by President Obama in 
April last year and the strategic guidance that resulted.
    We look forward to the witnesses' explanation of the 
process that they went through to develop the new Defense 
Strategic Guidance, their assessment of this guidance's most 
important features and potential risks relative to the current 
and anticipated strategic environment, and how this budget 
request supports its strategic priorities and manages strategic 
risk in the near- and long-terms.
    The administration has called for two more base realignment 
and closure (BRAC) rounds. In my view, however, before we 
consider another round of BRAC, DOD ought to take a hard look 
at whether further reductions in bases can be made overseas, 
particularly in Europe. While DOD has announced the removal of 
two of the four combat brigades currently stationed in Europe, 
even after the brigades are withdrawn there will still be over 
70,000 U.S. military personnel deployed in Europe. Finding 
further reductions and consolidations in our overseas force 
posture should be our first priority before another BRAC round.
    The fiscal year 2013 defense budget request reflects the 
continuing conflict in Afghanistan, but also reflects the fact 
that the process of transition has begun and continues apace. 
Afghan security forces (ASF) are assuming responsibility for 
securing the Afghan people in more and more areas throughout 
Afghanistan. Progress on security is real. A second round of 
areas to be transitioned to an ASF lead will be completed later 
this year. Then approximately 50 percent of the Afghan 
population will live in areas where ASF have the lead for 
providing security, with coalition forces playing a supporting 
role.
    I have long-pressed for ASF to move increasingly into the 
combat lead and to assume responsibility for securing more and 
more Afghan territory and communities as the size and 
capabilities of the Afghan National Army (ANA) and Afghan 
National Police (ANP) are built up. The success of our mission 
in Afghanistan depends on getting the ASF in the lead, with the 
support of the Afghan people, thereby putting the lie to the 
Taliban propaganda that the coalition is an occupying force.
    The Afghan Foreign Ministry spokesman recently made clear 
there was full agreement on transition, saying: ``We have 
always maintained that Afghan security is an Afghan 
responsibility.''
    Last June, President Obama said that the 33,000 U.S. surge 
force would be removed from Afghanistan by the end of this 
summer. That means that 68,000 U.S. troops would remain in 
Afghanistan after the drawdown of the surge. He also said that 
after the reduction of the U.S. surge force, U.S. troops will 
continue to draw down ``at a steady pace.'' Yet the fiscal year 
2013 OCO budget request now before Congress is based on an 
assumption that there are no additional reductions in the 
68,000 troop level in Afghanistan throughout all of fiscal year 
2013.
    The question that I hope our witnesses will address this 
morning is whether they expect further reductions in U.S. troop 
levels in Afghanistan during fiscal year 2013 below 68,000 and 
what associated cost savings would result. If that decision has 
not yet been made by the President, what is the timetable for 
its being made?
    I also hope Secretary Panetta will clarify his surprising 
statements earlier this month that, ``Our goal is to complete 
all of the transition to a training, advisory, and assistance 
role in 2013,'' and that he said, ``Hopefully by the mid- to 
latter-part of 2013, we will be able to make a transition from 
a combat role.''
    There are many reports about reconciliation talks with the 
Taliban. If Taliban statements are true that they will open a 
political office in Qatar, it would have the potential to be a 
positive development. I am concerned, however, by reports that 
in exchange for the opening of this office, the administration 
is considering transferring five Afghan Taliban detainees from 
the Guantanamo detention facility to Qatar. Such a significant 
step strikes me as premature and should be considered, in my 
view, only following positive discussions and not preceding 
them.
    Another concern I have regarding the progress of the 
reconciliation talks is the reported decision by the Government 
of Afghanistan to open a second channel in the dialogue with 
the Taliban that would be in Saudi Arabia. It seems to me that 
this would create the potential for confusion. The United 
States has said it is committed to an Afghan-led reconciliation 
process. That is another reason that the discussion process 
ought to be pursued through a single channel, with both the 
Afghan Government and with us, fully coordinated and 
participating together, whether it takes place in one or two 
venues.
    With respect to the realignment of U.S. marines on Okinawa, 
Senator McCain, Senator Webb, and I have advocated changes in 
the current plan in ways that support the strategic goals of 
the U.S. regional military posture while avoiding excessive and 
unsustainable costs associated with large and elaborate new 
bases. The announcement last week that the United States and 
Japan are reconsidering elements of the plan is welcome news, 
but the steps are not yet adequate.
    There are other challenges, of course. There is strong 
bipartisan determination on this committee and in Congress to 
do all we can to counter the threat that Iran poses, including 
stopping Iran from acquiring nuclear weapons. President Obama 
has focused considerable diplomatic effort towards that goal 
because, in his words, ``America is determined to prevent Iran 
from getting a nuclear weapon. And I will take no options off 
the table to achieve that goal.'' The administration is 
bringing the world together, as it should, to speak with one 
voice against Iran's nuclear ambitions.
    Relative to Egypt, the decades-old relationship between the 
United States and Egypt is under strain. In recent days, 
General Dempsey traveled to Cairo to engage the Supreme Council 
of the Armed Forces of Egypt on the very troubling decision by 
the Egyptians to charge 19 Americans and dozens of other 
individuals for operating programs in support of Egyptian civil 
society. The committee is eager to learn the findings of 
General Dempsey's visit because the decision by the Egyptians, 
if unresolved, will negatively affect funding decisions that 
Congress makes in the coming months.
    Relative to Syria, the regime of President Al-Assad is 
waging war on the people of Syria and, despite the condemnation 
of the Arab League and almost all nations, China and Russia are 
preventing the United Nations (U.N.) Security Council from 
taking any effective action. If the situation is left as it is, 
there is also a significant threat that surrounding countries 
could be severely impacted. Our witnesses will, hopefully, 
discuss options that we have to help end the slaughter, as 
limited as those options might be.
    On cybersecurity, the Defense Strategic Guidance notes that 
both state and non-state actors pose the capability and intent 
to conduct cyber espionage and the capability to conduct cyber 
attacks on the United States, with possibly severe effects on 
both our economy and our security. The Director of National 
Intelligence (DNI) in recent Senate testimony placed the 
cybersecurity threat in the top tier alongside terrorism and 
nuclear proliferation and other proliferation of weapons of 
mass destruction.
    A recent report from the National Counter-Intelligence 
Executive stated that entities operating from within China and 
Russia are responsible for the massive theft of U.S. commercial 
and military technology that could threaten our national 
security and our economy. We should let China and Russia know 
in no uncertain terms that cyber economic espionage will have 
very negative consequences for normal trade relations and other 
relations.
    Finally, in the area of personnel, DOD proposes numerous 
personnel-related reforms aimed at slowing the increase in 
personnel and health care costs, which continue to rise at 
unsustainable rates. These reforms include a significant 
reduction in military end strength over the next 5 years, other 
personnel-related reforms, and a commission to review military 
retirement benefits. I agree with General Dempsey, Admiral 
Winnefeld, the Service Chiefs, and the Services' senior 
enlisted advisers, who urged me in a letter dated January 25, 
2011, to grandfather the retirement benefits of those currently 
serving. We owe it to our servicemembers and their families to 
address any change in their compensation and benefits in a 
manner that acknowledges the commitment that we made to them 
when they volunteered to serve in our Armed Forces.
    Secretary Panetta, General Dempsey, and Mr. Hale, we look 
forward to your testimony, and I now call on Senator McCain.
    [The prepared statement of Senator Levin follows:]

                Prepared Statement by Senator Carl Levin

    This morning the committee welcomes Secretary of Defense, Leon 
Panetta, and Chairman of the Joint Chiefs of Staff, General Martin 
Dempsey, for our hearing on the Department of Defense (DOD) fiscal year 
2013 budget request, the associated Future Years Defense Program, and 
the posture of the U.S. Armed Forces. The committee also welcomes Under 
Secretary of Defense (Comptroller) Robert Hale who has joined the 
Secretary and the Chairman at the witness table.
    Let me start by thanking all of you for your continued 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. They are 
truly deserving of the Nation's affection and support. I also want you 
to know that we very much appreciate the positive way you all have 
worked with this committee and the relationships you have fostered with 
our members.

                                 BUDGET

    Your testimony today marks the beginning of the committee's review 
of the fiscal year 2013 budget request for DOD. This year's request 
includes $525 billion for the base budget and $88.4 billion for 
overseas contingency operations (OCO). The fiscal year 2013 base budget 
request is $5 billion less than the fiscal year 2012 enacted level of 
$530 billion. The OCO request is $27 billion less than last year's 
enacted level of $115 billion.
    The fiscal year 2013 base budget request conforms with the Budget 
Control Act that Congress passed last summer. The Senate approved the 
Budget Control Act on a bipartisan basis with 74 Senators voting for 
it. The Budget Control Act locked in defense and non-defense 
discretionary spending caps over 10 years. The defense caps reduced 
projected defense spending by nearly half a trillion dollars over 10 
years and the Department responded with a new strategy and new program 
to meet the Nation's security challenges and preserve our military 
capabilities.
    The Budget Control Act also included language requiring Congress to 
pass legislation with additional far-reaching deficit reduction. If 
Congress does not come up with a deficit reduction package by next 
January, one that locks in another $1.2 trillion in deficit reduction 
over 10 years, then automatic spending cuts, called sequestration, will 
be imposed on both defense and non-defense programs. We need to find a 
comprehensive deficit reduction plan that will avoid these drastic and 
arbitrary cuts. The budget the President sent us yesterday avoids 
sequestration by meeting the $1.2 trillion additional defense reduction 
target--approximately one-half in further cuts in spending and one-half 
in additional revenues.

                                STRATEGY

    The defense budget request for fiscal year 2013 not only conforms 
to the funding limits of the congressionally-mandated Budget Control 
Act, it also supports the results of the Department's comprehensive, 
carefully managed, and inclusive strategic review initiated by 
President Obama in April last year and the strategic guidance that 
resulted. The requirement for a new strategic review, following so 
closely on the heels of the 2009 Quadrennial Defense Review, was driven 
in part by the fiscal crisis confronting the Nation. As former Chairman 
of the Joint Chiefs, Admiral Mike Mullen, cautioned us in August 2010: 
``The most significant threat to our national security is our debt.'' 
Senior military leaders have made it clear that updating and where 
necessary adjusting the Nation's security strategy was their first 
order of business and the budget they have sent to us this year was 
built after and to support that new Defense Strategic Guidance.
    In looking more toward the future, the new Defense Strategic 
Guidance places emphasis on potentially growing strategic challenges in 
the Asia-Pacific region, but intends to do so without ignoring the 
enduring challenges of the Middle East. Consistent with this shift, the 
Department will place more emphasis on systems that project our 
military power, assuring access and freedom of operations in any 
region. It sustains the growth in Special Operations Forces (SOF) and 
intelligence, surveillance, and reconnaissance, and increases 
investment in unmanned systems and cyberspace capabilities. The 
guidance deemphasizes stability operations in the near and distant 
future and therefore reduces the size of Army and Marine Corps ground 
forces to slightly above pre-2003 levels. Finally, as a strategic and 
operational hedge, implementation of the reductions in current 
capabilities such as end strength and force structure will be 
accomplished in a way that allows for stopping or reversing the changes 
depending on developments in the strategic environment or the emergence 
of an unforeseen crisis.
    We look forward to the witnesses' explanation of the process they 
went through to develop the new Defense Strategic Guidance, their 
assessment of this guidance's most important features and potential 
risks relative to the current and anticipated security environment, and 
how this budget request supports its strategic priorities and manages 
strategic risk in the near- and long-terms.

                      BASE REALIGNMENT AND CLOSURE

    The administration has called for two more base realignment and 
closure (BRAC) rounds. In my view, however, before we consider another 
round of BRAC, the Department ought to take a hard look at whether 
further reduction in bases can be made overseas, particularly in 
Europe. While the Department has announced the removal of two of the 
four combat brigades currently stationed in Europe, even after the 
brigades are withdrawn, there will still be over 70,000 U.S. military 
personnel deployed in Europe. Finding further reductions and 
consolidations in our overseas force posture should be our first 
priority before another BRAC round.

                          AFGHANISTAN/PAKISTAN

    The fiscal year 2013 defense budget request reflects the continuing 
conflict in Afghanistan, but also reflects the fact that the process of 
transition has begun and continues apace. Afghan security forces are 
assuming responsibility for securing the Afghan people in more and more 
areas throughout the country. Progress on security is real. The second 
round of areas to be transitioned to an Afghan security lead will be 
completed later this year. Then, approximately 50 percent of the Afghan 
population will live in areas where Afghan security forces have the 
lead for providing security, with coalition forces playing a supporting 
role.
    I have long pressed for Afghan security forces to move increasingly 
into the combat lead and to assume responsibility for securing more and 
more Afghan territory and communities, as the size and capabilities of 
the Afghan Army and police are built up. The success of our mission in 
Afghanistan depends on getting the Afghan security forces in the lead 
with the support of the Afghan people, thereby putting the lie to the 
Taliban propaganda that the coalition is an occupying force.
    The Afghan Foreign Ministry spokesman recently made clear there was 
full agreement on transition, saying: ``We have always maintained that 
Afghan security is an Afghan responsibility.''
    Last June President Obama said that the 33,000 U.S. surge force 
would be removed from Afghanistan by the end of this summer. That means 
that 68,000 U.S. troops will remain in Afghanistan after the drawdown 
of the surge.
    He also said that after the reduction of the U.S. surge force, U.S. 
troops will continue to draw down ``at a steady pace.'' Yet the fiscal 
year 2013 OCO budget request now before Congress is based on an 
assumption that there are no additional reductions in the 68,000 troop 
level in Afghanistan throughout all of fiscal year 2013. The question 
that I hope our witnesses will address this morning is whether they 
expect further reductions in U.S. troop levels in Afghanistan during 
fiscal year 2013 below 68,000 and what associated cost savings would 
result. If that decision has not been made by the President, what is 
the timetable for its being made? I also hope Secretary Panetta will 
clarify his surprising statements earlier this month that, ``Our goal 
is to complete all of [the transition to a training, advisory and 
assistance role] in 2013'' and that ``Hopefully by mid- to the latter 
part of 2013 we'll be able to make a transition from a combat role.''
    There are many reports about reconciliation talks with the Taliban. 
If Taliban statements are true that they will open a political office 
in Qatar, it would have the potential to be a positive development. I 
am concerned, however, by reports that in exchange for the opening of 
this office, the administration is considering transferring five Afghan 
Taliban detainees from the Guantanamo detention facility to Qatar. Such 
a significant step strikes me as premature and should be considered in 
my view only following positive discussions, not preceding them.
    Another concern I have regarding the progress of the reconciliation 
talks is the reported decision by the Government of Afghanistan to open 
a second channel in the dialogue with the Taliban in Saudi Arabia. It 
seems to me this would create the potential for confusion. The United 
States has said it is committed to an Afghan-led reconciliation 
process. That is another reason that the discussion process ought to be 
pursued through a single channel, with both the Afghan Government and 
the United States fully coordinated and participating together, whether 
it takes place in one or two venues.
    The wild card in the peace process is what role Pakistan will play. 
In the past few months, our relations with Pakistan have hit a low 
point. If Pakistan is committed to peace and stability in the region, 
it needs to begin by ending the safe havens in Pakistan for insurgents 
who are attacking our forces, the Afghan forces and the Afghan people. 
Pakistan cannot expect to have a normal relationship with the United 
States until it deals with the threats to us emanating from these 
militant sanctuaries for militants in Pakistan.

                  SECURITY POSTURE IN THE ASIA PACIFIC

    The Defense Strategic Guidance emphasizes the U.S. military 
presence and posture in the Asia Pacific, and rightly so. The recent 
death of North Korea's Kim Jong-il creates new uncertainties about 
possible threats to regional security, and questions about China's 
rapid military growth. Its increasing assertiveness in areas like the 
South China Sea remind us that our presence and constructive engagement 
in the region remains important to the security interests of the United 
States and the region. The committee remains keenly interested in the 
plans for U.S. force posture in the Pacific.
    With respect to realignment of U.S. marines on Okinawa, for 
example, Senator McCain, Senator Webb, and I have advocated changes to 
the current plan in ways that support the strategic goals of the U.S. 
regional military posture while avoiding excessive and unsustainable 
costs associated with large and elaborate new bases. The announcement 
last week that the United States and Japan are reconsidering elements 
of the plan is welcome news, but the steps are not yet adequate. For 
instance, there is apparently no intention to reconsider the plan to 
build the unaffordable Futenma Replacement Facility at Camp Schwab on 
Okinawa, nor does it appear that the U.S. Air Force bases in the region 
are being considered as part of the solution although they now have 
excess capacity. It is important that any changes be jointly agreed 
upon and jointly announced, and that they go far enough that a more 
viable and sustainable U.S. presence in Japan and on Guam results.

                            OTHER CHALLENGES

Iran
    There is a strong bipartisan determination on this committee and in 
Congress to do all we can to counter the threat Iran poses, including 
stopping Iran from acquiring nuclear weapons. President Obama has 
focused considerable diplomatic effort towards that goal because, in 
his own words, ``America is determined to prevent Iran from getting a 
nuclear weapon, and I will take no options off the table to achieve 
that goal.'' The administration is bringing the world together to speak 
with one strong voice against Iran's nuclear ambitions.
    The administration has sought to make clear the benefits available 
to Iran and its people if it complies with international norms and 
obligations, but also to make clear the negative consequences if it 
decides to produce nuclear weapons. Concerted, coordinated, 
international diplomatic and economic pressure will hopefully make Iran 
understand in practical terms the consequences of its actions, and will 
convince Iran not to pursue the development of a nuclear weapon.

Arab Spring
    The impact of the Arab Spring has had significant implications on 
security and stability in the region, including U.S. security 
cooperation, military-to-military relations, and counterterrorism 
cooperation. The Department's new Defense Strategic Guidance places 
considerable emphasis on partnering with foreign nations and their 
militaries on matters of mutual interest. The committee will be 
interested to hear from the Secretary and the Chairman on the impact of 
the Arab Spring, and the problems and opportunities it has created for 
our security.

Egypt
    The decades old relationship between the United States and Egypt is 
under strain. In recent days, General Dempsey traveled to Cairo to 
engage the Supreme Council of the Armed Forces on the very troubling 
decision by the Egyptians to charge 19 Americans and dozens of other 
individuals for operating programs in support of Egyptian civil 
society. The committee is eager to learn the findings of General 
Dempsey's visit because the decision by the Egyptians, if unresolved, 
will negatively affect funding decisions that Congress makes in the 
coming months.

Syria
    Finally, the regime of President Bashar-al-Assad is waging war on 
the people of Syria and despite the condemnation of the Arab League and 
almost all nations, China and Russia are preventing the U.N. Security 
Council from taking any effective action. If the situation is left as 
is, there is also a significant threat that surrounding countries could 
be severely impacted. Our witnesses will hopefully discuss options we 
have to help end the slaughter, as limited as those options might be.

                            MISSILE DEFENSE

    Given the existing and growing threat of ballistic missiles from 
nations such as North Korea and Iran, Congress has been supportive of 
efforts to develop and field effective ballistic missile defenses 
against these threats. The completion of Phase 1 of the European Phased 
Adaptive Approach (EPAA) at the end of 2011 provided an initial level 
of protection against Iran's regional missile threat to Europe, and is 
expected to be part of the North Atlantic Treaty Organization's (NATO) 
initial missile defense capability later this spring. The Department is 
continuing to develop additional EPAA capabilities to counter future 
Iranian missile threats.
    NATO and the United States continue to pursue cooperation with 
Russia on missile defense, since it could enhance our security against 
the common threat of Iranian missiles. Although this has been a 
contentious issue with Russia, a new independent study released at the 
Munich Security Conference points the way to a practical and beneficial 
approach to such cooperation, similar to the NATO approach. If there is 
U.S.-Russian cooperation on this, it would send a powerful signal to 
Iran and might help dissuade Iran from developing nuclear weapons and 
missiles to carry them.

                             CYBERSECURITY

    The Defense Strategic Guidance notes that both state and non-state 
actors possess the capability and intent to conduct cyber espionage and 
the capability to conduct cyber attacks on the United States, with 
possibly severe effects on both our economy and on our security. The 
Director of National Intelligence, in recent Senate testimony, placed 
the cybersecurity threat in the top tier, alongside terrorism and 
proliferation. A recent report from the National Counterintelligence 
Executive stated that entities operating from within China and Russia 
are responsible for the massive theft of U.S. commercial and military 
technology that could threaten our national security and economy. We 
should let China and Russia know, in no uncertain terms, that cyber 
economic espionage will have very negative consequences for normal 
trade relations.
    In addition to defending its own networks, the Department of 
Defense has an important role to play in supporting the Department of 
Homeland Security in improving the security of all government networks 
and those of the Nation's 17 designated critical infrastructure 
sectors, which includes the Defense Industrial Base, 
telecommunications, energy, transportation, and banking and finance, 
among others. The security of those networks is also vital to the 
Department of Defense, which depends on them to mobilize, deploy, and 
sustain our military forces.

                            COUNTERTERRORISM

    The Department's strategic guidance continues to place U.S. 
counterterrorism activities among its highest priorities. The United 
States has had a number of significant successes in the last year--most 
notably, operations against Osama bin Laden and Anwar al-Awlaki--and 
U.S. counterterrorism efforts are becoming more global as al Qaeda and 
its affiliates disperse to Yemen, Somalia, Iran, North Africa, and 
other prospective sanctuaries.
    The budget priorities outlined by the Department appropriately 
emphasize the capabilities possessed by Special Operations Forces to 
conduct counterterrorism, building partnership capacity, and other 
missions in support of geographic combatant commanders. The committee 
looks forward to learning more about how these forces will be utilized 
under the Strategic Guidance to meet demand for engagements with 
partner nations, particularly in the Asia Pacific, while continuing to 
counter al Qaeda and affiliated organizations elsewhere.

                               PERSONNEL

    Finally, in the area of personnel, the Department proposes numerous 
personnel-related reforms aimed at slowing the increase in personnel 
and health care costs, which continue to rise at unsustainable rates. 
These reforms include a significant reduction in military end strength 
over the next 5 years, other personnel-related reforms, and a 
commission to review military retirement benefits. I agree with General 
Dempsey, Admiral Winnefeld, the Service Chiefs, and the Services' 
senior enlisted advisors who urged me, in a letter dated January 25, 
2011, to grandfather the retirement benefits of those currently 
serving. We owe it to our servicemembers and their families to address 
any change in their compensation and benefits in a manner that 
acknowledges the commitment we made to them when they volunteered to 
serve in our Armed Forces.
    Secretary Panetta, General Dempsey, we look forward to your 
testimony.

                STATEMENT OF SENATOR JOHN McCAIN

    Senator McCain. Thank you, Mr. Chairman, and I join in 
welcoming Secretary Panetta and Chairman Dempsey to discuss the 
President's budget request for fiscal year 2013; his proposal 
to reduce the budget for DOD by $487 billion over the next 10 
years, and the impact of these reductions on FYDP for DOD.
    While the other members of this committee and I will 
continue to scrutinize these proposals, I can say today that I 
do not fully endorse this budget request. Indeed, I am 
seriously concerned about how we arrived at this point. On 
April 13, 2011, the President of the United States announced 
his intention to reduce the DOD budget by $400 billion through 
2023. However, his announcement was unsupported by any type of 
comprehensive strategic review or risk assessment. In fact, 
then-Secretary Gates testified before Congress that he only 
learned the night before about this massive proposed cut in our 
defense spending.
    Now, the President proposes $487 billion in cuts over 10 
years, and we're told that these proposed cuts are not budget-
driven, but based on a thorough strategic review of our defense 
priorities. Respectfully, this doesn't add up.
    Unfortunately, this defense budget continues the 
administration's habit of putting short-term political 
considerations over our long-term national security interests. 
In Afghanistan, our military commanders initially asked for a 
surge of 40,000 troops. The President disregarded their advice, 
sent 30,000 troops instead, and announced a date when they 
would begin withdrawing. Our commanders then recommended 
maintaining the full surge force throughout this year's 
fighting season, but the President again disregarded their 
advice and announced reductions to our force levels that the 
former Chairman of the Joint Chiefs of Staff, Admiral Mullen, 
said were more aggressive and incurred greater risks than he 
advised. Finally, in Iraq, the President disregarded the advice 
of his commanders again, dragged out negotiations with the 
Iraqi Government with no intent to maintain a presence of U.S. 
troops. Now, with the political and security situations 
unraveling, it is difficult to argue that Iraq today is, to use 
the President's phrase, ``stable and self-reliant.''
    It seems as though many of the President's most significant 
decisions about our national defense have been fundamentally 
disconnected from conditions on the ground and the advice of 
our military commanders, including commanders that the 
President himself selected. I fear that this defense budget and 
the broader plan to cut $487 billion from DOD over 10 years 
only continues this dangerous and regrettable pattern.
    By any objective assessment, the worldwide threats to our 
Nation, our interests, and our ideals are not diminishing. They 
are growing. Yet the defense budget before us would reduce the 
size of our force by more than 125,000 military personnel. It 
would jeopardize our nuclear modernization plan by making 
critical cuts to our nuclear weapons infrastructure programs. 
It would eliminate 20 percent of the Army's brigade combat 
teams (BCT), 6 Marine Corps battalions, 4 tactical air 
squadrons, 7 Air Force combat squadrons, and 130 mobility 
aircraft. Perhaps most concerning of all, in light of the 
administration's own identification of the Asia-Pacific region 
as the focus of U.S. defense strategy, this budget would 
require the Navy to reduce shipbuilding by 28 percent, to 
retire seven cruisers and two amphibious ships earlier than 
planned, to delay the next generation ballistic missile 
submarine, and to postpone the purchases of one Virginia-class 
attack submarine, two littoral combat ships, and eight high-
speed transport vessels.
    Furthermore, while this defense strategy and its related 
budget cuts clearly increase the risks to our national security 
objectives, there has been no formal risk assessment provided 
to Congress. How can we and the American people determine 
whether the additional risks associated with this strategy are 
acceptable if we do not know the specific nature of those risks 
as defined by the U.S. military?
    These cuts pale in comparison to what DOD would face under 
sequestration, an outcome that Secretary Panetta has correctly 
stated would be ``catastrophic'' for our national defense. Yet, 
here too, domestic politics are taking priority over national 
security, with the President saying he would veto an effort by 
Congress to eliminate sequestration that does not include 
raising taxes.
    Our message to you, Secretary Panetta, and to the President 
of the United States: If it is as catastrophic as you state, 
then why don't we sit down? Why doesn't the President sit down 
with us and we work out a way to avoid what you and General 
Dempsey have described as catastrophic consequences for the 
national security of this country, rather than the President 
sitting in the Oval Office and saying he'll veto any bill that 
doesn't have tax increases in it?
    In short, we have come to a critical turning point when 
decisions of the utmost importance for our national security 
must be resolved, and the consequences of those decisions, for 
better or worse, will forever shape our Nation's destiny. 
Defense spending is not what is sinking this country deeper 
into an unsustainable national debt. If we act under the 
assumption that it is, we will create something that is truly 
unaffordable, the hollowing out of the U.S. military and the 
decline of U.S. military power. We can either take the easy 
route of dramatic cuts to force structure and investments, 
which diminish our military capabilities and increase risk. Or, 
we can balance more modest and strategically-directed 
reductions in defense spending with an aggressive plan to 
address the broader cultural problems plaguing our defense 
establishment, the waste and inefficiency with which DOD buys 
goods and services under the undue influence of a 
noncompetitive military/industrial/congressional complex.
    I believe we must tackle this cultural problem head on. We 
must cut congressional earmarks and pork barrel spending on 
programs that the military does not request and does not need. 
We must have transparent and auditable financial statements, 
and we must eliminate the shameless cost overruns that 
characterize too many of our largest defense programs.
    From my review of these programs, this point is clear: The 
phenomenon of acquisition malpractice, which a senior DOD 
official publicly described just a few days ago, can be found 
in many more programs than just the Joint Strike Fighter (JSF). 
It pervades the entire major defense acquisition program 
portfolio, revealing a cultural problem in the acquisition of 
goods and services that is unsustainable. Before DOD further 
risks force structure to achieve budget savings, practices like 
this must end now.
    Now is the time to set politics aside for the sake of the 
one issue that we can all agree on is nonnegotiable to the 
future health and success of our Nation--our national defense. 
We need to start with goals, move to strategy, and allow that 
rigorous process to inform the budget we create. The 
administration's approach thus far has been too defined by 
short-term domestic political considerations. The 
administration has not led. For the sake of our national 
security, Congress should.
    Thank you, Mr. Chairman. I look forward to the testimony of 
our witnesses.
    Chairman Levin. Thank you, Senator McCain.
    Secretary Panetta.

   STATEMENT OF HON. LEON E. PANETTA, SECRETARY OF DEFENSE; 
   ACCOMPANIED BY ROBERT F. HALE, UNDER SECRETARY OF DEFENSE 
                         (COMPTROLLER)

    Secretary Panetta. Thank you very much, Chairman Levin, 
Senator McCain, members of the committee. I ask that my 
statement be made part of the record and I would like to 
summarize some of the key points.
    Chairman Levin. It will be made part of the record and, by 
the way, the balance of my statement that I didn't give will 
also be made part of the record.
    Secretary Panetta. Mr. Chairman and members of the 
committee, I appreciate the opportunity to appear before you to 
discuss the President's budget request for fiscal year 2013. 
Let me begin, as always, by thanking you for the support that 
you provide to servicemembers and to our military families. 
These brave men and women, along with DOD's civilian 
professionals who support them, have done everything asked of 
them and more, during more than a decade of war. I want to 
thank you for the support that you have given them in the past, 
the present, and hopefully in the future.
    The fiscal year 2013 budget request for DOD was the product 
of an intensive strategy review that was conducted by the 
senior military and civilian leaders of DOD, with advice and 
guidance of the President. The total request represents a $614 
billion investment in national defense that includes $525.4 
billion for DOD's base budget and $88.5 billion in spending to 
support our troops in combat.
    The reasons for this review are clear. First, the United 
States is at a strategic turning point after a decade of war 
and after very substantial growth in defense budgets.
    Second, with the Nation confronting a very large debt 
problem and deficit problem in this country, Congress passed 
the BCA of 2011, imposing a reduction in the defense budget of 
$487 billion over the next decade. We at DOD decided to step up 
to the plate, and that this crisis provided us an opportunity 
to establish a new strategy for the force that we would need in 
the future. That strategy has guided us in making the budget 
decisions and choices that are contained in the President's 
budget.
    The fact is, we are at an important turning point that 
would have required us to make a strategic shift probably under 
any circumstances. The U.S. military's mission in Iraq has 
ended. While we still have a tough fight on our hands in 
Afghanistan, 2011 marks significant progress in reducing 
violence and transitioning to an Afghan-led responsibility for 
security, and we are on track to complete this transition by 
the end of 2014 in accordance with our Lisbon commitments.
    Having just returned from the North Atlantic Treaty 
Organization (NATO) ministerial, I can assure you that all of 
the NATO nations are in line with the strategy that we are 
approaching with regards to Afghanistan. We are in a 
transition. We are transitioning security to Afghan forces, and 
our hope is that as we make the final transition in 2014, that 
they can take the lead on combat operations. We will be there. 
We'll be in support. We'll be combat-ready to support them 
through that process. I want to assure you that NATO is fully 
in agreement with the strategy that we are moving in in 
Afghanistan.
    Last year, in addition, the NATO effort in Libya also 
concluded with the fall of Qadafi, and successful 
counterterrorism efforts have significantly weakened al Qaeda 
and decimated its leadership.
    But despite what we have been able to achieve, unlike past 
drawdowns when threats have receded, the United States still 
faces a very complex array of strategic challenges across the 
globe. We are still a Nation at war in Afghanistan. We still 
face threats to our Homeland from terrorism. There is a 
dangerous proliferation of lethal weapons and materials. The 
behavior of Iran and North Korea continue to threaten global 
stability. There is continuing turmoil and unrest in the Middle 
East, from Syria to Egypt to Yemen and beyond. Rising powers in 
Asia are testing international rules and relationships, and 
there are growing concerns about cyber intrusions and attacks.
    Our challenge is to meet these threats, to protect our 
Nation and our people, and at the same time, meet our 
responsibility to fiscal discipline. This is not an easy task.
    To build the force we need for the future, we developed a 
new Defense Strategic Guidance that consists of five key 
elements.
    First, the military will be smaller and leaner, but we want 
a military that is agile, flexible, ready, and technologically 
advanced.
    Second, we will rebalance our global posture and presence 
to emphasize Asia Pacific and the Middle East, because those 
areas represent the threats for the future.
    Third, for the rest of the world, we need to build 
innovative partnerships and strengthen key alliances and 
partnerships from Europe to Latin America to Africa.
    Fourth, we will ensure that we have the capability to 
quickly confront and defeat aggression from any adversary, any 
time, anywhere.
    Fifth, this can't just be about cuts. It also has to be 
about protecting and prioritizing key investments in technology 
and new capabilities, as well as our capacity to grow, adapt, 
and mobilize as needed.
    We've developed this new Defense Strategic Guidance before 
any final budget decisions were made, in order to ensure that 
the decisions that are here, the choices we made, reflect the 
new defense strategy. While shaping the strategy, we didn't 
want to repeat the mistakes of the past. Our goals are to 
maintain the strongest military in the world, to not hollow out 
the force, to take a balanced approach to budget cuts by 
putting everything on the table, and to not break faith with 
our troops and their families.
    Throughout this review, we also wanted to make sure that 
this was an inclusive process. General Dempsey and I worked 
closely with the leadership of the Services and the combatant 
commanders and consulted regularly with Members of Congress. As 
a result of these efforts, DOD is strongly unified behind the 
recommendations that we are presenting today.
    Consistent with the BCA, this budget reflects in the next 5 
years a savings of $259 billion. That's compared to the budget 
plan that was submitted, obviously, to Congress last year.
    We think this is a balanced and complete package that 
follows the key elements of the strategy and adheres to the 
guidelines that we established. The savings come from three 
broad areas.
    First, efficiencies. We have redoubled our efforts to 
discipline the use of taxpayers' dollars, and that has yielded, 
we hope, about one-quarter of the targeted savings that we have 
in this package.
    The second area is force structure and procurement reforms 
and adjustments. We've made strategy-driven changes in both 
force structure and procurement programs to achieve roughly 
half of the savings in this package.
    Finally, on compensation. We've made modest but important 
adjustments in personnel costs to achieve some very necessary 
cost savings in this area. This area represents about one-third 
of our budget, but here it accounted for little more than 10 
percent of the total reduction that we've presented.
    Let me walk through each of these areas. First of all, with 
regards to disciplining defense dollars, if we're going to 
tighten up the force then I, like Senator McCain, believe very 
strongly that we have to begin by tightening up the operations 
of DOD. We have to reduce excess overhead, eliminate waste, and 
improve business practices across DOD.
    The fiscal year 2012 budget proposed more than $150 billion 
in efficiencies, and we continue to implement those changes. 
But we also identified another $60 billion in additional 
savings over 5 years through measures like streamlining support 
functions, consolidating information technology enterprise 
services, rephasing military construction (MILCON) projects, 
consolidating inventory, and reducing service support 
contractors.
    As we reduce force structure, we also have a responsibility 
to provide the most cost-efficient support for the force. For 
that reason, the President will request Congress to authorize 
the BRAC process for 2013 and 2015. As somebody who went 
through the BRAC process in my own district, I recognize how 
controversial this process is for Members and for 
constituencies. Yet, it is the only effective way to achieve 
needed infrastructure savings.
    To provide better financial information, we are also 
increasing our emphasis on audit readiness and accelerating key 
timelines. In October 2011, I directed DOD to accelerate 
efforts to achieve fully auditable financial statements. We 
were mandated to do it by 2017; what I have ordered is that we 
move that up to 2014.
    But efficiencies alone are not enough to achieve the 
required savings. Budget reductions of this magnitude require 
that we make adjustments to force structure and procurement 
investments. The choices that we made have to fit the five 
elements of the strategy that we developed for the future 
military force.
    First, we knew that coming out of these wars, as I said, 
the military would be smaller, but our approach to 
accommodating these reductions has been to take this as an 
opportunity to fashion an agile and flexible military that we 
need for the future. That highly networked and capable joint 
force consists of an adaptable and battle-tested Army that 
remains our Nation's force for decisive action, capable of 
defeating any adversary on land, and at the same time being 
innovative about how it deploys its forces; a Navy that 
maintains forward presence and is able to penetrate enemy 
defenses; a Marine Corps that remains a middleweight 
expeditionary force, with reinvigorated and amphibious 
capabilities; an Air Force that dominates air and space and 
provides rapid mobility, global strike, and persistent 
intelligence, surveillance, and reconnaissance (ISR); and a 
National Guard and Reserve that continue to be ready and 
prepared for operations when needed.
    To ensure this agile force, we made a conscious choice not 
to maintain more force structure than we could afford to 
properly train and equip. If we do it the other way, we 
guarantee a hollow force. We wanted a force structure that we 
could effectively train and maintain.
    We are implementing force structure reductions consistent 
with the new Defense Strategic Guidance for a total savings of 
$50 billion over the next 5 years. The adjustments include, as 
was pointed out, a resizing of the Active Army from 562,000 to 
490,000 soldiers by 2017. This will transition down in a 
responsible way.
    We'll gradually resize the Active Marine Corps from about 
202,000 to 182,000. We'll reduce and streamline the Air Force's 
airlift fleet. We'll retire some aging C-5As and C-130s. But at 
the same time, we'll maintain a fleet of 275 strategic 
airlifters and 318 C-130s, a fleet that will be more than 
capable of meeting the airlift requirements of the new 
strategy.
    The Navy will protect our highest priority and most 
flexible ships, but we also will retire seven lower priority 
Navy cruisers. The reason we're doing that is that these 
cruisers have not been upgraded with ballistic missile defense 
capability and would require significant repairs. That's the 
reason the Navy chose to do that.
    Second, the New Strategic Guidance made clear that we must 
protect our capabilities needed to project power in Asia 
Pacific and the Middle East. To this end, the budget maintains 
the current bomber fleet, it maintains the aircraft carrier 
fleet at a long-term level of 11 ships and 10 air wings, it 
maintains the big-deck amphibious fleet, and it restores Army 
and Marine Corps force structure in the Pacific after the 
drawdown from Iraq and as we draw down in Afghanistan, while 
continuing to maintain a strong presence in the Middle East. 
Our goal is to expand our rotational presence in both areas.
    The budget also makes selected new investments to ensure we 
develop new capabilities to project power in key territories 
and domains. We're going to put $300 million to fund the next 
general Air Force bomber. We're putting $1.8 billion to develop 
the new Air Force tanker, $18.2 billion for the procurement of 
10 new warships, including 2 Virginia-class submarines, 2 
Aegis-class destroyers, 4 littoral combat ships, 1 joint high-
speed vessel, and 1 CVN-21-class aircraft carrier. We're also 
investing $100 million to increase cruise missile capacity of 
future Virginia-class submarines.
    Third, the strategy makes clear that, even as Asia Pacific 
and the Middle East represent the areas of growing strategic 
priority, the United States will continue to work to strengthen 
its key alliances, to build partnerships, to develop innovative 
ways, such as rotational deployments, to sustain our presence 
elsewhere in the world.
    To that end, we make key investments in NATO and other 
partnership programs. We're putting $200 million in fiscal year 
2013 and nearly $900 million over the next 5 years on the NATO 
alliance Ground Surveillance System, one that was just approved 
by the NATO ministerial in this last meeting; $9.7 billion in 
fiscal year 2013 and about $47 billion to develop and deploy 
missile defense capabilities that protect the U.S. Homeland and 
strengthen regional missile defenses as well.
    The new strategy envisions a series of organizational 
changes to boost efforts to partner with other militaries. 
We're allocating a U.S.-based brigade to the NATO response 
force and will rotate U.S.-based units to Europe on a regular 
basis for training and exercises, increasing the opportunities 
as well for Special Operations Forces (SOF) to advise and 
assist our partners in other regions.
    Fourth, the United States must have the capability to fight 
more than one conflict at a time. But we are in the 21st 
century and we have to use 21st century capabilities. That's 
the reason this budget invests in space, in cyber space, in 
long-range precision strike, and in the continued growth of 
SOF, to ensure that we can still confront and defeat multiple 
adversaries even with the force structure reductions that I've 
outlined earlier.
    It also sustains the nuclear triad of bombers, missiles, 
and submarines to continue to ensure that we have a safe, 
reliable, and effective nuclear deterrent. Even with some 
adjustments to force structure, the budget sustains a military 
that I believe is the strongest in the world: an Army of more 
than 1 million Active and Reserve soldiers with 18 divisions, 
approximately 65 BCTs, and 21 combat aviation brigades; a naval 
force of 285 ships, the same size force that we have today, 
that will remain the most powerful and flexible naval force on 
Earth; a Marine Corps with 31 infantry battalions, 10 artillery 
battalions, and 20 tactical air squadrons; and an Air Force 
that will continue to ensure air dominance, with 54 combat-
coded fighter squadrons and the current bomber fleet.
    Lastly, we can't just, as I said, cut. We have to invest. 
We have to leap ahead of our adversaries by investments in the 
latest technologies. That's why this budget provides $11.9 
billion for science and technology (S&T). It includes $2.1 
billion for basic research. It provides $10.4 billion to 
sustain the continued growth in SOF. It provides $3.8 billion 
for unmanned air systems and it invests $3.4 billion in cyber 
activities.
    At the same time, the New Strategic Guidance recognizes the 
need to prioritize and distinguish urgent modernization needs 
from those that can be delayed, particularly in light of 
schedule and cost problems. Therefore, the budget has 
identified $75 billion in savings over 5 years resulting from 
cancelled or restructured programs. Some examples: $15.1 
billion in savings from restructuring the JSF, by delaying 
aircraft purchases so that we can allow more time for 
development and testing; $1.3 billion in savings from delaying 
development of the Army's ground combat vehicle due to 
contracting difficulties; $4.3 billion in savings from delaying 
the next generation of ballistic missile submarines by 2 years 
for affordability and management reasons.
    In addition, we terminate selected programs: the Block 30 
version of Global Hawk, which has grown in cost to the point 
that it is simply no longer cost-effective; the weather 
satellite program, because we can depend on existing 
satellites, resulting in a savings of $2.3 billion.
    All of this requires that we have to have and maintain the 
ability to mobilize and to regrow the force if we have to. That 
means we need to maintain a capable and ready National Guard 
and Reserve. One of the things we are doing is that the Army is 
going to retain more mid-grade officers and noncommissioned 
officers so they'll be there with the experience and structure 
we need if we have to move quickly to regrow the force. The 
Reserve component has demonstrated its readiness and importance 
over the past 10 years of war and we must ensure that it 
remains available, trained, and equipped to serve in an 
operational capacity when necessary.
    Another key part of preserving our ability to quickly adapt 
and mobilize is maintaining a strong and flexible industrial 
base. I'm committed to make sure that our budget recognizes 
that industry is our partner in the defense acquisition 
enterprise. We have to maintain a base if we're going to be 
able to mobilize and be prepared in the future.
    Finally, with regards to our most important element of our 
strategy and our decisionmaking process: our people. This 
budget recognizes that they, far more than any weapons system 
or technology, are the great strength of the U.S. military. One 
of the guiding principles in our decisionmaking process was 
that we must try to keep faith with our troops and their 
families. For that reason, we've determined to protect family 
assistance programs, to sustain these important investments in 
this budget that serve our troops and their families, and 
continue to make efforts to ensure that these programs are 
responsive to their needs.
    Yet, in order to build the force needed to defend the 
country under existing budget constraints, the growth in costs 
of military pay and benefits must be put on a sustainable 
course. This is an area of the budget that has grown by nearly 
90 percent since 2001, about 30 percent above inflation, while 
end strength has only grown by 3 percent. So this budget 
contains a road map to try to address those costs in military 
pay and health care and retirement in ways that we believe are 
fair, transparent, and consistent with our fundamental 
commitments to our people.
    On military pay, there are no pay cuts. We've created 
sufficient room to allow full pay raises in 2013 and 2014. 
However, we will provide more limited pay raises beginning in 
2015, giving troops and their families fair notice and lead 
time before changes take effect.
    The budget devotes about $48, almost $50 billion to health 
care costs. It's a big part of our budget, an amount that has 
more than doubled over the last decade. In order to continue to 
control the growth of these costs, we're recommending increases 
in health care fees, in copays and deductibles that are to be 
phased in over 4 to 5 years. None of these fee proposals would 
apply to Active-Duty servicemembers and there will be no 
increases in health care premiums for families of Active-Duty 
servicemembers under this proposal.
    We also feel that it's important to address the military 
retirement costs as well. What we urge is the establishment of 
a commission with authority to conduct a comprehensive review 
of military retirement. But we have made clear, the President 
and DOD, that the retirement benefits of those who currently 
serve should be protected by grandfathering their benefits.
    Members of the committee, putting this together, this kind 
of balanced package, has been difficult, and at the same time 
it has been an opportunity to try to think about what force do 
we need now and what force do we need in the future. I believe 
we, the Service Chiefs, the combatant commanders, have 
developed a complete package to try to address our threats for 
the future and to try to ensure that we achieve our strategic 
aims.
    As a result, the fiscal year 2013 request is balanced, it 
keeps America safe, and we think it sustains U.S. leadership 
abroad. Please take a look at each of the individual parts of 
this plan. I encourage you to review this entire budget. This 
has to be a partnership. But I ask you also to bear in mind the 
strategic tradeoffs that are inherent in any particular budget 
decision. This is a zero sum game. There is no free money here. 
The need to balance competing strategic objectives is taking 
place in a resource-constrained environment. We'll need your 
support and partnership to implement this vision of the future 
military.
    I know these are tough issues. This is the beginning, it's 
not the end of this process. But make no mistake, the savings 
that we are proposing are significant and broad-based and will 
impact all 50 States. But this is what Congress mandated on a 
bipartisan basis, that we reduce the defense budget by almost 
half a trillion dollars. We need your partnership to do this in 
a manner that preserves the strongest military in the world. 
This will be a test for all of us of whether reducing the 
deficit is about talk or about action.
    Let me be clear. You can't take a half a trillion dollars 
out of the defense budget and not incur additional risks. We 
believe they are acceptable risks, but they are risks. We're 
going to have a smaller force. We'll depend on the speed of 
mobilization. We have to depend on ingenuity in terms of new 
technologies for the future, and very frankly, when you go 
through this there is no margin for error.
    This is why Congress must do everything possible to make 
sure that we avoid sequestration. We are more than prepared to 
work with Congress to try to develop an approach that will 
detrigger sequestration. This approach would subject DOD to 
another $500 billion in additional cuts that would be required 
to take place in a meat-axe approach. We are convinced that it 
would result in hollowing out the force and inflicting severe 
damage to our national defense.
    So the leadership of DOD, both military and civilian, is 
unified behind the strategy we've presented, behind this 
budget, and behind the need to avoid sequestration.
    I look forward to working closely with you in the months 
ahead. This is going to be a tough challenge, but it's what the 
American people expect of its elected leaders, to be fiscally 
responsible in developing the force for the future, the force 
that can defend the country, the force that supports our men 
and women in uniform, and a force that is and always will be 
the strongest military in the world.
    Thank you, Mr. Chairman.
    [The prepared statement of Secretary Panetta follows:]

               Prepared Statement by Hon. Leon E. Panetta

    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 2013.
    Let me begin by first thanking you for your support for our 
servicemembers and our military families. These brave men and women, 
along with the Department's civilian professionals who support them, 
have done everything asked of them and more during more than a decade 
of war.

                        DEFENSE STRATEGY REVIEW

    The fiscal year 2013 budget request for the Department of Defense 
(DOD) was the product of an intensive strategy review conducted by the 
senior military and civilian leaders of the Department with the advice 
and guidance of President Obama. The total request represents a $614 
billion investment in national defense--including a $525.4 billion 
request for the Department's base budget, and $88.5 billion in spending 
to support our troops in combat.
    The reasons for this review are clear: first, the United States is 
at a strategic turning point after a decade of war and substantial 
growth in defense budgets. Second, with the Nation confronting very 
large debt and deficits, Congress passed the Budget Control Act of 
2011, imposing limits that led to a reduction in the defense budget of 
$487 billion over the next decade.
    Deficit reduction is a critical national security priority in and 
of itself. We at the Department decided that this crisis presented us 
with the opportunity to establish a new strategy for the force of the 
future, and that strategy has guided us in making the budget choices 
contained in the President's budget. We are at an important turning 
point that would have required us to make a strategic shift under any 
circumstances. The U.S. military's mission in Iraq has ended. We still 
have a tough fight on our hands in Afghanistan, but over the past year 
we have begun a transition to Afghan-led responsibility for security--
and we are on track to complete that transition by the end of 2014, in 
accordance with our Lisbon commitments. Last year, the North Atlantic 
Treaty Organization (NATO) effort in Libya also concluded with the fall 
of Qadhafi. Successful counterterrorism efforts have significantly 
weakened al Qaeda and decimated its leadership.
    But despite what we have been able to achieve, unlike past 
drawdowns when threats have receded, the United States still faces a 
complex array of security challenges across the globe: We are still a 
nation at war in Afghanistan; we still face threats from terrorism; 
there is dangerous proliferation of lethal weapons and materials; the 
behavior of Iran and North Korea threaten global stability; there is 
continuing turmoil and unrest in the Middle East; rising powers in Asia 
are testing international relationships; and there are growing concerns 
about cyber intrusions and attacks. Our challenge is to meet these 
threats and at the same time, meet our responsibility to fiscal 
discipline. This is not an easy task.
    To build the force we need for the future, we developed a new 
Defense Strategic Guidance that consists of these five key elements:

         First, the military will be smaller and leaner, but it 
        will be agile, flexible, ready, and technologically advanced.
         Second, we will rebalance our global posture and 
        presence to emphasize Asia-Pacific and the Middle East.
         Third, we will build innovative partnerships and 
        strengthen key alliances and partnerships elsewhere in the 
        world.
         Fourth, we will ensure that we can quickly confront 
        and defeat aggression from any adversary--anytime, anywhere.
         Fifth, we will protect and prioritize key investments 
        in technology and new capabilities, as well as our capacity to 
        grow, adapt and mobilize as needed.

                  STRATEGY TO FISCAL YEAR 2013 BUDGET

    We developed this new Defense Strategic Guidance before any final 
budget decisions were made to ensure that the budget choices reflected 
the new defense strategy.
    While shaping this strategy, we did not want to repeat the mistakes 
of the past. Our goals were: to maintain the strongest military in the 
world, to not ``hollow out'' the force, to take a balanced approach to 
budget cuts, to put everything on the table, and to not break faith 
with troops and their families. Throughout the review we made sure this 
was an inclusive process, and General Dempsey and I worked closely with 
the leadership of the Services and combatant commanders, and consulted 
regularly with Members of Congress.
    As a result of these efforts, the Department is strongly united 
behind the recommendations we are presenting today. Consistent with 
title I of the Budget Control Act, this budget reflects $259 billion in 
savings over the next 5 years and $487 billion over the next 10 years 
compared to the budget plan submitted to Congress last year. Under the 
5 year budget plan, the base budget will rise from $525 billion in 
fiscal year 2013 to $567 billion in fiscal year 2017. When reduced war-
related funding requirements are included, we expect total U.S. defense 
spending to drop by more than 20 percent over the next few years from 
its peak in 2010, after accounting for inflation.
    This is a balanced and complete package that follows the key 
elements of the strategy and adheres to the guidelines we established. 
The savings come from three broad areas:

         First, efficiencies--we redoubled efforts to make more 
        disciplined use of taxpayer dollars, yielding about one quarter 
        of the target savings;
         Second, force structure and procurement adjustments--
        we made strategy-driven changes in force structure and 
        procurement programs, achieving roughly half of the savings; 
        and
         Finally, compensation--we made modest but important 
        adjustments in personnel costs to achieve some necessary cost 
        savings in this area, which represents one third of the budget 
        but accounted for a little more than 10 percent of the total 
        reduction.

    Changes in economic assumptions and other shifts account for the 
remainder of the $259 billion in savings. Let me walk through these 
three areas, beginning with our efforts to discipline our use of 
defense dollars.

                MORE DISCIPLINED USE OF DEFENSE DOLLARS

    If we are to tighten up the force, I felt we have to begin by 
tightening up the operations of the Department. This budget continues 
efforts to reduce excess overhead, eliminate waste, and improve 
business practices across the department. The more savings realized in 
this area, the less spending reductions required for modernization 
programs, force structure, and military compensation.
    The fiscal year 2012 budget proposed more than $150 billion in 
efficiencies between fiscal year 2012 and fiscal year 2016, and we 
continue to implement those changes. This budget identifies about $60 
billion in additional savings over 5 years. Across the Military 
Services, new efficiency efforts over the next 5 years include:

         The Army proposes to save $18.6 billion through 
        measures such as streamlining support functions, consolidating 
        information technology enterprise services, and rephasing 
        military construction projects;
         The Navy proposes to save $5.7 billion by implementing 
        strategic sourcing of commodities and services, consolidating 
        inventory, and other measures; and
         The Air Force proposes to save $6.6 billion by 
        reducing service support contractors and rephasing military 
        construction projects.

    Other proposed DOD-wide efficiency savings over the next 5 years 
total $30.1 billion, including reductions in expenses in the Office of 
the Secretary of Defense and the Defense agencies.
    Additionally, we are continuing the initiative to improve the 
Department's buying power by seeking greater efficiency and 
productivity in the acquisition of goods and services. We are 
strengthening acquisition support to the warfighter, executing 
acquisitions more efficiently, preserving the industrial base, and 
strengthening the acquisition workforce. This budget assumes that these 
policies produce savings of $5.3 billion over the next 5 years.
    In terms of military infrastructure, we will need to ensure that 
our current basing and infrastructure requirements do not divert 
resources from badly needed capabilities.
    As we reduce force structure, we have a responsibility to provide 
the most cost efficient support for the force. For that reason, the 
President will request that Congress authorize the Base Realignment and 
Closure process for 2013 and 2015. As someone who went through BRAC, I 
realize how controversial this process can be for members and 
constituencies. Yet, it is the only effective way to achieve 
infrastructure savings.
    Achieving audit readiness is another key initiative that will help 
the Department achieve greater discipline in its use of defense 
dollars. The Department needs auditable financial statements to comply 
with the law, to strengthen its own internal processes, and to reassure 
the public that it continues to be a good steward of Federal funds. In 
October 2011, I directed the Department to emphasize this initiative 
and accelerate efforts to achieve fully auditable financial statements. 
Among other specific goals, I directed the Department achieve audit 
readiness of the Statement of Budgetary Resources for general funds by 
the end of calendar year 2014, and to meet the legal requirements to 
achieve full audit readiness for all Defense Department financial 
statements by 2017. We are also implementing a course-based 
certification program for defense financial managers in order to 
improve training in audit readiness and other areas, with pilot 
programs beginning this year. We now have a plan in place to meet these 
deadlines, including specific goals, financial resources, and a 
governance structure.
    These are all critically important efforts to ensure the Department 
operates in the most efficient manner possible. Together, these 
initiatives will help ensure the Department can preserve funding for 
the force structure and modernization needed to support the missions of 
our force.

        STRATEGY-DRIVEN CHANGES IN FORCE STRUCTURE AND PROGRAMS

    It is obvious that we cannot achieve the overall savings targets 
through efficiencies alone. Budget reductions of this magnitude require 
significant adjustments to force structure and investments, but the 
choices we made reflected five key elements of the Defense Strategic 
Guidance and vision for the military.

    1.  Build a force that is smaller and leaner, but agile, flexible, 
ready and technologically advanced

    We knew that coming out of the wars, the military would be smaller. 
Our approach to accommodating these reductions, however, has been to 
take this as an opportunity--as tough as it is--to fashion the agile 
and flexible military we need for the future. That highly networked and 
capable joint force consists of:

         an adaptable and battle-tested Army that is our 
        Nation's force for decisive action, capable of defeating any 
        adversary on land;
         a Navy that maintains forward presence and is able to 
        penetrate enemy defenses;
         a Marine Corps that is a ``middleweight'' 
        expeditionary force with reinvigorated amphibious capabilities;
         an Air Force that dominates air and space and provides 
        rapid mobility, global strike and persistent ISR; and
         National Guard and Reserve components that continue to 
        be ready and prepared for operations when needed.

    To ensure an agile force, we made a conscious choice not to 
maintain more force structure than we could afford to properly train 
and equip. We are implementing force structure reductions consistent 
with the new Defense Strategic Guidance for a total savings of about 
$50 billion over the next 5 years.
    These adjustments include:

         Gradually resizing the Active Army to 490,000, 
        eliminating a minimum of 8 BCTs and developing a plan to update 
        the Army's brigade structure;
         Gradually resizing the Active Marine Corps to about 
        182,100, eliminating 6 combat battalions and 4 Tactical Air 
        squadrons;
         Reducing and streamlining the Air Force's airlift 
        fleet by retiring all 27 C-5As, 65 of the oldest C-130s and 
        divesting all 38 C-27s. After retirements, the Air Force will 
        maintain a fleet of 275 strategic airlifters, and 318 C-130s--a 
        number that we have determined is sufficient to meet the 
        airlift requirements of the new strategy, including the Air 
        Force's commitment for direct support of the Army;
         Eliminating seven Air Force Tactical Air squadrons--
        including five A-10 squadrons, one F-16 squadron, and one F-15 
        training squadron. The Air Force will retain 54 combat-coded 
        fighter squadrons, maintaining the capabilities and capacity 
        needed to meet the new Defense Strategic Guidance; and
         Retiring seven lower priority Navy cruisers that have 
        not been upgraded with ballistic missile defense capability or 
        that would require significant repairs, as well as retiring two 
        dock landing ships.

    The strategy review recognized that a smaller, ready and agile 
force is preferable to a larger force that is poorly trained and ill-
equipped. Therefore, we put a premium on retaining those capabilities 
that provide the most flexibility across a range of missions. We also 
emphasized readiness. For fiscal 2013, the Department is requesting 
$209 billion in the base budget for Operation and Maintenance, the 
budget category that funds training and equipment maintenance among 
other aspects of operations. That represents an increase of 6 percent 
compared to the enacted level in 2012, even though the overall base 
budget will decline by 1 percent. Striking the right balance between 
force structure and readiness is critical to our efforts to avoid a 
hollow force, and we will continue to focus on this area to ensure that 
we make the right choices.

    2.  Rebalance global posture and presence to emphasize Asia-Pacific 
and the Middle East

    The strategic guidance made clear that we must protect capabilities 
needed to project power in Asia-Pacific and the Middle East. To this 
end, this budget:

         Maintains the current bomber fleet;
         Maintains the aircraft carrier fleet at a long-term 
        level of 11 ships and 10 air wings;
         Maintains the big-deck amphibious fleet; and
         Restores Army and Marine Corps force structure in the 
        Pacific after the drawdown from Iraq and as we drawdown in 
        Afghanistan, while maintaining persistent presence in the 
        Middle East.

    The budget also makes selected new investments to ensure we develop 
new capabilities needed to maintain our military's continued freedom of 
action in face of new challenges that could restrict our ability to 
project power in key territories and domains. Across the Services, this 
budget plan requests $1.8 billion for fiscal year 2013, and a total of 
$3.9 billion over the next 5 years, for enhancements to radars, 
sensors, and electronic warfare capabilities needed to operate in these 
environments.
    Other key power projection investments in fiscal year 2013 include:

         $300 million to fund the next generation Air Force 
        bomber (and a total of $6.3 billion over the next 5 years);
         $1.8 billion to develop the new Air Force tanker;
         $18.2 billion for the procurement of 10 new warships 
        and associated equipment, including 2 Virginia-class 
        submarines, 2 Aegis-class destroyers, 4 Littoral Combat Ships, 
        1 Joint High Speed Vessel, and 1 CVN-21-class aircraft carrier. 
        We are also requesting $100 million to develop the capability 
        to increase cruise missile capacity of future Virginia-class 
        submarines;
         $2.2 billion in fiscal year 2013 for the procurement 
        of an additional 26 F/A-18E/F Super Hornet aircraft;
         $1.0 billion in fiscal year 2013 for the procurement 
        of 12 EA-18G Growler aircraft, the Navy's new electronic 
        warfare platform that replaces the EA-6B; and
         $38 million for design efforts to construct an Afloat 
        Forward Staging Base planned for procurement in fiscal year 
        2014. This base can provide mission support in areas where 
        ground-based access is not available, such as counter-mine 
        operations, Special Operations, and ISR.

    3.  Build innovative partnerships and strengthen key alliances and 
partnerships

    The strategy makes clear that even though Asia-Pacific and the 
Middle East represent the areas of growing strategic priority, the 
United States will work to strengthen its key alliances, to build 
partnerships and to develop innovative ways to sustain U.S. presence 
elsewhere in the world.
    To that end, this budget makes key investments in NATO and other 
partnership programs, including:

         $200 million in fiscal year 2013 and nearly $900 
        million over the next 5 years in the NATO Alliance Ground 
        Surveillance system. This system will enable the Alliance to 
        perform persistent surveillance over wide areas in any weather 
        or light condition;
         $9.7 billion in fiscal year 2013, and $47.4 billion 
        over the next 5 years, to develop and deploy missile defense 
        capabilities that protect the U.S. Homeland and strengthen 
        regional missile defenses. The request includes the Phased 
        Adaptive Approach that is being deployed first in Europe and is 
        designed to protect NATO allies and forces from ballistic 
        missile threats; and
         $800 million for the combatant commanders exercise and 
        engagement program. Jointly with the State Department, we will 
        also begin using the new Global Security Contingency fund that 
        was established at our request in the fiscal year 2012 
        legislation.

    The new strategy also envisions a series of organizational changes 
that will boost efforts to partner with other militaries. These 
include:

         Allocating a U.S.-based brigade to the NATO Response 
        Force and rotating U.S.-based units to Europe for training and 
        exercises;
         Aligning an Army BCT with each regional combatant 
        command to foster regional expertise; and
         Increasing opportunities for Special Operations Forces 
        to advise and assist partners in other regions, using 
        additional capacity available due to the gradual drawdown from 
        the post-September 11 wars.

    4.  Ensure that we can confront and defeat aggression from any 
adversary--anytime, anywhere

    The strategic guidance reaffirmed that the United States must have 
the capability to fight more than one conflict at the same time. Still, 
the strategic guidance recognizes that how we defeat the enemy may well 
vary across conflicts.
    This budget invests in space, cyberspace, long range precision-
strike and the continued growth of Special Operations Forces to ensure 
that we can still confront and defeat multiple adversaries even with 
the force structure reductions outlined earlier. It also sustains the 
nuclear triad of bombers, missiles and submarines to ensure we continue 
to have a safe, reliable and effective nuclear deterrent.
    Even with some adjustments to force structure, this budget sustains 
a military that is the strongest in the world, capable of quickly and 
decisively confronting aggression wherever and whenever necessary. 
After planned reductions, the fiscal year 2017 joint force will consist 
of:

         An Army of more than 1 million Active and Reserve 
        soldiers that remains flexible, agile, ready and lethal across 
        the spectrum of conflict, with 18 divisions, approximately 65 
        Brigade Combat Teams, 21 Combat Aviation Brigades and 
        associated enablers;
         A Naval battle force of 285 ships--the same size force 
        that we have today--that will remain the most powerful and 
        flexible naval force on earth, able to prevail in any combat 
        situation, including the most stressing anti-access 
        environments. Our maritime forces will include 11 carriers, 9 
        large deck amphibious ships (although we should build to 10 
        such ships in fiscal year 2018), 82 guided missile cruisers and 
        destroyers, and 50 nuclear powered attack submarines;
         A Marine Corps that remains the Nation's expeditionary 
        force in readiness, forward deployed and engaged, with 31 
        infantry battalions, 10 artillery battalions and 20 tactical 
        air squadrons; and
         An Air Force that will continue to ensure air 
        dominance with 54 combat coded fighter squadrons and the 
        current bomber fleet, with the Joint Strike Fighter in 
        production and the next generation bomber in development. Our 
        Air Force will also maintain a fleet of 275 strategic 
        airlifters, 318 C-130s and a new aerial refueling tanker.

    5.  Protect and prioritize key investments, and the capacity to 
grow, adapt, and mobilize

    The force we are building will retain a decisive technological 
edge, leverage the lessons of recent conflicts and stay ahead of the 
most lethal and disruptive threats of the future.
    To that end, the fiscal year 2013 budget:

         Provides $11.9 billion for science and technology to 
        preserve our ability to leap ahead, including $2.1 billion for 
        basic research;
         Provides $10.4 billion (base and OCO) to sustain the 
        continued growth in Special Operations Forces;
         Provides $3.8 billion for Unmanned Air Systems by 
        funding trained personnel, infrastructure, and platforms to 
        sustain 65 USAF MQ-1/9 combat air patrols with a surge capacity 
        of 85 by fiscal year 2016. We slowed the buy of the Reaper 
        aircraft to allow us time to develop the personnel and training 
        infrastructure necessary to make full use of these important 
        aircraft. We also protected funding for the Army's unmanned air 
        system Gray Eagle;
         Invests $3.4 billion in cyber activities, with several 
        initiatives receiving increased funding relative to last year. 
        The scale of cyber threats is increasing and we need to be 
        prepared to defeat these threats, mitigate the potential 
        damage, and provide the President with options to respond, if 
        necessary. We are investing in full spectrum cyber operations 
        capabilities to address the threats we see today and in the 
        future. The Department is also pleased to see progress being 
        made in Congress regarding cyber legislation and is supportive 
        of the bipartisan legislation being introduced by Senators 
        Lieberman and Collins; and
         Provides $1.5 billion to fund the Department's 
        Chemical and Biological Defense program.

    At the same time, the strategic guidance recognizes the need to 
prioritize and distinguish urgent modernization needs from those that 
can be delayed--particularly in light of schedule and cost problems. 
Therefore this budget identifies about $75 billion in savings over the 
Future Years Defense Program (FYDP) resulting from canceled or 
restructured programs. Key modifications and associated savings over 
the FYDP include:

         $15.1 billion in savings from restructuring the Joint 
        Strike Fighter by delaying aircraft purchases to allow more 
        time for development and testing;
         $1.3 billion in savings from delaying development of 
        the Army's Ground Combat Vehicle due to contracting 
        difficulties;
         $2.2 billion in savings from curtailing the Joint Land 
        Attack Cruise Missile Defense Elevated Netted Sensor System due 
        to concerns about program cost and operational mobility;
         $4.3 billion in savings from delaying the next 
        generation of ballistic missile submarines by 2 years for 
        affordability and management reasons; and
         $0.8 billion in savings from delaying selected Army 
        aviation helicopter modernization for 3 to 5 years.

    We will also terminate selected programs, including:

         The Block 30 version of Global Hawk, which has grown 
        in cost to the point where it is no longer cost effective, 
        resulting in savings of $2.5 billion;
         Upgrades to High Mobility Multipurpose Wheeled 
        Vehicles; we will focus our modernization resources on the 
        Joint Light Tactical Vehicle, resulting in savings of $900 
        million; and
         The weather satellite program, because we can depend 
        on existing satellites, resulting in savings of $2.3 billion.

    We have also invested in a balanced portfolio of capabilities that 
will enable our force to remain agile, flexible and technologically 
advanced enough to meet any threat. We will ensure that we can 
mobilize, surge, and adapt our force to meet the requirements of an 
uncertain future. To that end, ground forces will retain the key 
enablers and know-how to conduct long-term stability operations, and 
the Army will retain more mid-grade officers and noncommissioned 
officers. These steps will ensure we have the structure and experienced 
leaders necessary should we need to re-grow the force quickly.
    Another key element is to maintain a capable and ready National 
Guard and Reserve. The Reserve component has demonstrated its readiness 
and importance over the past 10 years of war, and we must ensure that 
it remains available, trained, and equipped to serve in an operational 
capacity when necessary. We will maintain key combat support 
capabilities and ensure that combat service support capabilities like 
civil affairs are maintained at a high readiness level. We will also 
leverage the operational experience and institute a progressive 
readiness model in the National Guard and Reserves in order to sustain 
increased readiness prior to mobilization.
    In keeping with the emphasis on a highly capable reserve, this 
budget makes only relatively modest reductions in the ground-force 
Reserve components. Over the next 5 years, the Army Reserve will be 
sustained at 205,000 personnel, the Army National Guard will marginally 
decrease from 358,200 to 353,200 personnel, and the Marine Corps 
Reserve will sustain an end-strength level of 39,600 personnel. The 
Navy Reserve will decrease from 66,200 to 57,100 personnel over the 
next 5 years. Over the same span, the Air Force Reserve will decrease 
from 71,400 to 69,500 personnel, and the Air National Guard will 
decrease from 106,700 to 101,200 personnel.
    Another key part of preserving our ability to quickly adapt and 
mobilize is a strong and flexible industrial base. This budget 
recognizes that industry is our partner in the defense acquisition 
enterprise. A healthy industrial base means a profitable industrial 
base, but it also means a lean, efficient base that provides good value 
for the taxpayers' defense investments and increases in productivity 
over time.

              ENSURING QUALITY OF THE ALL-VOLUNTEER FORCE

    Now to the most fundamental element of our strategy and our 
decision-making process: our people. This budget recognizes that they, 
far more than any weapons system or technology, are the great strength 
of our U.S. military. All told, the fiscal year 2013 budget requests 
$135.1 billion for the pay and allowances of military personnel and 
$8.5 billion for family support programs vital to the well-being of 
servicemembers and their families.
    One of the guiding principles in our decisionmaking process was 
that we must keep faith with our troops and their families. For that 
reason, we were determined to protect family assistance programs, and 
we were able to sustain these important investments in this budget and 
continue efforts to make programs more responsive to the needs of 
troops and their families. Yet in order to build the force needed to 
defend the country under existing budget constraints, the growth in 
costs of military pay and benefits must be put on a sustainable course. 
This is an area of the budget that has grown by nearly 90 percent since 
2001, or about 30 percent above inflation--while end strength has only 
grown by 3 percent.
    This budget contains a roadmap to address the costs of military 
pay, health care, and retirement in ways that are fair, transparent, 
and consistent with our fundamental commitments to our people.
    On military pay, there are no pay cuts. We have created sufficient 
room to allow for full pay raises in 2013 and 2014 that keep pace with 
increases in the private sector. That means for 2013, we propose a pay 
increase of 1.7 percent for servicemembers. However, we will provide 
more limited pay raises beginning in 2015--giving troops and their 
families fair notice and lead time before changes take effect. Let me 
be clear: nobody's pay is cut in this budget nor will anyone's pay be 
cut in the future years of this proposal.
    This budget devotes $48.7 billion to health care costs--an amount 
that has more than doubled over the last decade. In order to continue 
to control the growth of these costs, we are recommending increases in 
health care fees, co-pays and deductibles to be phased in over 4 to 5 
years. None of the fee proposals in the budget would apply to Active-
Duty servicemembers, survivors of servicemembers who died on Active 
Duty, or retirees who retired due to disability. Most of the changes 
will not affect the families of Active-Duty servicemembers--there will 
be no increases in health care fees or deductibles for families of 
active-duty servicemembers. Those most affected will be retirees--with 
the greatest impact on working-age retirees under the age of 65 still 
likely to be employed in the civilian sector. Even with these changes, 
the costs borne by retirees will remain below levels in most comparable 
private sector plans--as they should be.
    Proposed changes include:

         Further increasing enrollment fees for retirees under 
        age 65 in the TRICARE Prime program, using a tiered approach 
        based on retired pay that requires senior-grade retirees with 
        higher retired pay to pay more and junior-grade retirees less;
         Establishing a new enrollment fee for the TRICARE 
        Standard/Extra programs and increasing deductibles;
         Establishing a new enrollment fee for the TRICARE-for-
        Life program for retirees 65 and older, also using a tiered 
        approach;
         Implementing additional increases in pharmacy co-pays 
        in a manner that increases incentives for use of mail order and 
        generic medicine; and
         Indexing fees, deductibles, pharmacy co-pays, and 
        catastrophic caps to reflect the growth in national health care 
        costs.

    We also feel that the fair way to address military retirement costs 
is to ask Congress to establish a commission with authority to conduct 
a comprehensive review of military retirement. But the President and 
the Department believe that the retirement benefits of those who 
currently serve should be protected by grandfathering their benefits. 
For those who serve today I will request there be no changes in 
retirement benefits.

                 FULLY SUPPORTING DEPLOYED WARFIGHTERS

    The costs of Overseas Contingency Operations (OCO) are funded 
separately from the base budget in a stand-alone fiscal year 2013 
request of $88.5 billion. That funding level represents a decrease of 
$26.6 billion from the fiscal year 2012 enacted level.
    This year's OCO request, which ensures that deployed troops have 
all the financial resources they need to conduct their challenging 
missions, primarily supports operations in Afghanistan but also 
requests relatively small sums for the Office of Security Cooperation 
in Iraq (OSC-I) and the repair or replacement of equipment redeploying 
from Iraq.
    Our fiscal year 2013 OCO request includes funding for added 
personnel pay and subsistence for deployed forces; communications; 
mobilizing Reserve component units; transportation; supplies; 
deployment and redeployment of all combat and support forces; force 
sustainment; and sustainment and replenishment of war reserve stocks.
    For fiscal year 2013 we request $5.7 billion in funding for the 
Afghan National Security Forces (ANSF). It is critically important that 
we maintain sufficient financial support to ANSF so that they can 
ultimately assume full security responsibility across Afghanistan.
    Much tough fighting lies ahead in Afghanistan, but the gradually 
improving situation permits the remainder of the U.S. surge force to 
redeploy by the end of September 2012, leaving 68,000 U.S. troops in 
Afghanistan at that time. The fiscal year 2013 OCO request assumes a 
continued level of about 68,000 troops in Afghanistan. While future 
changes in troop levels may be implemented during fiscal year 2013, 
those decisions will be based on advice from field commanders about 
conditions on the ground.
    In Iraq, OCO funding supports continued security assistance and 
cooperation with Iraqi Security Forces through the OSC-I in the areas 
of common interest, including counterterrorism, counter-proliferation, 
maritime security, and air defense. This funding is critical for the 
U.S. to strengthen its long-term partnership with Iraq. Additionally, 
to ensure that U.S. forces redeployed from Iraq are ready and equipped 
for future operations, this funding replenishes equipment and stocks 
for these forces.

                           A BALANCED PACKAGE

    Members of the committee: putting together this balanced package 
has been a difficult undertaking and, at the same time, an important 
opportunity to shape the force we need for the future. I believe we 
have developed a complete package, aligned to achieve our strategic 
aims. We have achieved buy-in from the Service Secretaries, the Service 
Chiefs, combatant commanders, and the senior enlisted leaders of the 
Department.
    Our strategy review preceded and guided the budgeting process. This 
strategy-first approach enabled the Department to balance strategic 
priorities, place individual budget decisions within a broader 
strategic context, and ultimately, to guide us in making some tough 
choices.
    As a result, the fiscal year 2013 request is a carefully balanced 
package that keeps America safe and sustains U.S. leadership abroad. As 
you take a look at the individual parts of this plan, I encourage you 
to do what the Department has done: to bear in mind the strategic 
trade-offs inherent in any particular budget decision, and the need to 
balance competing strategic objectives in a resource-constrained 
environment.
    Each decision needs to be judged on the basis of the overall 
strategy that it supports, recognizing that unwinding any one piece 
puts our whole package in jeopardy. The bottom line is that I believe 
there is little room for modification to preserve the force and 
capabilities we believe are needed to protect the country and fulfill 
assigned missions.
    Ultimately that means we will need your support and partnership to 
implement this vision of the future military. I understand how tough 
these issues can be, and that this is the beginning and not the end of 
this process. Make no mistake: the savings we are proposing will impact 
all 50 States. But it was this Congress that mandated, on a bi-partisan 
basis, that we reduce the defense budget, and we need your partnership 
to do this in a manner that preserves the strongest military in the 
world. This will be a test of whether reducing the deficit is about 
talk or action.
    My hope is that now that we see the sacrifice involved in reducing 
the defense budget by almost half a trillion dollars, Congress will be 
convinced of its important responsibility to make sure that we avoid 
sequestration. That would be a doubling of the cuts, another roughly 
$500 billion in additional cuts that would be required to take place 
through a meat-axe approach, and that we are convinced would hollow out 
the force and inflict severe damage on our National defense.
    So the leadership of this department, both military and civilian, 
is united behind the strategy that we have presented, and this budget. 
I look forward to working closely with you in the months ahead to do 
what the American people expect of their leaders: be fiscally 
responsible in developing the force for the future--a force that can 
defend the country, a forced that supports our men and women in 
uniform, and a force that is, and always will be, the strongest 
military in the world.

    Chairman Levin. Thank you, Secretary Panetta.
    General Dempsey.

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

    General Dempsey. Thank you, Chairman Levin, Senator McCain, 
distinguished members of the committee. Thank you, as always, 
for this opportunity to discuss the President's defense budget 
proposal for fiscal year 2013. This budget represents a 
responsible investment in our Nation's security. At its core, 
it is an investment in people, the sons and daughters of 
America who serve this Nation in our military. Allow me to open 
with a few words about them and what they have accomplished.
    The last 10 years of war have been among the most 
challenging in our Nation's military history. Through it all, 
the joint force has persevered and it has prevailed. Our 
families have stood with us deployment after deployment after 
deployment and so have you. Together, we have fulfilled our 
solemn vow to protect and defend America, her citizens, and her 
interests.
    As I sit with you today, our service men and women remain 
globally engaged. They are deterring aggression, developing 
partners, delivering aid, and defeating our enemies. They stand 
ready, strong, and swift in every domain, every day.
    I had the privilege to be with a few of them while 
traveling to Afghanistan and Egypt this past week. As always, I 
witnessed extraordinary courage and skill--in the young 
soldiers just off patrol in the deep snows of the Hindu Kush, 
in the men and women of the NATO training mission managing the 
development of the Afghan National Security Forces (ANSF), and 
the brave and vigilant Marine Corps security detachment in our 
embassy in Cairo, and in the superb junior airmen who flew us 
to the right place at the right time.
    They exemplify a professional military with a reliable 
record of performance. In just the past year, for example, we 
further crippled al Qaeda. We helped protect the Libyan people 
from near-certain slaughter, while affirming NATO's important 
role beyond the borders of Europe. We brought to a close more 
than 20 years of military operations in and over Iraq and, like 
we did in Iraq, we are steadily transitioning responsibility 
for security onto Afghan shoulders. We also helped Japan 
recover from a perfect storm of tragedy and destruction.
    Of course, these were just the most visible 
accomplishments. Behind the scenes and beneath the surface, we 
defended against cyber threats, sustained our nuclear deterrent 
posture, and worked with allies and partners to build capacity 
and to prevent conflict across the globe. We continue to 
provide this Nation with a wide range of options for dealing 
with the security challenges that confront us.
    An increasingly competitive and uncertain security 
environment demands that we be alert, responsive, adaptive, and 
dominant. This budget helps us do that. It's informed by a real 
strategy that makes real choices. It maintains our military's 
decisive edge and our global leadership. Moreover, it ensures 
we keep faith with the true source of our military strength, 
and that is our people.
    With this in mind, allow me to add a few additional 
comments to those of the Secretary. First, this budget should 
be considered holistically. I caution against viewing its 
programs in isolation because it represents a comprehensive and 
carefully devised set of decisions. It achieves balance among 
force structure, modernization, pay, and benefits. Changes that 
are not informed by this context risk upending the balance and 
compromising the force.
    Second, this budget represents a way point, not an end 
point, in the development of the joint force we will need for 
2020 and beyond. It puts us on a path to restore versatility at 
an affordable cost. Specialized capabilities, once on the 
margins, become more central, even while we retain conventional 
overmatch. It builds a global and networked joint force that is 
ably led and always ready.
    Third, this budget honors commitments made to our military 
families. It does keep faith with them. There are no freezes or 
reductions in pay. There's no lessening in the quality of 
health care received by our Active-Duty servicemembers and 
medically wounded veterans.
    That said, we cannot ignore the increasing costs of pay and 
benefits. To manage costs, we need pragmatic reform. All of 
this can be done in a way that preserves our ability to recruit 
and retain America's talented youth.
    Finally, all strategies and the budgets to resource them 
carry risk. This one is no different. In my judgment, the risk 
lies not in what we can do, but in how much we can do and how 
often we can do it. This budget helps buy down that risk by 
investing in our people and in the joint capabilities they most 
need.
    To close, thank you. Thank you for keeping our military 
strong. Thank you for taking care of our military families, for 
supporting those who serve and who have served and who will 
serve. I know you share my pride in them. I look forward to 
your questions.
    [The prepared statement of General Dempsey follows:]

            Prepared Statement by GEN Martin E. Dempsey, USA

    Chairman Levin, Senator McCain, and distinguished members of the 
committee, it is my privilege to update you on the state of the United 
States' Armed Forces and to comment on the President's budget proposal 
for fiscal year 2013. The context for this year's posture testimony is 
unique. Our military has transitioned many of our major operations, and 
we have a new Defense Strategic Guidance that sets priorities. We are 
also facing real fiscal constraints and an increasingly competitive 
security environment. The President's proposed fiscal year 2013 defense 
budget accounts for these realities. It provides a responsible 
investment in our Nation's current and future security.

                       GLOBAL MILITARY OPERATIONS

    Today our Armed Forces stand strong. We are proud of the 
performance and accomplishments of our men and women in uniform over 
the past year. They have carried out far-ranging missions with much 
success. They have defended our Homeland, deterred aggression, and kept 
our Nation immune from coercion. Despite a decade of continuous combat 
operations, our troops and their families remain resilient.
    U.S. Forces-Iraq recently completed its mission. More than 20 years 
of military operations in and over Iraq came to conclusion. The 
security of Iraq is now the responsibility of the Iraqi people, 
leaders, and security forces. We have transitioned to a normal 
military-to-military relationship. Diplomats and civilian advisors are 
now the face of the United States in Baghdad. To be sure, Iraq still 
faces challenges to the country's future. But as we look to that 
future, we will continue to build ties across Iraq to help the people 
and institutions capitalize on the freedom and opportunity we helped 
secure.
    In Afghanistan, we are seeing the benefits of the surge in combat 
forces begun in early 2010. The security situation is improving. By 
nearly every measure, violence has declined. The Taliban are less 
capable, physically and psychologically, than they were 2 years ago. 
Afghan and International Security Assistance Forces (ISAF) have 
maintained persistent pressure on insurgent groups and have wrested the 
initiative and momentum from them in much of the country. But these 
groups remain determined, and they continue to threaten the population 
and the government. Combat will continue.
    Key to long-term stability in Afghanistan is the development of the 
Afghan National Security Forces (ANSF). In 2011, the Afghan National 
Army grew by 18 percent. The Afghan National Police grew by 20 percent. 
These forces, combined with the nascent but ever more capable Afghan 
Local Police, are steadily assuming responsibility for Afghan security. 
The process of transition began in July, and today, after nearly 
completing the second of five ``tranches'' of transition, Afghan 
security forces are now responsible for the day-to-day security of 
almost half of Afghanistan's population. Developing the ANSF, degrading 
insurgent capabilities, and turning over responsibilities have allowed 
us to begin a measured draw down of our forces in Afghanistan. We have 
withdrawn over 10,000 of the surge troops and will withdraw the 
remaining 23,000 by the end of this summer. By that time, we expect the 
ANSF to achieve their initial operating capability and to be 
responsible for securing nearly two-thirds of the Afghan population. 
They are on track to meet the goal of assuming full lead for security 
by the end of 2014.
    Sustaining progress in Afghanistan requires dealing with some 
significant challenges. The ANSF and other national and local 
government institutions require further development. Corruption remains 
pervasive and continues to undermine the capacity and legitimacy of 
government at all levels. Insurgent sanctuaries in Pakistan remain 
largely uncontested. Ultimately, much more work remains to achieve the 
political solutions necessary to end the fighting in Afghanistan.
    Our military has been vigilant and active in other areas and with 
other missions to keep America and our partners safe. We decapitated al 
Qaeda and pushed this terrorist network decidedly closer to strategic 
defeat through the successful special forces operation targeting Osama 
bin Laden. We supported NATO in its U.N. mission to protect civilians 
in Libya allowing them to end Muammar Qaddafi's tyrannical rule. We 
responded quickly to the devastating earthquakes and tsunami that 
struck Japan, saving lives and acting on our commitment to this key 
ally. We fended off cyber intrusions against our military's computer 
networks and systems. We helped counter aggression and provocation from 
Iran and North Korea.

                          A TIME OF TRANSITION

    While our military continues to capably and faithfully perform this 
wide array of missions, we are currently in the midst of several major 
transitions. Any one of them alone would be difficult. Taken together, 
all three will test our people and our leadership at every level.
    First, we are transitioning from a war-time footing to a readiness 
footing. With the end of our operations in Iraq and Libya and the 
ongoing transition of security responsibilities in Afghanistan, our 
troops are steadily returning home. From a peak of more than 200,000 
troops deployed to combat 2 years ago, we have fewer than 90,000 today. 
This shift cannot lead us to lose focus on ongoing combat operations. 
But, it does mean we must give attention to restoring our readiness for 
full spectrum operations. We need to reset and refit, and in many cases 
replace, our war-torn equipment. We need to modernize systems 
intentionally passed over for periodic upgrading during the last 
decade. We must retrain our personnel on skills used less often over 
the last decade. We will have to do all of this in the context of a 
security environment that is different than the one we faced 10 years 
ago. We cannot simply return to the old way of doing things, and we 
cannot forget the lessons we have learned. As described in the 
Department's recently released strategic guidance, we should adjust our 
missions, our posture, and our organizational structure in order to 
adapt to ever evolving challenges and threats.
    Second, our military is transitioning to an era of more constrained 
resources. The days of growing budgets are gone, and as an institution 
we must become more efficient and transparent. We must carefully and 
deliberately evaluate trade-offs in force structure, acquisition, and 
compensation. We must make the hard choices, focus on our priorities, 
and overcome bureaucratic and parochial tendencies. In sum, we must 
recommit ourselves to being judicious stewards of the Nation's 
resources.
    Third, tens of thousands of our veterans--and their families--are 
facing the transition to civilian life. Many enlistments are coming to 
their normal conclusion, but we are also becoming a leaner force. As we 
do this, we must help our veterans find education opportunities, 
meaningful employment, and first-class health care. We must pay 
particular attention to those bearing the deepest wounds of war, 
including the unseen wounds. We must help those who have given so much 
cope with--and where possible, avoid--significant long-term challenges 
such as substance abuse, divorce, depression, domestic violence, and 
homelessness. Addressing these issues is not the exclusive 
responsibility of the Services or veterans organizations. How we 
respond, as a military community and as a Nation, conveys our 
commitment to our veterans and their families. It will also directly 
affect our ability to recruit and retain our Nation's best in the 
future.
    I have outlined several priorities for the Joint Force to help us 
anticipate and navigate the challenges these transitions present. We 
will maintain focus on achieving our national objectives in our current 
conflicts. We will begin creating the military of our future--the Joint 
Force of 2020. We will also confront what being in the Profession of 
Arms means in the aftermath of war. Above all else, we will keep faith 
with our military family. In doing all these things, we will provide an 
effective defense for the country and strengthen the military's 
covenant of trust with the American people.

                        A RESPONSIBLE INVESTMENT

    The President's fiscal year 2013 Department of Defense base budget 
of $525 billion and overseas contingency operations (OCO) budget of $88 
billion represent a responsible investment in our Nation's security. 
The decisions underlying them flow from the strategic guidance the 
Department of Defense issued last month. This guidance set priorities 
for assessing our programs, force structure, and spending in the 
context of a persistently dangerous and increasingly competitive 
security environment. With those priorities in mind, the budget 
proposal strikes an appropriate and necessary balance between 
succeeding in today's conflicts and preparing for tomorrow's 
challenges. It accounts for real risks and real fiscal constraints, 
marrying versatility with affordability.
    The tradeoffs were complex, and the choices were tough. They will 
produce $259 billion in savings over the next 5 years and a total of 
$487 billion over the next 10 years. They will not lead to a military 
in decline. Rather, this budget will maintain our military's decisive 
edge and help sustain America's global leadership. It will preserve our 
ability to protect our vital national interests and to execute our most 
important missions. Moreover, it will keep faith with the true source 
of our military's strength--our people.
    The merits of this budget should be viewed in the context of an 
evolving global security environment and a longer term plan for the 
Joint Force. Coming on the heels of a decade of war, this budget begins 
the process of rebalancing our force structure and our modernization 
efforts and aligns them with our strategy. Essentially, we are 
developing today the Joint Force the Nation will need in 2020, and our 
plans to build this force will unfold over the course of several budget 
cycles. This budget is the first step--a down payment. If we fail to 
step off properly, our recovery will be difficult, and our ability to 
provide the Nation with the broad and decisive military options will 
diminish.
    It is worth addressing head-on some of the major changes we are 
planning as we adapt to changing global opportunities and challenges. 
Just as this budget must be viewed in the context of a broader plan, 
these changes must be viewed in the context of our evolving force. They 
represent a comprehensive, carefully devised package of decisions that 
strikes a fine balance. They are not, and cannot be viewed as, 
individual, isolated measures. In all cases, needed capabilities are 
preserved or, when necessary, generated, through one or several 
programs.
    This budget will make critical investments in our future force. 
Certain specialized capabilities, once on the margins, will move to the 
forefront. Networked special operations, cyber, and Intelligence, 
Surveillance, and Reconnaissance will become increasingly central. The 
results will be a Joint Force that is global and networked, that is 
versatile and innovative, and that is ably led and always ready. This 
force will be prepared to secure global access and to respond to global 
contingencies. We will be a military that is able to do more than one 
thing at a time--to win any conflict, anywhere.
    Particular attention will be placed on our anti-access/area-denial 
capabilities. The proliferation of technology threatens our unfettered 
access to the global commons--access that is fundamental to global 
commerce and security. As we rebalance our global posture to emphasize 
the Asia-Pacific region and the Middle East, we are adjusting our 
operating constructs and the systems we employ. This includes divesting 
some outdated ships, planes, and equipment as well as investing in new 
programs. We will also commit to our partnerships and to helping 
develop our partners' security capabilities.
    Similarly, this force will place added focus on our military's 
cyber defense capabilities. The threats to the average American's day-
to-day life and our military capabilities that emanate from cyber space 
have evolved faster than many could have imagined. We must adapt to 
these threats with similar adroitness and capacity. This budget allows 
for us to expand many of our nascent cyber capabilities and to better 
protect our defense networks. Similarly, bipartisan cyber legislation 
being introduced in Congress is a good first step in developing 
protection for our Nation's critical infrastructure. With much work to 
be done, we look forward to working with agencies across the government 
and with our allies and partners to confront this broad range of 
emerging threats.
    While some additional capabilities for our Joint Force will be 
needed, others will not. The Joint Force of the future will be leaner 
than today's. We will no longer be sized for large scale, prolonged 
stability operations. As a result, we expect to draw down the Army from 
562,000 to 490,000 by the end of fiscal year 2017, and the Marine Corps 
from over 202,100 to 182,100 by the end of fiscal year 2016. Some of 
this reduction was planned several years ago when Congress authorized 
temporary end strength increases to support our operations in Iraq and 
Afghanistan.
    But in making ourselves leaner, we will not make the mistakes of 
previous draw downs. We will not retain organizational structures that 
lack the people, training, and equipment necessary to perform the tasks 
we expect from them. We will be realistic about the organizations we 
keep, while also maintaining our ability to reconstitute and mobilize 
forces. We will still be able to respond to any large scale 
mobilization against us. To do this, the Joint Force will retain 
capacity in our Reserve components and our industrial base should they 
be required to surge. We will maintain the Army Reserve end strength at 
205,000 and reduce the Army National Guard by only 5,000 down to 
353,200. The Marine Corps Reserves will be retain their current 
strength.
    Another major concern among our troops, their families, retirees, 
and with the American public is military compensation and benefits. I 
want to make it clear that cuts in spending will not fall on the 
shoulders of our troops. There are no proposed freezes or reductions in 
pay. There is no change to the high quality health care our Active-Duty 
members and medically retired Wounded Warriors receive. But we cannot 
ignore some hard realities. Pay and benefits are now roughly one third 
of defense spending. Pay will need to grow more slowly in the future. 
We are also proposing a commission to review of military retirement. To 
control the growth of healthcare costs, we are also recommending 
changes to TRICARE. These adjustments include modest, new or phased-in 
increases in health care fees, co-pays, and deductibles largely for our 
retirees--but not our Active-Duty servicemembers. Even with these 
increases, TRICARE will remain one of the finest medical benefits in 
the country.
    Overall, these proposed changes value both the demands of military 
service and our duty to be good stewards of the Nation's fiscal 
resources. They will sustain the recruitment, retention, and readiness 
of the talented personnel we need. Most importantly, they will sustain 
our enduring commitment to our troops and their families--we must never 
break faith with them. I want to note, however, that keeping faith with 
our service men and women is not just about pay and benefits. It is 
also about ensuring we remain the best trained, best equipped, and best 
led force on the planet.
    The last, and perhaps most critical issue, is risk. This budget and 
the strategy it supports allow us to apply decisive force 
simultaneously across a range of missions and activities around the 
globe. They mitigate many risks, but they accept some as well, as all 
strategies must. The primary risks lie not in what we can do, but in 
how much we can do and how fast we can do it. The risks are in time and 
capacity. We have fully considered these risks, and I am convinced we 
can properly manage them by ensuring we keep the force in balance, 
investing in new capabilities, and preserving a strong Reserve 
component. We can also compensate through other means, such as 
effective diplomacy and strong partnerships. I believe that these risks 
are acceptable and that we will face greater risk if we do not change 
from our previous approaches.

                               CONCLUSION

    In the upcoming year, our Armed Forces will build on the past 
year's achievements, adapt to emergent challenges, seize new 
opportunities, and continue to provide for our common defense. We will 
continue to face threats to our security, whether from aggressive 
states or violent terrorist organizations. But our military will be 
ready for them, and our response will be a source of pride for the 
American people. In all of our efforts, we will aim to maintain 
strength of character and professionalism--at the individual and 
institutional level--that is beyond reproach.
    As we embark on this critical new course, we will need Congress' 
support to help us build the Joint Force the Nation needs and to 
strengthen our relationship with the American people. As I stated 
before, this budget and the choices that underlie it should be 
understood in the context of the comprehensive, carefully balanced, 
multi-year plan they support. These choices were tough. Some decisions 
will be controversial. But they call for an investment that allows our 
force to take the steps necessary to ensure our Nation's defense for 
years to come. We ask Congress to support this budget and, more 
importantly, to avoid the deep and indiscriminant cuts that 
sequestration would impose.
    I thank this committee, and the entire Congress, for all you have 
done to support our men and women under arms and their families. Your 
resolute attention to their needs and to our security has been both 
invaluable and greatly appreciated.

    Chairman Levin. Thank you so much, General.
    Mr. Hale, do you have any opening comments to make?
    Mr. Hale. No, sir, thank you.
    Chairman Levin. Okay, let's have a 7-minute round. I doubt 
that we'll get to a second round, but if there is any time 
after our first round, because I expect a good turnout, we will 
try a very short second round.
    General Dempsey, let me start with you. Do you and each of 
the Joint Chiefs of Staff fully support the new Defense 
Strategic Guidance?
    General Dempsey. Yes, Senator, we do.
    Chairman Levin. Do you and each of the Joint Chiefs of 
Staff fully support the President's fiscal year 2013 budget 
request?
    General Dempsey. Yes, Senator, we do.
    Chairman Levin. Now, can you tell us why?
    General Dempsey. Because we addressed it in the order in 
which you just presented it. Faced with the reality of a new 
fiscal environment, we took a look at our strategy and we made 
what we thought were important adjustments to it, not just 
based on the new fiscal reality, but also based on the lessons 
of 10 years of war and where we thought the security 
environment would take us in the out-years.
    I'm an advocate of looking beyond this particular budget 
submission, out to 2020, and we did that, with not only the 
Service Chiefs, but also with the combatant commanders. Then, 
having decided on what adjustments to make to our strategy, we 
built a budget to support it. So for that reason, we support 
it.
    Chairman Levin. General, you made reference to the risks 
that are increased when there are budget reductions. Would you 
expand on that, as you did in your prepared testimony, as to 
whether those risks are acceptable and why?
    General Dempsey. As I said, Senator, every strategy incurs 
risks because there's never--at least I've never in my 38 years 
experienced any strategy that was completely unconstrained. So 
I think it's important to note that there's always risk in 
every strategy and in every budget to support it.
    There's two kinds of risk we deal with. One is risk to our 
missions: Can we accomplish the tasks given to us by the 
national command authority for freedom of access, to defeat our 
enemies, to deter aggression? Then the other is risk to force, 
which gets at a phrase that would be familiar to you in terms 
of operations tempo: How much can we ask of the All-Volunteer 
Force in terms of its deployments and redeployments and 
redeployments?
    In both cases, we assess the risk to mission and the risk 
to force. We have found that there are portions of our 
capabilities that are more stressed. Again, that's not anything 
new to us. What we've been doing now for the past month and 
will continue to do is to look for ways to mitigate those 
risks.
    But we're very confident, because we've worked this 
collaboratively, that we can mitigate risks by adapting lessons 
from the last 10 years of war, new emerging capabilities. I've 
mentioned two notable ones to you in the past, special 
operating forces and cyber. The integration of all those and 
the interdependence of the joint force is what allows us to 
mitigate the risk to our operations plans and to do so at a 
sustainable rate.
    But there are risks, because there is always uncertainty in 
the future.
    Chairman Levin. Now to both of you: The OCO funding level 
of $88.4 billion is based on the assumption that there will be 
68,000 U.S. troops in Afghanistan for all of fiscal year 2013. 
You reiterated that, Secretary Panetta, in your opening 
statement. Now, that assumes that there will be no further 
drawdown of U.S. forces from Afghanistan during the 12 months 
after the 33,000 U.S. surge forces are withdrawn by the summer 
of this year. That's what the budget assumes.
    But last June, when the President announced the plans for 
the drawdown of the U.S. surge forces, he also said that after 
reduction of those surge forces, ``Our troops will continue to 
come home at a steady pace, as ASF move into the lead.''
    First, General Dempsey, are we on track to complete the 
withdrawal of the 33,000 U.S. surge force this summer?
    General Dempsey. Yes, sir, we are. If I could just 
elaborate a bit, General Allen's already reduced the force by 
10,000. I don't yet have his plan for the reduction of the 
additional 23,000, but in a visit with him last week he assured 
me that he would have that plan to us by about the 1st of 
April.
    Chairman Levin. Do you continue to support the President's 
decision to withdraw the U.S. surge force by the end of the 
summer?
    General Dempsey. I do and will continue to do so, unless 
General Allen comes back in to me and tells me we're incurring 
too much risk. But my own personal observation at this point is 
yes.
    Chairman Levin. Secretary Panetta, how do you square the 
fiscal year 2013 OCO funding assumption that the troop level of 
68,000 will remain in Afghanistan through fiscal year 2013 with 
the President's statement that U.S. troops will continue to 
draw down after this summer ``at a steady pace as ASF assume 
the lead for security''?
    Secretary Panetta. Mr. Chairman, as the President stated, 
we'll continue that process. But at this point, no decisions 
have been made as to how that will take place, because we're 
focusing, obviously, on the drawdown of the surge. The number 
that we have there is, frankly, a target number in order to 
support the OCO funding that we would need for the future.
    Chairman Levin. Will the decision be made as to when 
reductions will be made from the 68,000 level--and that level, 
again, is going to be reached by the end of this summer. When 
will that decision be made on further reductions after the 
68,000 level is achieved?
    Secretary Panetta. I think the target right now is 
obviously to focus on the reduction of the surge. As General 
Dempsey pointed out, we haven't received the plan from General 
Allen as to how we'll complete the reduction of 23,000. Once 
we've done that and we've learned the lessons from that, I 
think then we would apply it to deciding the next steps with 
regards to further reductions.
    Chairman Levin. That will be done by the end of the summer 
as currently contemplated?
    Secretary Panetta. Right.
    Chairman Levin. So when would the next decision be made on 
reductions beyond the surge reductions?
    Secretary Panetta. I suspect we'll begin that discussion 
process in the latter part of this year.
    Chairman Levin. Begin it or make a decision by the end of 
the year?
    Secretary Panetta. I assume we'll begin it, and if we're 
fortunate, we'll be able to make that decision. But the first 
thing is to discuss the lessons that we've learned and what we 
should apply and what level of force are we going to need for 
2013.
    Chairman Levin. Do you assume there will be further 
reductions beyond the 68,000 during fiscal year 2013?
    Secretary Panetta. Again, no decisions have been made.
    Chairman Levin. You assume that there will be.
    Secretary Panetta. I assume that, in line with what the 
President said, we'll continue to make transitions downward.
    Chairman Levin. Would there be savings then from any 
additional reductions below 68,000?
    Secretary Panetta. Will there be savings? Of course. 
Whatever we decide to do, it will achieve some savings.
    Chairman Levin. Senator McCain.
    Senator McCain. I thank the witnesses again.
    General Dempsey, were you asked by the administration to 
perform a risk assessment to our national security interests as 
a result of these cuts?
    General Dempsey. I have been asked and it's also codified 
in the National Defense Authorization Act (NDAA) that I perform 
a Chairman's risk assessment annually.
    Senator McCain. Is that forthcoming?
    General Dempsey. I have completed it. DOD has it, and they 
are required to submit with it a risk mitigation strategy.
    Senator McCain. So we have not received your risk 
assessment yet?
    General Dempsey. You have not, sir.
    Senator McCain. I want to return just for a second. 
Secretary Panetta, you again talk about the cataclysmic effects 
of sequestration. We are in total agreement. I hope in your 
meetings with the President that you will urge him to sit down 
with us and see if there are ways that we can avoid the effects 
of this.
    Have you made any plans yet to comply with the effects of 
sequestration in 2013?
    General Dempsey. No, we haven't.
    Senator McCain. In your view, Secretary Panetta, is Iraq a 
stable and self-reliant nation?
    Secretary Panetta. Iraq is a nation that has the capability 
to govern and secure itself. Does it continue to face risks in 
that process? Does it continue to face challenges in that 
process? It certainly does.
    Senator McCain. Do we still have U.S. military forces 
operating in Iraq?
    Secretary Panetta. We have a small number that are assigned 
there, approximately, I believe the number we're looking at is 
about 600 military and civilians that are assigned to the 
security operations there.
    Senator McCain. General Dempsey, I know you just returned 
from Egypt. All Americans are concerned about the events there 
concerning Americans who have had to move to the U.S. embassy 
in order to preserve their safety and security. We realize the 
absolute criticality of our relationship with Egypt and the 
role that Egypt plays in the Middle East. What advice, what 
recommendation, do you have as to how the U.S. Government 
should be handling this very, very tough situation?
    General Dempsey. Senator, I had planned this trip to Egypt 
before the nongovernmental organization crisis, and it is a 
crisis, occurred. So when I met with Field Marshal Tentawi, 
General Annan, and General Mwafi, the key leaders with whom we 
interact and have interacted for decades, I explained to them 
that I was coming there to talk to them about our military-to-
military relationship, about Syria, about Lebanon, about the 
Sinai, but that I couldn't do that because we had this issue 
that was an impediment to that. I spent about a day and a half 
in conversation with them, encouraging them in the strongest 
possible terms to resolve this so that our military-to-military 
relationship could continue.
    Senator McCain. The result of those conversations?
    General Dempsey. I am convinced that potentially they were 
underestimating the impact of this on our relationship. When I 
left there, there was no doubt that they understood the 
seriousness of it.
    But I'd like to add, Senator, I know of the amendment 
that's being proposed to break our military relationship and 
cut off all aid, and I think my personal military judgment is 
that would be a mistake.
    Senator McCain. I want to assure you that we are discussing 
that and ways to certainly avoid that action at this time. But 
I hope you explain to the rulers, who are the military and 
leftovers from the Mubarak regime, that this situation is 
really not acceptable to the American people. Our relationship 
with Egypt is vital, but the fact is that the welfare of our 
citizens is even more vital.
    General Dempsey. We completely agree, sir, and I did make 
that clear.
    Senator McCain. General, would you think it's a good idea 
to trade five high-ranking Taliban as a, ``confidence-building 
measure'' to move the negotiations with the Taliban forward?
    General Dempsey. I have some issues with the 
reconciliation, but generally speaking I'm in support of 
reconciliation. But I am concerned about our ability to 
maintain vigilance and control of those individuals. So I am 
supportive of reconciliation.
    Senator McCain. I don't know of any living person who 
isn't.
    General Dempsey. I join that group.
    Senator McCain. Does that mean that you, at this particular 
moment in time, would support the trade or the release to 
Qatar, understanding that under very loose security conditions, 
would be advisable at this time?
    General Dempsey. Sir, the Secretary has some certification 
requirements by law, and I'm supportive of the Secretary of 
Defense's approach to that and supportive of his effort to 
ensure we have those certifications.
    Senator McCain. Again I ask, with respect, for your opinion 
as to whether you think it's a good idea or not at this time?
    General Dempsey. Yes, I do.
    Senator McCain. Do you agree that it's a good idea, 
Secretary Panetta?
    Secretary Panetta. Absolutely no decisions have been made 
along this line. I can tell you this, that, based on the law 
that's passed by Congress, I have to certify that anybody who 
leaves Guantanamo cannot wind up going back to the enemy, and I 
have to be convinced that those kinds of protections are in 
place before I certify that anything like that happens. I have 
made very clear that unless I am convinced that in this kind of 
situation those steps are taken to ensure that these 
individuals do not wind up going back to the battlefield, I'm 
not going to certify that kind of transfer.
    Senator McCain. Even though approximately a quarter of 
those who have been released in the past have gone back into 
the fight.
    What is the progress of our negotiations with the Afghan 
Government, President Karzai, on a long-term security 
agreement, which we failed to reach in Iraq? What are the 
prospects of that and what are you expecting, and can you give 
us a timeframe?
    Secretary Panetta. We are continuing to work with President 
Karzai and our counterparts in Afghanistan to try to develop 
and agree on a strategic agreement. There are two areas that we 
still have difficulties with, one of which involves the 
transfer of detention facilities. The other involves night-time 
raids. We continue to try to see if we can work out some kind 
of compromise on those issues.
    As far as the basic agreement, I think most of the 
elements, frankly, are in place. So I'm confident that, 
hopefully within the next few weeks, we'll be able to reach 
some kind of agreement.
    Senator McCain. I thank you. I thank the witnesses. I would 
just add a comment. General, when the enemy thinks you're 
leaving, it's very unlikely in my study of history that they're 
ready to make an agreement, and they certainly have that 
impression throughout that part of the world.
    I thank you, Mr. Chairman.
    Chairman Levin. Thank you, Senator McCain.
    Senator Lieberman.
    Senator Lieberman. Thanks, Mr. Chairman.
    Mr. Secretary, General Dempsey, Mr. Hale, good morning and 
thank you for your service and your testimony.
    As I look at the budget that's been submitted and I hear 
your testimony today, it seems to me that in this budget the 
U.S. military and our national security are being asked to pay 
the price for the fiscal irresponsibility of our government 
over the last decade. The budget that you've submitted to us 
certainly in its bottom line is one that you were mandated to 
submit by the BCA that Congress adopted and the President 
signed last summer. But I must say as one member of this 
committee, one Member of the U.S. Senate, that as I look at 
what you have had to do to meet the bottom line requirements of 
the BCA, it represents, in my opinion, unacceptable risk to our 
national security, without proportionate changes in the threats 
that we face around the world.
    This budget for the coming fiscal year would represent an 8 
percent reduction in spending beneath what was planned in the 
5-year defense plan for the coming year, a 9 percent reduction 
for the 5 years. It, as we've discussed, would require the 
reduction of our Army and Marine Corps by 125,000 personnel. It 
would call for the termination or delay of several, in my 
opinion, critical defense equipment systems.
    It's hard for me to conclude that there's any reason you 
would make such a recommendation other than the fact that 
you're required by law to do it. In other words, what drives 
this presentation is the budgetary pressure, as I said, the 
accumulated weight of the fiscal irresponsibility of our 
government over the last decade, and the specific requirement 
of the BCA, not the threat environment in the world.
    Mr. Secretary, as you said, and I agree, this morning: 
``The United States still faces a complex array of security 
challenges across the globe. We're still a nation at war in 
Afghanistan. We still face threats from terrorism. There's 
dangerous proliferation of lethal weapons and materials. The 
behavior of Iran and North Korea threaten global stability. 
There's continuing turmoil and unrest in the Middle East. 
Rising powers in Asia are testing international relationships 
and there are growing concerns about cyber intrusions and 
attacks,'' said by you, Mr. Secretary, this morning.
    I agree with all that, and I think in that context my 
conclusion, I state again, is that there's always risk, but 
that the risk involved in this budget is unacceptable. 
Therefore, I believe that we have to have the political courage 
both in facing the budget for fiscal year 2013 and the threat 
of sequestration to work together across party lines and with 
the President and the administration to reduce the impact of 
these proposed cuts. We have to do it responsibly.
    We either have to find savings elsewhere or we have to have 
the political guts to raise revenues to pay for an adequate 
defense to, in my opinion, fulfill our constitutional 
responsibility to provide for the common defense.
    You have complied with the BCA in making this budget 
recommendation to us, but in my opinion, if we accept it, we're 
not fulfilling our responsibility under the Constitution to 
provide for the common defense. So I hope we can work together 
to essentially alter what we required you to do in the BCA and 
to do it in a fiscally responsible way.
    There is risk here and I appreciate, General Dempsey, that 
in response to Senator McCain's question, you said that you'd 
be preparing a Chairman's risk assessment for us. The Defense 
Strategic Guidance that DOD did, issued in January, really is 
the equivalent of a follow-on to a Quadrennial Defense Review 
(QDR). In the QDR, of course, we require a Chairman's risk 
assessment.
    I hope, Mr. Chairman, Senator McCain, that we don't act on 
this request and that the Appropriations Committees don't act 
on a budget request for DOD, before we get your risk 
assessment, because I think it's that important.
    But for now, since, Mr. Secretary, you said quite directly, 
with the directness that we've come to expect of you, that 
there is risk here, inevitably. You can't cut this much money 
out of the defense budget without risk. So I wanted to ask you 
and General Dempsey in advance of the formal report, what are 
the two or three top risks that you are concerned about that 
this budget places on our military and on our national 
strategy?
    Secretary Panetta. Senator, first of all, I'm abiding by 
the law, the law that was passed by Congress that required the 
reductions that we've proposed. I think, just to your comment, 
we have tried to step up to the plate and do our duty here. I 
think in weighing how you address this issue, you also have to 
take into consideration the national security threat that comes 
from the huge deficits and the huge debt that we're running. 
We're running a debt now that's comparable to our gross 
domestic product (GDP). At some point, Congress and the 
President have to address that larger issue. What I'm doing 
here is basically doing my part, as dictated by Congress.
    With regards to the threats, as I said, you can't take a 
half a trillion dollars out of the defense budget and not incur 
some risks. The main concerns that I see are that we are going 
to have a smaller force, and when you have a smaller force the 
ability to move that force where you have to is not going to be 
as easy as it would be with a larger force, the ability to move 
quickly, to be agile, to be able to deploy them. I think we can 
do it under the plan we've presented, but it clearly is an 
additional risk.
    The risk of mobilizing if we face a serious crisis and we 
have the need to mobilize, our ability to mobilize quickly, to 
pull the force together, as we had to do, frankly, after 
September 11, our ability to be able to do that and respond 
quickly and be able to deploy that force involves some risks. I 
think we've designed the way to do that by keeping a strong 
Guard and a strong Reserve, but nevertheless, that's an 
additional risk.
    We depend an awful lot on technology here. I think 
technology is very important, but our ability to develop that 
technology, to make sure that it works, to make sure that we 
have that leap-ahead capability, is something that involves 
some risks.
    Lastly, as I said, when you shave the budget by a half a 
trillion dollars, it leaves very little margin of error.
    Senator Lieberman. Right.
    Secretary Panetta. That, I think, is probably the biggest 
risk of all.
    General Dempsey. If I have time, Senator, I'd like to 
respond, because I will preview my risk assessment for you. I 
did not assess unacceptable risk in my assessment, and I don't 
believe this budget incurs unacceptable risk. I will tell you 
that I am prepared to say that sequestration would pose 
unacceptable risk, and here's why it's important to note.
    It's pretty clear. There's physics involved. In this budget 
we have decided to off-ramp a certain number of service men and 
women, and we've about maxed out our ability to do that with 
the proper dignity and respect to the force. So 10,000, 15,000 
a year is about as many as you can ask to leave and still have 
enough influence on how they do that.
    That's maxed out right now. It's pretty clear to me that 
we're going to have some challenges with infrastructure and 
changes to it, whether this committee and others agree with our 
recommendation for BRAC. So if we fix those two variables in 
sequestration, I can't ask soldiers, sailors, airmen, and 
marines to leave quicker than they're going to leave, and I 
can't touch infrastructure--sequestration leaves me three 
places to go to find the additional money: operations, 
maintenance, and training. That's the definition of a hollow 
force.
    Senator Lieberman. I thank you both for your answers. 
They're helpful to me. With all respect, I consider this budget 
to represent unacceptable risk to our national strategy, and I 
hope members of this committee across party lines will work 
together to reduce that risk in a fiscally responsible way.
    Thanks, Mr. Chairman.
    Chairman Levin. Thank you, Senator Lieberman.
    Senator Inhofe.
    Senator Inhofe. Thank you, Mr. Chairman.
    Let me just get on the record, Secretary Panetta, that 
there will be some of us at this table, and I'd be one of them, 
that would be opposing another BRAC round, really for two 
reasons: one, I think we've reduced our force, our capability, 
to an unacceptable level, and to bring our infrastructure down 
to meet what I consider to be as a member of this committee an 
unacceptable level, I think, is something I would not want to 
do.
    Then the second thing is, the problem we're facing right 
now is really an immediate problem. Everything is on fire. 
We're trying to put out the biggest fires. I'm going from 
memory now, but as I recall, all these BRAC rounds--and I've 
been here since the very first one--you lose money in the first 
5 years. So it's not going to really gain anything in terms of 
that. So there's going to be opposition up here.
    Secretary Panetta, I saw you on television on 60 Minutes, 
and I didn't envy you when you had to answer the question, to 
stop and think about how many combat operations there are, and 
you started counting on your fingers. So it is something that 
we've been talking about here. It is something very serious.
    But when you talk about the budget, I just want to get in 
here, so that--now that we have the President's new budget, we 
keep hearing about inheriting deficits and all of this. During 
the 8 years of President Bush, and these are the Office of 
Management and Budget's (OMB) figures, it was right at $2 
trillion. This President in his budget that he's proposed is 
$5.3 trillion in just 4 years. So, obviously, you're talking 
about just a huge amount of money.
    I saw in this morning's Washington Post they're talking 
about everything is growing in government, except--there it 
is--the military. I agree with the statements of the two 
previous speakers, that this is supposed to be our number one 
concern up here, defending our country.
    So anyway, I just would like to not press the thing. It's 
already been talked about enough on risk. But I only ask the 
question: When you actually meet with the Chairman and you come 
up with your risk assessment, when did you say that would be?
    Secretary Panetta. I anticipate it will be over here by the 
end of the month.
    Senator Inhofe. Okay.
    One of the commands that doesn't get a lot of attention is 
U.S. Africa Command (AFRICOM), and we remember that was divided 
into three commands. I think everyone in this room knows that 
we have done the right thing. However, I look at it as the 
forgotten command. It doesn't seem to get the attention.
    One of the things about AFRICOM is it gets its resources 
from the U.S. SOF that are in Europe, and right now, excepting 
the fact that as the pressure gets on in the Middle East, a lot 
of the terrorism, the potential terrorism, is going down 
through Djibouti and the Horn of Africa and spreading out 
there, so one of the great things that's happening with AFRICOM 
is the SOF are training the Africans.
    The number breaks down to about one SOF guy or gal is going 
to be responsible for 100 forces. I've seen this down there. I 
know it's happening. So the question I'd ask you, do you think 
there are impacts by moving out of the U.S. European Command 
(EUCOM) some of the SOF insofar as Africa is concerned?
    Secretary Panetta. First, I agree with you on the benefits 
of having an AFRICOM focused on those issues on that continent. 
Actually, we source our requirements into Africa and elsewhere 
through a global force management process. So it tends to be 
that European SOF have a particular habitual relationship, but 
there could be SOF and, for that matter, general purpose forces 
employed in Africa.
    We move the force around where it's needed. So I don't 
think the issue you described there with EUCOM will have any 
effect on Africa.
    Senator Inhofe. I'm glad to hear that. I appreciate that.
    This is an issue that no one's talked about yet and I don't 
know why I've been so close to it, but a good friend of mine, 
Specialist Christopher D. Horton, was killed over there. In 
fact, I was supposed to be meeting with him in Afghanistan a 
month later, but he was killed. His wife, Jane Horton, has 
worked for me and we've become very sensitive to the redacted 
investigation reports to families.
    I've talked to General Odierno about this. We've made 
progress on this. But I'm hoping that you will help us continue 
with that, because we have some of them--in the case of one of 
them, it went all the way from May 2010 until just about a week 
ago. I'd like to have some special attention given to that 
issue. The families of Specialist Augustus J. Vacari and Second 
Lieutenant Jered W. Ewy were killed in July 2011 and I think 
they should have their reports. So we're making progress, but 
I'm hoping that that's something that, with all these problems 
we're dealing with, that you'll be aware of and want to be of 
some help.
    General Dempsey. Could I just respond briefly, Senator?
    Senator Inhofe. Yes.
    General Dempsey. I'm very aware of that, and in fact, as 
you recall, I was at Specialist Horton's funeral with you. I 
just want to make two points. One is, this is the first 
conflict in which we've done a collateral investigation on 
every death, the first time in the history of warfare. We've 
learned the hard way, it's very resource intensive and it's 
important to get it right.
    The timeline on which these investigations are provided to 
families has been gradually improving and is the same, it's 
important to note, for Active, Guard, and Reserve. So it's not 
that the Active families get the investigation done faster than 
the Guard and Reserve. It's just a very challenging task, one 
which we're addressing.
    Senator Inhofe. Yes, I understand that. We went back and 
checked between the Active and the regular component and that's 
right.
    My question actually is meant to be a compliment, because 
we're making great progress on that.
    General Dempsey. Well, then, I withdraw my comments. 
[Laughter.]
    Senator Inhofe. In looking at the reset, we're going to be 
looking at a real problem after having gone through this for 12 
years, and it's going to be--my concern is that it comes from 
the right sources, that it's not going to come from the base 
budget. Is it your intention to have this come from the OCO 
when this time is before us? Do you think it will have a 
deteriorating effect on the base budget, on the reset, the cost 
of reset?
    General Dempsey. That's exactly why the OCO bill tends to 
be as high as it is, because we're not just looking at the cost 
of current operating forces. It's the recapitalization 
challenge we face beyond that. Is that a fair statement, Bob?
    Mr. Hale. Yes.
    Senator Inhofe. The last thing, because my time has 
expired, I had occasion to go down to Fort Worth and see the 
progress, what's happening right now with the F-35. There have 
been a lot of delays and I would just hope that we have a 
commitment from the two of you to progress on that program, 
because that's a very needed platform that we will be pursuing.
    Secretary Panetta. Senator, we need a fifth generation 
fighter. The F-35 represents that fifth generation fighter. 
We're committed to it. We just want to make sure it's done 
right.
    Senator Inhofe. Thank you.
    Chairman Levin. Thank you, Senator Inhofe.
    Senator Reed.
    Senator Reed. Thank you very much, Mr. Chairman.
    Thank you, Mr. Secretary, General Dempsey, Mr. Hale. We've 
talked a lot, and I think appropriately so, about the risks to 
the national security of the United States. But those risks are 
mitigated, not simply by what's done in the DOD budget; it's 
also mitigated by what's done in the Department of State (DOS) 
budget, the Department of Homeland Security (DHS) budget, TSA, 
the FBI, a whole host of agencies that contribute directly and 
indirectly to the national security of the United States.
    We've talked about the sequester, but to simply shift those 
costs in a potential sequester without additional revenue, 
strictly do it by cutting more, will invariably catch the FBI, 
DHS, TSA, contracting, and other functions that might not be in 
the purview of DOD, but significantly contribute to the risk 
that we run as a Nation. Is that an accurate perception, Mr. 
Secretary?
    Secretary Panetta. Oh, absolutely. I think, Senator, 
national security is dependent on all of the things you just 
cited, but frankly, it's dependent on more. We're talking about 
sequester on defense, but sequester also takes place on the 
domestic side of the budget. Very frankly, our national 
security is dependent not just on the national defense side of 
that ledger; it's dependent on the quality of life that we 
provide for our citizens. So all of that could be impacted 
through sequester.
    Senator Reed. One other aspect of this whole debate, as has 
been pointed out, has been, particularly with respect to those 
platforms that you've decided are not affordable at this 
juncture. But I would presume--and, General Dempsey, you might 
comment--that one of your calculations is not just the number 
of platforms, but the capability of platforms. As you've made--
particularly when it comes to both aviation platforms and 
ships, that you and your colleagues have made careful 
calculations about increased capabilities with those remaining 
ships versus what you'd have to do with the airplanes; is that 
accurate?
    General Dempsey. It is accurate, Senator. We mapped the 
budget decisions to the strategies. Fundamentally, are we going 
to deliver the strategy we've described, given the decisions 
we're about to make.
    As we've talked for years, we are moving toward platforms 
that are both more capable, but also multi-role. So for 
example, the A-10, and by the way, the uniform I wear, I'm a 
huge advocate of the A-10, the Warthog, because it provides 
close air support. But we're at a point where we think it's 
prudent to force ourselves into a more multi-role capability in 
that regard.
    So we did, we mapped the decisions to the strategy.
    Senator Reed. Thank you very much.
    One of the other aspects that's been brought up, and I 
think it goes to my initial question about the broader scope of 
national security, is that proactive engagement. I think one of 
the lessons of the last few years, proactive engagement is very 
helpful to us. Had we been more engaged in some countries, we 
might have mitigated the dangers we faced in the last decade.
    When you talk about your meeting in Egypt, when you talk 
about your multiple meetings in Pakistan, when you talk about--
a lot of that is, one might argue, just as critical to national 
security, but is not measured in terms of brigades or lift, 
airlift, et cetera. It goes also to the issue of special 
forces, not so much in their counterterrorism mission, but in 
their training and their collaboration mission.
    Can you comment on, General Dempsey, on how this budget 
will encourage proactive engagement at every level?
    General Dempsey. We've accepted as a core competency of all 
the Services building partner capacity. So when you have a 
chance to have Ray Odierno in here, for example, he'll talk 
about his desire to meet our strategy by taking general purpose 
forces who have been completely consumed in Afghanistan and who 
will be less consumed now and applying them in that role, a 
regionally aligned brigade, for example. So AFRICOM has a U.S. 
Army brigade in the Army Force Generation readiness cycle that 
can deploy in any number of ways, as headquarters, or it can 
send teams, it can reorganize itself, to go and engage nations 
in the particular combatant where it might be needed.
    So I think this budget does that and it is one of the ways 
that we are mitigating risk, as you suggest.
    Senator Reed. Mr. Secretary, you suggested and I think you 
said that one of the fastest growing areas of cost in your 
budget is personnel costs, particularly health care costs. 
You're looking at a very tight budget this year. I think even 
if we're able to settle some of our political fights up here, 
the idea of the defense growing at the rate it grew over the 
last decade is not within anyone's purview.
    At some point, if you don't take effective steps with 
respect to personnel costs, it becomes so big, in my view, that 
it eats into what is the great risk General Dempsey sees in 
sequestration: it all comes out of operations, maintenance, and 
training, and suddenly you have a force that is there, but it's 
not capable.
    Do you have a notion of sort of how much time we have left 
before this, these uncontrolled, unless we take steps, these 
costs eat up all of the operations and maintenance?
    Secretary Panetta. As I mentioned, this is an area of the 
budget that's grown by 90 percent, and it consumes now close to 
half of the defense budget. Right, Bob?
    Mr. Hale. About a third.
    Secretary Panetta. About a third, about a third of the 
defense budget is in the compensation area. The problem is at 
that rate of growth that's going on, it's moving more and more 
into these other key areas of the defense budget and crowding 
them out. So if compensation is not touched, if we don't 
control the costs of growth in the compensation area, what it 
means is that we're going to have to take it out of force 
structure, we're going to have to take it out of training, 
we're going to have to take it out of other systems, and it's 
going to mean that ultimately we won't have a balanced approach 
to dealing with the defense savings that we need to deal with.
    So even in talking with members, in talking with the 
generals, in talking with the chiefs, they acknowledge that, as 
tough as this is--and it is tough, because it affects, 
obviously, troops and their families and retirees--but if we 
don't begin the process of developing some kind of cost control 
in the out-years and limiting the growth that's taking place, 
then we're going to pay a very high price within the next few 
years.
    Senator Reed. Is that your conclusion, General Dempsey?
    General Dempsey. Senator, it is. We talk a lot about 
keeping faith and oftentimes that's equated to how many dollars 
we're putting in a soldier's, sailor's, airman's, or marine's 
pocket. But it's a lot more than that. Keeping faith is making 
sure they're the best trained, best equipped force on the 
planet. To do that, we have to balance the budget against all 
of the various levers we have to pull.
    Senator Reed. Thank you, gentlemen.
    Chairman Levin. Thank you, Senator Reed.
    Senator Wicker.
    Senator Wicker. Thank you very much, Mr. Chairman. I want 
to thank both of our witnesses for their service.
    Secretary Panetta, I want to ask you about the David 
Ignatius article from February 2. Let me just read the way it 
begins: ``Defense Secretary Leon Panetta has a lot on his mind 
these days, from cutting the defense budget to managing the 
drawdown of U.S. forces in Afghanistan. But his biggest worry 
is the growing possibility that Israel will attack Iran over 
the next few months. Panetta believes there is a strong 
likelihood that Israel will strike Iran in April, May, or June, 
before Iran enters what Israelis describe as a `zone of 
immunity' to commence building a nuclear bomb.''
    Mr. Secretary, did Mr. Ignatius accurately characterize 
your view and would you like to comment on that?
    Secretary Panetta. No, I usually don't comment on 
columnists' ideas about what I'm thinking. Usually it's a 
dangerous game to get into.
    But let me just express my thoughts, that Iran is of great 
concern. We have common cause with Israel, we have common cause 
with the international community with regards to the concerns 
about Iran. We have made very clear that they are not to 
develop a nuclear weapon. We have made very clear that they are 
not to close the Straits of Hormuz. We've also made very clear 
that they are not to export terrorism and try to undermine 
other governments.
    Those are areas that concern us, and it concerns the 
international community. As a result of that, the international 
community has taken strong steps on sanctions, on economic and 
diplomatic areas to bring pressure on Iran and to isolate them. 
I guess my preference, my view, is that we ought to keep the 
international community together in applying that kind of 
pressure.
    Senator Wicker. Do you believe there's a strong likelihood 
that Israel will strike Iran in April, May, or June?
    Secretary Panetta. I think, as the President has suggested, 
we do not think that Israel has made that decision.
    Senator Wicker. Were you mischaracterized? Did you have a 
conversation with Mr. Ignatius?
    Secretary Panetta. As I said, the comments that are 
included in a column about what I'm thinking or what I'm 
possibly worried about is up to the columnist.
    Senator Wicker. But did he interview you?
    Secretary Panetta. We talked, but we talked about a lot of 
things, frankly.
    Senator Wicker. Okay. Were you trying to send some sort of 
signal to the international community, either to Iran or 
Israel?
    Secretary Panetta. No.
    Senator Wicker. So you do not have a position as to whether 
it is likely that Israel will make such an attack this spring?
    Secretary Panetta. I do not.
    Senator Wicker. All right. Thank you for clearing that up. 
I will say that there were no quotation marks in that column, 
but it did sound a whole lot like a quote.
    As I understand it in the budget, in compliance with the 
BCA, Mr. Secretary, there's half a trillion dollars worth of 
cuts. If we had the sequestration, that would be another half a 
trillion. Now, what was your conversation with the 
administration, with OMB, within DOD, about submitting a budget 
that doesn't comply with the statute, because sequestration is 
the law of the land right now as I understand it?
    Did you consider submitting a budget that outlined the 
catastrophic results if sequestration does go into effect? Then 
what is your strategy to, as you say, detrigger, to work with 
this Congress to detrigger sequestration, which is the law of 
the land, you will acknowledge?
    Secretary Panetta. It is. Obviously, our approach was to 
deal with what the BCA had provided in terms of targeted 
savings in the defense budget. We frankly developed the 
strategy that we presented to based on really trying to lay out 
a strategy about where our force structure needed to be between 
now and 2020 and do it in a responsible way to protect our 
military force and to be able to respond to the threats that 
are out there.
    Sequestration has this, frankly, mindless formula that's 
already built into it, that basically cuts across the board. 
It's not as if we can take sequestration and make sense out of 
the damn thing. The fact is, it's going to happen the way it's 
supposed to happen, through this kind of mindless formula 
that's there.
    So our approach, frankly, was to not pay any attention to 
it. If it's going to take place in January 2013--and I hope 
that's not the case--then it will take place under its mindless 
procedure. But I don't think we ought to try to bring some kind 
of common sense to what is a crazy process.
    Senator Wicker. Let me underscore what Senator Lieberman 
said, that this budget makes us worry about risks. I understand 
what General Dempsey said, that he believes that there are 
risks, but they're not unacceptable. But the sequestration 
would prove unacceptable, and I hope there's a strategy to get 
that through.
    Thank you, Mr. Secretary, for mentioning the industrial 
base. We're at 8.3 percent unemployment right now. Undoubtedly 
the President is going to send a spending bill to Congress 
which he believes and the administration believes will create 
more jobs. It makes no sense to me, at a time when there's an 
effort to create more jobs with other spending, to cut defense 
spending, which gives us the twofer of protecting the country 
and protecting the industrial base, which is a whole lot of 
Americans out there working to provide us with the 
infrastructure we need.
    It is a fact, is it not, that this budget will have an 
adverse effect on our industrial base? Is that not right, Mr. 
Secretary?
    Secretary Panetta. We've taken a lot of steps to try to 
protect against that happening, because as I've said, we 
absolutely have to protect our industrial base and those 
industries that support the defense budget. We can't afford to 
lose any more. So for that reason, we've designed an approach 
that will keep them in business with regards to the systems 
that we're trying to develop for the future.
    Senator Wicker. Albeit with fewer industrial manufacturing 
jobs.
    Secretary Panetta. I understand that, and that does have 
some impact.
    Senator Wicker. Thank you very much.
    Chairman Levin. Thank you, Senator Wicker.
    I've asked Senator Akaka if he would yield 1 minute of his 
time to me and he's graciously said he would, because I want to 
clarify this issue of the budget and sequestration. As I read 
the budget which was submitted to us, there is additional $3 
trillion in deficit reduction above the trillion that has 
already been taken, which would, if this budget were adopted as 
submitted, avoid sequestration totally.
    Now, half of the additional $3 trillion is in revenue 
increases, including, as the President's budget says, tax 
reform, including the expiration of tax cuts for single 
taxpayers making over $200,000, married couples making over 
$250,000, by adoption of the Buffett rule. Then the budget 
document says that the President is offering a detailed set of 
specific tax loophole closures and measures to broaden the tax 
base that, together with the expiration of the high income tax 
cuts, would be more than sufficient to hit the $1.5 trillion 
target, which means if this budget were adopted and the revenue 
were included--and the revenue represents about half of the 
additional deficit reduction--you avoid sequestration.
    Is that your understanding?
    Secretary Panetta. Yes, my understanding is that in the 
President's budget there is a plan, obviously, to provide for 
the kind of additional deficit reduction that the country 
needs. But obviously, if it were adopted it would de-trigger 
sequestration.
    Chairman Levin. Okay, because that's not been stated here 
this morning, but I think it's very, very important. I tried to 
say it in my opening statement, but I don't know that I said it 
clearly enough. The budget that was submitted to us says it 
very clearly. That's the strategy. Whether Congress adopts it 
or not is a different issue, but sequestration can be avoided 
and hopefully will be, and the President has submitted his way 
to avoid it in his budget document.
    Senator Wicker. Mr. Chairman, I thank you for clarifying 
that, and I do look forward to the President's budget being 
brought to the Senate floor for an up or down vote.
    Chairman Levin. Thank you. I think the Republican 
alternative will also be brought to the Senate floor, if there 
is one. We look forward to seeing an alternative budget as 
well.
    So much for that. Back to Senator Akaka.
    Senator Akaka. Thank you very much, Mr. Chairman.
    Aloha to Secretary Panetta and General Dempsey, and thank 
you so much for your leadership and all you do for our country. 
Mr. Secretary, my aloha to Sylvia, too. I notice that the PGA 
Tour was just at Pebble Beach. Had you chosen a different path 
than you're on now, you could have been at home in Carmel 
playing in the Pro-Am with your friends. But no, your 
dedication to continue serving our country puts you before us 
today. That says a lot, a lot about you and who you are. I've 
known you, as we know, since we served together in the House.
    In all seriousness, I really appreciate your dedication and 
your hard work, Mr. Secretary. I add my appreciation to the 
brave men and women of the Armed Forces who lead and their 
families for their service and sacrifice.
    Secretary Panetta, it is impossible to overstate the 
importance of our military engagement in the Asia-Pacific 
region. It's obvious that there are many challenges in this 
area, given the new focus on this vital region. If you look at 
continuing developments in the Pacific, our conventional 
adversaries are advancing and it is critical we maintain our 
superiority in the region.
    Given the many demands on the defense budget, as you 
mentioned, and the unique mission and environment we have in 
the region, my question to you is, how does DOD's fiscal year 
2013 budget impact our military readiness in the Pacific 
region?
    Secretary Panetta. That's obviously a primary concern for 
us, because we do believe that it is important to maintain a 
strong presence in the Pacific. For that reason, we maintain 
the 11 carriers in the Navy in order to ensure that we have 
sufficient forward presence. There's nothing like a carrier to 
be able to allow for quick deployment in that area, and that 
will give us a great capacity to be able to show our force 
structure in the Pacific.
    In addition to that, we're going to maintain, obviously, a 
military presence. We already have one in Korea, but we're 
going to maintain an additional rotational presence with our 
Marines throughout that area. We've just developed an agreement 
with Australia to do a rotational presence there. We're working 
with the Philippines on hopefully a similar arrangement there 
as well.
    In addition to that, obviously, we have our air bases and 
the forward deployed air assets that will give us the 
capability to cover that area as well. So we feel very good 
about the force structure that we have in this budget and our 
ability to maintain a real presence in the Pacific.
    Senator Akaka. Thank you.
    General Dempsey, the United States has been attempting to 
engage China with military-to-military exercises and other 
cooperative opportunities, including humanitarian and disaster 
relief operations, and you've done well. General, how do you 
foresee these efforts at engagement proceeding as the U.S. 
focuses resources in the Pacific?
    General Dempsey. I think the strategy is actually quite 
sound. By the way, it's important to note we never left the 
Pacific, so the idea of rebalancing ourselves globally is just 
that, it's rebalancing. It's not a light switch on or off or a 
pivot. That word got ahead of me a bit.
    We're rebalancing our strategy and we're doing that based 
on the trends, demographic trends, economic trends, and 
military trends. In so doing, we do have the opportunity to 
increase our engagement with the People's Republic of China, 
because there are many things with which we have a common 
interest. They've been working with us in the Gulf of Aden on 
counter-piracy for some time.
    We've had military-to-military engagement. It hasn't been 
as consistent as we'd like it. We have a chance, I think, now 
in the coming months to reemphasize it. I think that will 
assist us in implementing our strategy. So this is an 
opportunity for us, Senator, and we intend to take it.
    Senator Akaka. Thank you.
    Mr. Secretary, I am a true believer in our Special Forces. 
Having visited the SEALs conducting training operations, I have 
seen firsthand the talent and dedication of our Special Forces 
personnel. Special Forces units are likely to do more in the 
future. I want to make sure that as an end result, as end 
strength numbers are reduced, that the career fields--they 
could be fields in communications and logistics as well--which 
support and help the Special Forces complete their missions are 
not reduced to a point which could limit the overall readiness 
of Special Forces units.
    General, can you share any thoughts also on this?
    General Dempsey. I can, sir. To your point, one of the 
lessons of the last 10 years or certainly among the lessons of 
the last 10 years is that the SOF have demonstrated their 
versatility and their capabilities, not just in the 
counterterror realm, but also in the building partner capacity, 
security force assistance.
    One of the things we've been talking about with the Service 
Chiefs is finding a new paradigm where we will partner 
differently with SOF to give us greater capability, synergy. 
The sum is greater than the individual parts. We're working on 
that. The Army, for example, is working on habitual 
relationships of the enablers you're talking about--lift, 
medical, communications.
    So I can assure you there will be no degradation to our 
Special Operations community. But I also want to assure you we 
cannot put all of our eggs in that basket because, as I've said 
in previous testimony, SOF are just that, they're special. If 
we go too far in that direction, then the conventional force 
becomes the special and the SOF no longer have that capability. 
So we just have to find the right balance, and we're working on 
it.
    Secretary Panetta. Senator, there's no question that 
Special Forces--through their agility and their ability to 
deploy quickly, represent a very important force for the 
future. They've been very effective, as we know, in terms of 
terrorism. But as the General has pointed out, they've also 
been very effective at developing partnerships with other 
countries, working with them, doing exercises, providing 
advice. They have a great capability there.
    So I think the kind of force we're looking at, obviously, 
as the General has pointed out, is to maintain a strong Army 
that can confront a land enemy and be able to defeat that enemy 
in a land war, but at the same time develop the kind of 
rotational capability, using Special Forces, using the Marines, 
using elements of the Army as well, to be able to have a 
presence elsewhere in the world. That would give us the best of 
all things.
    Senator Akaka. Thank you very much.
    Chairman Levin. Thank you, Senator.
    Secretary Panetta. By the way, Senator, I should point out 
that we are increasing our Special Operations. I think the 
numbers, we're going to increase them by 3,000. We're putting 
about $10.4 billion more along those lines.
    Chairman Levin. Thank you, Senator Akaka.
    Senator Brown.
    Senator Brown. Thank you, Mr. Chairman.
    Mr. Chairman, since you brought up the budget, certainly 
I'm looking forward to voting again on the President's budget. 
It's been over 1,000 days since the Senate's put out a budget. 
I and the American people would like that to be different and 
have that come up at some point.
    That being said, I have, with 7 minutes, a lot of other 
questions. I'm going to submit some for the record. Mr. 
Secretary, one of them I will be discussing is the Global Hawk 
Block 30 program. I'm going to be asking about the cost 
comparisons between the U-2 and the Global Hawk, have they been 
reviewed, particularly as it relates to sustainment? Can the U-
2 alone provide the ISR necessary in order to meet the 
operational requirements? That will be one of them.
    In addition, I live in an innovative State, Massachusetts, 
and we have an innovative base, Hanscom, in dealing with the 
cybersecurity threat. I agree with the chairman--before we talk 
about any BRAC closures, I would hope that we would continue to 
work on the cybersecurity emphasis on areas and bases like 
Hanscom, because I think that is the next real area where we 
need to focus on, as referenced in your earlier testimony.
    Taking it a step further, the Air Force has proposed 
restructuring its civilian workforce to the tune of about 
16,000 civilian contracted employees. I would ask that you keep 
in mind these restructuring efforts as it affects the small 
businesses, as Senator Wicker and others have referenced and 
you referenced in your comments. It affects, obviously, 
Hanscom, Westover, and other bases throughout the country. I 
know Senator Ayotte and I are deeply concerned about that.
    One of the observations I made as I served in Afghanistan 
this summer was, obviously, the drawdown. I have felt that we, 
if we do it thoughtfully and methodically, can transfer 
authority and control over to the Afghans, but if we do it too 
quickly, we're going to be in deep trouble and we'll lose all 
those benefits that we had.
    One of the things that I referenced and acknowledged 
through speaking and meeting with all the generals and with 
General Allen, is the fact that we have so many audits going on 
right now, without referencing any particular directorate, one 
general had 75 audits going on at once. So I said to him: ``How 
can you actually expect to do the drawdown, as General Allen's 
doing, and then continue to do your mission, keep our soldiers 
safe and secure, and then complete the audits?'' He says: ``We 
can't; something has to give.''
    So, General Dempsey and Mr. Secretary, I would ask you to 
seriously look at that. If we're going to be doing this 
drawdown, we absolutely need to address these audit issues, 
there's so much duplication right now, and it's just, I think, 
some agencies justifying their existence. So I'm hoping you can 
comment on that issue.
    General Dempsey. I won't comment on them justifying their 
own existence, because they'll audit me if I do that and I 
don't want to go there. [Laughter.]
    Senator Brown. I hear you.
    General Dempsey. But I share your concern, sir. I've been 
on the receiving end of it, and there is clearly a need to be 
auditable because the Nation is investing incredible resources. 
But it has gotten a bit out of control, and my J-8 and the 
Under Secretary for Policy are both working to squeeze those 
audits to make sure they're not redundant, because some of them 
are redundant. They're absolutely duplicates. If you read them, 
which I have, you'll see they're the same exact thing. There 
has to be a central location or a central effort to do that, 
because the troops can't do their jobs and work 24/7 on audits 
and then go expect to perform the mission, which is obviously 
very serious.
    That being said, in Iraq, with obviously us being out of 
there, is it accurate that we now have over 100,000 civilian 
contractors there doing the job that ultimately our soldiers 
did? In fact, if that is so, is the cost two to three times 
more than what we were paying our soldiers? If that is the 
case, where is that money coming from?
    Secretary Panetta. Go ahead.
    General Dempsey. Thanks, sir. [Laughter.]
    I don't have the exact numbers. At one time towards the end 
of the calendar year, I was tracking those numbers on a daily 
basis.
    Senator Brown. It's substantial.
    General Dempsey. Oh, it is substantial, sir.
    Senator Brown. We're paying two to three times more, and 
we're paying two to three times more than we were paying the 
average soldier.
    General Dempsey. In some functions we are paying more. 
Security force or security details are more expensive, but 
other places, logistics, transportation, we're not paying as 
much as you would normally pay a soldier.
    But we have that information, if you place that question in 
the record.
    Senator Brown. Yes, I'd like to do that and get that for 
the record, because I'd like to know where that money is coming 
from and how that's being worked into the budget.
    [The information referred to follows:]

    The 2010 Quadrennial Defense Review acknowledged that contractors 
are part of the total force, providing an adaptable mix of unique skill 
sets, local knowledge, and flexibility that a strictly military force 
cannot cultivate or resource for all scenarios, permitting our nation 
to concentrate military resources on those areas which are inherently 
governmental. Contractors provide a broad range of supplies, services, 
and critical logistics support in many capability areas, while reducing 
military footprint and increasing the availability and readiness of 
resources.
    Currently, there are 10,967 contractors on the Department of 
Defense (DOD) contracts in Iraq. Of that, private security contractors 
make up 2,991, 84 percent of which are third country nationals (TCN) 
that earn, on average, lower salaries than U.S. servicemen. The average 
TCN security contractor earns $17,751 per guard, per year. In 
comparison, pay and benefits (annual composite rate) for an E-5 is 
$76,381.
    DOD funds to support these contracts are requested in the Overseas 
Contingency Operations budget.

    Senator Brown. In terms of the reverse, General Dempsey, in 
terms of the understanding of the term ``reversibility,'' it's 
a general concept designed to ensure the total force stays 
prepared for unexpected contingencies as the Active component 
inevitably gets stronger. How does the Guard and Reserve work 
in? I know you referenced it briefly, but I would think, 
obviously being in the Guard, that you would get more valuable 
dollars, more bang-for-the-buck, so to speak?
    Is there an effort, a real sincere effort, to push a lot of 
the training responsibilities, mobilization, et cetera, to the 
Guard and Reserves?
    General Dempsey. This effort, the new strategy and the 
budget to support it, has caused each Service to relook at how 
they balance across components--Active, Guard, and Reserve. 
I'll give you an example why that's an important conversation. 
Senator McCain in his opening comment cited that we were 
reducing 20 percent of the BCTs in the Army. That's true for 
the Active component brigades, but if you look at the totality 
of BCTs, which after this change will be 68, then the 8 is 
really an 11 percent degradation or decline in BCTs.
    So your point is an important one. We have to look at what 
this total force and the joint force provide, not strictly what 
we're doing to any one of them, and we are doing that.
    Senator Brown. I would ask you to pay particular attention 
to the Air Guard and take a look at moving some missions into 
the Guard portfolio, because you do get a better bang-for-the-
buck, I would argue.
    The other big elephant in the room, aside from 
sequestration, is the fact that we have approximately 1 million 
servicemembers expected to join the veterans ranks in the next 
5 years, and unemployment among young veterans is very high, 
and it's high also in the Guard and Reserves. Is there a 5-year 
plan to meet the expected demand, and how are we working with 
the Department of Veterans Affairs (VA) to address these 
important issues?
    Secretary Panetta. Senator, you've raised a very important 
point, because as we go through these additional drawdowns we 
absolutely have to make sure that a support system is out there 
as our men and women come back from service. We are working 
with the VA in a number of areas, number one to try to provide 
a jobs pool so that these veterans will have the opportunity to 
get jobs in the private sector.
    Second, we're working with the VA to try to improve the 
seamless approach, so that when it comes to health care and 
benefits, that people can move without long delays, without a 
lot of bureaucracy, from coverage under the defense budget to 
coverage under the veterans budget.
    In addition to that, we're providing a lot of counseling 
and support systems by all of the Services to make sure that 
these families are supported once they come out so that they 
can readjust. If they want to go into education, the education 
benefits are provided. If they want to get a job, jobs are 
provided. If they want to go into small business, we provide 
the small business loans to assist them.
    So there is a pretty solid package. We have to continue to 
work at it and make sure that it's working and that it's 
meeting the need. But we are very concerned that we have that 
support system for these troops when they get out.
    Senator Brown. I'd be eager to offer my assistance on those 
very real issues. It's something that we've been working on in 
Massachusetts for a very, very long time and have some real 
knowledge about that issue.
    Mr. Chairman, I'm presuming we'll have an opportunity to 
add questions for the record and there will be a time allotted 
to do so, the response?
    Chairman Levin. Yes, there will be questions that are asked 
for the record, and we'll ask our witnesses to promptly 
respond.
    Senator Brown. Thank you.
    Chairman Levin. Thank you, Senator Brown.
    Right after Senator Nelson's turn, we're going to take a 5-
minute break. Senator Nelson.
    Senator Nelson. Thank you, Mr. Chairman.
    Thank you, gentlemen, for your service. Currently, progress 
is being made toward the new U.S. Strategic Command (STRATCOM) 
headquarters at Offutt in Nebraska, a new command and control 
complex for STRATCOM. Now, the entire project has been 
authorized, but because of the nature of this project DOD will 
have to request phased-in or incremental funding as we move 
along over a multi-year construction project.
    Much has been said about cyber today. Mr. Secretary and 
General Dempsey, could you explain the basis for, the need for 
a new headquarters dealing with almost every aspect of our 
military, defense and offense? Mr. Secretary?
    Secretary Panetta. Senator, we think it's extremely 
important because STRATCOM is obviously extremely important to 
defending the Homeland. In order to defend the Homeland, you 
have to develop the capabilities that we're facing right now, 
and cyber obviously is one of those areas. Our ability to 
develop the latest technology, the latest abilities in order to 
not only defend ourselves, but understand what that threat is 
about, is extremely important. We have to be able to develop 
the kind of communications systems that are the state-of-the-
art, so that they can deal with quick communications.
    In that area, any time we face a threat there is an 
immediate response that has to take place and has to take place 
quickly and effectively. Frankly, we need good systems in order 
to make sure that happens. So for all those reasons, it's 
important to our future that we develop that kind of capability 
there.
    Senator Nelson. It's safe to say that what the internal 
components are within the structure would be equally important 
as the structure itself. In other words, it's going to be a 
high tech complex to be able to deal with the modern challenges 
we have.
    General Dempsey?
    General Dempsey. Without talking about the structure 
itself, I will tell you that the Service Chiefs, combatant 
commanders, and I have begun a series of strategic seminars to 
look at ways to better integrate, to learn lessons, and to 
ensure that we can deliver our strategy with the force that 
this budget will provide.
    We know we can. We're looking at now how do we mitigate 
change. One of the emerging insights I'll share with you is 
that any regional conflict in the future--and we're looking out 
in this budget to 2017. So in 2017, any regional conflict will 
impact in the continental United States, in the Homeland, 
without a doubt. That is to say, the Homeland is no longer a 
sanctuary in 2017.
    Therefore, commands like U.S. Cyber Command (CYBERCOM) and 
STRATCOM become more important in that environment.
    Senator Nelson. Thank you.
    I have a lot of concerns about our presence in Iraq. We've 
had questions raised about the number of contract employees 
there, contractors. I also understand that DOS is now in a lead 
role trying to decide what the mission is in Iraq. We have the 
largest embassy in the world and it's growing, physically 
growing, but we don't have an established mission.
    I know that part of this will be DOS, but I assume that DOD 
also has a vital role in establishing that mission.
    Secretary Panetta, might you fill us in on what progress is 
being made to establish a mission? It seems like we have the 
cart before the horse here, but perhaps you can help us.
    Secretary Panetta. Frankly, I think DOD has a pretty good 
plan there that we're implementing. We have about eight sites 
that we're located in. We're working with foreign military 
sales (FMS) that are being provided to the Iraqis. We're 
providing training. We're providing support. It's both DOD and 
contract individuals that are working in those sites. It's 
pretty limited, but it's very helpful to the Iraqis in terms of 
their ability to develop security for the future.
    In addition, we're open to continuing to discuss with them 
additional opportunities, particularly with regards to other 
operations, going after al Qaeda, et cetera, that we think are 
important to continue as well.
    So I think we feel pretty good about the mission that we're 
performing right now there.
    General Dempsey. Yes, absolutely, sir. We've built the 
Office of Security Cooperation-Iraq based on the capabilities 
that the Iraqi Government wanted us to support them, how they 
wanted to be supported, notably with the program of record for 
FMS and then institution-building. We have our resources mapped 
to those functions, and I'm very confident that we have the 
Office of Security Cooperation sized about right for now.
    If they were to choose to expand our relationship in any 
way, we could do so.
    Senator Nelson. There seems to be room within that 
structure to expand, because of the size of the structure. I 
don't mean to minimize the necessity of having the presence in 
Iraq, but it seems like the structure is going to be more than 
adequate to take care of our needs. When I emphasize ``more 
than adequate,'' it's consistent with the DOD Inspector 
General's criticisms or observations about the size of the 
structure and continuing to expand without a stated mission. I 
hope we can get where we feel like we can state what that 
mission ultimately is.
    I'd like to turn to Iran for just a minute. It seems like 
every time we check any of the news today Iran is involved in 
it--questions about Iran engaging in terrorist activities in 
two locations around the world in the last day or so, the plot 
to take out the Saudi Ambassador to the United States, Mr. Al-
Jubeir. You said, Secretary Panetta, on 60 Minutes, it's a red 
line for us and it's a red line obviously for the Israelis if 
they have the ability to deliver a nuclear weapon with a 
missile. What are your opinions about that, if you might be 
able to enlighten us a bit more?
    Secretary Panetta. As I said, we have a number of concerns 
here that we worry about with regards to Iran. Those are 
concerns that we share not just with the Israelis but with the 
entire international community. As the President himself has 
stated, we will not tolerate an Iran that develops a nuclear 
weapon, and yet they continue, obviously, to try to improve 
their nuclear enrichment capabilities. That's something that 
concerns us a great deal.
    They continue to threaten the possibility of closing the 
Straits of Hormuz, and we have made very clear that that is a 
red line for us, that that Strait is extremely important to 
free commerce and to shipping and to the shipping lanes, and 
would have a huge economic impact if that were to happen. That 
too is unacceptable and not tolerable for the United States.
    We're concerned about Iran and the spread of terrorism, the 
fact that they seek to undermine legitimate governments around 
the world. That too concerns us. We think that the approach of 
the international community to apply sanctions, to apply 
diplomatic pressure, is having an impact. It has isolated Iran. 
It's made very clear to them that they have to change their 
behavior. I think that we need to keep that pressure on. That's 
an important effort. I think the international community is 
unified in that effort, and I guess my hope would be that we 
could all stick together in ensuring that we continue to 
isolate Iran and make very clear to them that they should 
choose to join the international community, the rules and the 
laws and the regulations of the international community, and 
become part of that family. If they choose otherwise, then--
that would have serious implications.
    Senator Nelson. Our concern is more than just about their 
nuclear capacity, although that is a very important part. But 
are the actions that they're taking beyond being pesky, in 
terms of what they are intending to do?
    Secretary Panetta. It's far beyond being pesky. It's 
deliberately supplying equipment and arms to others to engage 
in terrorist activity, and that too concerns us very much.
    Senator Nelson. Thank you.
    Thank you, Mr. Chairman.
    Chairman Levin. Thank you, Senator Nelson.
    We'll take a short break.
    [Recess from 11:46 a.m. to 11:56 a.m.]
    Chairman Levin. We'll come back to order.
    Senator Portman has yielded to Senator Graham, and then 
we'll put Senator Portman back in his order when he returns. 
Senator Graham.
    Senator Graham. If we could earmark, I would help Ohio. So 
I just want to let Rob know I appreciate this very much. 
[Laughter.] I have to run.
    Secretary Panetta, do you believe it's a viable strategy 
for the United States to try to contain a nuclear-armed Iran?
    Secretary Panetta. Yes, indeed.
    Senator Graham. The idea of containment. Shouldn't we 
prevent them from getting a nuclear capability, not contain 
them?
    Secretary Panetta. It's not just contain, but it's 
obviously doing everything we can to prevent them from 
developing.
    Senator Graham. Right. I guess my question more correctly 
asked is, if they get a nuclear weapon, do you think the idea 
of containment is a way to go? Should we prevent them versus 
containing them?
    Secretary Panetta. No, I think we have to prevent them.
    Senator Graham. Because if they got a nuclear weapon the 
damage is done. Other nations follow suit. Terrorists are more 
likely to get the material. So the Secretary of Defense's view 
is that the idea of containing a nuclear-armed Iran is not the 
way to go; the idea is to prevent them from doing it. 
Hopefully, we can do it through sanctions and diplomatic 
engagement. I hope we can.
    Okay, China. General Dempsey, there are a lot of media 
reports that the Chinese routinely, the People's Liberation 
Army (PLA), engages in cyber attacks of our business and 
national security infrastructure. Do you believe that is a 
reality of the 21st century?
    General Dempsey. I believe someone in China is hacking into 
our systems and stealing technology and intellectual property, 
which at this point is a crime. I can't attribute it directly 
to the PLA.
    Senator Graham. Let's say if we could find that the PLA was 
involved in hacking into our defense infrastructure, would you 
consider that a hostile act by the Chinese?
    General Dempsey. I would consider it to be a crime. I think 
there are other measures that could be taken in cyber that 
would rise to the level of a hostile act.
    Senator Graham. What would they be?
    General Dempsey. Attacking our critical infrastructure.
    Senator Graham. That could be a hostile act?
    General Dempsey. I think so.
    Senator Graham. Allowing us to respond in kind?
    General Dempsey. In my view that's right, yes, sir.
    Senator Graham. So I'm going to have lunch with the Vice 
President of China in about 20 minutes. So what do you want me 
to tell him? [Laughter.]
    General Dempsey. Happy Valentine's Day. [Laughter.]
    Senator Graham. All right, okay. I'll do that.
    Chairman Levin. By the way, Senator Graham, in my opening 
statement I made it very clear that the cyber espionage going 
on from China has to stop and it's mighty serious stuff. So you 
can pass along, if you would, that comment as well.
    Senator Graham. All right. Would you consider it a hostile 
act?
    Chairman Levin. I sure would.
    Senator Graham. Okay, I would, too.
    Chairman Levin. But Happy Valentine's Day. [Laughter.]
    Senator Graham. It ought to be an interesting lunch. 
[Laughter.]
    Secretary Panetta, in 2014 the game plan is to transition 
to Afghan security force control; they're in the lead, is that 
correct?
    Secretary Panetta. That's correct.
    Senator Graham. We'll have a training mission, we'll be 
providing intelligence gathering, providing capabilities they 
are not quite yet capable of doing, like airlift; is that 
correct?
    Secretary Panetta. That's correct.
    Senator Graham. Do you support the concept of a follow-on 
force past 2014 that's part of a strategic partnership 
agreement, that would have a military footprint post-2014 that 
would allow American air power to remain in Afghanistan along 
with special forces units, at the Afghans' request? Do you 
think that is in our national security interest to consider 
such a follow-on force?
    Secretary Panetta. I believe, as the President has stated, 
that we have to have an enduring presence in Afghanistan. We 
need to, obviously, discuss what those missions are, but I 
think clearly counterterrorism operations is one of those 
missions. Training and advising is one of those missions. 
Providing the right enablers is one of those missions. 
Obviously providing air support is one of those missions as 
well.
    Senator Graham. So you would agree with the concept that 
post-2014 if we had a configuration of American forces with 
adequate air power to assist the Afghan security forces, plus a 
Special Forces component, the Taliban days are over in terms of 
military conquest?
    Secretary Panetta. That ought to be the goal.
    Senator Graham. I think that ought to be the goal and I 
think you could do this with 15,000 or 20,000 troops, with 
several air bases spread throughout the country. To a war-weary 
public: We have air bases everywhere. If we leave Afghanistan 
and the issue is in doubt about the future of the Taliban, we 
will regret it. If we leave Afghanistan in a way to create a 
certainty about the Taliban's future, I think we can hold our 
heads up high.
    Do you think Iran is watching what we're doing in 
Afghanistan?
    Secretary Panetta. I would think without question.
    Senator Graham. General Dempsey, what is your biggest 
concern and your best hope about Iraq?
    General Dempsey. I'll start with the best hope, and that is 
that they appear to be committed to resolving the contentious 
issues among them politically, not through violence, with the 
exception of a few of the violent extremist organizations which 
remain there.
    My biggest concern is that they could potentially come to a 
decision that they no longer need our help. They might look 
elsewhere. That's why our Office of Security Cooperation there 
remains a very vital part of our strategy.
    Senator Graham. Do you see the security situation in Iraq 
getting worse or better?
    General Dempsey. I see it as being in a form of stasis 
right now. I think it is what it is for the foreseeable future, 
with of course the potential for it, based on some political 
decisions they might make, with increasing tension, for example 
in the Arab-Kurd region.
    Senator Graham. When it comes to the military budget, I 
don't see DOD as a job creator for America. That's one of the 
benefits, but I don't think we should view DOD as a way to just 
create jobs to deal with unemployment. I think we should have a 
robust defense capability to defend our values. So in that 
light, I do believe it's appropriate to reduce defense 
spending, and I do believe it's appropriate to consider another 
round of BRAC, as hard as that is for my colleagues. So just 
count me in in the process of having to make hard decisions, 
even in the defense area.
    When it comes to TRICARE premiums, is it sustainable--is 
the mandatory spending part of the budget sustainable without 
reform?
    Secretary Panetta. No.
    Senator Graham. So the question for the country is, if I 
don't get courtmartialed in the next couple of years and get to 
be a retired colonel and receive my TRICARE benefits when I'm 
60, it is okay to ask a guy like me to pay more. They haven't 
been adjusted since the 1990s, is that correct?
    Secretary Panetta. That's correct.
    Senator Graham. General Dempsey, you're willing to pay 
more?
    General Dempsey. I am, sir.
    Senator Graham. I guess the point is that we're so far in 
debt, no one group is off the table. It's hard to ask those 
who've done the most to secure our freedom to give more, but 
I'm willing to do it. To the retired community, I'm willing to 
grandfather the current system, but I'm also willing to look 
outside the box, because if we don't do something in terms of 
health care growth and entitlement, retiree benefits, you're 
going to compete the retired force with operational needs, and 
that's just not where we want to go.
    So thank you both. I don't know if $487 billion is the 
right number, but I'll work with you to get a number that is 
robust.
    One last question. Do you see a scenario in the next decade 
where 100,000 American troops could be involved over a 
sustained period of time? If you do, how would reducing the 
Army and the Marine Corps by 125,000 affect those operations?
    General Dempsey. First of all, I don't know the answer to 
that, sir. But I think we wouldn't want to shape a future where 
we completely ignored the possibility.
    The force we're building on the fiscal year 2013 to 2017 
budget is capable, we assess, of stability operations, long-
term stability operations or prolonged conflict, up to a force 
of about 50,000. The other 50,000 would have to come out of the 
Guard and Reserve.
    Chairman Levin. Thank you, Senator Graham. You have my 
proxy at lunch, by the way. [Laughter.]
    Senator Webb.
    Senator Webb. Thank you, Mr. Chairman.
    Mr. Secretary, General, first let me just say that as 
somebody who spent 5 years in the Pentagon, one of them as a 
serving Marine and the other as a defense executive, I 
appreciate all of the work that's gone into this presentation. 
We're going to have our disagreements, but, having sat on the 
Defense Resources Board for 4 years, I know how much effort has 
gone into what you brought over here.
    There are already reports--I was back in my office--on the 
discussion to slash the Army and the Marine Corps. I think for 
the record we ought to point out that what we're looking at 
here is historically consistent with the end point of sustained 
ground operations. In fact, if my numbers are correct, if you 
go back to the pre-September 11 military and look at 2017, 
which you're projecting in your testimony, Secretary Panetta, 
the Army is going to be about 9,000 higher than it was pre-
September 11 and the Marine Corps is going to be again about 
9,000 higher than pre-September 11.
    So I look forward to working with you on a lot of different 
issues, and some on which we may have disagreement. But again, 
I have great respect for all of the energy that's gone into 
this, preparation of this budget.
    I want to talk about basing in the Pacific. Chairman Levin 
mentioned this in his opening comments. Chairman Levin, Senator 
McCain and I have spent a great deal of effort on this. I 
agree, General Dempsey, with what you said. I don't see a pivot 
here. I think we've always been there, we've always needed to 
be there. I've been speaking for many years about the need for 
us to reconfigure our presence in a way not that downsizes or 
not that confronts or attempts to contain China, as some people 
are saying, but just as a way to strengthen our alliances and 
our presence out there.
    There's a strong strategic dynamic in the region. There's 
also a very important and potentially volatile political 
dynamic in Japan if we don't get this right and if we don't get 
it right soon. This has been going on for more than 15 years. 
We can't kick the can down the road--I'm not asking for your 
comment on this, but this is more along the lines of getting 
your bank statement. There are a couple things that are due to 
us and they're very important in our consideration. One is the 
reporting requirement that is scheduled to come out of the 
independent study that was mandated by the NDAA. There's a 90-
day period for which the bill was signed, which I think was 
December 31, for the study to come to the Secretary of Defense 
and then the Secretary of Defense would have up to 90 days, not 
necessarily mandated, to report to us on this independent 
evaluation of the basing structure.
    It's very important. It's going to happen at the same time 
that there are environmental statements and other issues taking 
place on Okinawa about the basing system there. I'm very 
interested in getting this study and seeing if we can't move 
forward in a very timely way to resolve this.
    The other one is the Marine Corps laydown. I have spoken 
with the Assistant Commandant about the numbers that they're 
using. I support this transition in concept. I've had many 
conversations with the Marine Corps and with others about this 
earlier. But we do need to see it. We need to see the laydown. 
It's again a part of the NDAA.
    The question that I actually have in this short period of 
time relates to the evolving situation in Syria. General, I 
would like to ask if you might characterize for us, for lack of 
a better term, the on-the-ground opposition that now exists to 
the Syrian regime? What proportion of this is domestic? What 
proportion is foreign? What are your observations?
    General Dempsey. My observations, Senator, are that it is a 
much different situation than we collectively saw in Libya. I 
think that's an important point to make, because we don't have 
as clear an understanding of the nature of the opposition. 
We're working in the intelligence community to develop it. But 
there are some significant differences vis-a-vis Syria. There 
is a chemical and biological warfare threat. There's a very 
significant integrated air defense system, a very credible 
military.
    We're watching the trend lines on their military to see if 
they are still under the control of the regime. There's also 
huge regional implications, big players and actors who have 
vested interests there. So this is one where we have to not 
only understand what's happening on the ground, but also look 
at the regional context in which we're dealing.
    Of course, we will, when asked, provide options to the 
national command authority. But this is a very different 
challenge.
    Senator Webb. First let me reiterate that I had serious 
concerns about the Libyan operation and the nature in which the 
President exercised unilateral authority. But on the Syrian 
situation, do you have any indication about the makeup of the 
on-ground opposition to the regime, how much of it is domestic 
and how much of it is in fact not?
    General Dempsey. As I sit here today, the Free Syrian Army, 
which is generally speaking the centerpiece of the opposition, 
is for the most part domestic, although we also know that other 
regional actors are providing support for it. That complicates 
the situation.
    Senator Webb. There were reports over the weekend that al 
Qaeda has been involved as a part of the opposition. Do you 
have any confirmation of that?
    General Dempsey. No confirmation. I saw the same report.
    Senator Webb. But have you discounted it?
    General Dempsey. No, not at all. Syria is an issue of a 
Sunni majority rebelling against an oppressive Alawite Shia 
regime. All of the players--this is what I mentioned a moment 
ago--in the region it seems have a stake in this. So those who 
would like to foment a Sunni-Shia standoff--and you know who 
they are--are all weighing in in Syria. It is the last 
remaining piece in the puzzle of what you and I probably months 
ago would have described as the Arab Spring, but this is a very 
important moment in the region and all the players are weighing 
in.
    Senator Webb. Thank you, General. Thank you, Mr. Secretary.
    Thank you, Mr. Chairman.
    Chairman Levin. Thank you, Senator Webb.
    Senator Portman.
    Senator Portman. Thank you, Mr. Chairman.
    Mr. Secretary and General Dempsey, thank you for being here 
this morning.
    I told Secretary Panetta that I was going back and forth 
between the Senate Budget Committee and this committee. It's 
been interesting because I'm really seeing two different points 
of view and really world views. I commend both of you today and 
your comments about the need for us to deal with the 
unsustainable growth on the entitlement or mandatory side of 
the spending. In response to your question from Senator Graham, 
is the mandatory spending for the military sustainable, you 
gave a simple answer, no.
    I will tell you, to be honest, having just engaged in the 
Senate Budget Committee about the President's budget, which was 
submitted yesterday, it not only adds another $12 trillion to 
our debt, taking it up to over $25 trillion, but it really 
takes the pass on any of the tough decisions that have to be 
made on the biggest part of the budget and the fastest growing 
part of the budget, and that's the entitlements side.
    It actually grows, under their own numbers, from about 64 
percent of our total budget now--this would be Medicare, 
Medicaid, Social Security, interest on the debt. That grows 
from 64 percent now, so the largest part of our budget, to 78 
percent during the 10-year window of the President's budget and 
yet there is no mention of Social Security, no reforms.
    On Medicare, the only reform I can see on the beneficiary 
side happens after the next term of whoever's President, and 
that's on some slight means testing changes.
    So my concern is exactly what you have outlined today, and 
I quote you from your overview document, where you said: ``Our 
growing national debt, if not addressed, will imperil our 
prosperity, hurt our credibility and influence around the 
world, and ultimately put our national security at risk.''
    General Dempsey, you talked about that during your 
nomination hearing last year, and I again appreciate the 
approach you have taken. I'm very concerned that if we continue 
down the path that has been outlined we will all be here many 
more hearings like this one, talking not about how to improve 
our national security, but instead talking about how budgets 
have been crowded out by unsustainable practices elsewhere in 
our government and we simply can't afford the force we know we 
need.
    So, with that, if I could focus on two things in terms of 
the defense budget, because I do think there is room, despite 
my concern about the bigger budget crowding out defense, within 
defense to find savings. Two areas I want to touch on quickly 
if I could are personnel and the area of procurement.
    On the personnel side, I appreciate the fact that you both 
again have focused on compensation, health care benefits. 
You've proposed a retirement review. These are all tough 
issues. I think we all agree that our men and women in uniform 
are our single greatest asset and we need to be very cautious 
on the personnel side.
    On the other hand, we need to be sure that we are not 
crowding out, even within the defense budget, the need for us 
to be sure that we have adequate resources for operations and 
maintenance.
    So I would ask you this. When you look at what you have 
proposed, in essence you've taken out one issue to a commission 
on the retirement issue, again a very delicate issue, and you 
have some suggestions on changing compensation in the military 
health system here, although I would suggest more would have to 
be done to meet your own criteria you've laid out.
    My question to you is, is there a more holistic approach 
here, in that this does relate to retention and obviously our 
ability to attract the great professional force that we have 
now?
    General Dempsey. We thought about bundling these issues 
together into, as you described it, a holistic look at pay, 
compensation, health care, and retirement. The chiefs and I 
were of the opinion that we wanted to address the issue we saw 
before us that we knew had to be changed, and that was pay, 
compensation, and health care, but take the time to study the 
impact of retirement change, because one of the things we're 
concerned about is, although it's counterintuitive, you know 
that about 70 percent of the force retires--not retires, but 
separates before retirement, but 100 percent of the force, when 
asked, even at the 5-year mark of their career, will say to 
you: Don't screw around with my retirement or I may not stick 
around, even though they know that the chances of them actually 
retiring is only about 30 percent.
    So there's a psychological factor with retirement benefits 
here that we don't fully understand yet. We want to take some 
time to understand what the impact of retirement reform would 
be on both recruitment and retention. That's why we all felt, 
the chiefs and I, that we should separate these.
    Senator Portman. Secretary Panetta, any thoughts with 
regard to this, given your background on the budget issues?
    Secretary Panetta. I think it's important, as a former OMB 
Director that I was, that we have to approach this budget based 
on the fact that there's no holy ground here. You have to look 
at everything and you have to question everything. We 
approached it on that basis.
    We talked about allowances, we talked about pay, we talked 
about pay raises, we talked about all the health care areas. We 
looked at a number of those areas. We felt we have to take a 
step to make sure that compensation is part of the answer to 
what we have to achieve here in savings. For that reason, we 
selected the areas that we looked at.
    I think it's important that all of this has to relate to 
what it means to the soldier, the uniformed man or woman who is 
there on the battlefield. How do we make sure that we provide 
the benefits that are necessary to attract the very best? 
Frankly, we have the very best operating on behalf of the 
United States today. How do we do that, how do we maintain that 
benefit base that's important, but at the same time, understand 
that we have to control these costs in the out-years?
    That was the dilemma that we had to confront. We think we 
approached it in the right way. Is there more that can be done? 
Probably.
    Senator Portman. I know that members of the committee know 
this, but maybe for someone watching, this is an increasing 
part of your budget, just as it is for the Federal budget, as I 
mentioned, if you look at your percent of spending on TRICARE, 
for instance, as a percent of your overall budget.
    So as one member of the committee--and I think I speak for 
a lot of other colleagues, including at least one I heard speak 
earlier--we look forward to working with you on that and trying 
to be supportive.
    On procurement, we don't have time to go into it because my 
time is up. But just again, to focus on competition, the need 
for us maybe to spend a little more upfront to be sure we have 
a competitive process because it'll save so much over time. I 
look forward to maybe a follow-up question in writing in that 
regard.
    Thank you, Mr. Chairman, and thank you, gentlemen.
    Chairman Levin. Thank you, Senator Portman.
    Senator McCaskill.
    Senator McCaskill. Thank you, Mr. Chairman.
    Thank you all for your service to our country. As some of 
you know, I have spent a lot of time working on contracting 
issues as a member of this committee and other committees. I 
don't need to tell you what a huge piece of your budget 
contracting represents. The Project on Government Oversight 
released a report last year that is the first in-depth analysis 
that's been done in a while about the cost of personal services 
contracts as compared to the costs of a Federal employee.
    That study showed that we are paying contractors 1.83 times 
more than the government pays Federal employees, and that's 
including taking into account the benefits package that goes 
along with the personnel costs of hiring a Federal employee.
    I think there's been an awful lot of talk around the Senate 
about freezing Federal employees' salaries and cutting the 
number of Federal employees, but there's been very little real 
difficult work of trying to hold down the cost of personal 
services contracts.
    Secretary Panetta, with the reductions of DOD personnel 
contained in this budget, what are you doing to ensure that 
reducing--because what's happened over the years is, while 
we've tried to hold the line on Federal employees, contracting 
has just ballooned. You are by far number one in that. Number 
two is DHS. So I'd like you to address that if you could, 
either you or Mr. Hale.
    Secretary Panetta. Senator, you've provided tremendous 
leadership on this issue, and it is of great concern to me 
personally because it is an area that has expanded 
dramatically. Almost everywhere I go in my new capacity, I see 
contract employees obviously providing a lot of services. Some 
of them are very important and they perform a very important 
role. Some of them I question whether or not we could perform 
the same role and be able to do it at a smaller price.
    We did look at this area as part of our efficiency approach 
to trying to see if we could gain some savings, and I'd like to 
ask our Comptroller to speak to that.
    Mr. Hale. Just briefly, I think you know, Senator 
McCaskill, we had an initiative a couple of years ago to in-
source jobs where it was cost-effective. We are still looking 
at where it's cost-effective. I think with these budget 
cutbacks we're looking at what the right mix is. Probably both 
contractors and civil servants are going to come down over the 
next few years in our budget.
    We have to try to find the right mix. I don't claim we have 
an easy formula, but I think we are looking at it in that 
context, which is the right one: What's the most cost-effective 
way that we can get the work done?
    Senator McCaskill. We're going to have a hearing on this in 
the Subcommittee on Contracting Oversight of the Homeland 
Security and Governmental Affairs Committee, and what I will be 
looking forward to seeing is what kind of strict analysis is 
DOD embracing to get a handle on contract employees versus 
full-time Federal employees? Because it surprised me when I got 
here that not only do we not know how many contractors there 
were in Iraq, we didn't know how many contractors there were 
sitting in government buildings within 5 miles of where we're 
sitting right now. That is a huge problem, that the contractors 
just became task orders, as opposed to keeping a handle on how 
this monster got out of hand.
    We also are going to have some legislation coming from the 
Wartime Contracting Commission that finished its work. I will 
look forward to direct input from you about the legislation 
that we will be hopefully filing this week, and we will be 
working with this committee to try to get some of its 
provisions included in the defense authorization.
    As I look at Afghanistan, $16 billion GDP, $2 billion of 
that is not from us. That is a huge impact on that country. As 
some of you are aware, I've also been looking at the way that 
the Commanders' Emergency Response Program (CERP) funds have 
been used over there in terms of infrastructure and how for the 
first time in the budget there was actually an infrastructure 
fund embedded in the budget coming from the military to do the 
things that traditionally the DOS had always done. That is, 
large infrastructure. It was like CERP on steroids, is 
essentially what the infrastructure fund was.
    I'm going to quote what the Counterinsurgency Advisory and 
Assistance Team (CAAT) said. The CAAT, which provided a report 
directly to General Allen, found that the CERP was not 
achieving counterinsurgency goals. I'm going to quote this 
report:

          ``Current incentives promote spending CERP funds 
        without sufficient accountability. There is no system 
        for determining what projects are likely to advance 
        counterinsurgency effects and no apparent desire to 
        objectively evaluate whether counterinsurgency 
        objectives were achieved. Commanders at various ends of 
        the spectrum are judged by the amount of funds 
        committed, obligated, or spent over actual measures of 
        effectiveness. This situation is not only wasteful, but 
        allows for corruption, insurgent resource capture, and 
        delegitimization of the Afghan state. We retain primary 
        responsibility for project success or failure while the 
        host government and population are spectators.''

    I know that CERP has been something that has been held near 
and dear, and now the Afghanistan Reconstruction Fund is an 
outgrowth of that because we've gotten beyond fixing window 
fronts to large highway construction projects, without the kind 
of rigorous analysis in terms of sustainability. As we drop off 
the cliff in Afghanistan in terms of what we're giving this 
country of GDP, aren't we creating a scenario that a lot of 
this money is going to go into the category that it went into 
in Iraq, and that is, a lot of wasted taxpayers' dollars on 
Afghanistan infrastructure?
    Secretary Panetta. Senator, I'll have a general comment on 
the actual use of those funds, but let me say this. I share the 
concern that you've indicated. As we do draw down and as we 
turn over these responsibilities to the Afghans, one of the 
issues that we have to think long and hard about is the 
sustainability of these efforts.
    For example, in the Afghan force that takes over and 
provides the principal security for the country, what is the 
level that we need? Is it sustainable? Can this country provide 
the support system that it has to? What kind of economic base 
is that country going to have for the future? The issues that 
you've raised all relate to that question. What are we looking 
at in terms of the future of this country and can it sustain 
itself?
    That's going to be something we're going to have to give a 
lot of consideration to. Not only the United States, but 
obviously all of our NATO allies have to take a hard look at 
what we do to try to sustain this country in the future if 
we're going to be successful there.
    General Dempsey. I'll just add, Senator, I first of all 
hope we don't drop off a cliff. One of the things we've been 
discussing is the glide slope in every sense. It's our glide 
slope, it's the ANSF glide slope. It's our funding glide slope.
    If we do drop it off a cliff, it will have the result you 
just predicted. That's the reason that I would suggest we can't 
fall off a cliff in Afghanistan. We have to transition this 
thing responsibly.
    As for whether they have the capacity to deal with all of 
this, that has been--I've done this in several countries around 
the world, to include Iraq most recently, and that is always 
the most difficult part of these missions, is building the 
capacity, the capability and then the capacity, to--it's really 
institution-building. It's pretty easy to build infantry 
battalions. It's pretty easy to partner with them and embed 
with them. But the institution that sits above it all has to be 
developed.
    I would suggest to you that we've made some pretty 
significant progress in that regard since about 2008, and it is 
part of our strategy going forward. But I share your concerns. 
I'm not sure that I share the understanding of all of the 
results of that study you just cited, because depending on when 
it was done and who did it and where they did it, it could have 
a very different outcome other places. I'd suggest to you that 
we owe you some information on that going forward.
    Senator McCaskill. I have to tell you, I think that some of 
the stuff that we've built in Afghanistan, we can go ahead and 
build the stuff, we can hire the people to build it, our know-
how can provide the leadership to build it, and I think it's 
been like wishful thinking that the institutional capacity of 
this country will catch up. We have a power generation facility 
in Afghanistan that's sitting there as an expensive extra power 
generator because they can't even use it, and it was hundreds 
of millions of dollars of American taxpayers' money.
    That kind of stuff, we just can't afford to do that. I have 
a modernization to move some of this money back to the United 
States for infrastructure, and I think it's important that we 
do that because of the needs of this country, and the real 
problem that a lot of this money for security purposes is 
ending up in the bad guys' hands, and we know that. There's 
been way too many instances that we've found it.
    So I appreciate the more information you can give me about 
what kind of rigor you're bringing to the sustainability 
equation, because I can't find that rigor and I've looked for 
it.
    Thank you, Mr. Chairman.
    Chairman Levin. Thank you, Senator McCaskill.
    Senator Ayotte.
    Senator Ayotte. Thank you, Mr. Chairman.
    General Dempsey, Secretary Panetta, Mr. Hale, thank you for 
your leadership during very challenging times for DOD.
    I appreciate very much that we need to find savings in 
defense in a way that does not undermine our national security, 
no question. But please count me out when it comes to BRAC, and 
here's why. I want to echo concerns that Secretary Panetta 
himself, having gone through this process, raised before the 
House committee in October, where, Mr. Secretary, you said:

          ``I went through BRAC. I know that all the dollars 
        that people looked for huge savings in BRAC, and yet 
        they didn't take into consideration the cleanup, they 
        didn't take into consideration all the work that had to 
        be done. They didn't take into consideration all the 
        needs that had to be addressed. In many cases it wound 
        up costing more. In fact, the recent Government 
        Accountability Office report found that it cost us for 
        the 2005 BRAC round 67 percent more than we estimated, 
        and in fact we're not going to see any savings from the 
        2005 round until 2018, 13 or 14 years down the line. So 
        I have serious questions whether we save any money from 
        a BRAC process. Particularly at a time when we're still 
        making decisions about our global posture and our 
        force, end strength of our forces, I don't think it's 
        the right time for a BRAC process where we may not save 
        a dime, frankly. That's what really concerns me at the 
        end of the day.''

    I want to ask you, Secretary Panetta, about our 
reengagement rate at Guantanamo. Director Clapper testified, I 
believe it was last year or in the spring, that our 
reengagement rate of those who had been released from 
Guantanamo Bay was 27 percent. Do you know what the number is 
now, and has that percentage of 27 percent getting back into 
the fight gone up?
    Secretary Panetta. I think 27 percent was over the long 
period stretching back into the last administration, where most 
of the individuals were transferred. I believe under the ones 
that have been transferred under this administration that it's 
less. I can't remember the exact percentage.
    Senator Ayotte. But overall it's been--whatever 
administration released it, Director Clapper said the overall 
reengagement rate is 27 percent; is that correct?
    Secretary Panetta. That's true, and I think that number is 
correct. I'll get back to you on the specifics.
    [The information referred to follows:]

    Data regarding the reengagement rate of former Guantanamo Bay 
detainees is collected and distributed by the Office of the Director 
for National Intelligence (ODNI). In March 2012, ODNI released updated 
public statistics on detainee reengagement for all detainees 
transferred from Guantanamo Bay through December 29, 2011: Out of the 
total 599 Guantanamo detainees transferred, 95 or 15.9 percent are 
confirmed to have reengaged in terrorist or insurgent activity, and an 
additional 72 or 12 percent are suspected of so reengaging.

    Senator Ayotte. That would be great. I just want to know if 
the overall reengagement rate, regardless of who released them, 
has increased at all.
    The reason I asked is, in follow-up to Senator McCain's 
question earlier about what we've heard could be the 
administration's potential release of five Guantanamo prisoners 
in exchange to the Taliban, I just wanted to raise concerns 
about it on a couple of fronts. Number one, as I see it, 
according to the Wall Street Journal and the Washington Post, 
of these five people--let's be clear. If these reports, public 
reports, are accurate, we're talking about individuals who, 
senior-most Taliban commander in northern Afghanistan, someone 
who is an alleged war criminal in his role for the massacre of 
Shiite Afghans. Two of them are potentially involved in killing 
of a Central Intelligence Agency (CIA) operative, an American 
CIA operative. Of the remaining three, one is alleged to have 
helped smuggle weapons in to attack U.S. troops and is loyal to 
the Haqqani network, another one is directly associated with 
Osama bin Laden and Mullah Omar and then the final one may 
belong to al Qaeda and his release has been called highly 
problematic.
    All five of these individuals were characterized by the 
administration in 2010, if these reports are accurate about who 
these individuals are, all five of them were deemed by this 
administration in 2010 ``too dangerous to transfer, but not 
feasible for prosecution.''
    I know that you have to certify, Secretary Panetta. Two 
years later, is there something changed about these individuals 
that we're unaware of? My follow-up would be, as I understand 
the administration's plan, this is in exchange for goodwill 
from the Taliban. If we are going to release five, if these 
reports are the case, these public reports of who these 
individuals are, dangerous individuals who could get back and 
reengage with our troops, and who aren't just soldiers, they 
appear to be leaders among the Taliban and Haqqani networks, 
that if we were to release them in exchange for a measure of 
goodwill, it seems to me that, why aren't we getting a 
ceasefire if we're going to put out people that are so 
dangerous?
    So two questions to you: First, has something changed from 
2010 of the assessment of these five individuals in terms of 
being too dangerous to release? Second, do you think this is a 
good deal if we're only going to get a goodwill gesture from 
the Taliban?
    Secretary Panetta. Let me reemphasize that absolutely no 
decisions have been made with regards to reconciliation. There 
have been some discussions, but the conditions for 
reconciliation have been made very clear, that the Taliban has 
to lay down their arms, they have to renounce al Qaeda, they 
have to recognize the constitution in Afghanistan. As far as I 
know, none of those conditions have been met at this point, and 
obviously would be part of the discussions.
    As to whether or not as part of whatever these discussions 
involve that there was a transfer as part of that, under my 
obligations as Secretary, I have to certify that these 
individuals will not return to the battlefield, and I have to 
be convinced that steps are taken to ensure that that does not 
happen. Until I am assured that that's the case, I'm not going 
to certify.
    Senator Ayotte. I appreciate that, Mr. Secretary. These are 
very dangerous individuals if they are as they've been reported 
by the Washington Post and Wall Street Journal, and in 
particular to transfer them for a so-called goodwill gesture. I 
appreciate your list of conditions of a ceasefire, laying down 
of arms, and I obviously am very concerned to transfer these 
individuals at all, given how dangerous they have been in the 
past.
    Frankly, we haven't always been right about this. We've 
been 27 percent wrong, whatever administration we're in. In 
fact, Mullah Zakir was assessed as a medium risk--these guys 
are all high risk--a medium risk, and he was released, and he's 
now leading the Taliban forces fighting the U.S. Marines in the 
Helmand Province.
    So we do our best in these situations, but as a prior 
prosecutor the best predictor of future behavior is usually 
prior behavior, and these guys aren't good. So I appreciate 
your looking at this certification very carefully.
    Thank you all for being here today.
    Chairman Levin. Thank you, Senator Ayotte.
    Senator Udall.
    Senator Udall. Thank you, Mr. Chairman.
    Good morning, gentlemen. I'm sure you'd rather spend 
Valentine's Day with any group other than the Senate Armed 
Services Committee, so thanks for being here.
    It's apparent that the fiscal challenges that DOD faces are 
those that we face across the Federal budget. We've had a 
respite given, the end of the war in Iraq. But unfortunately, 
more broadly--and I'm not speaking to DOD, but I'm speaking 
more broadly--we've mismanaged our finances across the board, 
and we've put ourselves in a pretty tough, I would say even 
unacceptable, financial position.
    If you look at our history, we've leveraged our economic 
and military strength to accomplish our goals, and we can't 
effectively project our power abroad if we're weak at home. 
Then we've also undercut our domestic and strategic goals by 
managing our finances so poorly.
    You both know in spades that we have to carefully strike a 
balance between fiscal responsibility and strategic capability. 
We can't hollow out the force, we can't eat our seed corn. We 
have to get this right.
    Fortunately, I think we have a lot of history to guide us, 
and we have to make sure that we incorporate the lessons 
learned from our successes and both our failures. As a mountain 
climber, I always learned more when I was on the mountains I 
didn't climb as the ones I was successfully summitting.
    But, General, in that spirit I wanted to turn to the 
summary that I've heard that DOD has affirmed its commitment to 
Department-wide research and development programs and the 
continued development of alternative energy technologies. DOD's 
always been an innovator and military research has created a 
number of products that we now consider essential to everyday 
civilian life.
    At the same time, there are concerns that there are 
operational needs that need to be addressed now. Can you 
discuss the thinking behind this focus on the future and how 
that decision affects current operations and those that might 
be just over the horizon?
    General Dempsey. On the issue of energy, operational 
energy, I can.
    Senator Udall. Certainly on energy, but then even more 
broadly, too--medical advances. I know you have a long list.
    General Dempsey. We do, sir. In terms of looking out to 
Joint Force 2020, that's exactly why we want to project 
ourselves out and then look back and find our way forward. This 
budget is the first step in that.
    I will use operational energy as an example. We lose 
soldiers, marines, notably airmen and soldiers, on the roads of 
Afghanistan going from forward operating base (FOB) to FOB, on 
resupply missions and so forth. So to the extent we can create 
autonomous or semi-autonomous in terms of energy consumption, 
power and energy, organizations, net zero in terms of their 
consumption of power and energy, we'll actually save lives and 
become a lot more agile because we won't be as tied to some 
kind of traditional linear line of communications.
    So we're all in. The Army has five installations--one of 
them is Fort Carson, CO, by the way--where we're trying to 
receive a net zero energy situation. But that's kind of the 
garrison environment.
    Operationally, we're trying to do the same thing with our 
tactical units. Every Service, frankly, is working on this 
diligently and I think this budget reflects that.
    Senator Udall. There have been some compelling stories 
about what the marines are doing in theater, on the front lines 
at the FOBs. As your predecessor put it well, saving energy 
saves lives. So I commend you for what you're doing. I look 
forward to working with you in this important area as we move 
forward.
    Mr. Secretary, if I could turn to you. Congress, as I think 
you're aware, worked with DOD to establish an Operationally 
Responsive Space (ORS) Office within the Air Force to rapidly 
field small responsive satellites that are tactical in nature 
and tasked by the combat commanders in the field. That's in 
comparison to the large national systems that take somewhere 6 
to 8 years and literally billions of dollars to field.
    As I understand it, in fiscal year 2013 DOD is proposing to 
abolish the ORS Office, zero its budget from $111 million last 
year, and integrate whatever capability is left into the Space 
and Missile System Center. Can you explain DOD's thinking here, 
when the first satellite they launched was judged by U.S. 
Central Command (CENTCOM) to be successful? ORS-1 started 
sending images back to them in the fall of 2011, almost 3 years 
to the day after the program was started.
    One additional question. Is there a possibility that this 
decision puts the cart before the horse? I assume the budget 
was probably put together before CENTCOM started using the 
system. Can you explain the reasoning here?
    Secretary Panetta. Senator, let me have Bob Hale talk to 
that.
    Senator Udall. Great.
    Mr. Hale. Senator, what we've done, as you said, is 
terminate the program office, but not the commitment to ORS 
initiatives. It'll be put into Space Command, where it can be 
looked at in the broader context. We think that's the right 
decision, as opposed to focusing on one particular approach, 
but to look more broadly at this initiative. There are a lot of 
ways to do it. We need to find a cost effective way. So I think 
that's our approach.
    Senator Udall. I look forward to working with you to make 
sure we continue to get this right. We talked about smaller, 
agile forces on the front lines and this is in a way a form of 
doing that, but in space.
    Let me turn to Iraq and Afghanistan. We've ended our 
mission in Iraq. We're drawing down our surge forces in 
Afghanistan. We've proposed reducing end strength in all four 
Service branches, substantially reducing the number of 
aircraft, ships, and Army BCTs. After all that and more, when 
adjusted for inflation, the DOD budget for 2017 will still be 
at almost exactly the same level as it was in 1986. That's the 
height of the Reagan-era buildup against the Soviets.
    Can you talk about the major reasons why we're spending the 
same amount of money for a smaller force?
    Secretary Panetta. Senator, what we have here is that $487 
billion was in the planned DOD budget over the next 10 years, 
and that included, obviously, a lot of what we've had to reduce 
in terms of the budget looking forward. So overall, make no 
mistake about it, even though the defense budget shows a slight 
increase between now and 2017, the bottom line when you add 
what we had proposed in our budget plus the amount that would 
be involved in terms of the war costs, we're going to be going 
down pretty dramatically, by about 20 percent, which is 
comparable to what we've seen in past drawdowns.
    So this budget bites. But at the same time, by virtue of 
what we've done we've made it much tighter. Obviously, we've 
had to take down the force structure. We've had to make cuts in 
ships and planes and in other areas, space, as you said. But 
the bottom line is we think we have a sustainable budget that 
will take us to the kind of force we're going to need in order 
to meet the threats that are out there in the world.
    Senator Udall. Thank you, Mr. Secretary. Thank you, General 
Dempsey, for your service.
    Chairman Levin. Thank you, Senator Udall.
    Senator Collins.
    Senator Collins. Thank you, Mr. Chairman.
    I'm sure at this point in the hearing, Secretary Panetta, 
that you're contemplating what Danny Akaka said to you and 
wondering about your career choice. But we do appreciate your 
service and indeed the service of all of you.
    General Dempsey, I want to bring up with you an issue that 
really troubles me. Since May 2007, Afghan security forces have 
killed 70 American and allied troops and wounded many more, 
over 100 more, in 45 separate attacks. One of those killed was 
a Maine soldier, Private First Class Buddy McLain.
    I'm so disturbed by the frequency of these attacks. It 
raises questions about our vetting process. It raises concerns 
among our troops when here they're risking their lives to train 
and assist these Afghan troops, only to have some of them turn 
on them and kill them.
    It's my understanding that a CENTCOM red team report 
concluded that there was a crisis of distrust that permeated 
both the Afghan national security troops that we're training 
and our own troops as well. So here they're being sent out on 
joint missions, they're training side by side, but they don't 
trust each other.
    Unless steps are taken to stop these attacks on our troops 
by the Afghan security personnel, that level of trust that is 
so necessary for a successful strategy is going to be 
extraordinarily difficult to achieve. After all, these are the 
very security forces that we're depending on to take over from 
us so that we can come back home.
    So I would ask you, what is being done to address this very 
serious and destructive problem?
    General Dempsey. Thanks, Senator. Yes, I'm well aware of 
this issue. In fact, I just recently briefed the President on 
it, who shares your concern. As you say, it's actually 47 
instances. About 11 of them were related to infiltration or 
self-radicalization. The remainder were issues of personnel. 
It's stress, it's tribal. It's not related to Taliban influence 
or ideological issues. That's an important point. It doesn't 
make it any better, but it makes it more understandable.
    The other thing I want to mention is, it's not just what we 
call--it's not just them attacking us. They're attacking each 
other, and probably at a rate of about three times. So we are 
interested in this. We have an eight-step vetting process that 
includes--I don't have the entire thing memorized, but it 
includes things like letters from tribal elders, biometrics, 
training, indoctrination, and then the embedding of 
counterintelligence agents, both United States and coalition, 
but also Afghans themselves.
    Recently, because of this recent issue with the French you 
may recall, President Karzai and the Ministry of Interior, 
Bismillah Khan, agreed to embed some counterintelligence agents 
in throughout the Afghan National Army in order to try to get 
after this.
    So we're seized with it. It is tragic and we are taking 
steps to improve it. We are not going to get it to zero. It's 
the nature of this kind of conflict.
    Senator Collins. It's one thing to tell a family that's 
lost a loved one that they did so in support of the Afghan 
people to help them have a secure country and to make our 
national security better. But it's so different to try to 
console a family that has lost a son or daughter as a result of 
Afghan security force members killing them. I just think it's a 
terrible problem, and the seeming frequency of it is really 
disturbing.
    I realize we're never going to get to zero, but there are 
too many incidents.
    Secretary Panetta. Senator, if I could, I share your 
concern deeply. I just returned from the NATO ministerial, 
where obviously the French were very concerned, having lost 
some of their troops to this situation. What we did at the NATO 
ministerial was to task General Allen to report back on the 
steps that are being taken. Before this, he had actually taken 
some of the steps that General Dempsey recommended. They are 
moving aggressively to try to do a better review of those that 
are going into the Afghan army, better checks, better 
background checks, in order to ensure that these incidents are 
cut back.
    I would say that, even though no killings this way are in 
any way justifiable, that it still remains not something that 
is something that's endemic. It is sporadic, but nevertheless, 
we have to address it and make sure it doesn't happen.
    Senator Collins. Thank you. I would ask that your offices 
keep me informed as you do try to improve the process.
    Secretary Panetta, I share a lot of the concerns that my 
colleagues have expressed about some of the cuts in the budget, 
particularly those that affect shipbuilding and the size of our 
fleet. It seems inconsistent to say that we're going to focus 
on the Asia Pacific area and yet not seek to get to what for 
years has been the absolute minimum goal of 313 ships.
    I am pleased, however, that the budget request indicates 
that DOD intends to seek a multi-year procurement plan for the 
DDG-51 destroyers between now and 2017. First of all, do you 
support that plan, and do you see that as helping to produce 
the kinds of efficiencies that will lead to a lower cost per 
unit?
    Secretary Panetta. Absolutely. I think that's extremely 
important. Two things are important. We want to maintain--we 
have 285 ships now. We want to be at 285 ships in 2017. In the 
next 5 years, our hope is to gradually move up to 300 ships by 
2020. So we're clearly intent on having a Navy that is fully 
capable to project that forward presence that we're interested 
in.
    Second, I think we have to do it in order to protect our 
economic base. We have to have a strong industrial base here 
that supports DOD, and for that reason my instructions are to 
do everything possible, not only to obviously get better 
competition and better savings, but to make sure that we keep 
our industrial base busy serving our needs.
    Senator Collins. That is so important, because once that 
industrial base is gone, you never get it back. Once those 
trained workers go into other fields, you've lost them forever, 
and that would greatly weaken our capabilities. I agree.
    Thank you for that response.
    Thank you, Mr. Chairman.
    Chairman Levin. Thank you, Senator Collins.
    Senator Hagan.
    Senator Hagan. Thank you, Mr. Chairman.
    General Dempsey, Secretary Panetta, and Mr. Hale, thank you 
for your service, and it is good afternoon now. Thank you for 
your leadership, particularly during this time.
    Improvised Explosive Device (IED) proliferation is a key 
concern of mine and it certainly has been for quite a while. I 
support anything that we can do to counter IEDs and obviously 
protect our troops, and I also support anything we can do to 
improve the detection rates and interdict the flow of caches of 
ammonium nitrate.
    Reportedly, last year in Afghanistan IEDs caused over half 
of U.S. military deaths, and IEDs will continue to pose an 
enduring threat to our military men and women. I believe we 
need an enduring capability to counter this threat. However, we 
have to ensure that our countermeasures effectively deal with 
the types of IEDs that we face now and in the future, along 
with the environments that they'll likely be utilized in, and 
our efforts must be geared toward countering IEDs in any 
locale.
    My figures show that we've spent approximately $17 billion 
on various counter-IED initiatives and equipment, not counting 
the $45 billion spent on mine-resistant ambush protected (MRAP) 
vehicles. I see these, our young soldiers, all the time with 
loss of limbs. We host wounded warrior luncheons in my office. 
I see them at the airports. I really want to do everything 
possible we can to counterdict the IEDs.
    But at the same time, we're spending billions of dollars to 
fight a technology that currently is costing the enemy tens of 
dollars. So I'm wondering, how do we figure out how to alter 
this investment ratio? What investments will DOD make in 
developing effective IED countermeasures in order to protect 
our troops and at the same time avoid restricting their freedom 
of movement?
    General Dempsey. Senator, the IED challenge is the enemy's 
asymmetric tool. I think you're correct in stating that it has 
been the biggest killer on the battlefield and is likely to 
remain so. That'll be true, I think, by the way, wherever we're 
deployed. I think we are so capable that they will find ways to 
attack us, and typically now that's through IEDs.
    The next challenge, by the way, will be precision rockets 
and missiles. But we'll get to that one.
    To your point about IEDs, the way we're trying to address 
the cost ratio is by expanding--and we have been doing this--
the aperture. So it's not just about trying to find 
technological means to defeat the device. Defeating the device 
is important--under-armor improvement kits, MRAP, as you say, 
mine detection, deep penetration radars, or ground-penetrating 
radars. But it's also training to identify signatures, and I'll 
explain that briefly in a second, and then also attacking the 
network.
    So you have to do all three. You have to identify 
signatures, and that is to say the components, the chemicals, 
and then find ways to identify those components and attack the 
supply chain. Then it's attacking the network. That includes 
the financiers and includes those who emplace. Then finally, 
it's defeating the device.
    We've gotten actually quite good at it, but again this is 
the enemy's principal munition that he uses against us and it 
does continue to incur casualties. So we just have to stay with 
it. I don't have any better answer than that.
    Secretary Panetta. If I could, Senator, follow up a little 
bit on that?
    Senator Hagan. Okay, yes, please.
    Secretary Panetta. Probably one of the best things that was 
developed was the MRAP, and it has saved a lot of lives and it 
was done on an expedited basis. So it's a good example, 
frankly, of trying to produce something needed by our fighting 
men and women on a fast basis. We're continuing to, obviously, 
do that kind of research, to try to develop the best ways to 
try to protect our young men and women.
    I agree with you, anybody who's seen the results of an IED 
has to shudder at the devastating wounds that result from that.
    The other piece of this, though, relates to the supply 
network for these IEDs. In some ways that relates to the safe 
haven in Pakistan that continues to supply a lot of this. That 
is an area that we believe we've urged the Pakistanis to 
address it. We think that whole issue needs to be addressed if 
we're going to be effective at trying to cut back on these.
    Senator Hagan. That was actually my next question, and I 
know we've discussed this before: What is DOD doing to put 
pressure on Pakistan's network of the distribution of ammonium 
nitrate?
    Secretary Panetta. We have made very clear to them where 
these threats emanate from. We've identified locations. We've 
directed them to specific sites. We've urged them to take 
steps. In some cases they have. In some cases they wind up 
there too late. But we're continuing to impress upon them that 
they have to be part of the answer to dealing with this issue.
    Senator Hagan. I think that would help tremendously, and 
hopefully lowering the number of the IEDs that are placed.
    Secretary Panetta, I also wanted to thank you for lifting 
the Marine Corps variant of the JSF off probation. The decision 
I believe is essential for the Marine Corps to operate and to 
move seamlessly from the sea ashore and in the air. It's also 
key to preserving the strategic value of our amphibious 
capabilities. Airlift capable of short takeoff and vertical 
landing (STOVL), a great example is when the F-15 fighter pilot 
crashed in Libya and these airplanes were able to, I believe 
within about 90 minutes, take off from a large-deck amphibious 
ship, rescue the pilot, and have him back on board. So 
obviously there is a critical need.
    I also understand that the original JSF procurement was 
currently planned at 2,443 aircraft, and in light of the new 
Defense Strategic Guidance and budget, the JSF program perhaps 
is looking at being restructured, which may include fewer 
aircraft spread out over a longer timeframe. According to 
Deputy Secretary of Defense Ashton Carter, DOD will slow its 
approach to full rate production of aircraft.
    Do we have a projected timeline to complete the necessary 
testing and implementation of developmental changes in order to 
start buying the aircraft in higher quantities, and how is DOD 
conveying this to the defense industrial base, which Senator 
Collins was just talking about?
    Secretary Panetta. We think it's extremely important to get 
these fifth generation fighters out there as soon as we can. 
Obviously, it's taken time. There's been a lot of testing. 
They've had to readjust. The STOVL is the best example of that. 
There were five areas that were identified that put it on 
probation. They dealt with all five areas. It's tested well. 
Now, we're basically into software testing right now, and one 
of the reasons we wanted to slow it is to make sure that we 
knew what the problems were and we could get ahead of it, 
rather than go ahead producing these things and costing even 
more if we're catching up with some of the problems.
    So we think we've set the right timeframe. I think our hope 
is that by, what, 2017, we'll begin to produce these planes?
    Mr. Hale. We're buying them now, some tests. But they will 
be operational aircraft as well. We've just slowed the ramp, so 
we don't buy so many and then have to fix them later, which is 
very expensive. So we're buying them now. We'll buy 29 aircraft 
in fiscal year 2013, and I don't have in my head the number in 
2017, but it will be substantially higher than that. We've just 
slowed down the ramp.
    Senator Hagan. My time for questions is over, but I did 
want to emphasize that I think it's critically important that 
DOD continue to invest in S&T programs and the research and 
development initiatives. These are the seeds that we need to 
plant and nurture in order to ensure that our military remains 
the best and most technologically advanced in the world, 
especially when dealing with the emerging threats. I just don't 
think we can emphasize enough the need for research and 
development.
    Thank you, Mr. Chairman.
    Chairman Levin. Thank you, Senator Hagan.
    Senator Cornyn.
    Senator Cornyn. Thank you, Mr. Chairman.
    Gentlemen, thank you for being here. You have my respect 
and admiration.
    You also have a very difficult job, which we've talked a 
little about. But let me just start with a quote from the DNI, 
James Clapper, who 2 weeks ago said: ``Never has there been in 
my almost 49-year career in intelligence a more complex and 
interdependent array of challenges than we face today. 
Capabilities, technologies, know-how, communications, and 
environmental forces aren't confined by borders and can trigger 
transnational disruptions with astonishing speed, as we have 
seen.''
    I doubt you would disagree with his comments. I don't know 
anybody who would.
    But the challenge we're all struggling with--and Senator 
Lieberman, among others, has expressed this--is our heartfelt 
desire to have the mission determine the budget and not the 
budget the mission. You are, of course, constrained by law that 
Congress passes and that the President signs, so we realize 
that this is our responsibility. Your responsibility is to try 
to minimize risks and to maximize our national security, given 
the money appropriated by Congress.
    I appreciate, General Dempsey, your talking about looking 
beyond the budget window to long-term risk. But let me talk 
about a near-term risk and something that's already been 
alluded to here. That is, Secretary Panetta, you and others, 
have made statements that there are certain red lines with 
regard to Iran--such as blockading the Straits of Hormuz, 
building a nuclear weapon. Iran is important to us, it's 
important to the region, but it's an existential threat to 
Israel, our ally. I don't believe they're going to wait on 
anyone else in determining what determines their right to 
continue to exist and their people's security.
    Of course, Iran's already been killing Americans in 
Afghanistan and Iraq in a low-grade war against the United 
States and other NATO allies. But if Iran is hit by Israel, 
what sort of retaliation would you anticipate against not only 
Israel, but other countries in the region and American 
personnel in the Middle East?
    Secretary Panetta. The General suggests that we ought to 
look at a closed session to really address all the implications 
of what that may or may not mean. Obviously, we're very 
concerned about it. We're looking at all of the implications 
and consequences that could result. But it really involves 
intelligence and we should do that in closed session.
    Senator Cornyn. I respect your judgment on that, Secretary 
Panetta and General Dempsey, and I look forward to further 
briefings on that.
    But it strikes me that, we're not saying we're cashing the 
peace dividend, but we are certainly making disproportionate 
cuts to DOD and our national security expenditures. My view is 
that this is the number one responsibility the Federal 
Government has--a lot of other things that we do, we could put 
off or do without. But this is it; this is the most important 
thing that the Federal Government does. There are very real, 
not long-term but near-term, potentialities that could embroil 
not only the United States, but the Middle East and our allies, 
in a full-fledged war that would have dire economic 
consequences to our country and obviously to our allies. More 
than economic, also matters of life and death and existence.
    Secretary Panetta. Senator, without getting into the 
particulars, let me just assure you that we have very strong 
capabilities in place to deal with any circumstances that could 
develop in that region. We feel fully prepared for whatever 
might take place.
    Senator Cornyn. I'm confident you've done everything that 
you know how to do to prepare and our military and DOD has as 
well. It will not be without cost. It will not be without 
casualties. It will not be without serious consequences, is my 
only point.
    So it troubles me, at a time when our national security 
apparatus is asked to do more with less, in a world that's 
getting more dangerous, not less dangerous, that we have a 
budget that unfortunately engages in--I guess the most 
charitable words I can use is ``phantom savings''--phantom 
savings. Some might call it budgetary gimmicks and the like.
    For example, the so-called trillion dollars in savings from 
a drawdown in operations in Afghanistan and Iraq that are not 
currently planned, which have been funded by borrowed money in 
the past 10 years, and which really represent--here's one 
headline in the National Journal, it says: ``Pentagon budget 
revives war spending voodoo.'' Like I said, I think ``phantom 
savings'' is the most charitable thing I've seen.
    It just strikes me as extraordinarily dangerous at a time 
when the risk is deadly serious to have a budget proposal which 
makes a trillion dollars in savings on expenditures that we 
never anticipated spending in the first place. At the same 
time, I will grant you, we don't know what the risks will be in 
the future.
    Let me close on this item. It's a little more concrete. It 
appears from my reading of the budget that there is a decrease 
of about 50 percent in the budget for training and equipping of 
Afghan security forces from 2012 to 2013.
    I'd like first, a confirmation that my reading is correct; 
and second--Mr. Hale is nodding that it's correct, so I will 
just ask you, if our withdrawal from Afghanistan is conditioned 
on the ability of the Afghans to defend themselves and maintain 
stability there, how is a cutting of the budget by 50 percent 
from 2012 to 2013 consistent with that?
    General Dempsey. I'll take that one, Senator. The ANSF fund 
was front-loaded when we had to develop a lot of their 
infrastructure. We front-loaded the purchase of a lot of their 
equipment. What you're seeing in this budget is that most of 
the capital investments, in our terms, have been made in the 
previous years.
    So the reduction is a reflection that we have what we need, 
and most of the fund now is for replenishment and training and 
operations. But the simple answer to your question is we front-
loaded the investments, the capital investments.
    Senator Cornyn. In terms of size of the force and 
capability, do you see that getting larger or maintaining the 
status quo?
    General Dempsey. We are committed to building the Afghan 
security forces out to 352,000, 195,000 of which is the army. 
That will be completed here within the next 90 to 120 days. We 
have not yet decided how long we'll keep it at that size, but 
that's a question we're looking at as we determine how to get 
from here to 2014 and deliver the Lisbon objectives.
    Senator Cornyn. Thank you very much.
    Secretary Panetta. I might just add, Senator, to follow up 
on that, one of the things that was important in 2011 was that 
not only were we able to reduce the level of violence and 
weaken the Taliban, but one of the important things that took 
place is that the Afghan army really stepped up and started 
taking over real responsibility in terms of security.
    In the areas that we've transitioned so far--and we're in 
the second tranche of those transitions--the Afghan army is 
doing a very good job at taking over security. We just have to 
make sure we continue to train them, we continue to make them 
capable to be able to take that responsibility.
    General Dempsey. Mr. Chairman, could I respond?
    Chairman Levin. If you can do it quickly.
    General Dempsey. I will, very quickly.
    Chairman Levin. Very quickly.
    General Dempsey. That National Journal article, I don't 
ascribe to its conclusions because I've been so involved in the 
process. Some of the changes we made definitely will have an 
effect on our base budget. Some of those effects will be 
mitigated in the near-term by OCO. That's what he's talking 
about, that we've papered over the problem. But I don't accept 
that.
    The Army in particular has 10,000 to 12,000 non-deployable 
soldiers directly resulting from the repeated deployments, and 
we're going to pay that bill out of OCO because it is related 
to OCO.
    Senator Cornyn. We don't know what sort of unexpected 
challenges and threats our country will face in the future, is 
my point.
    General Dempsey. We do not, sir, and I accept that. But 
that's what contingency funds are for.
    Chairman Levin. Thank you, Senator Cornyn.
    Senator Gillibrand, to be followed by, according to my 
list, Senator Shaheen, Senator Blumenthal, Senator Manchin.
    Senator Gillibrand. Thank you, Mr. Chairman.
    Thank you, Mr. Secretary. Thank you, General Dempsey. I 
appreciate your service. Thank you, Mr. Comptroller, as well.
    I understand you touched earlier today on the value of the 
Guard and Reserves and how important their service has been, 
serving shoulder to shoulder in both Afghanistan and Iraq. With 
regard to your Air Force restructuring strategy, about half the 
cuts have come out of the Guard, even though they only 
represented about a third of the costs. I believe the Vice 
Chairman of the Joint Chiefs did a report talking about 
managing budget issues, and actually made the point that Guard 
and Reserves provide capabilities at a lower cost than would be 
the case were the Nation to rely solely on full-time forces.
    So I have a concern about the decisionmaking with regard to 
the Air National Guard, and specifically because of the assets 
that New York has. Obviously, we all have specific assets and 
strategies and resources in our States that we think are 
particularly important for our national security. But one thing 
that a lot of our bases and assets have is this National Guard 
and Reserve component that has been so effective in both Iraq 
and Afghanistan.
    So I would like to urge you to look at that restructuring 
to see if there are cost savings by maintaining particularly 
Air Force National Guard and Reserve components as they are, 
whether it's Zebruski or whether it's in Niagara. Those are 
important aspects.
    The second issue that I want to highlight with regard to 
New York specifically is the cyber mission that we do. We do 
such an important mission for cyber security and cyber defense 
in Rome, Rome Labs, that has been vital, I think, in being at 
the cutting edge of both technology and research and 
development.
    One thing that I want to bring your attention to is what 
makes New York so good at doing some of this is the public-
private partnerships that have developed with the private 
sector. A lot of the DOD contracts are being done by private 
developers, researchers, scientists, that have developed as a 
hub in all these areas across New York. We have the nanotech 
center in Albany, we have Rome Labs, we have throughout western 
New York a lot of research and development that will very much 
complement the work that the military is doing.
    I understand that there will be interest in consolidations 
and cutting, but you will lose that synergy, that effort 
towards collaboration and clustering that is so important in 
the high tech sector, and I don't want you to underestimate how 
valuable that is for the military.
    Then last, just to speak to these particular assets in New 
York, we are 100 percent staffed. We have no environmental 
issues. We have a workforce and communities that are so 
dedicated to the mission that the armed services have placed on 
these men and women, that you will lose some of that enormous 
benefit to the extent you have to consolidate or restructure.
    We would love to gain missions, particularly with the 
National Guard and Reserve training, with unmanned aircraft and 
with cyber. So I wanted to just give you that background.
    Secretary Panetta. Senator, there are just a couple of 
things and then I'll yield to the General. First of all, on 
cyber, we are making increased investments there of about $3.4 
billion and even more in the out-years, because we think cyber 
is extremely important. So obviously partnering with the 
private sector is extremely important, and being able to 
develop the technological capability that we're going to need 
to have for the future, so I think that's important to 
remember.
    Second, with regards to the Air Reserve, I understand the 
concerns. The Air Force made the decisions. Some of these 
planes in the past have come out of the Active-Duty Force and 
that's one of the reasons they tried to look at where some of 
the reductions could be made based on the age of these planes, 
as well as their capabilities. But they are trying to do 
whatever they can to mitigate against those impacts, because 
again we do need to depend on the Reserves to be there. They've 
responded in dramatic fashion over these last few years every 
time we've called upon them to come forward and take their 
place alongside other fighting men and women in the 
battlefield, and they've done a great job.
    We want to be able to maintain that for the future. But 
that was the reason some of these cuts were made in those 
areas.
    General Dempsey. The only thing I'd add, you mentioned 
cyber and I want to mention for the record that we strongly 
support the Lieberman-Collins-Rockefeller legislation, to get 
us in the proper place in dealing with the cyber threat, which 
is significant and growing, as well as the Senator Feinstein 
amendment to that legislation. So I'd like to say that.
    Then I'd also say, I'm one of your constituents and how 
about them Giants? [Laughter.]
    Senator Gillibrand. Go Giants! [Laughter.]
    Thank you all for your service.
    I wanted to make sure that there's nothing else that you 
need in the cyber bill as well, that you have reviewed it, and 
that it is providing the assets and resources that you need to 
enhance your mission.
    Secretary Panetta. I think the General is correct, that the 
bill that I know is being put together by Senator Lieberman and 
others reflects all of the issues that we think are important 
to address. So we'll continue to work, however, with the Senate 
and with Congress to make sure that if a bill does emerge it 
addresses our concerns about trying to make this country better 
prepared to deal with the cyber issues that are growing every 
day.
    Senator Gillibrand. I would request that you look at the 
legislation with an eye towards making sure you have all the 
authorities that you need to support this growing mission, and 
also the resources necessary to do adequate recruitment, 
because obviously we want the strongest pipeline for cyber 
defense that we could create and the flexibility to bring in 
the talent that you're looking for. We want to make sure that, 
whether it's civilian talent or through the normal course, we 
want to make sure you have the flexibility and ability to 
recruit, train, and keep the best and brightest to do that.
    Last, if I have time, Mr. Chairman, it's a very separate 
issue, but one I feel very strongly about, that I would like 
your commitment. I've heard you already speak to the issue of 
sexual assault in the military and the ability of the military 
to respond effectively to those concerns, to allegations, and 
to making sure we have the best fighting force we can have. 
That means that we create the right protocols and the right 
ability for women to be able to report such incidents and to be 
heard on those issues.
    I'd like your comments, your views on that, and I would 
like to work with each of you on developing stronger 
protections for our women who are serving.
    Secretary Panetta. Senator, we look forward to working with 
you on this issue.
    You've provided great leadership on this issue, and it's an 
area that concerns me greatly, that the incidents of sexual 
assault have grown. Frankly, my concern is that we have to be 
able to take action in these situations.
    I announced a series of steps to try to improve our 
response to sexual assault. One of the most important things is 
to make sure that the command structure responds to these 
situations, because the longer they take to respond, it 
inhibits the ability to bring a case, and that's what has hurt 
us in being able to move aggressively in most of these cases.
    So we need to do a broad education effort to make sure that 
the command structure understands how important it is to 
respond in these situations. We also need a legislative package 
and I would like to work with you in trying to address the 
legislative needs that we're going to need in order to really 
be able to get this problem in control.
    Senator Gillibrand. Thank you, Mr. Secretary.
    Chairman Levin. Thank you, Senator Gillibrand.
    Senator Shaheen.
    Senator Shaheen. Thank you, Mr. Chairman.
    Thank you, Secretary Panetta, General Dempsey, and Mr. 
Hale, for your commitment and your stamina. We appreciate it.
    I want to begin actually where you began, Mr. Secretary, 
that Congress must do everything possible to avoid 
sequestration, because I certainly agree with that. I share the 
concerns we've heard expressed from my colleagues. I'm not 
going to ask you to respond to this, but I would certainly hope 
that we in Congress would do what you have been willing to do, 
and that is to put everything on the table and put aside our 
posturing and come to some agreement that addresses the long-
term debt and deficits of this country.
    It is inexcusable that we are in this position now with you 
and all of the men and women who are serving in defense and in 
our military and across the Federal Government not knowing what 
we're going to do because we have been unable to act.
    So I would like to start with where Senator Gillibrand left 
off, and that is with the Guard and Reserve. I was very 
pleased, Mr. Secretary, to see in your statement that you 
talked about continuing a National Guard that is equipped and 
ready. I know that the decision to transition our Guard and 
Reserve units from a strategic reserve to an operational 
reserve required a significant investment and a change in 
strategy.
    So, General Dempsey, I wonder if you could speak to the 
original rationale for that transition?
    General Dempsey. I think it's important to roll back the 
tapes, maybe all the way back to 1973, when, coming out of the 
Vietnam war, there were no Joint Chiefs at the time, but the 
Service Chiefs all realized that one of the problems we had 
during that conflict was we really never got the American 
people involved because it was borne on the back of the Active 
component, with very little reliance upon the Guard and 
Reserve.
    So we built a structure that not only allows for the 
utilization of the Guard and Reserve, but it makes it 
absolutely necessary. So the question is not will we use the 
Guard and Reserve, because fully a third of the capabilities 
necessary at any given time to do anything reside in the Guard 
and Reserve.
    So we are committed to it. What we've found in this 
conflict as we went forward, we relearned a lot of those 
lessons. We made some pretty significant investments and the 
Guard and Reserve and the Active component have never been 
closer.
    Now, as we go forward, of course, and as the demand goes 
down, that's going to put some--and the budget goes down--
strain on that relationship. You've seen some of that already.
    But I can tell you that each Service has a plan in terms of 
the rotational readiness of its formations, that they will 
include the Guard and Reserve in that rotation. So the entire 
Guard will never be operational, any more than the entire 
Active component is always operational. But I think you can 
feel secure in the knowledge that we understand and will work 
toward this goal in a rotational readiness cycle.
    Senator Shaheen. I appreciate that. As we look forward this 
year, I know that the Air Force is going to be making some 
initial decisions on where to base the new KC-46 tankers, and I 
would hope that the Air Force and DOD will take a look and 
ensure that at least some of those aircraft are based at Guard 
bases around the country. I have one particular in mind, but 
I'll let you draw your own conclusions.
    But can I ask you, is there a commitment on the part of DOD 
to base some of those new tankers at Guard facilities?
    Secretary Panetta. I think the Air Force is looking at a 
whole set of options in order to make sure that we mitigate 
whatever cuts have been made and make use of the facilities 
that are out there with the National Guard and Reserve. I can 
assure you that they'll be in consideration.
    [The information referred to follows:]

    The Department of Defense will make use of the National Guard and 
Reserve facilities, consistent with operational needs. Regarding where 
to base the KC-46 tankers, I will reiterate that these facilities will 
be in consideration.

    Senator Shaheen. Thank you. I appreciate that.
    I would also like to go back to BRAC, which a number of my 
colleagues have addressed, and I share many of the concerns 
that have been expressed. I know, Secretary Panetta, that 
you've said you've seen just about every side of the BRAC 
process. Can you commit to providing us with a comprehensive 
assessment of the savings from the 2005 round, and I assume if 
you're looking at 2013 and 2015, that you also have estimates 
of savings in those two rounds, and that we would also see 
those as we're looking at a decision about what to do about the 
next BRAC round?
    Secretary Panetta. I'll be happy to give you what 
information we have with regards to the past BRAC rounds, and 
obviously some ideas about what we would do in terms of future 
rounds.
    As I said, I've been through the process. Frankly, I don't 
wish the process on anybody, having been through it, because it 
is tough. 25 percent of my local economy was hit by virtue of a 
BRAC closure. But we did use it as an opportunity to develop a 
college-university campus there and it's proved very successful 
as a reuse.
    I think the issue is it did cost a lot more than anybody 
anticipated, but the fact is, we are achieving in the long-run 
significant savings as a result of that. That's number one. 
Number two, I don't know of any other way to deal with the kind 
of infrastructure savings we have to achieve here as a result 
of reducing the force without going through that kind of 
process. That's the problem I have. It's the most effective way 
of trying to address that issue.
    Senator Shaheen. Certainly in New Hampshire we've seen both 
sides of the issue, because Pease Air Force Base was the first 
base closed in the country. Fortunately, it's doing very well 
now. The Portsmouth Naval Shipyard, which is on the border 
between New Hampshire and Maine, was actually removed from the 
last round by the commission because of their effectiveness.
    One concern I have as we look going forward, particularly 
with respect to our public shipyards, is that there's a real 
backlog of projects that need to be done at those shipyards. 
Obviously, the Portsmouth shipyard is not alone in that. They 
have been producing, I think, very well despite that backlog. 
They just delivered the USS San Juan attack submarine 8 days 
ahead of schedule, despite some of the challenges with that.
    Senator Collins and Senator Ayotte and I had a 
modernization in last year's defense authorization bill that 
asks DOD to produce a shipyard modernization plan to address 
these shortfalls. I hope that DOD will take that very seriously 
and produce that, because as we're looking at our security 
going forward, those public shipyards are a critical part of 
that.
    Secretary Panetta. Senator, as I stated before and I'll say 
again, we absolutely have to maintain the industrial base we 
have, and the shipyards in your area, the other shipyards we 
deal with, are extremely important to our ability to respond to 
the needs that we have. So we're going to do everything 
possible to work with you, not only to increase, obviously, the 
competitive nature of trying to achieve savings, but also to 
try to do what we can to provide those upgrades.
    Senator Shaheen. Thank you.
    A final question. Secretary Panetta, one of the concerns 
that we've heard in a number of reports over recent years has 
been the challenge of attracting people with the backgrounds 
that we're going to need, with science, technology, 
engineering, and math subjects, to be able to continue to do 
the jobs that are critical to our defense establishment. I 
wonder if either you or General Dempsey could address what 
strategy we have for trying to attract those young 
professionals when the private sector is offering them so many 
more attractive monetary rewards.
    Secretary Panetta. Initially I shared the same concern. I 
know when I went out to the National Security Agency and when I 
look at the people that are involved in that area, not only at 
my past agency, but other agencies as well, I have to tell you 
we are attracting some very bright, capable, young people to 
those jobs. They're very interested, they're very capable, and 
with the investment we're making in cyber, I'm absolutely 
convinced we're going to be able to attract the talent to be 
able to make that work.
    Senator Shaheen. I think our challenge as a Nation is to 
get enough young people engaged in those subjects, so we're 
training the people we need.
    General Dempsey?
    General Dempsey. I think the Service Chiefs will have a 
view on this as well, and it's actually exacerbated by the fact 
that--and I think you and I have actually had this 
conversation--only about one out of every four American young 
men and women can qualify to get into the military, either 
based on education or physical issues or issues of making 
really stupid Facebook posts in their youth or something.
    So we are all competing, as you say, academia, corporate 
America, and the military, for the same 25 percent of the 
population. So the answer has to be to get after education in 
this country as well, it seems to me.
    Senator Shaheen. I totally agree.
    General Dempsey, I was very disappointed to hear you 
mention the Giants. You're fortunate that all the other New 
England members of this committee have gone. [Laughter.]
    General Dempsey. My condolences, ma'am. [Laughter.]
    Senator Shaheen. Thank you.
    Chairman Levin. Thank you, Senator Shaheen.
    Senator Blumenthal.
    Senator Blumenthal. Just in fairness, General Dempsey, and 
as a New Englander, I interpreted your remark more as an 
expression of battlefield admiration than an endorsement. So I 
think you're still on fair ground. [Laughter.]
    I want to thank all of you for your extraordinarily 
effective and persuasive explanation of the President's budget 
and thank you for your patience in answering our questions so 
effectively.
    I want to begin with a subject that the President certainly 
emphasized, which is undersea warfare capability, and note the 
slipping, postponing, delaying, whatever the correct term is, 
of a submarine construction, one submarine from 2014 to 2018. I 
have heard from Electric Boat and indeed within the Navy about 
the cost savings that can be realized if we stay on schedule 
and build two submarines every year. I wonder if there is a 
possibility for considering and perhaps your hearing our views 
on that issue, Secretary Panetta?
    Secretary Panetta. This is all about, obviously, having to 
reduce the budget by half a trillion dollars. We have to look 
really closely at affordability and cost efficiencies. If 
anybody comes forward with a better idea as to how to save 
money, I'm more than open to listen to it.
    Senator Blumenthal. I think we may come forward if you'd be 
willing to consider it.
    Secretary Panetta. Absolutely.
    Senator Blumenthal. I would appreciate it.
    Let me go to what you have really very convincingly said is 
the military's greatest asset, which is its people, and you've 
been discussing it very movingly and inspiringly, most recently 
to Senator Shaheen, talking about keeping faith and providing 
many of the men and women, our warfighters who are going to be 
coming back from Iraq and Afghanistan, with jobs and transition 
assistance, which has been expanded under the most recent 
legislation on veterans to be approved by this Congress, an 
amendment that I offered in a separate bill.
    I want to focus on what can be done to aid those veterans 
before they leave the service to more effectively transition 
into civilian employment, because as they come back if they 
enter the Guard or Reserve, to have an unemployment rate which 
is vastly higher, that is, right now in Connecticut, double the 
general rate in Connecticut, 15.5 percent as compared to 8.2 
percent, will simply be a profound deterrent to anyone going 
into the Armed Forces. If that is going to be the kind of 
hurdle they face coming out of the service, it will defeat your 
best efforts to recruit the brightest and most capable.
    Secretary Panetta. Senator, this is a problem that I worry 
about a great deal. Frankly, it's one of the risks involved as 
we reduce the budget by this level, is how to ensure that we 
take care of those that are returning. We already have a 
backlog and we're going to be pumping anywhere from 12,000 to 
14,000 a year as we go through these drawdowns.
    I think it is extremely important that we be able to 
provide the services as these men and women come back to really 
be able to counsel them, to gather them, to make sure they're 
aware of the job opportunities, to make sure they're aware of 
the education opportunities, to make sure they're aware of the 
funds that are available to help them transition, to make sure 
that their families are cared for as well, as we make that 
transition.
    This has to be a package approach. Each Service now does it 
in their own way. They do it pretty effectively. But I think we 
have to make very clear that nobody should fall through the 
cracks.
    Senator Blumenthal. I know the Marine Corps has been doing 
it more effectively. I've talked to General Amos about----
    Secretary Panetta. They do a great job.
    Senator Blumenthal.--his very, very effective work. I 
wonder if--and you may already be doing it--there's some 
servicewide approach building on the best models and best 
practices, would be appropriate.
    Secretary Panetta. We are looking at that.
    General Dempsey. If I could add, Senator, there are more 
initiatives on this issue than we possibly have time to 
discuss. As the Secretary mentioned earlier, we're trying to 
team ever more closely with the VA to do this. We're starting 
to take a view that transition begins when you enter a Service, 
not in the last 6 weeks before you leave it.
    But the other thing I want to mention here is some of this 
can be legislated, some of this can be made a matter of policy, 
but this is one of those issues that will be best solved from 
the bottom up when corporate America reaches out to embrace the 
returning veterans.
    By the way, a lot of them are. I can't tell you how many 
times I'll go to some conference or something and someone will 
tell me that they have a new initiative to hire 10,000 
veterans. So I think it's a matter of merging what can be done 
at the governmental level, but also what needs to be done at 
the grassroots level to help this out.
    Senator Blumenthal. I would agree with you, General 
Dempsey, that corporate America is stepping forward more often 
and more effectively. But I don't believe I'm telling you 
anything you haven't heard before in saying that there's still 
a lot of employers who look at somebody who's in the National 
Guard or the Reserves and who say, not explicitly, but think to 
themselves: This person's going to be gone for a year or more 
if he or she is deployed, and better to hire someone I know I 
can count on to be on the job without interruption.
    That is discrimination. It's illegal if it can be proved, 
but it has to be surmounted as a matter of practice implicit in 
some of the employers. I believe that we need more effective 
measures for enforcement to counter that approach, because it 
will undermine your best efforts, which I admire, to attract 
the best and most capable to the Guard and the Reserve.
    So I'm not asking for your comment, but I hope that perhaps 
we can work together on the initiatives that we don't have time 
to discuss here.
    Just one last question. The IEDs that all too often are 
maiming and killing our warfighters, I wonder whether there are 
new initiatives there that perhaps we can discuss, if not here, 
at some other point, because I've been interested in it and 
appreciated Secretary Carter's very important work in 
accelerating delivery of the so-called biker shorts and the 
groin protective gear, and also the work that I hope is being 
done to discourage the Pakistanis from permitting the 
fertilizer and ammonium calcium nitrate from crossing the 
border and going into these roadside bombs.
    Secretary Panetta. Yes, Senator. I know that your time is 
short on this round, but I'd just assure you that we are seized 
with this. Our relations with Pakistan have been somewhat 
challenged. They're improving, and this is one of the points of 
friction between us that we have to get at.
    Senator Blumenthal. Thank you very much and I appreciate 
your answers to my questions. I want to associate myself with 
the remarks made by Senator Gillibrand and your remarks about 
the problem of sexual assault within the military, but also the 
issue of suicides, which we will not have time to discuss 
today, perhaps I can follow up with you on.
    Thank you.
    Chairman Levin. Thank you, Senator Blumenthal.
    Senator Manchin.
    Senator Manchin. First of all, I want to commend the three 
of you for your endurance. I know you've been through this 
before, and a lot of the questions have probably been touched 
on that I wanted to ask, but I wanted to go over a few things, 
if I may.
    First of all, the most defining moment in my short Senate 
career was when Admiral Mullen sat there and the question was 
asked to him, ``what's the greatest threat the United States of 
America faces?'' I thought I would hear some type of a military 
response, whether it was al Qaeda, whether it was North Africa, 
or China building up their military. He didn't even hardly 
hesitate. He came right back and said that ``the deficit and 
debt of this Nation is the greatest security risk.'' I know you 
all realize that and take it serious, too, and I know we've 
talked about it, Mr. Secretary.
    I'm looking everywhere I can to cross over the aisle in a 
bipartisan way to find out how we can make this financial, the 
wherewithals that we have financially, but also get our 
financial house in order. I know that we talked about cutting 
back, and everybody--I don't know of anybody in here, Democrat 
or Republican, that does not support a strong military.
    But everybody's afraid of the political ramification if 
they say one thing. I can only say this to you, that with the 
growth of the contractors in the military--when I looked at 
just the period of time, maybe 10 years, and the support of 
contractors--and I'm not talking about the manufacturing base 
of contracting, and I wanted to maybe mention, if you would, as 
I get done with this question, about Buy America and how we can 
do more in America to make sure that we are supporting the 
manufacturing base.
    But with that being said, in a simplistic way I believe 
that we could strengthen the military or men and women in 
uniform by reducing the contractors who are doing the same. I 
hear an awful lot of them that tell me that. I see them in the 
airports, and I ask every one of them that are private 
contractors that are going back to Afghanistan, and I stop and 
I talk to them. I introduce myself. Were most of you previous 
military? Yes. Would you have stayed in the military if not for 
the large paychecks that you might be able to get from the 
contractors? Yes, we would have if this option wasn't there.
    So I can't figure this one out. Then it'll dovetail into 
the whole thing I'm going to talk to, which I know everybody's 
talked about, how do we best use our National Guard? We're all 
extremely proud, but I can give you examples of how we say--but 
first of all, the purpose of contracting. Can't we cut the 
amount of contractors that we have that are doing the same jobs 
as military without facing political ramifications of you're 
cutting the military? I'm not going to vote to cut the 
military, but I will cut the contractors, sir.
    Secretary Panetta. Senator, this is an area that we're 
paying attention to in the efficiencies that we're looking at, 
which are going to be about $60 billion. This is one of the 
areas that we are looking at, contract services, number of 
contracts that are provided, in order to determine where we can 
achieve savings.
    Any ideas you have, recommendations along these lines, 
we're more than happy to listen to. This is a big job, going 
after $487 billion in savings. So I'm willing to look at any 
area necessary.
    Senator Manchin. Mr. Secretary, there was a report--I want 
to make sure of this--that $12 million a day for the past 10 
years in Iraq and Afghanistan has been wasted, misspent, 
whatever, by contractors. I think that report was given to you, 
too. So there's many areas.
    But I'm just saying, wherever a uniformed person can do it, 
why--I know we're cutting 100,000 troops. That concerns me. If 
anything, I'd rather cut 200,000 contractors and keep the 
100,000 uniforms and use the support of our National Guard.
    I will say this, that they touched on the veterans, all of 
us. To me, in the private sector you do the best job of 
providing the training for a military person, their discipline, 
their ability to come out and they can do it. Why is our 
unemployment so high, and what are we doing wrong? We started a 
caucus, I started it with Senator Kirk, and it's ``Hire a 
Vet.'' I have two vets in my office and we're looking for more 
good vets. We always do.
    How do we do this to prepare to get them back in? I know 
that the Senator from New York touched on that quickly.
    Secretary Panetta. I think, and I'll let the General expand 
upon this, but we really are--look, part of the problem is the 
economy, the overall economy. These kids are coming back and 
they go back home, and most of these local economies are having 
tough economic times, and you suddenly pour some of these young 
men and women back into their communities and there aren't jobs 
for the people that are there, much less for these young people 
that are coming back.
    Having said that, we really have had some impressive 
efforts by the private sector because of the reasons you 
suggested. These are kids who are disciplined. They usually 
have a capability and a talent that is extraordinary that can 
be used. Most of the private sector people I talk to really 
want to have these kinds of individuals as part of their 
workforce.
    More and more of these individuals are now coming forward. 
We've set up a web site where we list the jobs that are 
available in the private sector. More of these private sector 
individuals are committing themselves to hire our vets as they 
come back. So there is an important effort going forward, but a 
lot of it obviously depends on an economy that has to recover 
as well.
    Senator Manchin. I think, first of all, I want to commend 
all of you for working with our office so close on this new 
caucus. As I just previously mentioned, we just started it, 
``Hire a Vet.'' We would like to even expand on that with you. 
If we would know who's cycling out and what skill sets, so we 
could network better, we think there's ways that we could 
improve on this and work together. So I appreciate that and 
we'll be very close.
    General Dempsey, my final question would be to you. I 
talked about the National Guard. In West Virginia we've been 
very blessed by having a highly rated National Guard, one of 
the best in the Nation. A lot of people get a lot of good 
training, and I'm so proud of them. We saved DOD $27 million 
this year alone. If these small town facilities were fully 
tasked, we could do that, we think DOD could save $250 million 
a year.
    We're talking about things that basically is refurbishing 
generators, the Humvees, tents, tire assemblies, these are 
things that we have been able to do at tremendous cost savings. 
I'm sure other Guards are doing them also. Is there a way that 
we can network more of that to use our Guard? We've proven that 
the savings in just a couple of our little facilities were 
quite substantial. I don't know how we can expand on that.
    General Dempsey. I don't either, sitting here today with 
you, Senator. But certainly we all, to include the Service 
Chiefs, who really are the leaders of their particular Guard--
you're going to have General--I'm not throwing him under the 
bus here, but you're going to have General Odierno here later 
in the week, and I think he would be eager to understand that 
and see if we can take advantage of it.
    Clearly, anything we can do to in-source, and I mean 
Active, Guard, and Reserve--is effort well spent.
    Senator Manchin. Yes. The other thing, it gives the 
training to the person we're trying to cycle back into the 
private sector, so it has a twofold purpose.
    I think you all realize the sensitivity of what we're 
dealing with here, trying to make sure that we give you what is 
needed to keep this safe and free. On the other hand, the 
responsibility, when General Mullen said our greatest threat is 
basically our own finances, so we're taking all that serious. 
We need your help, and we think contracting--if we can downsize 
the contracting, reinforce the military and people in uniform, 
I think you'll have us all on both sides. You might be able to 
bridge the gap that we can't bridge.
    Secretary Panetta. Senator, if I could just comment. Look, 
I think DOD has stepped up to the plate. What we've proposed 
here is real, it's well thought out. We've done a strategy to 
back up our decisions, and all of that's contained in our 
recommendations.
    But I really would urge you and others to engage in the 
broader discussion that has to take place with regards to how 
we reduce the deficit. That has to include a number of areas 
that, unfortunately, have not been on the table, that have to 
be on the table if we're ever going to confront the debt crisis 
that faces this country. This can't just fall on the backs of 
defense. Other areas have to be considered if we're going to be 
able to effectively reduce the deficit.
    Senator Manchin. There's a group of us in a bipartisan 
effort that are looking at ways that--and we know it takes 
everything, getting the money that we're not receiving now that 
should be paid in revenues, and also make sure we get fraud, 
waste, and abuse, and run more efficiently. So I think you're 
going to find quite a few of us on both sides willing to meet 
with you, sir.
    Thank you so much. I appreciate all your service.
    Chairman Levin. Thank you, Senator Manchin. As I mentioned 
before, I hope all of us will take a look at the proposals in 
the budget in front of us to raise an additional $3 trillion 
for deficit reduction. It's in the budget that came in 
yesterday, but it seems a lot of us are unaware of that. Half 
of that is revenue increases. Upper income tax increases, 
restoring their bracket, the millionaires tax, a number of 
other revenue measures, are in this request. I was surprised by 
so many of our colleagues here today talking about the need for 
deficit reduction and the importance of avoiding 
sequestration--which I think, by the way, is a bipartisan 
goal--were unaware of the fact, because I don't think the 
administration, frankly, has done a good job of focusing on 
what's in their own budget in terms of deficit reduction. It 
meets the $1.5 or $1.2 trillion goal.
    Senator Manchin. Mr. Chairman, we've had this discussion 
and we can raise the revenues without raising taxes, by closing 
the loopholes----
    Chairman Levin. Exactly right.
    Senator Manchin.--changing our corporate laws, changing and 
making sure there's a fairness. If the American people think 
that we're putting fairness to the system, I'll guarantee you 
they're behind us 1,000 percent.
    Chairman Levin. They are. It's amazing, when you look at 
public opinion polls they say that we have to include revenues 
in deficit reduction. We can do it without raising taxes on 
middle income Americans.
    Senator Manchin. We can cut spending, too, sir.
    Chairman Levin. We can cut spending, too. The balance in 
this budget that has been given to us yesterday is about 50 
percent additional cuts and about 50 percent additional 
revenues. But frankly, I don't think the administration in its 
rollout yesterday focused on the fact that this would avoid 
sequestration. This budget, if we adopted it, avoids 
sequestration. It does it because finally they're talking about 
additional revenues.
    Now, they've talked about it in the administration, but now 
they've put it in their budget. We had Republican colleagues 
today talking about avoiding sequestration, and when I pointed 
out this budget that was given to us avoids sequestration 
because there's additional revenues in it, what they were 
saying is, well, they hope they can vote on it. Well, my answer 
to that is we also ought to have a Republican alternative, if 
there is one, so we can see exactly what the options are in 
that regard.
    So we've had silence on the revenue side from our 
Republican colleagues, and it's that silence which needs to be 
corrected by the administration, frankly. I would hope that 
there would be greater focus on what's in the budget relative 
to the revenues which will help us avoid sequestration. We all 
want to avoid sequestration.
    I think that you are interested in having a bite to eat. We 
thank you very, very much, and we thank your staffs.
    We will stand adjourned.
    [Questions for the record with answers supplied follow:]

               Questions Submitted by Senator Carl Levin

                         NONSTANDARD EQUIPMENT

    1. Senator Levin. Secretary Panetta and General Dempsey, the 
Department of Defense (DOD) has acquired millions of dollars in 
tactical nonstandard equipment to address the evolving threat in 
Afghanistan (and previously in Iraq), including the enemy's use of 
improvised explosive devices (IED). To what extent are you considering 
this nonstandard equipment purchased by Joint IED Defeat Organization 
(JIEDDO) and others to meet urgent warfighter needs as equipment that 
should be added as standard equipment to unit requirements?
    Secretary Panetta. DOD has established and utilized processes, such 
as Army G-3 Capabilities Development for Rapid Transition and Joint 
Improvised Explosive Device Defeat Organization Transition, Transfer, 
Terminate Process, to review and transfer equipment and capabilities 
for service sustainment. A significant amount of equipment (e.g., body 
armor, CREW, Counter-Rocket, Artillery and Mortar, radios, et cetera) 
is already transitioning to the Services and the standardized equipment 
list. Supporting these efforts, DOD is conducting two separate but 
related studies to identify and review counter-improvised explosive 
capabilities, including nonstandard equipment that are appropriate to 
sustain. The studies will also serve to identify a plan to transition 
the necessary capabilities funded by overseas contingency operations 
(OCO) to programs of record. These ongoing studies will inform DOD's 
development of the President's budget for fiscal year 2014.
    General Dempsey. The Office of the Secretary of Defense (OSD), the 
Joint Staff, and the JIEDDO work closely with the Services to identify 
which of the nonstandard equipment purchased to meet urgent warfighter 
needs should be added as standard equipment. JIEDDO assists in the 
process by conducting monthly meetings with the Services and Joint 
Staff to identify if a JIEDDO-funded program should be transitioned, 
transferred, or terminated based on Service and Joint Staff 
requirements. This year-long process culminates in direction to the 
Services from the Deputy Secretary of Defense to assume responsibility 
for JIEDDO initiatives identified for transfer or transition.

    2. Senator Levin. Secretary Panetta and General Dempsey, to what 
extent has DOD identified future maintenance and other sustainment 
costs for these items that will have to be funded in future base 
budgets?
    Secretary Panetta. The Deputy Secretary of Defense directed the 
Under Secretary (Comptroller)/Chief Financial Officer to study enduring 
activities funded through the OCO portion of DOD's budget. This study, 
co-led by the Director, Cost Assessment and Program Evaluation, is in 
process. The study is to inform DOD's decisions regarding, among other 
items, the approach to fund enduring equipment needs.
    General Dempsey. The Deputy Secretary of Defense directs the 
Services to assume responsibility for JIEDDO funded programs and 
equipment in one of two categories: transferred or transitioned. A 
transferred program is a proven counter-improvised explosive device (C-
IED) capability that is not assessed to be an enduring capability for 
the Joint Force, but one that requires sustainment for the current 
conflict. Maintenance and sustainment costs are shifted from JIEDDO to 
the appropriate Service to be funded using OCO funds. A transitioned 
program is assessed as an enduring capability for the Joint Force and 
ownership, management, funding, and future development becomes a base 
capability of the appropriate Service and is requested in the 
President's budget.
    As part of a larger effort by the DOD, the Joint Staff has 
initiated a review of the C-IED portfolio to identify enduring 
requirements. This review will be used to inform Services as they 
prepare future budgets in the context of DOD's new Defense Strategic 
Guidance.

    3. Senator Levin. Secretary Panetta and General Dempsey, what are 
the plans for placing these estimated requirements into the Services' 
budgets for fiscal year 2013 and beyond?
    Secretary Panetta and General Dempsey. The Joint Staff, Services, 
and JIEDDO are conducting a comprehensive C-IED portfolio review to 
determine which of the nonstandard equipment programs established by 
JIEDDO are enduring and should become Programs of Record. This review 
will inform the Services as they incorporate C-IED capabilities into 
their respective budgets for fiscal year 2014 and beyond.

                  AFGHANISTAN DISTRIBUTION CHALLENGES

    4. Senator Levin. Secretary Panetta and General Dempsey, in a 2011 
report to Congress, the Government Accountability Office (GAO) found 
that although U.S. Transportation Command (TRANSCOM) has established 
some processes for oversight, it does not have full oversight of the 
distribution of supplies and equipment to the warfighter in 
Afghanistan. In addition, DOD has taken some steps to mitigate 
challenges in distributing materiel to forces operating in Afghanistan, 
however DOD continues to face challenges in distributing materiel to 
forces operating in Afghanistan including: (1) a lack of adequate 
radio-frequency identification information to track all cargo 
movements; (2) no common operating picture for distribution data and 
integrated transportation systems; (3) complex customs clearance 
processes in Afghanistan and Pakistan that delay shipments; (4) limited 
information on incidents of pilferage and damage of cargo; and (5) 
ineffective tracking and management of cargo containers. To what extent 
has DOD assessed the impact of supply challenges on unit and equipment 
readiness?
    Secretary Panetta and General Dempsey. While DOD acknowledges that 
challenges remain in the distribution of supplies and equipment, these 
challenges have not led to any degradation with respect to supplies or 
equipment readiness. As GAO's report indicates, DOD has made great 
strides in improving distribution operations in Afghanistan. It is 
important to note that GAO's audit occurred during the recent surge of 
30,000 additional U.S. forces in Afghanistan. Remarkably, U.S. Forces-
Afghanistan was simultaneously able to increase ration stocks from 30 
to more than 60 days and fuel stocks from 30 to 45 days of supply on 
hand. This unprecedented growth reflects a robust supply network, not 
hampered by delivery timelines. Further evidence of DOD's logistics 
resiliency is demonstrated by the fact that in spite of our main supply 
route (Pakistan road networks) being closed since November 26, 2011, 
our flexible system has allowed us to actually increase on-hand stocks 
and sustain our troops at a very high rate of readiness. DOD is 
striving to ensure that we meet these distribution challenges in the 
most timely, efficient, and effective manner in order to ensure the 
best possible support to all of our U.S. Armed Forces personnel.

    5. Senator Levin. Secretary Panetta and General Dempsey, to what 
extent has DOD improved its visibility over equipment and supplies in 
Afghanistan?
    Secretary Panetta and General Dempsey. DOD is engaged in ongoing 
efforts to improve visibility over equipment and supplies in 
Afghanistan. Steps we have taken in the last 18 months include:

    1.  Leveraging the use of Radio Frequency Identification (RFID) 
tags for tracking cargo and providing In Transit Visibility (ITV) and 
Asset Visibility (AV). RFID remains the backbone of our tracking 
capability.
    2.  Developed, refined, and fielded tools, such as the Integrated 
Data Environment/Global Transportation Network Convergence, Battle 
Command Sustainment Support System-Nodal Management, and the U.S. 
Central Command (CENTCOM) Logistics Common Operating Picture, to 
provide commanders down to the tactical level with a comprehensive ITV 
picture.
    3.  TRANSCOM is developing a contractual means to implement the use 
of commercial Active Tracking and Intrusion Detection (ATID) devices on 
Pakistan and Afghanistan road networks. The ATID devices will provide 
near-real-time tracking of containerized unit cargo and equipment 
thereby improving ITV and AV on containerized shipments transiting to 
and from Afghanistan via Pakistan.
    4.  Improved pre-deployment training on the proper methods for 
preparing and installing RFID tags.
    5.  Developed procedures to identify non-compliance with RFID 
policy/directives so that the responsible commanders can be notified 
and corrective action initiated.

    As a result of these steps, the visibility that we have over our 
equipment and supplies in Afghanistan has improved.

    6. Senator Levin. Secretary Panetta and General Dempsey, to what 
extent has DOD developed a common operating picture to improve its 
processes for tracking equipment and supplies in Afghanistan?
    Secretary Panetta. DOD has improved its capability to track 
equipment and supplies by developing, refining, and fielding tools such 
as CENTCOM's Logistics Common Operating Picture (LOGCOP), the BCS3-NM, 
and other automated information technologies (i.e., RFID/Active 
Tracking Intrusion Detection). These improved tools provide 
comprehensive ITV of critical DOD assets to commanders and staffs at 
all levels of command.
    General Dempsey. We have reemphasized to commanders at all levels 
the importance of maintaining visibility over equipment and supplies 
transiting Afghanistan. We have improved their capability to track 
equipment and supplies by developing, refining, and fielding tools such 
as CENTCOM's LOGCOP and the BCS3-NM. These improved tools provide a 
comprehensive ITV and AV picture to commanders and staffs at all levels 
of command.

    7. Senator Levin. Secretary Panetta and General Dempsey, to what 
extent is DOD anticipating throughput challenges in Pakistan that would 
limit DOD's ability to remove equipment from Afghanistan?
    Secretary Panetta and General Dempsey. Although loss of access to 
the Pakistan ground transportation routes has not adversely affected 
U.S. military operations in Afghanistan to date, sole reliance on the 
Northern Distribution Network (NDN) and air/multi-modal cargo 
operations would affect DOD's ability to efficiently drawdown equipment 
and significantly increase costs. Increased NDN usage would maximize 
its capacity and, although cargo would continue to move, transit times 
would increase. Reliance on the NDN and air/multi-modal movement also 
places U.S. Forces and objectives in Afghanistan at significant risk 
due to the uncertainties associated with the nations that U.S. cargo 
transits. Politically, any one or a combination of countries that 
comprises the NDN could halt or impede cargo movement for any reason. 
The physically fragile critical infrastructure and weather-dependent 
routing along the NDN can create chokepoints, causing congestion and 
disruptions and further limiting NDN capacity. Finally, delays in 
retrograde can create labor and space problems in terms of securing, 
storing, and maintaining equipment in Afghanistan that would otherwise 
move out of the theater. Multiple transit routes would provide DOD the 
most flexibility and save money and time.

    8. Senator Levin. Secretary Panetta and General Dempsey, to what 
extent has DOD developed alternatives to the Pakistan routes to be able 
to remove equipment from Afghanistan?
    Secretary Panetta and General Dempsey. DOD began to move U.S. cargo 
to Afghanistan on the NDN in 2009, with established routes utilizing 
existing commercial infrastructure through Russia and the Baltic, 
Caucasus, and Central Asian states. Current efforts to expand the NDN 
include obtaining permission and agreements as necessary to conduct 
reverse transit and movement of wheeled armored vehicles. The first 
proofs of principle executing retrograde transit began in early 2012. 
Additional multi-modal routes have been added to relieve pressure on 
the ground distribution system and further increase the velocity of 
cargo departing Afghanistan.

    9. Senator Levin. Secretary Panetta and General Dempsey, what 
challenges remain in developing these alternatives?
    Secretary Panetta and General Dempsey. Cost and operational 
requirements to achieve retrograde velocity to support the projected 
2014 drawdown timeline are key factors in considering the alternatives 
to the Pakistan ground transportation routes (i.e., NDN and air/multi-
modal). The monthly overall transportation cost to distribute 
sustainment cargo, redeploy combat forces, and retrograde materiel is 
expected to increase by more than two-thirds due to the Pakistan ground 
transportation routes closure. In addition to higher costs, the NDN's 
operational drawbacks include longer transit times due to longer 
distances and lower cargo velocity due to transit restrictions.

                   CHANGES IN EQUIPMENT RESET FUNDING

    10. Senator Levin. Secretary Panetta and General Dempsey, Congress 
has aggressively supported DOD's equipment reset funding requests 
throughout our operations in Iraq and Afghanistan. DOD has recently 
announced plans to reduce the Army and Marines Corps force structure by 
100,000 troops. While the proposed budget does not specifically call 
for any offsetting reduction in equipment reset funding, it would seem 
logical that with a smaller force we might not have as large a 
requirement to reset equipment. To what extent is it important to 
maintain current funding level for the reset of equipment, despite the 
planned reduction of 100,000 Army and Marine Corps troops?
    Secretary Panetta and General Dempsey. The level of reset funding 
is set by aligning the required Modified Table of Organization and 
Equipment (MTOE) to the programmed force structure and by the type and 
condition of equipment returning from operations in a given year. As 
the Services reduce Active Duty end strength by 103,000 personnel, 
units will be identified for deactivation. The deactivated unit's MTOE 
equipment will be redistributed throughout the Services. This should 
reduce the number of items needed to be reset. However, if we fail to 
fully fund the reset required for the programmed force structure, we 
would face serious equipment shortfalls as current inventories are used 
up, expended, damaged, or worn out, and not replaced and repaired in a 
timely manner. These shortfalls would have a direct impact on unit 
readiness levels.
    Precise reset requirements are dependent on many variables, 
including equipment condition upon return; we cannot predict exactly 
what total reset costs will be at this point. However, we do know that 
the high operating tempo and harsh environments of Afghanistan and Iraq 
have a substantial deteriorating effect on equipment.

    11. Senator Levin. Secretary Panetta and General Dempsey, if DOD 
believes it necessary to retain the same level of reset funding, what 
is the rationale for this decision?
    Secretary Panetta and General Dempsey. Precise reset requirements 
are dependent on many variables, including equipment condition upon 
return; we cannot predict exactly what total reset costs will be at 
this point. However, we do know that the high operating tempo and harsh 
environments of Afghanistan and Iraq have a substantial deteriorating 
effect on equipment.
    The level of reset funding is set by aligning the required MTOE to 
the programmed force structure and by the type and condition of 
equipment returning from operations in a given year. As the Services 
reduce Active Duty end strength by 103,000 personnel, units will be 
identified for deactivation. The deactivated unit's MTOE equipment will 
be redistributed throughout the Services. This should reduce the number 
of items needed to be reset. However, if we fail to fully fund the 
reset required for the programmed force structure, we would face 
serious equipment shortfalls as current inventories are used up, 
expended, damaged, or worn out, and not replaced and repaired in a 
timely manner. These shortfalls would have a direct impact on unit 
readiness levels.

    12. Senator Levin. Secretary Panetta and General Dempsey, GAO has 
previously reported that the Military Services tend to build their 
reset budget requirements simply on the basis of the equipment it 
anticipates will actually return to the United States in the next year, 
rather prioritizing or targeting its reset requirements to address 
equipment shortages or other needs. To what extent do you believe 
opportunities exist to better focus the requirements for equipment 
reset, so that reset dollars go farther to meet equipment shortages, 
and better address our home stationed unit readiness rates?
    Secretary Panetta and General Dempsey. To better focus the 
requirement for equipment reset, DOD considered the MTOE required for 
the programmed force structure and the type and condition of equipment 
returning from operations in a given year.
    The Services also fully consider the future requirement for the 
equipment before DOD makes the reset funding request. Equipment reset 
is integrated with equipment modernization objectives, long-term 
support, and strategic investment plans.

    13. Senator Levin. Secretary Panetta and General Dempsey, the 
administration has called for renewed attention on the Pacific region 
and the emerging threats there. To what extent do the reset 
requirements in this budget recognize and take into account this shift 
and perhaps the different numbers and types of equipment we should be 
resetting to improve our readiness to address conflicts in that region?
    Secretary Panetta and General Dempsey. DOD's budget request aligned 
the programmed force structure to the new Defense Strategic Guidance, 
which addresses the Pacific region focus. Reset requirements were then 
aligned to MTOE requirements for that force structure and the type and 
condition of equipment returning from operations in a given year, while 
accounting for a wide spectrum of potential future challenges, many of 
which are anticipated in the Pacific area of operations.

    14. Senator Levin. Secretary Panetta and General Dempsey, last year 
Congress gave the Army $20 million to begin the competition process for 
the Humvee capitalization effort known as the Medium Expanded Capacity 
Vehicle program. However, DOD's fiscal year 2013 budget request plans 
to terminate that program and commit to the Joint Light Tactical 
Vehicle (JLTV) program with the Marine Corps. Without pushing the 
merits of either program, to what extent do we need to lock into some 
strategy on our future equipment needs to effectively plan and 
economically budget to meet defense strategic equipping goals?
    Secretary Panetta and General Dempsey. Given the current fiscal 
environment, this was one of many situations where limited resources 
drove the need to prioritize areas of overlapping capabilities. The 
commitment to the JLTV was based on an analysis of alternatives and 
Joint Requirements Oversight Council (JROC) deliberation, which 
included consideration of the Medium Expanded Capacity Vehicle program 
and other modernization options. The JROC reviewed tactical wheeled 
vehicles from a holistic portfolio perspective to ensure that the 
correct programs were being pursued to support the national strategy.

                           OVERALL READINESS

    15. Senator Levin. Secretary Panetta and General Dempsey, DOD's new 
Defense Strategic Guidance, released in January 2012, as well as the 
accompanying document, ``Defense Budget Priorities and Choices,'' make 
a number of statements which have implications for the readiness of the 
force. For example, the strategic guidance states that, ``it (the 
guidance) is intended as a blueprint for the Joint Force that will help 
guide decisions about force size and shape over subsequent program and 
budget cycles.'' It also notes that, ``DOD will manage the force in 
ways that protect its ability to regenerate capabilities that might be 
needed to meet future, unforeseen demands.'' What are the specific 
capabilities that DOD believes it will be able to regenerate?
    Secretary Panetta and General Dempsey. Since September 11, our 
forces have developed many specialized skills and capabilities--
language and culture, rule of law, security force assistance. DOD 
invested heavily in developing and expanding the supply of these skills 
and intends to make sure that those investments aren't inadvertently 
lost as we downsize. Also, the current and anticipated security 
environment indicates that the demand for this mission set will persist 
at some level, further emphasizing the need to ensure that ground force 
capabilities developed over the last decade for counterinsurgency, 
irregular warfare, counterterrorism, and security force assistance, and 
partnership engagement remain viable.
    The recent strategic review made clear that a smaller, ready, and 
agile force is preferable to a larger force that is poorly trained and 
ill-equipped. Therefore, we put a premium on retaining capabilities 
that provide flexibility across a range of missions and that require a 
long time to generate--in terms of training, equipping, et cetera. 
Additionally, other specialized capabilities, often associated with 
ground forces, stability operations, counterinsurgency (COIN), security 
force assistance (SFA), building partnership capacity (BPC), et cetera, 
and most gained over the last decade of conflict, must be carefully 
managed. We may reduce our capacity in skill sets where we expect a 
reduced demand and experience indicates retraining can occur quickly. 
These kinds of skills will need to be retained (the Services are 
analyzing), although at lower capacity, by keeping the right number of 
experienced people balanced between the Active component and Reserve 
component, and the right training curricula and infrastructure to 
rebuild these capabilities in a timely manner when needed.

    16. Senator Levin. Secretary Panetta and General Dempsey, given 
DOD's plans to reduce force structure and decisions to terminate 
certain weapons systems, platforms, et cetera, or delay procurement, 
how does it expect to be able to regenerate these capabilities and does 
it have specific plans that project how long it would take to achieve 
such regeneration?
    Secretary Panetta and General Dempsey. The Services are shaping 
their future force structure in ways that protect their ability to 
maintain and regenerate capabilities when needed to meet future, 
unforeseen demands, maintaining intellectual capital and rank structure 
that could be called upon to expand key elements of the force. For 
those critical skill sets, there will be a need to keep on hand some of 
the specialized infrastructure (people, facilities, training 
curricula), or seed corn, that will enable a new capability to be 
developed in a timely manner. Keeping experienced mid-grade officers 
and noncommissioned officers (NCO) will also be key. The seed corn and 
the experience will need to be properly balanced between the Active and 
the Reserve components.

    17. Senator Levin. Secretary Panetta and General Dempsey, in 
particular, given the current state of personnel readiness, 
particularly in the Army, how does DOD propose that it will be able to 
regenerate Active component end strength and in what timeframes?
    Secretary Panetta. Regenerating Active component end strength is 
generally a function of the particular forces being requested and the 
time in which the forces are needed. As the Services draw down, each 
will analyze their missions--considering the likelihood of need for 
various capabilities and the time required to regenerate while taking 
into account industrial base and the Reserve component availability--
and make decisions accordingly.
    Specifically, it is vital that the Army maintain a strong cadre of 
noncommissioned and mid-grade officers to form the core of new 
formations when needed. We are also making investments in Army Special 
Operations Forces (SOF) to increase their capabilities and provide more 
options to the President. It will also require a strong, ready, and 
accessible Army National Guard and Army Reserve Forces.
    General Dempsey. The new Defense Strategic Guidance released in 
January 2012, notes that since we cannot predict how the strategic 
environment will evolve with absolute certainty, we need to manage the 
force in ways that protect its ability to regenerate capabilities 
should they be needed to meet future, unforeseen demands. The strategy 
also notes that we need to retain intellectual capital and rank 
structure that can be utilized to expand key elements of the force. The 
Army is examining strategies, policies, and investments that would 
posture the Army to slow down and reverse drawdowns of Army end 
strength and formations, and regenerate end strength over the course of 
a number of years in response to a future crisis.
    This will involve reexamining the mix of elements in the Active and 
Reserve components, maintaining a strong National Guard and Army 
Reserve, retaining a healthy cadre of experienced noncommissioned and 
midgrade officers, and preserving the health and viability of the 
Nation's defense industrial base.

                          REBUILDING READINESS

    18. Senator Levin. Secretary Panetta and General Dempsey, in the 
past, this committee, GAO, and others have called for DOD to develop a 
plan for rebuilding readiness that clearly identifies requirements, 
prioritizes these requirements, and ties them to resources. DOD has 
typically pointed to its budget request to reflect such a plan. Given 
the current readiness levels of each of the Services and plans to 
reduce the force structure and end strength, to what extent has DOD and 
the Services developed plans and established priorities for rebuilding 
readiness?
    Secretary Panetta. DOD is committed to helping the Services 
maintain adequate readiness to fight the current fight and respond to 
contingencies across a broad spectrum of conflict. The Services have 
worked to achieve a balance among their manpower, training, and 
equipment requirements given anticipated force structure changes, 
evolving military strategies, and emerging resource constraints. Those 
decisions on the future force will be reflected to the extent possible 
in the President's budget fiscal year 2014 submission. Achieving that 
balance will require ongoing evaluation over the next several budget 
cycles.
    We have addressed full-spectrum training requirements in the 
current budget. However, as we implement the new Strategic Defense 
Guidance, the processes we have established will closely monitor 
whether our current training strategies are sufficient to meet these 
requirements and adjust as necessary. For example, as we decrease pre-
deployment training for the current fight, COIN, we will increase the 
use of time, ranges, and resources to train for full-spectrum 
operations.
    General Dempsey. OSD, the Joint Staff, and the Services continue 
working on programs focused on maintaining and rebuilding readiness. 
The Services are reviewing priorities in the context of the new Defense 
Strategic Guidance to ensure their resources are focused on the most 
critical readiness issues. Key aspects of this planning include 
resetting and reconstituting the force, refining force generation 
models, prioritizing resources, and determining capabilities gaps and 
associated mitigation options. A key component to the viability of 
these planning efforts is predictability in resourcing which is 
directly affected by the passage of appropriation legislation.

    19. Senator Levin. Secretary Panetta and General Dempsey, 
specifically, has DOD assessed the manning, equipping, and training 
priorities for a smaller force, and are these priorities reflected in 
its fiscal year 2013 funding request?
    Secretary Panetta. Yes. The budget decisions represented in the 
fiscal year 2013 funding request aligns our investments to the five 
major tenets of our strategy:

         Rebalance force structure and investments toward the 
        Asia-Pacific region and the Middle East region while sustaining 
        key alliances and partnerships in other regions.
         Plan and size forces to be able to defeat a major 
        adversary in one theater while denying aggression elsewhere or 
        imposing unacceptable costs
         Protect key investments in the technologically advance 
        capabilities most needed for the future, including countering 
        anti-access threats.
         No longer size Active Forces to conduct large and 
        protracted stability operations while retaining the expertise 
        of a decade of war.
         To the extent possible, structure major adjustments in 
        a way that best allows for their reversal or for regeneration 
        of capabilities in the future if circumstances change.

    There are many examples in the request, and listed in the Defense 
Budget Priorities and Choices document that accompanies the new Defense 
Strategic Guidance: maintaining current bomber and aircraft carriers 
fleet; retiring some of our oldest aircraft; protecting SOF and 
Unmanned Aerial Systems; COCOM Engagement and Exercises; Global 
Security Contingency Funding; protecting Reserve component readiness; 
sustaining critical segments of the industrial base; and funding for 
wounded warriors and transitioning veterans.
    General Dempsey. Yes. The new Defense Strategic Guidance set 
priorities for assessing our programs, force structure, and spending in 
the context of the current and forecast security environment. With 
those priorities in mind, the budget proposal strikes an appropriate 
and necessary balance between succeeding in today's conflicts and 
preparing for tomorrow's challenges. It accounts for real risks and 
real fiscal constraints, and begins the process of rebalancing and 
aligning our force structure and modernization efforts with our new 
strategy.

    20. Senator Levin. Secretary Panetta and General Dempsey, the new 
Defense Strategic Guidance and related defense priorities call for 
rebalancing toward the Asia-Pacific region and puts heavy reliance on 
unmanned systems and SOF. Given that DOD plans to reduce the size of 
the Army and the Marine Corps, does the new strategy require more 
reliance on the Air Force and Navy? If so, how will this shift in focus 
be reflected in the fiscal year 2013 and future budget requests?
    Secretary Panetta. All Services will play integral roles in 
addressing future U.S. security challenges across all domains. The Army 
and Marine Corps grew in order to better meet the demands of operations 
in Iraq and Afghanistan. As those conflicts wind down, some reductions 
in ground forces are appropriate.
    The nature of the future strategic environment will require even 
greater flexibility and agility in projecting power to accomplish the 
Nation's security objectives. Increasing operational focus on enhanced 
presence, power projection, freedom of action, and deterrence in the 
Pacific and Middle East, will require a range of mutually reinforcing 
joint activities in these regions to accomplish priority missions.
    To this end, over the Future Years Defense Program (FYDP), DOD will 
fund the next-generation bomber and aerial refueling aircraft. 
Additionally, the Navy will invest in a design for Virginia-class 
submarines that will allow them to carry significantly more cruise 
missiles and potentially provide an undersea conventional prompt strike 
capability. The future years budgets also invest resources in 
increasing stocks of our most capable cruise missiles, purchasing 
advanced maritime patrol aircraft, upgrading avionics and 
communications systems in our current bomber fleet, and enhancing 
capabilities in space, cyber, electronic warfare, missile defense, and 
intelligence, surveillance, and reconnaissance (ISR) systems that will 
be particularly well-suited to operations in the Middle East and Asia-
Pacific regions.
    General Dempsey. The end strength for ground forces has grown over 
the past 10 years due to high operating tempo and extended contingency 
operations. As these operations draw down, we are adjusting the size 
and composition of the Joint Force to meet the anticipated threat in 
the new strategy.
    As we rebalance our global posture to emphasize the Asia-Pacific 
region and the Middle East, we are adjusting our operating constructs 
and the systems we employ. The new strategy requires increased emphasis 
on improving joint operational access capabilities as well as programs 
that address the proliferation of technology that threatens our access 
to global commons. Similarly, cyber threats have evolved faster than 
many could have imagined, so this budget request has an added focus on 
our military's cyber capabilities. The sourcing of these increasingly 
important capabilities spans all components.

    21. Senator Levin. Secretary Panetta and General Dempsey, more 
specifically, how will resources be divided among the Services?
    Secretary Panetta. DOD undertook a comprehensive review to develop 
a revised defense strategy and accompanying investment priorities over 
the coming decade. We made disciplined decisions based on our 
assessment of future global challenges, key missions that we must be 
ready to execute, and essential capabilities that we need to perform 
those missions. The development of the fiscal year 2013 budget was 
truly a strategy-driven process.
    The fiscal year 2013 DOD budget reflects tough decisions that will 
preserve the strongest military in the world. We made appropriate and 
selective cuts in overall capacity and force structure while sustaining 
or increasing investments in key capability areas, including SOF, ISR, 
long-range strike assets, as well as space and cyber systems, among 
others, to preserve a ready, agile, flexible, and capable force.
    Decisions on allocating resources are grounded in a careful 
assessment of operational needs of the Joint Force working as an 
integrated whole to ensure that we have the necessary capabilities to 
accomplish assigned missions.
    General Dempsey. This budget must be viewed in the context of a 
broader strategy to achieve the Joint Force of 2020 and represents an 
integrated, carefully devised package of decisions that should not be 
viewed as individual, isolated measures.
    Excluding OCO funding, there are no major shifts expected in 
resources among the Services--the emphasis will be on shifting the 
priority of the resources to capabilities such as cyber and anti-
access/area denial, not on individual Services.

    22. Senator Levin. Secretary Panetta and General Dempsey, given 
current readiness of the Air Force and the Navy, has DOD assessed their 
ability to support this shift in focus?
    Secretary Panetta. Yes. In the future, our Services will generally 
be smaller, but each will develop future force structure that maintains 
the agility, flexibility, and readiness to engage a full range of 
contingencies and threats. And, as described in DOD's recently released 
strategic guidance, we are adjusting missions, posture, and 
organizational structure in order to adapt to ever evolving challenges 
and threats.
    One way in which the Air Force is posturing itself for the future 
in light of the strategic guidance is through pursuit of the Air-Sea 
Battle (ASB) concept in partnership with its sister Services. The ASB 
concept will guide the Services as they work together to maintain a 
continued advantage against the global proliferation of advanced 
military technologies and capabilities. ASB will leverage military and 
technological capabilities and is guiding us to develop a more 
permanent and better institutionalized relationship between the 
Military Departments that will ultimately shape our Service 
organizations, inform our operational concepts, and guide our materiel 
acquisitions.
    Providing the Nation offshore options to deter, influence, and win 
in an era of uncertainty is one of the primary contributions of the 
U.S. Navy. We keep the Fleet forward through a combination of 
rotational deployments, Forward Deployed Naval Forces, and forward 
stationing. We will rely on these basing constructs and strategic 
partnerships overseas that provide places for rest, repair, refuel, and 
resupply which enable forward presence without increases to the Fleet's 
size.
    General Dempsey. Yes. DOD continues to meet global demands while 
simultaneously conducting a thorough analysis of future force 
requirements to successfully implement the new strategy. The Services 
are updating their programs and metrics to evaluate current and future 
force structure requirements, modernization efforts, force generation 
capacity, and the resources required to maximize capabilities in 
support of the strategic priorities. DOD has established a forum that 
will consider any cross-cutting department management decisions to 
ensure DOD actions are substantive, synchronized, and coordinated 
across the defense enterprise.

    23. Senator Levin. Secretary Panetta and General Dempsey, does DOD 
plan to reassess its current operational plans and the types of 
scenarios that it will plan for in the future? If so, did DOD take into 
account the current readiness levels of the Services?
    Secretary Panetta. The President approves the Contingency Planning 
Guidance every 2 years, per statutory requirements. DOD frequently 
assesses its operational plans to ensure that they are realistic and 
that they cover the range of plausible challenges DOD may face. Those 
plans on which we place highest priority undergo a detailed review 
process to examine force availability and readiness against the 
combatant commanders' intent for phasing a specific contingency, the 
capability of DOD to project the required force, and competing demands 
across the globe. Both General Dempsey and I are involved deeply in 
this critical review process.
    General Dempsey. The Joint Staff is working with OSD to reassess 
the operational and contingency plans directed in the Joint Strategic 
Capabilities Plan. Our shift to rebalance priorities to the Asia-
Pacific region may require the Services and combatant commands refine 
or develop plans to meet the new guidance. We are accounting for the 
Services' current and projected readiness as we review planning 
requirements and potential scenarios.

    24. Senator Levin. Secretary Panetta and General Dempsey, what kind 
of risk assessment did DOD perform, including in terms of the current 
force's ability to support the shift in strategic direction?
    Secretary Panetta. The new Defense Strategic Guidance and the 
decisions in the fiscal years 2013 to 2017 FYDP were informed by risk 
considerations. Although there are inherent risks in any defense 
strategy, I believe the risks associated with the new Defense Strategic 
Guidance are manageable and acceptable.
    DOD took several steps to assess and mitigate risk. Preliminary 
insights from the 2012 Chairman's Risk Assessment (CRA) were 
instrumental in the development of DOD's strategic guidance. More 
broadly, during the strategic review, we addressed risk through 
wargaming, scenarios, trends analysis, and other processes. DOD's risk 
mitigation plan (submitted March 2012) underscores active mitigation 
efforts for the specific risks identified in the CRA.
    Spending reductions of the magnitude directed by the 2011 Budget 
Control Act (BCA) require difficult choices that result in additional 
risk in some areas. For example, by reducing overall end strength and 
aggregate force structure, we are accepting greater risk in undertaking 
future prolonged large-scale conventional or stability operations.
    But we will mitigate that risk by protecting our ability to 
regenerate capabilities as needed--the reversibility principle. This 
includes maintaining intellectual capital and rank structure that could 
be called on to expand key elements of the force, ensuring our Reserve 
component is well-equipped and well-trained, and preserving the health 
and viability of the Nation's defense industrial base.
    The Joint Force we are shaping, although smaller and leaner, will 
be agile, flexible, and ready to confront and defeat aggression 
anywhere in the world. It will have the capability to surge, mobilize, 
and regenerate forces and capabilities, enabling us to balance risk 
appropriately across the full range of military missions and to counter 
any future threats.
    General Dempsey. The 2011 CRA which provided the initial baseline 
assessment for the Comprehensive Defense Review (CDR) and the analysis 
for the 2012 CRA were executed in parallel. During that review, we 
conducted an assessment of the nature and magnitude of the strategic 
and military risks associated with successfully executing the missions 
called for under the current National Military Strategy as required by 
Title 10. This assessment leveraged both combatant command and Service 
perspectives, as well as independent Joint Staff analysis. Multiple 
risk perspectives provided an opportunity to balance the ongoing 
operational risks with the force's ability to address future 
challenges. Accordingly, the risk assessment provided a reasoned basis 
for our enduring emphasis on the broader Middle East and the increased 
strategic emphasis on Asia and the Pacific while helping us to focus 
additional effort on specific future capabilities like cyber and Joint 
Operational Access.

    25. Senator Levin. Secretary Panetta and General Dempsey, what 
analysis did DOD do to support the notion of slowing the pace of 
building new ships and accelerating the retirement of some existing 
ships, including examining various cost-benefit alternatives?
    Secretary Panetta. The underlying analysis that informs the 
President's budget for fiscal year 2013 force structure was the 
strategic review conducted by DOD in the summer and fall of 2011. 
During this review, DOD evaluated, among other things, the Joint 
Forces' presence, surge, and shaping demands. For the Navy, the review 
identified the number of ships and aircraft required to sustain a 
forward presence capable of deterring potential adversaries and 
providing options for immediate crisis response while also ensuring 
sufficient capacity to execute combatant commanders' plans.
    The analysis used to inform the decision to accelerate the 
retirement of older cruisers and amphibious ships was predicated on the 
need to balance the cost to upgrade and repair less capable older ships 
with the cost to procure newer more capable ships. Over the past 10 
years, the Fleet has deployed more frequently and sometimes for longer 
than planned. Consequently, maintenance and repair have sometimes been 
deferred. The life cycle costs of maintaining and repairing ships to 
achieve expected service life is normally less expensive than buying 
new ships. However, the average age of the Fleet is increasing due to 
the high annual procurement rates of the 1980s and 1990s. With an eye 
toward sustaining the Fleet's readiness and its capacity and capability 
to fight and win at sea, DOD decided to decommission some older, less 
capable ships in advance of their expected service life in order to 
invest in newer, more capable ships.
    General Dempsey. Specific resourcing decisions were made through a 
comprehensive strategic review that included detailed analysis by the 
Joint Staff, the Services, and OSD. Cost reductions from the early 
retirement of some ships will allow DOD to invest in new technology and 
ships that specifically address the threats targeted by the 
administration's new strategy.

                           OPERATIONAL ENERGY

    26. Senator Levin. Secretary Panetta and General Dempsey, in 2009, 
to address congressional concerns over DOD's heavy reliance on 
petroleum-based fuels to sustain operations on the battlefield in 
locations such as Afghanistan, GAO recommended that the combatant 
commanders and the Military Services establish requirements and 
guidelines for fuel demand management at forward-deployed locations 
within their areas of responsibility (AOR). Also, GAO recommended that 
DOD's operational energy strategy should establish incentives for 
commanders of forward deployed locations to promote fuel demand 
reduction at their locations, as well as identify a viable funding 
mechanism for pursuing fuel reduction initiatives. While we are aware 
that the combatant commands are documenting operational energy 
capability gaps, what is the status of combatant commands including 
CENTCOM formally incorporating requirements related to fuel demand 
management at forward-deployed locations into policy and guidance?
    Secretary Panetta. The combatant commands, including CENTCOM, are 
establishing requirements related to fuel demand management at forward-
deployed locations into their policy and guidance. On June 7, 2011, 
Commander, International Security Assistance Forces (COMISAF) issued 
policy guidance directing commanders to take ownership of unit fuel 
demand and make energy-informed decisions in their operations. In 
October 2011, CENTCOM revised its Contingency Base Camp Development 
Standard Regulation 415-1 to integrate fuel demand management best 
practices. On December 11, 2011, the new COMISAF issued a policy 
memorandum that built upon existing guidance and stated that 
``operational energy equates exactly to operational capability.''
    This policy and guidance has produced tangible fuel demand 
management improvements while capturing critical lessons learned for 
application in other combatant commands. The June 2011 COMISAF 
requirements memorandum resulted in several power generation and 
distribution improvements across Afghanistan. For example, the Army's 
Logistical Contract Augmentation Program (LOGCAP) Program Management 
Office established an Energy Savings Initiative Policy to engage 
contractors in fuel demand reduction efforts. This effort has reduced 
the fuel requirement in Afghanistan by one million gallons per year.
    General Dempsey. The combatant commands, including CENTCOM, are 
establishing policy and guidance related to fuel demand management at 
forward-deployed locations. In June 2011, COMISAF, issued policy 
guidance directing commanders to take ownership of unit fuel demand and 
make energy-informed decisions in their operations.
    The June 2011 COMISAF requirements memorandum resulted in several 
power generation and distribution improvements across the Combined 
Joint Operating Area in Afghanistan. Also, in June 2011, the Army's 
LOGCAP Program Management Office released its Energy Savings Initiative 
Policy to engage contractors in fuel demand reduction efforts.

    27. Senator Levin. Secretary Panetta and General Dempsey, what has 
DOD done to incentivize commanders and units that effectively reduce 
fuel consumption?
    Secretary Panetta. DOD's primary incentives to reduce fuel 
consumption are mitigating operational risk and enhancing combat 
capability. These fundamental incentives have led the Army and Marine 
Corps to achieve substantial reductions in fuel consumption by deployed 
units. DOD also oversees targeted incentive programs such as the Navy's 
Incentivized Energy Conservation Program, which recognizes naval 
vessels that reduce shipboard fuel consumption. The Navy also has a 
similar program for its aviation units called the Navy Air-Energy 
Conservation Program. In addition, the Air Force's Air Mobility Command 
aviation fuel efficiency incentives program provides high-performing 
Mobility Air Force wings financial awards for demonstrating the largest 
gains in energy efficiency.
    General Dempsey. Incentives in fuel consumption reduction are 
mitigating operational risk, thereby enhancing combat capability. DOD 
oversees targeted incentive programs such as the Navy's Incentivized 
Energy Conservation Program awards to naval vessels that best apply the 
program's training to reduce shipboard fuel consumption. The Navy has a 
similar program for its aviation units, the Navy Air-Energy 
Conservation Program. In addition, The Air Force's Air Mobility Command 
aviation fuel efficiency incentives program recognizes high-performing 
Mobility Air Force wings that demonstrate the largest gains in energy 
efficiency.

    28. Senator Levin. Secretary Panetta and General Dempsey, how does 
DOD plan to track fuel consumption at its forward-deployed locations?
    Secretary Panetta. The primary fuel management goal at forward-
deployed locations is to ensure our forces have a reliable, steady 
supply of fuel. The Defense Logistics Agency-Energy tracks fuel 
supplies to forward operations for that purpose, taking into account 
the full range of incidents and factors, including seasonal and 
cultural, that can affect fuel availability.
    In addition, DOD is taking steps to improve data on fuel 
consumption at forward locations for the purposes of managing demand. 
The Defense Operational Energy Board, co-chaired by the Assistant 
Secretary of Defense for Operational Energy Plans and Programs and the 
Joint Staff Director for Logistics, has chartered a task group to 
develop a baseline of operational energy consumption to inform energy 
performance metrics. DOD will apply these metrics to measure and manage 
improvements in energy security for the warfighter. Each of the 
Military Services has taken steps to improve their data collection on 
fuel consumption in military operations as well.
    General Dempsey. The Defense Operational Energy Board, co-chaired 
by the Assistant Secretary of Defense for Operational Energy Plans and 
Programs and the Joint Staff Director for Logistics, chartered a task 
group to develop a baseline of operational energy consumption to inform 
energy performance metrics. DOD will apply these metrics to measure and 
manage improvements in energy security for the warfighter.
    DOD is working to employ new systems to automate data collection 
down to the tactical level. The Army is undergoing limited fielding of 
the Tactical Fuel Manager Defense (TFMD) program at several Afghanistan 
bases. TFMD tracks fuel consumption by the individual piece of 
equipment to improve fuel efficiency.

    29. Senator Levin. Secretary Panetta and General Dempsey, in the 
National Defense Authorization Act (NDAA) for Fiscal Year 2012, this 
committee put into law that the Chairman of the Joint Chiefs of Staff 
shall designate a senior official to be responsible for operational 
energy plans and programs and be responsible for coordinating with the 
Assistant Secretary to implement initiatives. What progress has been 
made to date to establish this operational energy element within the 
Joint Staff, and how do you anticipate the Joint Staff will assist the 
Services on decreasing their reliance on fuel in current and future 
military operations?
    Secretary Panetta. In August 2011, the Chairman of the Joint Chiefs 
of Staff designated the Director for Logistics (DJ-4) as Joint Staff 
point of contact for operational energy plans and programs.
    I also recently signed DOD's Operational Energy Strategy 
Implementation Plan, which established the Defense Operational Energy 
Board, co-chaired by the Assistant Secretary of Defense for Operational 
Energy Plans and Programs (ASD(OEPP)) and DJ-4. I chartered the board 
to reduce energy demand, expand supply, and balance requirements. The 
board provides a mechanism for reviewing, synchronizing, and supporting 
department-wide operational energy policies, plans, and programs.
    General Dempsey. In August 2011, the Chairman of the Joint Chiefs 
of Staff designated the Director for Logistics, DJ-4, as Joint Staff 
point of contact for operational energy plans and programs.
    The Defense Operational Energy Board, co-chaired by the ASD(OEPP) 
and DJ-4, recently published their implementation plan to reduce energy 
demand, expand supply, and adapt the future force. The board provides a 
mechanism for reviewing, synchronizing, and supporting department-wide 
operational energy policies, plans, and programs.

    30. Senator Levin. Secretary Panetta and General Dempsey, with the 
additional leadership provided by the Joint Staff on operational energy 
efforts, what significant changes should we expect regarding how DOD 
plans and currently manages fuel demand and energy challenges in 
current and future war time scenarios?
    Secretary Panetta. DOD is following through on the changes to DOD 
force planning, requirements development, and acquisition processes 
Congress directed in the John Warner NDAA for Fiscal Year 2009. My 
expectation is that the work of the new Defense Operational Energy 
Board and DOD's Operational Strategy Implementation Plan will drive 
significant changes in how DOD plans and programs. We see operational 
energy, particularly demand reduction, becoming an increasingly 
important requirement for our forces because of the inherent 
vulnerability of fuel storage and logistics lines of communication and 
the growth of anti-access/area denial (A2/AD) capabilities to threaten 
them. The recent Joint Operational Access Concept states that DOD 
should ``decrease the logistical appetite of joint forces in all 
classes of supply, but especially in fossil fuels,'' to decrease the 
risk of these A2/AD threats.
    General Dempsey. DOD is following through on the changes to DOD 
force planning, requirements development, and acquisition processes 
directed by Congress in the 2009 NDAA. We believe operational energy 
demand reduction is becoming an increasingly important requirement for 
our forces due to the inherent vulnerability of fuel storage and 
logistics lines of communication, and the growth of A2/AD capabilities 
that threaten them.

    31. Senator Levin. Secretary Panetta and General Dempsey, have 
there been discussions on including specific energy efficiency 
strategies into strategic planning documents?
    Secretary Panetta. The recently signed Operational Energy Strategy 
Implementation Plan includes specific targets that direct changes to 
policy, doctrine, and combatant command activities. The Defense 
Operational Energy Board established a task group to review relevant 
DOD policies and develop a prioritized roadmap for including strategies 
to reduce operational demand, assure supply, and adapt the future 
force. As overarching strategic planning documents are reviewed, the 
board will provide a focal point for coordinating across the defense 
components.
    General Dempsey. The recently signed Operational Energy Strategy 
Implementation Plan includes specific targets that direct changes to 
policy, doctrine, and combatant command activities. The Defense 
Operational Energy Board established a task group to review relevant 
DOD policies and develop a prioritized roadmap for including strategies 
to reduce operational demand, assure supply, and adapt the future 
force.

           DEFENSE INDUSTRIAL BASE AND SCIENCE AND TECHNOLOGY

    32. Senator Levin. Secretary Panetta, the new Defense Strategic 
Guidance stated that DOD will ``make every effort to maintain an 
adequate industrial base and our investment in science and technology 
(S&T).'' DOD's budget for S&T activities decreased from $12.3 billion 
in fiscal year 2012 to $11.9 billion in this year's request. While it 
appears S&T was spared draconian cuts in an attempt to make a 
commitment in our seed corn for the future, I'd like to better 
understand what explicit steps DOD is taking. Are there specific areas 
DOD is increasing its S&T investments in?
    Secretary Panetta. The fiscal year 2013 President's budget request 
for DOD S&T is $11.861 billion, which represents a modest decline of 
$386 million compared to the fiscal year 2012 President's budget 
request of $12.247 billion. This is a decline of 4.73 percent, when 
adjusted for inflation. Within this budget request, DOD decided to 
strongly support sustainment of Basic Research. While a decline of just 
under 5 percent in the S&T program does have an impact, it is 
manageable and reasonable when taken in the context of the overall DOD 
budget decline of 7.01 percent, adjusted for inflation. Specific areas 
where DOD is increasing its S&T investments include promising 
technologies to counter other nations' development of A2/AD 
capabilities, cyber operations, autonomy, human systems, electronic 
warfare, and counter weapons of mass destruction (WMD). S&T funds have 
also been aligned with the Office of Management and Budget (OMB) and 
Office of Science and Technology policy priorities in advanced 
manufacturing, Army medical research, advanced robotics capabilities, 
advanced training technologies, and clean energy programs. Across the 
FYDP (fiscal year 2013 to fiscal year 2017), DOD has increased funding 
for high speed kinetic strike ($353 million), electronic warfare/cyber 
($195 million), offensive cyber operations ($400 million) and cyber 
communications ($382 million). We believe this budget represents a 
reasonable reprioritization of the DOD S&T program.

    33. Senator Levin. Secretary Panetta, are there areas that are 
facing reductions?
    Secretary Panetta. S&T funding declined 4.73 percent against 
inflation in the fiscal year 2013 President's budget request, with 
reductions occurring in all components. While the funding went down, we 
believe we are able to manage the risk. Specific technical areas with 
greater risk in the Army include: military engineering technology 
development for installations and field operations; applied 
topographical research for geospatial products; and weapons, munitions, 
missile, and rocket technology development for small precision 
munitions, such as mortars. Navy reductions were smaller than the other 
Military Departments and included technology development to improve 
logistics operations and sustainment. Within the Air Force, additional 
risk was accepted in the following areas: laser protection for anti-
access standoff munitions and for aircraft pilot visors; novel 
navigation techniques for non-permissive environments; space precision 
navigation and timing; trusted systems for avionics devices; and 
advanced airborne networked and wide-band communications. Funding 
reductions also occurred in the following Defense-wide technology 
areas: National Defense Education Program; human, social, cultural, 
behavior modeling; Joint Experimentation; Joint Capability Technology 
Demonstrations; biomaterials technologies; machine intelligence; 
cognitive computing; command, control and communication systems; and 
advanced electronics. Although the reductions are numerous, most are 
below $20 million in magnitude, and funding for DOD's highest priority 
technology programs was protected.

    34. Senator Levin. Secretary Panetta, is the DOD laboratory 
enterprise facing any potential base realignment and closure (BRAC) 
facility and workforce reductions?
    Secretary Panetta. BRAC enables DOD to reconfigure its 
infrastructure to match the demands of leaner, more flexible forces to 
accommodate our changing strategic emphasis. It is an important tool 
for DOD to use to make the tough fiscal choices necessitated by current 
budget challenges. If Congress does authorize the requested BRAC 
rounds, DOD will undertake the BRAC rounds in accordance with the 
statutory directive to consider all installations equally and make 
decisions based on 20-year force structure plan and statutory selection 
criteria, which give primary consideration to military value. In this 
context, DOD will examine all its missions and functions, including the 
laboratory enterprise.

    35. Senator Levin. Secretary Panetta, what specifically is DOD 
doing to maintain an adequate industrial base?
    Secretary Panetta. DOD is taking responsible steps to ensure that 
the defense industry can support our warfighters' needs, now and in the 
future. DOD's primary mechanism for supporting the industrial base is 
through the programs that buy the defense industry's products. DOD 
chooses what to purchase based on warfighter requirements, but DOD can 
sometimes adjust program schedules or capitalize on synergies across 
programs to sustain critical industrial base capabilities. In 
exceptional cases, in certain niches, when current programs will not 
support the minimum sustaining rate that a niche supplier needs to 
provide a critical product or service, DOD also uses its industrial 
base investment resources like the Defense Production Act Title III 
authority and the Manufacturing Technology Program to ensure the 
continued health of the selected parts of the defense industry. These 
rare interventions should only occur in areas where DOD is highly 
likely to need a product in the future, where the product would be hard 
and expensive to obtain after a hiatus, and where affordable and 
innovative approaches are available to use to retain the producers in 
the interim. Additionally, DOD is doing a continuous, systematic, fact-
based review of the defense industrial base, led by the Under Secretary 
of Defense for Acquisition, Technology and Logistics, called the 
Sector-by-Sector, Tier-by-Tier (S2T2) project. The S2T2 process, which 
is still ongoing, will identify critical and fragile niches in the 
industrial base that need additional monitoring. Combined, all of these 
efforts help to preserve the dynamic qualities of the industrial base 
that supply our warfighters with their technological edge.

    36. Senator Levin. Secretary Panetta, what is the definition of 
adequate?
    Secretary Panetta. In the context of the defense industrial base, 
``adequate'' means sufficient to provide the capabilities that our 
warfighters need, including maintaining our technological edge. An 
adequate industrial base has the capability to produce top-class 
equipment at reasonable cost today, and an adequate industrial base 
constantly adapts and invests in future capability.

    37. Senator Levin. Secretary Panetta, according to DOD's statement 
of defense budget priorities, ``some domestic manufacturers have key 
skills in the design and manufacture of military systems that cannot be 
duplicated elsewhere in the economy or regenerated quickly. In support 
of the strategic guidance's tenet of reversibility, this budget plan 
sustains, where possible, these segments of the industrial base. 
However, the industrial base will require careful monitoring in the 
future.'' What defense-unique industrial skills in design and 
manufacture are at greatest risk of loss given the administration's 
budget?
    Secretary Panetta. The defense industrial base is very diverse, and 
some sectors and tiers of the industrial base are in stronger positions 
financially and technically than others. DOD cannot support all parts 
of the industrial base equally. Some areas that DOD currently views as 
``at risk'' may appropriately decline as new technologies and the 
evolving strategic situation change our acquisition requirements. Even 
in the areas that DOD does need to sustain, we will take advantage of 
competition whenever we can, and we will invest in forward-leaning, 
pro-innovation efforts rather than preserving a static, backward-
looking industrial base.
    DOD is expanding its systematic investigation to identify critical 
and fragile niches that require especially close monitoring, but we 
already know of some areas of emphasis. For example, production in the 
aircraft sector is fairly robust, but for the first time in decades DOD 
does not have an ongoing tactical aircraft design effort, so we are 
examining creative and efficient ways to stimulate design capabilities 
there. In the production realm, demand for some strategic systems and 
space launch is relatively low at present, but we know that it will 
return in the future, so we are closely monitoring and investing to 
sustain and enhance production capability in solid rocket motors. Over 
time, DOD will make responsible choices with our industrial base 
efforts, we will rarely single out specific products or suppliers for 
support, and we will continuously update and adapt the list of niches 
that we monitor to reflect the changing industrial and strategic 
environments.

    38. Senator Levin. Secretary Panetta, which acquisition programs 
will be given the highest priority in ensuring reversibility?
    Secretary Panetta. DOD continues to apply ``reversibility'' to 
ensure DOD maintains the ability to regenerate, mobilize, and adapt our 
capabilities to ensure options for an uncertain future. The concept 
applies to our people, our Active-Reserve component balance, our 
posture, our partnerships, and our industrial base. As we establish 
priorities for acquisition programs, we aim to preserve select 
capabilities and critical skills within the industrial base to ensure 
we maintain skill sets vital to our ability to regenerate and adapt to 
changing threats. DOD's S2T2 initiative is assisting the Military 
Services in identifying critical industrial capabilities and skill sets 
that are at risk. Our decision calculus will be based upon a 
combination of many factors, including shocks or evolutions in the 
strategic, operational, economic, and technological spheres.
                                 ______
                                 
           Questions Submitted to Senator Joseph I. Lieberman

                    NORTH KOREAN NUCLEAR DETERRENCE

    39. Senator Lieberman. Secretary Panetta and General Dempsey, I am 
skeptical of DOD's apparent optimism that it will no longer be called 
on to conduct large-scale stability operations and worried about the 
consequences of declaring that we do not need to prepare for them. I 
believe it is important to note that DOD never actually sized the 
ground forces for large-scale stability operations, resulting in the 
severe dwell-to-boots-on-the-ground ratios that our soldiers have faced 
in recent years. It is in light of this skepticism that I am deeply 
concerned about the speed and depth of the reductions in ground force 
end strength envisioned in this budget request. Could you describe the 
specific risks you envision as a result of this decision and how you 
will mitigate them?
    Secretary Panetta. The new Defense Strategic Guidance states that 
our forces will retain the expertise, operational lessons learned, 
institutional knowledge, and specialized capabilities required for 
stability operations.
    In any defense strategy there are inherent risks; we believe the 
ones in this strategic guidance are manageable and acceptable. While 
U.S. forces will retain the capacity to undertake stability and 
counterinsurgency operations on a more limited scale, we are accepting 
greater risk in undertaking prolonged, large-scale stability 
operations. To mitigate that risk we will retain expertise, operational 
lessons learned, institutional knowledge, and specialized capabilities 
required for stability operations. Further, we will ensure that we have 
the ability to mobilize and regenerate forces should our assessments of 
the future scale of stability operations prove inaccurate.
    General Dempsey. You are correct that the Active component was not 
sized to conduct large-scale prolonged stability operations in the 
past; this will carry over to the future. If a large scale force is 
needed, risk will exist, as it has in the past, to the Active component 
until Reserve Forces can be recalled and trained to accomplish the 
mission. To help mitigate the risk, we will continue to rely on the 
battle-tested Reserve and Guard components of the Joint Force to 
provide the strategic and rotational depth should the Nation require us 
to execute a large-scale prolonged stability operation. We further 
mitigate operational risk to this mission by ensuring that we size the 
Active component to conduct limited counterinsurgency and other 
stability operations if required. Institutionally, we will mitigate 
risk by retaining the hard-won knowledge and experience in our force 
through retention of key leaders and emphasis on full-spectrum 
training. We mitigate risk with regard to future challenges by 
maintaining the right pace of reductions. If we go too fast, experience 
shows we will not do a good job of retaining key people and skills. 
Finally, the most comprehensive risk mitigation activity is a 
deliberate, comprehensive reset of the Joint Force. If we have fully 
trained and ready forces, and we do not exceed the current pace of 
reductions, I am confident that we can maintain military risk to that 
mission at an acceptable level.

    40. Senator Lieberman. Secretary Panetta and General Dempsey, while 
the new Defense Strategic Guidance states that ground forces will not 
be sized for large-scale stability operations, it also lists 
``stability and counterinsurgency operations'' as one of the ``primary 
missions'' of the U.S. military. Why won't the ground force be sized to 
conduct one of its ``primary missions?''
    Secretary Panetta. Stability and counterinsurgency operations are 
primary missions of the U.S. Armed Forces. With the transition of 
security responsibility in Afghanistan to the Afghan National Security 
Forces (ANSF) in 2014, and with sufficient time for U.S. forces to 
reset, we can reduce some capacity in the force for prolonged, large-
scale stability operations. U.S. forces will still retain expertise, 
operational lessons learned, institutional knowledge, and specialized 
capabilities required for stability operations, as well as the capacity 
to undertake stability and counterinsurgency operations on a more 
limited scale. Further, we will ensure that we have the ability to 
mobilize and regenerate forces if necessary.
    General Dempsey. It is important to note that stability operations 
and counterinsurgency will continue to be primary missions for the 
Joint Force. Mission sets are rarely binary--``high end'' or ``low 
end''. Missions are generally multi-faceted and tend to cross the full 
spectrum of operations. While we will increase emphasis on projecting 
power we are not forsaking our hard-won proficiencies in stability 
operations and counterinsurgency. The total ground force will be sized 
to conduct its primary mission, and we will rely on the battle tested 
Reserve and Guard components of the Joint Force to provide the 
strategic and rotational depth for all missions.

    41. Senator Lieberman. Secretary Panetta and General Dempsey, how 
can the force be prepared to conduct this particular ``primary 
mission'' without the necessary manpower?
    Secretary Panetta. U.S. forces will retain sufficient capacity to 
undertake limited counterinsurgency and stability operations, if 
required. We will also seek to operate alongside coalition forces, 
whenever possible. Recognizing the uncertainties of the international 
environment, we will ensure that we have the ability to mobilize and 
regenerate forces if a larger-scale stability operation becomes 
necessary in the future.
    General Dempsey. The force will have the necessary manpower 
resident in the total Joint Force--Active and Reserve.

    42. Senator Lieberman. Secretary Panetta and General Dempsey, the 
new Defense Strategic Guidance and fiscal year 2013 budget request 
emphasize investments in SOF. However, SOF personnel are drawn from 
general-purpose forces that are slated for reductions, and SOF units 
rely heavily on general-purpose forces for support. As General Dempsey 
has previously stated, ``The SOF can only be special if there's a 
conventional force that allows them to conduct their operations and 
shape the environment.'' What are the risks to SOF that will result 
from decisions to shrink general-purpose forces so significantly? For 
example, the fiscal year 2013 budget request calls for SOF by 3,000 
personnel, while cutting general-purpose ground force end strength. 
This reduction will impact the pool of personnel SOF can draw from. How 
can SOF grow without sacrificing standards with a smaller pool of 
manpower to draw from?
    Secretary Panetta. The remaining programmed growth for SOF is 
primarily focused on enhancing the organic combat support/combat 
service support capability in SOF units to provide increased 
capabilities in those areas, reducing the requirement for General 
Purpose Force (GPF) support to conduct forecasted operations. For long-
duration and large-scale operations, GPF support is necessary, and the 
Department is currently undertaking a range of different analyses to 
identify GPF support requirements for SOF, such as logistics and 
intelligence personnel, and to mitigate potential risks to SOF 
operations associated with reductions in the GPF.
    There is no requirement or expectation to change SOF's exacting 
selection standards, even if the pool from which to draw those 
individuals is reduced. GPF reductions will mean that a greater 
percentage of the overall force is actually resident in the special 
operations community and that we manage our force carefully in order to 
maintain the requisite talent pool. We must continue efforts to sustain 
the SOF that we already have most effectively. The Service component's 
continued support of robust, SOF-focused retention initiatives will 
have a positive impact on the retention behavior and readiness of our 
SOF personnel. The Department is working closely with U.S. Special 
Operations Command (SOCOM) to analyze force preservation challenges 
carefully.
    General Dempsey. Recently, the annual SOF manpower growth of 3-5 
percent we have sustained has not diluted the force or outpaced the 
required training and support structure. SOCOM has done a magnificent 
job of adjusting their processes to maintain the quality of SOF 
operators and support personnel during this current era of SOF growth. 
As an example, Special Forces soldiers (officers and enlisted) are 
drawn from the ranks of the Army's GPF; with the exception of 
relatively small number of 18Xs recruited ``off the street.'' Any 
future growth of SF will occur during a general reduction in Army end 
strength. SF will be recruiting from a smaller pool of candidates, just 
as all SOCOM components do. SOCOM will not compromise standards in 
selecting and training future SOF operators. It is vital to maintain 
the high standards that have been adopted by SOCOM's components since 
we have asked and continue to ask SOF operators to conduct National 
Level Missions in strategically sensitive environments. the Assistant 
Secretary of Defense (Special Operations/Low-Intensity Conflict 
(ASD(SO/LIC)) will work with the Service Secretaries (through OSD) to 
ensure that Commander, SOCOMs Special Operations Forces manpower needs 
are represented.
                                 ______
                                 
             Questions Submitted by Senator Daniel K. Akaka

                     SEXUAL ASSAULT IN THE MILITARY

    43. Senator Akaka. Secretary Panetta, DOD has taken a number of 
positive steps to address the very serious issue of sexual assault in 
our military. Over the holidays, you announced two new policies that 
provide greater support for the victims of sexual assault. What action 
is DOD taking to protect the men and women who so bravely protect us?
    Secretary Panetta. We are committed to doing everything we can to 
prevent sexual assault in the first place, provide all necessary care 
and services to victims of sexual assault, and ensure our commanders 
hold offenders appropriately accountable. Our new Expedited Transfer 
policy gives servicemembers who file unrestricted reports of a sexual 
assault an option to request quick transfer from their unit or 
installation to avoid harassment and separate them from the alleged 
perpetrator. For victims who made an unrestricted report we now require 
sexual assault documentation be retained for up to 50 years, making it 
easier for veterans to file a claim with the Department of Veterans 
Affairs (VA). For victims who file restricted reports, certain 
documentation must be retained for 5 years. In addition, we believe we 
have developed a set of initiatives that fundamentally change the way 
DOD deals with this problem. Some of the steps that we will work with 
Congress in trying to include in our legislative package are: enhancing 
training programs for sexual assault prevention, including training for 
new military commanders in handling sexual assault matters; 
establishing a ``Special Victim's Unit'' capability within each of the 
Services; allowing Reserve and National Guard personnel who have been 
sexually assaulted while on Active Duty to remain in their Active Duty 
status in order to obtain treatment and support; requiring a record of 
the outcome of disciplinary and administrative proceedings be centrally 
retained; and requiring commanders to conduct annual organizational 
climate assessments. Further, in July 2011, we assigned a general 
officer to lead our Sexual Assault Prevention and Response Office. Some 
of our other accomplishments are highlighted below:

    a.  In April 2011, we activated the anonymous and confidential DOD 
Safe Helpline which is a sexual assault crisis support and resources 
service for adult servicemembers of the DOD community. Users may call, 
click or text anytime, from anywhere for assistance and/or referrals 
regarding a sexual assault. Our most recent data confirm that this is a 
valuable tool being used by our servicemembers to facilitate care and 
reporting.
    b.  In January 2012, we reissued our DOD Directive that sets policy 
for the Department on Sexual Assault Prevention and Response (SAPR). 
The directive expanded support services to military spouses and adult 
military dependents, who will now be able to file confidential 
restricted reports and receive the services of a sexual assault 
response coordinator and victim advocate.
    c.  This Directive also ensures DOD civilian employees and their 
family dependents 18 years of age and older when they are stationed or 
performing duties outside of the continental United States (OCONUS) are 
eligible for treatment in the military healthcare system at military 
installations or facilities OCONUS. Additionally, U.S. citizen DOD 
contractor personnel when they are authorized to accompany the Armed 
Forces in a contingency operation OCONUS and their U.S. citizen 
employees are also eligible for the same emergency care and the help of 
a sexual assault response coordinator and a victim advocate, during 
that emergency care.
    d.  We have established the DOD Sexual Assault Advocate 
Certification Program which will require our sexual assault response 
coordinators and victim advocates obtain a credential aligned with 
national standards. This will ensure our victims of sexual assault 
receive the best care from a professional who can provide crucial 
assistance from the moment an assault is reported through case 
conclusion.
    e.  Sexual assault cases are some of the toughest cases to 
investigate and to prosecute and we must increase the number of subject 
matter experts in this area. To that end I have increased funding for 
military criminal investigators and judge advocates to receive 
specialized training. We are also ensuring that eligible victims have 
the opportunity to receive expanded legal assistance early in the 
process of their case.
    f.  We now have one integrated data system to track sexual assaults 
throughout the Department. The Defense Sexual Assault Incident Database 
(DSAID) achieved initial operational capability 30 March 2012, with the 
U.S. Air Force and the National Guard Bureau as the first users. By 31 
August 2012, it will be fully operational with the integration of the 
rest of the military Services. This data base will ensure the 
transparency of sexual assault-related data and enhance support 
services
    g.  Furthermore, because commanders are responsible to maintain 
good order and discipline of their people, as well as hold offenders 
appropriately accountable, I have directed an assessment of how we 
prepare and train our commanding officers and senior enlisted leaders 
to prevent and respond to sexual assault.
    h.  We are collaborating with the Departments of Labor and Veterans 
Affairs to develop a ``continuum of care'' for sexual assault victims 
transitioning out of military service. By leveraging our DOD Safe 
Helpline infrastructure, the Department is able to present clear and 
easily accessible information on how to get help with counseling, 
benefits determinations, transitions and employment. By bridging the 
gap from DOD to the VA for sexual assault victims, we provide a 
continuum of care from Active Duty to veteran status.
    i.  I recently introduced a new initiative that will elevate the 
disposition authority for the most serious sexual assault offenses to 
the ``Special Court Martial Convening Authority'' level. This reviewing 
officer is at the colonel or Navy captain level and will ensure these 
cases receive a high level of command attention.

    These initiatives are just a start. The Department is focused on 
building a safe environment for our men and women--I have no more 
important mission than to protect the people who protect this country.

                     MENTAL HEALTH IN THE MILITARY

    44. Senator Akaka. Secretary Panetta, ending the stigma associated 
with seeking mental health care is critical for the well-being of our 
men and women who serve in our military. I applaud the Department's 
success in increasing the percentage of those who seek help when 
needed. As we go forward, what do you see as the remaining challenges 
to further reducing the stigma associated with seeking mental health 
care?
    Secretary Panetta. Emphasis on the well-being and fitness of the 
Force, and the prevention of adverse outcomes for servicemembers, is a 
national priority. Early intervention through self-referral for issues 
of concern to servicemembers, and the reduction of stigma that may be 
associated with self-identification of the need for assistance for 
mental health conditions, are of paramount importance to leadership 
throughout DOD. To address these aims, a policy was issued in August 
2011, Command Notification Requirements to Dispel Stigma in Providing 
Mental Health Care to Servicemembers, which emphasizes that mental 
health providers are generally not required to notify Command when 
servicemembers voluntarily seek alcohol education or mental health 
services. This policy is part of the Department's effort to encourage 
servicemembers to come forward for evaluation and treatment before 
symptoms are serious enough to result in an alcohol related incident or 
in situations that might provoke command-directed action.
    All of these steps, and monitoring compliance with these measures 
at commands, should help reduce the stigma associated with seeking 
mental health care. The Deparment recognizes that more needs to be done 
to end that stigma, and we will continue to work toward that end. It is 
imperative for commanders to reinforce the value of help-seeking 
behavior within the military healthcare system. This can be done by 
fostering open discussion of mental health problems, making information 
regarding the means to access care readily available, and assisting 
servicemembers with their return to full duty following treatment.

                           GUARD AND RESERVE

    45. Senator Akaka. Secretary Panetta, as this budget submission 
looks to re-shape the military to be more agile, quick, and flexible--
and incorporate the lessons learned in 10 years of war--I appreciate 
the attention you give the Guard and Reserve components. Our Guard and 
Reserve Forces have been a crucial asset to this Nation and have served 
us well. The budget proposes force structure adjustments for our Active 
and Reserve Forces. How do you think the changes will impact the 
readiness of the Total Force?
    Secretary Panetta. Our goal is to develop a versatile mix of 
scalable organizations operating on a rotational cycle, to provide a 
sustained flow of trained and ready forces for the full range of 
military operations and to hedge against unexpected contingencies at a 
sustainable tempo for our All-Volunteer Force. At the same time, 
ensuring access to the Reserve component which is essential to 
providing the operational depth and flexibility combatant commanders 
require.
    As we have stated, our forces will get smaller; this will emphasize 
the importance of the Reserve component as an operational reserve. The 
Reserve component will also become more important as a steward for 
specialized skill sets to maintain expertise critical to regenerating 
capabilities when greater capacity is required.

    46. Senator Akaka. Secretary Panetta, upon completing deployments 
and returning to the civilian world, many in the Guard and Reserve 
continue to experience problems which may not have been diagnosed upon 
their return. I understand that sometimes post traumatic stress and 
other invisible wounds of war do not surface right away. In your 
opinion, what can be done to better assess and treat these returning 
Guard and Reserve soldiers?
    Secretary Panetta. DOD has revised its deployment mental health 
assessment process to provide comprehensive person-to-person mental 
health assessments before deployment and at 6 months, 1 year, and 2 
years after return from deployment. This process applies to Guard and 
Reserve soldiers who deploy, as well as to members of the Active 
component who deploy. These procedures comply with requirements in the 
NDAA for Fiscal Year 2012 (Section 702). The three post-deployment 
mental health assessments are performed by licensed mental health 
professionals or designated personnel trained and certified in 
performance of the assessments. These mental health assessments include 
an analysis of self-reported responses to mental health questions 
regarding symptoms of depression, posttraumatic stress disorder (PTSD), 
and alcohol misuse, detailed follow-up of positive responses regarding 
previous mental health diagnoses and medication use, and exploration of 
other reported emotional, life stress, or mental health concerns.
    During these assessment sessions, providers weigh risks for suicide 
or violence, offer education on relevant mental health topics, 
administer brief interventions, and, as indicated, make recommendations 
for follow-up assessment and care.
    After returning home from deployment, help for any mental health 
issues, including depression and PTSD, is available through the 
Military Health System for Active Duty and retired servicemembers, or 
through the VA for all veterans. Active Duty, National Guard, and 
Reserve servicemembers who separate and who served in support of a 
contingency operation are eligible for TRICARE's Transitional 
Assistance Management Program (TAMP), which provides health benefits 
for 180 days to assist servicemembers and their families with the 
transition to civilian life. For those who may be separating from the 
Service due to medical disability, VA Federal Recovery Coordinators and 
Service Recovery Care Coordinators assist with servicemember transition 
from DOD to VA care, treatment, and rehabilitation. The DOD 
inTransition program is a free, voluntary, and confidential coaching 
and assistance program that also provides a bridge of support for 
servicemembers while they are transitioning between healthcare systems 
or providers.
    Each Service has a comprehensive program to address the 
reintegration needs of wounded, ill, and injured servicemembers, 
including the Army Wounded Warrior Program, the Marine Wounded Warrior 
Regiment, Navy's Safe Harbor Program, and the Air Force Wounded Warrior 
Program. Across DOD, the Military Family Life Consultants address 
family distress by providing education and information on family 
dynamics, parent education, available support services, and the effects 
of stress and positive coping mechanisms. Military OneSource has 
counselors standing ready 24/7 by phone and email and are available for 
face-to-face counseling. The DOD Yellow Ribbon Reintegration Program 
was established to address the needs of National Guard and Reserve 
servicemembers and their families by facilitating access to support and 
reintegration services. The Defense Centers of Excellence for 
Psychological Health and Traumatic Brain Injury (DCoE) has a number of 
education and outreach programs, including DCoE's Outreach Center, 
``24/7 Help,'' which provides information and resources on 
psychological health and traumatic brain injury, and the 
Afterdeployment.org Web site, which assists servicemembers and their 
families in managing post-deployment challenges.
    The Military Services have developed training programs to mitigate 
the effects of combat-related stress. The Army implemented the 
Comprehensive Soldier Fitness Program Army-wide; the Air Force uses the 
Landing Gear program; the Navy has an Operational Stress Control 
program; and the Marine Corps uses a program called Operational Stress 
Control and Readiness. Each of these programs seeks to prepare 
servicemembers to better cope with combat and deployment stress before, 
during, and after deployment. On a more holistic level, the Office of 
the Chairman of the Joint Chiefs of Staff has promoted the Total Force 
Fitness model to address the need for a synchronized, DOD-wide approach 
to strengthen resilience and maintain optimal military force readiness. 
This model fosters leadership interventions throughout DOD that 
strengthen the comprehensive health of servicemembers across many 
domains: Behavioral, Social, Physical, Environmental, Medical, 
Spiritual, Nutritional, and Psychological.

                        FEMALES IN THE MILITARY

    47. Senator Akaka. Secretary Panetta, last week DOD announced that 
it would open about 14,000 combat-related positions to female troops. 
You also recently announced the President's nomination of the first 
female four-star general for the Air Force. These are both positive 
steps. Can you give me a sense of where you think DOD is with respect 
to diversity initiatives--such as fostering a diverse base of officers 
from which to select our future senior leaders?
    Secretary Panetta. DOD agrees the future military must be comprised 
not only of men and women of different racial and ethnic backgrounds, 
but also of individuals with a wide range of talents, experience, and 
skill sets. Because the military operates as a closed personnel system, 
the demographic diversity of accessions and those retained over the 
course of a career directly influences the potential demographic 
diversity of future senior leaders; on average it takes 25 years to 
``grow'' a General or Flag Officer. As such, given a limited pool of 
eligible candidates, outreach, recruiting, and retention strategies 
play a critical role in attracting and retaining qualified personnel to 
military service.
    DOD has committed a significant amount of resources to expand 
outreach efforts with affinity groups to strengthen the qualifications 
of potential candidates. For example, DOD hosts a number of training 
events particularly in the area of Science, Technology, Engineering, 
and Math (STEM) to strengthen shortcomings in an area critical to 
national security. Currently, a DOD pilot program with an East Los 
Angeles school-age population of roughly 20,000 includes programs to 
train parents and influencers on how to support STEM education in the 
home. The program begins in Kindergarten and ties into the California 
university system. The program is in its fourth year and surveys find 
that 100 percent of program participants have been positively 
influenced by the program. Additionally, DOD supports the STARBASE 
Program, a youth outreach program designed to increase student interest 
in STEM that will help build and enlarge the talent pool of potential 
military and civilian personnel needed by DOD. The DOD STARBASE Program 
operates at 60 locations in 34 States, the District of Columbia, and 
Puerto Rico. Military Commanders (Active, Guard, and Reserve) have 
collaborated with 1,086 schools from 387 school districts, serving 
approximately 64,000 students. Since 1993 more than 609,000 students 
have participated in the STARBASE Program.
    Cooperation and support of affinity groups also positively enhances 
diversity ``in-reach'' efforts to enhance career development, 
mentoring, and networking resources for those currently in uniform. DOD 
continues to work with components' leadership to address integration of 
talent management programs process and practices, mentorship, and 
succession planning to optimize the ability of all servicemembers to 
make informed career choices from accession to retirement.

                              NORTH KOREA

    48. Senator Akaka. Secretary Panetta, in 2011, the United States 
and North Korea agreed to restart efforts to search for and repatriate 
the remains of U.S. soldiers missing from the Korean War. Please 
provide an update on this program.
    Secretary Panetta. The United States and the Democratic People's 
Republic of Korea (DPRK) signed an arrangement on October 20, 2011, to 
resume joint remains recovery operations in the DPRK. The U.S. 
Government has worked diligently to comply with the arrangement and as 
of this hearing date we are on schedule to resume remains recovery 
operations in April.

                      DON'T ASK DON'T TELL POLICY

    49. Senator Akaka. Secretary Panetta, on December 22, 2010, 
President Obama signed the law which repealed the Don't Ask, Don't Tell 
policy. After required certifications were made, the repeal occurred on 
September 20, 2011. Have you encountered any difficulties in 
implementing the repeal of Don't Ask, Don't Tell?
    Secretary Panetta. The Services and combatant commands continue to 
provide monthly progress reports on the implementation of repeal. To 
date, and based on these reports, repeal is going smoothly and we have 
had no significant repeal-related issues. We attribute this success to 
our strong and dedicated leadership, comprehensive pre-repeal training 
programs, continued close monitoring and enforcement of standards by 
our military leaders, and servicemembers' adherence to core values that 
include professionalism, dignity, and respect for all.

    50. Senator Akaka. Secretary Panetta, have any new issues or 
concerns surfaced since the repeal went into effect?
    Secretary Panetta. No. DOD continues to closely monitor 
implementation across the Services and combatant commands. Through our 
monthly progress reports, we have found that the most common concern 
from the field is about benefits-specifically, whether or not benefits 
will be extended to same-sex partners.
    With regard to benefits, DOD is engaged in a comprehensive review 
of the possibility of extending eligibility for additional benefits, 
when legally permitted, to same-sex partners of military members.

                          READINESS CHALLENGES

    51. Senator Akaka. Secretary Panetta, some defense experts believe 
that, with the withdrawal from Iraq last year and considering our plans 
to leave Afghanistan by 2014, the U.S. military will enter a ``post-
counterinsurgency'' era. This view was reinforced by the 
administration's January 26 announcement of a strategic shift to the 
Asia-Pacific and Middle East region. Can you describe what readiness 
challenges U.S. forces will face as we transition to a new era where 
engagement and ensuring freedom of access will likely be the strategic 
norm?
    Secretary Panetta. Our future environment will present an 
increasingly complex set of challenges and opportunities to include:

         Transition in Afghanistan
         Violent extremism (destabilizing threats)
         Building partner security capacity
         Addressing challenges to U.S. power projection and 
        operational access

    For the last decade, the United States has been involved in 
extensive global operations to secure important national interests. The 
focus of these operations has overwhelmingly been counterinsurgency and 
stability operations, and we have focused on preparing ground combat 
forces for those operations, which means there has been less focus on 
training for conventional warfare.
    As these operations draw down and returning ground forces reset, 
our strategic approach will transition toward an increased emphasis on 
meeting future challenges. As it does, our forces will remain ready and 
able to conduct limited counterinsurgency and other stability 
operations. We are rebalancing training and equipment and maintaining a 
broad portfolio of capabilities that will ensure versatility to deal 
with this environment, to include increasing capacity in language, 
regional expertise, and associated culture. During this transition, our 
people and equipment, having endured maximum stress for extended 
periods, must be reset and sustained. To deter and defeat aggression, 
we must provide ready forces for current operations as well as prepare 
for unforeseen crisis and contingency response.

                        FOREIGN LANGUAGE SKILLS

    52. Senator Akaka. Secretary Panetta, in July 2009, DOD testified 
before the Senate Subcommittee on Oversight of Government Management, 
the Federal Workforce, and the District of Columbia on its foreign 
language capabilities. Concerning foreign languages, DOD testified that 
it ``is a priority for the Department of Defense.'' Please discuss how 
the DOD's fiscal year 2013 budget request ensures that the men and 
women in uniform and civilian workforce have the language skills 
necessary to meet DOD's mission.
    Secretary Panetta. DOD will continue to focus on expanding, 
improving, and strengthening language efforts that began in 2005 as a 
result of the Defense Language Transformation Roadmap. The current 
budget request ensures that the Defense Language Institute Foreign 
Language Center provides the men and women in uniform and the civilian 
workforce the language skills necessary to meet DOD's mission for the 
21st century. Our budget request will continue to support our Language 
Training Detachments located across the United States for GPF and 
Special Operations Forces training. We plan to continue funding 
initiatives such as the Afghanistan Pakistan Hands Program, which 
create a cadre of professionals with language and regional knowledge 
equipped to work in regions of U.S. engagement. My staff is working to 
improve and diversify the career paths of our language professionals 
and to improve retention and overall linguistic capabilities. At the 
same time, we are working to improve the process of identifying 
language requirements to better meet the needs of the Services and 
combatant commands. On the national level, we will continue to support 
the ROTC Project GO Programs and the National Security Education 
Program's Boren and Language Flagship programs, which collectively 
improve the school and university pipeline for language-enabled 
civilian and military personnel.

    53. Senator Akaka. Secretary Panetta, the National Language Service 
Corps is a pilot program that provides surge language capacity to DOD 
and the Federal Government during times of emergency and national need. 
Please explain how the National Language Service Corps contributes to 
the DOD's mission and provide specific examples.
    Secretary Panetta. The National Language Service Corps contributes 
to DOD's mission by bringing together 3,300 members who collectively 
speak more than 240 foreign languages in addition to professional level 
English proficiency. These patriotic individuals can be activated to 
meet short-term emergency and surge requirements. The National Language 
Service Corps complements the DOD's organic and contracted capabilities 
by providing a full range of language services to include 
interpretation, translation, participation as subject matter experts in 
standard setting for language assessment tools, and delivery of 
culturally-attuned language training. The members have supported DOD 
operational missions off the Coast of Senegal, critical exercises and 
training events in Indonesia, Thailand, Jordan and Germany, and have 
filled gaps in language support for the intelligence and law 
enforcement communities. We support the National Language Service Corps 
and consider it a key component of our strategy to mitigate uncertainty 
in current and future national security language needs.

    54. Senator Akaka. Secretary Panetta, what key lessons has DOD 
learned from implementing the National Language Service Corps pilot 
program?
    Secretary Panetta. DOD learned through this proof of concept (PoC) 
that there is a great deal of interest and need across the Federal 
Government for short-term foreign language skills that the National 
Language Service Corps (NLSC) provides. NLSC requests have more than 
doubled in the last few months and feedback on performance is 
excellent. We realize there is a great deal of willingness among the 
large number of U.S. citizens who speak more than one language to offer 
their skills in service to our Nation in times of need. Without a 
doubt, the vast majority of individuals who participate in the NLSC are 
professionals and offer more to the Nation than just their high level 
of language capability. The program is win-win.
    We also know now that proactively engaging in cross-agency 
partnerships through the NLSC can lead to increased collaboration and 
efficiencies. For example, the Defense Language and National Security 
Education Office has leveraged DOD efforts through a relationship with 
the Department of Justice and have shared best practices at a recent 
interagency working group.
                                 ______
                                 
            Questions Submitted by Senator Claire McCaskill

                      NATIONAL GUARD AND RESERVES

    55. Senator McCaskill. General Dempsey, the National Guard and 
Reserves have played a major role in combat operations over the past 
decade. National Guard and Reserve Forces have served faithfully in the 
Iraq and Afghanistan wars and there is no doubt that our Nation would 
not have been successful without the contribution of these citizen 
servicemembers. National Guard and Reserve servicemembers are unique in 
that they hold full-time civilian positions and jobs in communities 
across America outside of their military service. This makes the 
National Guard and Reserves an even more precious resource as our 
Nation transitions to a new defense strategy.
    I have concerns on how this transition will affect our National 
Guard and Reserve servicemembers and families. The new Defense 
Strategic Guidance calls for a drawdown of Active Duty servicemembers, 
which will put more emphasis on the readiness of the National Guard and 
Reserves. With a smaller Active Duty military, it is imperative that 
National Guard and Reserve Forces are well-maintained, trained, and 
adequately equipped to meet the Nation's challenges as they arise. In 
our current security environment, we must ensure that the National 
Guard and Reserves are postured for success on and off the battlefield.
    Over the past decade, servicemembers serving in the Guard and 
Reserves have become accustomed to deploying in support of our Nation. 
As these deployments become less frequent due to the drawdown in 
Afghanistan, how does DOD plan to retain the institutional and 
operational knowledge the Guard and Reserves have gained over the past 
decade?
    General Dempsey. As we implement the new Defense Strategic 
Guidance, we must avoid a hollow force and maintain the strongest 
military in the world. Although smaller and leaner, our military will 
remain flexible and ready to deploy quickly--an integral part of this 
agility rests on our ability to mobilize the National Guard and 
Reserves expeditiously. A properly trained and equipped Reserve 
component makes for a strong, capable, and ready National Guard and 
Reserves which is a prudent objective, both operationally and fiscally. 
Because of the investments made and operational experiences gained over 
the last decade, the Reserve component is well-postured to contribute 
valued capacity and capabilities to the Joint Force in the short-term. 
To sustain this over the long-term, we will continue rotational 
deployments, more extensively integrate Active and Reserve Forces, and 
enhance innovative readiness training.
    Each Service continues to reassess the rotational deployment plan 
of its unit formations, including National Guard and Reserves, to 
optimize total force readiness while being responsive to the combatant 
commanders' needs. This ongoing evaluation seeks to find the right 
balance to ensure readiness without overburdening either component 
against the anticipated demand signal. Keeping the Reserve component 
ready through periodic, predictable deployments adds value to the Total 
Force, distributes stress more evenly on all components, and provides 
force structure options in a resource constrained environment.
    The Services plan to retain appropriate levels of Reserve component 
readiness through continued Active and Reserve component integration of 
personnel and equipment. This Total Force integration will provide the 
most efficient training opportunities to all personnel, allow for 
shared use of resources, and maximize operational benefit and mission 
capability.
    We are reviewing Total Force training structure and strategies 
looking for ways to improve efficiencies and effectiveness. As 
deployment opportunities decline, our reliance on training must 
necessarily substitute to a greater degree for actual operational 
experience. We will continue to explore innovative ways to leverage 
technology and our human component as we build and maintain the 
readiness of the current and future Total Force.

    56. Senator McCaskill. General Dempsey, as we wind down combat 
operations in Afghanistan, the Guard and Reserves will transition to a 
posture that involves fewer combat operations overseas. As we plan to 
maintain the strongest force possible in the coming years, has DOD 
identified any problems in future recruitment, as many young men and 
women were drawn to service in a Guard and Reserve Force that was 
highly likely to deploy because of operations in Iraq and Afghanistan? 
If so, how does DOD plan to address these recruitment challenges?
    General Dempsey. In the short-term (3 to 5 years), we expect to 
continue to recruit and train some of our Nation's most talented men 
and women in numbers sufficient to ensure combat capability. For the 
past several years, all of our Military Services met, or exceeded, 
their Reserve component recruiting and retention goals with the 
exception of the Air National Guard. Today's reservists and guardsmen 
expect to deploy and be more operationally engaged than their 
counterparts of the 1990s. While the level of combat and other 
deployment operations is reduced from a few years ago, opportunities 
for Reserve component mobilization still exist. These opportunities 
will be on a more periodic and predictable schedule, which is more 
conducive to the needs of the Reserve component servicemembers, their 
families, and their employers. Programs such as the Post-9/11 GI Bill, 
the reduced retirement program, and stressed career field bonuses are a 
few examples of how we will be able to continue to maintain a strong 
and effective Reserve component.
    In the long-term (5 years and beyond), we may face challenges 
depending on the state of the economy and changing social norms. 
Although we seek only the best to join the Profession of Arms, fewer 
than one in four 17- to 24-year-olds are fully qualified for service, 
and we must attract over 15 percent of those. Today, only about a third 
of that percentage show a propensity to join, and that number may 
decrease as our Nation's economic conditions improve. Additionally, 
although the Reserve and National Guard bring in accessions directly 
from the Active component, not enough Active Duty personnel may be 
available. This will be due to several factors, such as reduced 
military end strength and the requirement that separation bonuses be 
repaid upon entry into the Reserve component. As it has in the past, 
DOD will need to count on congressional support to ensure our military 
remains the best the world has known.

                              F-35 PROGRAM

    57. Senator McCaskill. Secretary Panetta, for the third year in a 
row, DOD has been forced to delay plans for full production of the F-
35. Deputy Secretary of Defense Ash Carter has stated that the delay is 
not a budget issue, but rather a fundamental problem with the F-35 
program. Frank Kendall, Acting Assistant Secretary of Defense for 
Acquisition, Technology, and Logistics, has stated: ``putting the F-35 
into production years before the first test flight was acquisition 
malpractice.''
    While much attention has been given to the problems plaguing the 
Marine Corps F-35B variant, the F-35A and F-35C both suffer from 
significant design issues. For example, the F-35C has encountered a 
problem with its tailhook, a real and significant problem for an 
aircraft designed to land on an aircraft carrier deck. Last year, the 
Navy requested additional Super Hornets in order to mitigate delays in 
the Joint Strike Fighter (JSF) procurement schedule. Fiscal year 2013 
marks the third delay in 3 years for the JSF program, but, under 
current plans, the F/A-18 production line will end in fiscal year 2014, 
well before the F-35C is projected to be combat ready. Ending a viable 
aircraft production line before the JSF program will be able to meet 
full combat capability inevitably assumes a level of risk to the Navy 
and to the U.S. military.
    Does the DOD find that risk acceptable to our warfighters and our 
national security capabilities?
    Secretary Panetta. DOD remains committed to the F-35 program. The 
Department of the Navy does not currently plan to keep the F/A-18 
production line open beyond the final procurement of EA-18G aircraft in 
fiscal year 2013 and F/A-18E/F in fiscal year 2014; however, if further 
delays or significant development or design issues are discovered 
beyond the current F-35 program, as presented in the fiscal year 2013 
President's budget request, then DOD may consider all options, 
including procuring additional F/A-18 Super Hornets. Currently, the F/
A-18 production line shutdown begins with the key long-lead suppliers 
this summer. Regarding EA-18G unique parts, the final orders to support 
the final fiscal year 2013 procurement are also being placed this 
summer. From a force structure perspective, the Navy projects a 
manageable strike fighter shortfall of less than 65 aircraft in the 
2020s. DOD finds this risk acceptable to the Navy, and we are confident 
that we will have sufficient naval strike fighter capability to meet 
our national security requirements.

    58. Senator McCaskill. Secretary Panetta, does DOD have plans to 
mitigate that risk?
    Secretary Panetta. Yes, DOD is mitigating that risk through a 
number of means. The Navy is conducting a Service Life Assessment 
Program of the F/A-18E/F to define the necessary inspection and 
modifications required to extend the currently defined life limits of 
the aircraft.
    We have mitigated risk to the F-35 program by ensuring that the 
completion of the development program is adequately resourced and 
supported by realistic planning factors. The production ramp has been 
reduced to mitigate cost risk due to concurrency. This allows us to buy 
fewer aircraft in the near term that will require modifications while 
the design matures through continued testing and discovery.
    We believe that this risk is acceptable as we strive to shape a 
joint force for the future that is smaller and leaner but will be 
agile, flexible, ready, and technologically advanced.

    59. Senator McCaskill. Secretary Panetta, given the uncertainty 
that continues to plague the F-35 program, is DOD or the Navy 
considering options for keeping the F/A-18 line running beyond fiscal 
year 2014?
    Secretary Panetta. DOD plans to procure the final F/A-18E/F in 
fiscal year 2014. When those aircraft deliver in fiscal year 2016, DOD 
will have completed the program of record of 565 F/A-18E/F aircraft. 
However, if further delays or significant development or design issues 
are discovered beyond the current F-35 program as presented in the 
fiscal year 2013 President's budget request, DOD may consider all 
options, including procuring additional F/A-18 Super Hornets.
                                 ______
                                 
               Questions Submitted by Senator Mark Begich

                  BASE REALIGNMENT AND CLOSURE ISSUES

    60. Senator Begich. Secretary Panetta and General Dempsey, the Air 
Force is proposing to relocate the F-16 Fighter Squadron at Eielson Air 
Force Base (AFB) to Joint Base Elmendorf-Richardson in fiscal year 2013 
to achieve savings in base support costs. The F-16 squadron is the only 
Active Duty mission at Eielson. The Air Force intends to put Eielson in 
warm status by 2015. This proposal is the same one put forth by the Air 
Force in BRAC 2005 and it was rejected by the BRAC Commission due to 
overestimated cost savings and underestimation of the military value of 
Eielson AFB. Last week, the Alaska delegation wrote you a letter 
expressing concern about the proposal, mainly the fact this proposal is 
outside of the formal BRAC Commission process and may be in violation 
of statute as a significant number of military and civilian personnel 
will be impacted. What is your understanding of this proposal?
    Secretary Panetta and General Dempsey. The Air Force must achieve 
spending reductions in the current budget cycle regardless of whether 
additional BRAC rounds may ultimately be authorized. The Air Force is 
therefore making adjustments to its force structure, and the transfer 
of the Aggressor squadron from Eielson AFB to Joint Base Elmendorf-
Richardson is among them. The transfer in fiscal year 2013 garners 
manpower and efficiency savings by consolidating operations/maintenance 
supervision overhead and base support functions. The Air Force 
estimates resultant cost savings to be $3.5 million for fiscal year 
2013 and $169.5 million across the FYDP. These estimates are based on 
eliminating approximately 640 manpower authorizations that 
Headquarters-Pacific Air Forces determined were no longer needed at 
Eielson once the Aggressor squadron relocates. Sufficient capability, 
however, will remain in place at Eielson to support the remaining Air 
Refueling Wing and joint partners at Fort Wainwright. Additionally, the 
base will continue to provide critical training through the Joint 
Pacific Alaska Range Complex.
    DOD has the authority to close and realign military installations 
outside of a traditional BRAC round, provided that action does not 
trigger the thresholds established in 10 U.S.C. 2687. Section 2687 
specifies that DOD cannot take any action to effect or implement the 
closure of any military installation at which at least 300 civilian 
personnel are authorized to be employed, or the realignment of any such 
installation involving a reduction of more than 1,000 or by more than 
50 percent of the number of civilian personnel, whichever is less, 
unless and until certain requirements set out in the statute are met.
    The actions at Eielson do not trigger the thresholds specified in 
section 2687. Specifically, Eielson AFB is not being closed, and the 
realignment will not relocate either 1,000 or 50 percent of the 
permanent DOD civilian positions at Eielson to Elmendorf AFB. Were the 
triggering thresholds of the statute to be exceeded, the Air Force 
would have to report on the proposal, provide certain specified 
analyses, and wait a prescribed period of time before implementing the 
action.
    Finally, if Congress does authorize the requested BRAC rounds, the 
Air Force's currently proposed force structure changes do not 
presuppose what will happen to a particular installation during the 
BRAC analysis. DOD will consider all installations equally with 
military value as the primary consideration.

    61. Senator Begich. Secretary Panetta and General Dempsey, both of 
you have repeatedly stated the formal BRAC Commission process is the 
most objective, thorough, and non-partisan route to pursue with respect 
to real property management. In fact, during the 2005 BRAC round, below 
BRAC threshold actions were included in the formal process in 
recognition of the fact a comprehensive approach allowed DOD to make 
better use of real property and make better decisions. Would you agree 
with this statement? If so, do you support the Air Force's proposal?
    Secretary Panetta and General Dempsey. The statutory BRAC process 
is a fair, objective, and proven process for closing and realigning 
bases in the United States. I agree that ``below BRAC threshold actions 
were included in the formal process in recognition of the fact a 
comprehensive approach allowed DOD to make better use of real property 
and make better decisions.'' But strategic and fiscal imperatives leave 
DOD no alternative but to seek efficiencies at military bases here in 
the United States. While the President has asked Congress for BRAC 
authority, it is not clear how Congress will act on that request, and 
we cannot afford to delay in achieving efficiencies. DOD must use every 
tool at its disposal to address strategic and fiscal imperatives--
including acting within its existing authorities pending congressional 
action on BRAC authorization. The Secretary of Defense has the 
authority to close and realign military installations outside of a 
traditional BRAC round, provided that action does not trigger the 
thresholds established in section 2687 of title 10, U.S.C. Section 2687 
specifies that DOD cannot take any action to effect or implement the 
closure of any military installation at which at least 300 civilian 
personnel are authorized to be employed, or the realignment of any such 
installation involving a reduction of more than 1,000 or by more than 
50 percent of the number of civilian personnel, whichever is less, 
unless and until satisfying certain study and congressional reporting 
requirements and waiting the specified period of time.
    The Air Force must achieve spending reductions in the current 
budget cycle regardless of whether additional BRAC rounds may 
ultimately be authorized. The Air Force is therefore making adjustments 
to its force structure. It is important to note, however, that if 
Congress does authorize the requested BRAC rounds, the Air Force's 
currently proposed force structure changes do not pre-suppose what will 
happen to a particular installation during the BRAC analysis. DOD will 
consider all installations equally, with military value as the primary 
consideration.

    62. Senator Begich. Secretary Panetta and General Dempsey, how is 
the proposal in line with your goal of using the formal BRAC Commission 
process?
    Secretary Panetta. DOD's force structure changes drove both this 
proposal and the request for BRAC authorization. They are consistent. 
However, this proposal does not presuppose what will happen to a 
particular installation during the BRAC analysis. DOD will consider all 
installations equally with military value as the primary consideration.
    General Dempsey. DOD's force structure changes are one of the 
reasons why the President is requesting BRAC authorization. Simply 
stated, the cuts in force structure that we are implementing must be 
accompanied by cuts in supporting infrastructure, including military 
bases. Absent a process for closing and realigning bases, DOD will be 
locked in a status quo configuration that does not match its evolving 
force structure, doctrine, and technology. Moreover, given the expense 
of our installation infrastructure, if we retain bases that are excess 
to strategic and mission requirements, we will be forced to cut 
spending on forces, training, and modernization. That said, recently 
announced force structure changes do not pre-suppose what will happen 
to a particular installation during the BRAC analysis. DOD will 
consider all installations equally with military value as the primary 
consideration.

    63. Senator Begich. Secretary Panetta and General Dempsey, was the 
Air Force's proposal to realign the F-16 squadron at Eielson reviewed 
by DOD Legal Counsel to ensure it is in compliance with BRAC law in 
title 10, U.S.C., section 2687, which mandates a notice and hold period 
when closing or realigning installations?
    Secretary Panetta. The Air Force's proposal was reviewed by the Air 
Force Office of the General Counsel, in consultation with the DOD 
Office of the General Counsel.
    General Dempsey. The Air Force's proposal was reviewed by the Air 
Force Office of the General Counsel in consultation with the DOD Office 
of the General Counsel.
    DOD has the authority to close and realign military installations 
outside of a traditional BRAC round provided that action does not 
trigger the thresholds established in title 10 U.S.C., section 2687. 
Section 2687 specifies that DOD cannot take any action to effect or 
implement the closure of any military installation at which at least 
300 civilian personnel are authorized to be employed, or the 
realignment of any such installation involving a reduction of more than 
1,000, or by more than 50 percent of the number of civilian personnel, 
whichever is less, unless and until certain requirements set out in the 
statute are met.
    The actions at Eielson AFB do not trigger the thresholds specified 
in section 2687. Specifically, Eielson AFB is not being closed, and the 
realignment will not relocate either 1,000 or 50 percent of the 
permanent DOD civilian positions at Eielson to Elmendorf AFB. Were the 
triggering thresholds of the statute to be exceeded, the Air Force 
would have to report on the proposal, provide certain specified 
analyses, and wait a prescribed period of time before implementing the 
action.

    64. Senator Begich. Secretary Panetta and General Dempsey, last 
week, Admiral Locklear, the U.S. Pacific Command (PACOM) commander 
nominee, recognized Alaska's strategic location, calling the State and 
its installations critical and significant to his mission. Yet, the Air 
Force is proposing to place one of the most strategically located bases 
in warm status. How is placing Eielson in warm status conducive to 
DOD's strategic goals?
    Secretary Panetta and General Dempsey. The right-sizing of Eielson 
AFB is tied to DOD's strategic goal of reducing the ``cost of doing 
business.'' This entails reducing the rate of growth of manpower costs, 
finding further efficiencies in overhead and headquarters, and business 
practices. Eielson AFB hosts the only single squadron wing in the 
Active Duty Air Force. The Air Force proposes moving the 18th Aggressor 
Squadron and associated maintenance support to Joint Base Elmendorf-
Richardson in fiscal year 2013. The movement of the Aggressor squadron 
will garner efficiencies by reducing maintenance supervision overhead 
and support base functions. Units, such as flightline and backshop 
maintenance, will relocate to Joint Base Elmendorf-Richardson with the 
18th Aggressor Squadron. There is sufficient capacity at Joint Base 
Elmendorf-Richardson (hangars, flightline parking, and administrative 
space) to beddown the 18th Aggressor Squadron. Further manpower 
reductions will be assessed in fiscal year 2014 for fiscal year 2015 
and tied to installation restructuring and right-sizing, with remaining 
manpower/infrastructure supporting surge/war readiness materiel 
requirements, Alaska Air National Guard's 168th Air Refueling Wing, the 
Joint Pacific Alaska Range Complex, and exercises (e.g., Red Flag and 
Northern Edge).
    The proposal to retain the 168 Air Refueling Wing at Eielson AFB 
and maintain the base and runway operating capability while moving the 
training-coded F-16s to Joint Base Elmendorf-Richardson is directly 
tied to the strategic importance of this base and this location. The 
robust training capability for Red Flag Alaska exercises will remain at 
Eielson, a testament to the quality and capacity for unparalleled, 
world-class training and readiness emphasis, which is of particular 
importance to the Pacific theater. While the training-coded Aggressor 
F-16s are slated to relocate to Joint Base Elmendorf-Richardson, they 
will still participate in and support these large force, joint and 
combined exercises, the same way the combat-coded units at Joint Base 
Elmendorf-Richardson have done for years. The current training and 
readiness focus of effort will remain under the current proposal while 
affording the Air Force the opportunity to expand operations, if 
necessary, in the future specifically to meet the strategic goals in 
the Pacific.

    65. Senator Begich. Secretary Panetta, please provide more details 
regarding DOD's intent to seek authority for BRAC. You have indicated 
if Congress authorizes BRAC, DOD wants to move quickly on the process 
and implementation. The last BRAC took 5 years to complete; in fact, 
DOD sought waivers to extend the deadline for more than five BRAC 
actions. DOD will be responsible for environmental remediation at sites 
and community redevelopment which takes years and cannot be 
circumvented. How does DOD envision completing and implementing BRAC 
immediately?
    Secretary Panetta. Asking for a 2013 round is aggressive; but given 
the magnitude of the cuts we are making in force structure, we cannot 
afford to wait. Moving forward quickly will enable DOD to reap savings 
quickly and adjust to force structure changes in an effective manner. 
With this aggressive timeline in mind, we have started the initial 
preparatory work regarding internal governance for a BRAC process--
inventorying our property and evaluating the extent to which we need to 
update our analytical tools. These efforts will enable us to proceed 
expeditiously once Congress authorizes BRAC. We will be ready to use 
the authority effectively and therefore urge Congress to authorize 
BRAC.
    Additionally, in light of the accelerated timeline, our legislative 
proposal provides us additional time to submit the required Force 
Structure Plan and Installation Inventory not later than 60 days after 
the date of the enactment of the legislation for the fiscal year 2013 
round.

    66. Senator Begich. Secretary Panetta, BRAC 2005 cost DOD $35 
billion to implement. GAO estimated savings from the BRAC 2005 round 
will not be realized for at least a decade. DOD has to find savings 
now. How did DOD conclude BRAC is a financially sound decision in the 
near-term?
    Secretary Panetta. Of all the efficiency measures that DOD has 
undertaken over the years, BRAC is perhaps the most successful and 
significant. The first four rounds of BRAC generated $8 billion in 
annual recurring savings, which now total $100 billion. The comparable 
figure for BRAC 2005 is $4 billion. The annual recurring savings for 
all five rounds ($12 billion) represents the additional costs that DOD 
would incur every year for base operating support, personnel, and 
leasing costs without BRAC. Enough money to buy 300 Apache attack 
helicopters, 124 F/A-18E/F Super Hornets, or four Virginia-class 
submarines.
    Because BRAC is a key priority, DOD will apply the resources 
necessary to support both a robust and thorough BRAC analysis and an 
efficient and effective implementation process. BRAC begins generating 
savings almost immediately, and those savings will partially offset its 
initial costs. BRAC will generate recurring savings far in excess of 
the upfront investment.
    The 2005 round took place during a period of growth in the 
military, and it reflected the needs and goals of that time--aligning 
our infrastructure with our military strategy so as to maximize 
warfighting capacity and efficiency. These efforts contributed 
significantly to DOD's effectiveness; but they necessarily required 
substantial investments. Because the focus of the BRAC 2005 round was 
not on saving money and space, it is a poor gauge of the savings that 
DOD can achieve through another BRAC round. The prior BRAC rounds--
which reduced capacity and paid off in 2 to 3 years--represent a better 
gauge of such costs and savings. In those rounds, one-time costs 
ranging from $2.7 billion to $6.6 billion resulted in annual recurring 
savings of $1 billion to $2.7 billion.

    67. Senator Begich. Secretary Panetta, what is DOD's estimated cost 
of another BRAC?
    Secretary Panetta. The costs of a potential BRAC round will not be 
known until after DOD has developed its recommendations, they have been 
reviewed by the independent BRAC Commission and forwarded by the 
President to Congress, and, finally, Congress has failed to enact a 
joint resolution disapproving the recommendations. It is only at the 
end of this process that DOD can develop budget quality estimates of 
the costs.

    68. Senator Begich. Secretary Panetta, the budget is decreasing; 
how will DOD pay for BRAC?
    Secretary Panetta. Because BRAC is a key priority, DOD will apply 
the resources necessary to support both a robust and thorough BRAC 
analysis and an efficient and effective implementation process. As a 
legal obligation of DOD, the normal internal budget deliberation 
process will determine the source of the BRAC implementation costs.

    69. Senator Begich. Secretary Panetta and General Dempsey, the Air 
Force has been the only Service to vocalize strong support for BRAC. 
The Army has not made necessary decisions regarding end strength 
decrease force structure impacts. The last BRAC Commission determined 
another BRAC round would not be required until 2015 at the earliest. 
The request for BRAC appears to be preemptive and driven by budget 
constraints, not by national security needs. Was an assessment 
conducted which determined another BRAC round was required at this 
time?
    Secretary Panetta and General Dempsey. We have not conducted an 
assessment for a future round; however, parametric techniques used to 
analyze various capacity measures in 2004 indicated that DOD had 24 
percent excess capacity overall relative to the fiscal year 2009 force 
structure-based requirements. Because BRAC 2005 eliminated only about 3 
percent of DOD's capacity, we believe we have significant excess 
capacity, and force structure reductions will only exacerbate this 
condition. In accordance with its request for authority to conduct two 
new rounds of BRAC, DOD will undertake a similar analysis used in BRAC 
2005 to give a sense of its current excess capacity.

    70. Senator Begich. Secretary Panetta and General Dempsey, once 
infrastructure is lost in the United States, the capacity may never be 
gained back. What risk is assumed by more base closures?
    Secretary Panetta and General Dempsey. As it has done in prior BRAC 
rounds, DOD will develop closure and realignment recommendations that 
provide it with the flexibility to adapt to changing circumstances, 
particularly surge requirements that can arise from contingencies, 
mobilizations, or extended changes in force levels. Specifically, DOD 
uses a 20-year force structure plan and has specific selection criteria 
\1\ that capture the concept of surge capacity. Criterion one requires 
DOD to consider ``current and future'' mission capabilities, and 
criterion three assesses the ``ability to accommodate contingency, 
mobilization, surge and future total force requirements.'' Furthermore, 
through execution of prior BRAC rounds, and as verified in a 1999 
study, DOD has demonstrated that it will retain within the U.S. 
installation infrastructure sufficient difficult-to-reconstitute assets 
to respond to surge, accommodate a significant reconstitution of the 
force, and support all forces, including those currently based outside 
the United States.
---------------------------------------------------------------------------
    \1\ Congress specified the following criteria for use in the 2005 
BRAC round, and DOD has proposed to use the same criteria for the 
requested rounds in 2013 and 2015.

    Military Value Criteria:
      1. The current and future mission capabilities and the impact on 
operational readiness of the total force of DOD, including the impact 
on joint warfighting, training, and readiness.
      2. The availability and condition of land, facilities, and 
associated airspace (including training areas suitable for maneuver by 
ground, naval, or air forces throughout a diversity of climate and 
terrain areas and staging areas for the use of the Armed Forces in 
Homeland defense missions) at both existing and potential receiving 
locations.
      3. The ability to accommodate contingency, mobilization, surge, 
and future total force requirements at both existing and potential 
receiving locations to support operations and training.
      4. The cost of operations and the manpower implications.

    Other Criteria:
      5. The extent and timing of potential costs and savings, 
including the number of years, beginning with the date of completion of 
the closure or realignment, for the savings to exceed the costs.
      6. The economic impact on existing communities in the vicinity of 
military installations.
      7. The ability of the infrastructure of both the existing and 
potential receiving communities to support forces, missions, and 
personnel.
      8. The environmental impact, including the impact of costs 
related to potential environmental restoration, waste management, and 
environmental compliance activities.

    71. Senator Begich. Secretary Panetta and General Dempsey, 
according to DOD's Base Structure Report for 2011, DOD has 611 military 
sites overseas. Why is DOD not pursuing a more aggressive effort to 
identify sites overseas for closure and realignment?
    Secretary Panetta and General Dempsey. DOD continuously assesses 
U.S. defense posture overseas. The President and Secretary of Defense 
led DOD's civilian and military leadership through extensive 
deliberations to develop the most recent Defense Strategic Guidance, 
which was issued on January 5, 2012. This strategy requires DOD to 
sustain a global presence, with a rebalancing of our forces toward the 
Asia-Pacific region and a sustainment of our presence in the Middle 
East. In Europe, we are sustaining a presence that will meet defense 
commitments, deter aggression, and place greater reliance on rotational 
presence and partnership.
    Over the last several years, we have made significant reductions in 
our overseas infrastructure and personnel. Since 2003, DOD has returned 
more than 100 sites in Europe to our host nations and reduced our 
personnel by one third. Between fiscal year 2012 and fiscal year 2015, 
the Army alone will execute 23 additional site closures that were 
previously approved and announced for return to the host nation. But 
more can and should be done in light of upcoming force structure 
changes.
    Our European footprint today consists of more than 300 discrete 
sites, ranging from small communications sites to robust Main Operating 
Bases. Given the shift in strategic focus to the Pacific, coupled with 
force reductions in Europe and decreases in required support to 
CENTCOM, the legacy footprint in Europe is a prime focus. To that end, 
we are embarking on a European capacity analysis that will seek to 
reduce long-term expenses through footprint consolidations, while 
ensuring our infrastructure properly supports operational requirements 
and strategic commitments.
    Our examination will review opportunities across the theater for 
more extensive joint and coalition utilization of facilities. We will 
gauge the extent to which our installations can shed excess capacity or 
absorb new functions from other installations of lesser military value 
which, in turn, could be reduced or closed. In doing this, we will be 
careful to assess the cost and savings of each action and prioritize 
for implementation those initiatives with the highest payback. We 
expect to identify some preliminary options later this year.

    72. Senator Begich. Secretary Panetta, did DOD or OMB assess the 
impact of a BRAC in the next few years on the economy and unemployment 
rates?
    Secretary Panetta. No. DOD did not assess the impact of a BRAC in 
the next few years on the economy and unemployment rates. If Congress 
authorizes BRAC, DOD will develop recommendations for closures and 
realignments based on 20-year force structure plan and statutory 
selection criteria \2\ that place priority on military value. Economic 
impact is also one of the criteria. Specifically, criteria 6 is ``The 
economic impact on existing communities in the vicinity of military 
installations.''
---------------------------------------------------------------------------
    \2\ Congress specified the following criteria for use in the 2005 
BRAC round, and DOD has proposed to use the same criteria for the 
requested rounds in 2013 and 2015.

    Military Value Criteria:
      1. The current and future mission capabilities and the impact on 
operational readiness of the total force of DOD, including the impact 
on joint warfighting, training, and readiness.
      2. The availability and condition of land, facilities, and 
associated airspace (including training areas suitable for maneuver by 
ground, naval, or air forces throughout a diversity of climate and 
terrain areas and staging areas for the use of the Armed Forces in 
homeland defense missions) at both existing and potential receiving 
locations.
      3. The ability to accommodate contingency, mobilization, surge 
and future total force requirements at both existing and potential 
receiving locations to support operations and training.
      4. The cost of operations and the manpower implications.

    Other Criteria:
      5. The extent and timing of potential costs and savings, 
including the number of years, beginning with the date of completion of 
the closure or realignment, for the savings to exceed the costs.
      6. The economic impact on existing communities in the vicinity of 
military installations.
      7. The ability of the infrastructure of both the existing and 
potential receiving communities to support forces, missions and 
personnel.
      8. The environmental impact, including the impact of costs 
related to potential environmental restoration, waste management and 
environmental compliance activities.

                          ASIA-PACIFIC REGION

    73. Senator Begich. Secretary Panetta and General Dempsey, with our 
defense posture shifting to the Asia-Pacific, shouldn't we ensure the 
military's global footprint is aligned with our strategy?
    Secretary Panetta. Yes, DOD is ensuring that U.S. global defense 
posture is aligned with our strategy. We will have a Joint Force with 
global presence emphasizing the Asia-Pacific region and the Middle 
East, while still ensuring the ability to maintain defense commitments 
to Europe and elsewhere. Wherever possible, we will develop innovative, 
low-cost, and small-footprint approaches to achieve U.S. security 
objectives.
    In the Asia-Pacific region, DOD is pursuing a defense posture that 
is geographically distributed, operationally resilient, and politically 
sustainable. U.S. defense posture and presence in East Asia, Oceania, 
and Southeast Asia demonstrates the fact that the United States is a 
resident power in the region. The budget request for fiscal year 2013 
funds enhancements to our presence in Southeast Asia, such as the 
rotational deployment of U.S. Marine Corps and U.S. Air Force units in 
Australia, and of Littoral Combat Ships to Singapore. The Navy will 
also rebalance the fleet to establish a greater presence in the Pacific 
and all the Services will continue to maintain significant force 
structure in the region as we work to increase interaction with 
partners and allies.
    We are sustaining and, in some cases, enhancing elements of our 
defense posture in the Middle East. We will maintain an operationally 
responsive posture in this critical region to deter threats, as well as 
assure allies and partners in the face of growing security challenges.
    We are also evolving our posture in Europe. Although we plan to 
withdraw two Brigade Combat Teams (BCT) over the next 2 years, we will 
maintain a steady state presence of two BCTs in Europe and allocate a 
U.S.-based BCT to the North Atlantic Treaty Organization (NATO) 
Response Force, including periodic rotation of a battalion task force 
and brigade headquarters staff support to Europe for training and 
exercises to improve interoperability and coalition operations. 
Reflecting the resource-constrained environment, we will also work with 
NATO allies to develop a ``smart defense'' approach to pool, share, and 
specialize capabilities that address future challenges in Europe and 
beyond.
    General Dempsey. Absolutely. Global posture actions are 
continuously adjusted against requirements to support combatant 
commanders, and are designed to position U.S. forces to better conduct 
OCO, ease the burden of a high operational tempo on members of the 
Armed Forces and their families, and improve the ability of the United 
States to meet its commitments, while making these commitments more 
affordable and sustainable.

    74. Senator Begich. Secretary Panetta and General Dempsey, why not 
utilize U.S. locations, like Alaska, as we shift our focus to the Asia-
Pacific region to simultaneously promote economic development and 
readiness?
    Secretary Panetta. We currently leverage a variety of forces and 
capabilities stationed in Alaska to support PACOM assigned missions, 
and will continue to do so as we rebalance toward the Asia-Pacific 
region. Increasing the utilization of capabilities already stationed in 
Alaska, or increasing number of the forces stationed there for 
employment in PACOM-assigned missions, must be assessed against the 
ability of those forces to provide timely response to crises.
    As we implement our strategy, we continually assess the way our 
forces are arrayed and their effectiveness in providing the appropriate 
range of political, security, and economic benefits to the United 
States.
    General Dempsey. As we continue to adapt our existing military 
force posture in the Asia-Pacific region, we are examining a number of 
potential options to ensure that we enhance the Joint Force's ability 
to surge and regenerate forces and capabilities to confront and defeat 
aggression anywhere in the world.

                 GROUND-BASED MIDCOURSE DEFENSE SYSTEM

    75. Senator Begich. Secretary Panetta and General Dempsey, funding 
for the Ground-based Midcourse Defense (GMD) was protected. How does 
the fiscal year 2013 request compare to last year's request of $1.2 
billion? Please describe the importance of this system in defending the 
Homeland and the threat environment.
    Secretary Panetta. The fiscal year 2012 appropriated amount, $1.159 
billion, included a general congressional reduction of $1.5 million. 
Program execution includes Control Test Vehicle-1 (CTV-01) and Flight 
Test Ground-based Interceptor (GBI) (FTG)-06b, completion of the Fort 
Greeley, AK, power plant, completion of Missile Field 2, delivery of a 
second fire direction center node at Fort Greeley, and initiate 
manufacturing for GBIs 48 to 52. During fiscal year 2012, GMD will 
build up two GBIs to support the return to intercept (RTI) flight tests 
in fiscal year 2013. To increase GMD system reliability for Homeland 
defense, the Missile Defense Agency (MDA) will activate the hardened 
power plant at Fort Greeley this year and increase firepower of the 
fielded GBIs by continuing to test and upgrade the reliability of GBI 
components. Of note, on December 2011, GMD awarded the development and 
sustainment contract to Boeing, which gained efficiencies and savings 
across the Future Years Development Program.
    During fiscal year 2013, GMD plans to complete the RTI testing with 
CTV-01 and FTG-06b and to restart interceptor manufacturing, 
incorporating the corrective actions into the GBIs yet to be delivered. 
GMD will continue manufacturing GBIs 48 to 52 and start manufacturing 
GBIs 53 to 57. As part of improving Homeland defense, GMD will continue 
construction on an east coast in-flight interceptor communications 
system data terminal at Fort Drum, NY, planning for FTG-08 in fiscal 
year 2014, including the build-up of the second 2-Stage GBI, planning 
for the FTG-11 first intercontinental ballistic missile (ICBM) and 
salvo test in fiscal year 2015, and continuing software development for 
both the GBI and ground systems products. The fiscal year 2013 GMD 
budget request is $903.2 million. Reductions in fiscal year 2013 
include transferring $5.8 million for Defense Information Systems 
Agency (DISA) to the Command and Control, Battle Management and 
Communications Program and transfer $20.7 million to the MDA Program 
Wide Support account for facilities and environmental support at 
multiple MDA locations. Completing Missile Field 2 and deploying the 
Fort Greeley power plant in fiscal year 2012 resulted in lower funding 
requirements.
    The fiscal year 2013 budget request continues to support the GMD 
system as the primary element of the Ballistic Missile Defense System 
(BMDS) that provides combatant commanders to defend the U.S. Homeland 
against limited attack by intermediate- and long-range ballistic 
missiles. The primary components of the GMD system are the GBIs and the 
ground systems. The GBI is a solid-fuel boost vehicle integrated with a 
single non-explosive exoatmospheric kill vehicle (EKV). There are 
currently 30 GBIs emplaced in two missile complexes, at Fort Greeley, 
AK, and Vandenberg AFB, CA. The system can negate attacks from the 
current and projected threat from Northeast Asia and Southwest Asia.
    General Dempsey. DOD requested $903.2 million in fiscal year 2013 
for GMD RDT&E funding to buy an additional 5 GBIs for delivery in 
fiscal year 2018 and upgrade our current operational fleet of 30 GBIs. 
This will complete the total purchase of 57 GBIs.
    Today, GMD's operational GBIs protect the United States against a 
limited ICBM raid launched from current regional threats. The ballistic 
missile threat is increasing both quantitatively and qualitatively, and 
is likely to continue to do so over the next decade. Current global 
trends indicate the ballistic missile systems are becoming more 
flexible, mobile, survivable, reliable, and accurate, while also 
increasing in range. Regional actors such as North Korea and Iran 
continue to develop long range missiles that will threaten the United 
States, but it is not clear exactly when and how this type of ICBM 
threat to the U.S. Homeland will mature.

    76. Senator Begich. Secretary Panetta and General Dempsey, the Sea-
Based X-Band (SBX) radar is critical to GMD system performance and 
warfighter confidence in the system. Yet, DOD is proposing to make it a 
test asset only. What risk is assumed to GMD system performance by 
making the SBX radar a test asset only?
    Secretary Panetta. SBX's primary mission is discrimination and it 
is not necessary for tracking. Therefore, SBX is not required to be 
part of 24/7 operational kill chain today because there is no evidence 
of sophisticated countermeasures that require discrimination. With 
indications and warnings, SBX could return to full time status.
    In the Limited Test Support Status, the SBX radar will retain its 
unique contingency operations capabilities and will continue to support 
testing. Maintaining SBX in Limited Support Status does not add risk to 
GMD performance.
    Its technical performance capability will continue, including 
connectivity to the GMD Fire Control System. SBX will maintain its 
American Bureau of Shipping (ABS) and Coast Guard certifications, and 
will be staffed to maintain the vessel, X-band radar (XBR) and other 
critical systems for support to both testing and contingency 
activation.
    SBX will continue to participate in BMDS ground and flight testing, 
while being available to support contingency operations as directed by 
OSD and the Joint Staff. The MDA is working with Joint Staff and the 
U.S. Strategic Command's (STRATCOM) Joint Functional Component Command 
for Integrated Missile Defense to determine the appropriate response 
time for contingencies. During contingency operations an unfunded 
requirement reimbursement will be requested.
    Under the direction of OSD and the Joint Staff, SBX deployed from 
Pearl Harbor in less than 72 hours to provide contingency support 
during the North Korean space launch. This was the first operation of 
the SBX under U.S. Pacific Fleet tactical control and with Navy 
ownership and operation of the SBX vessel.
    General Dempsey. DOD intends to place SBX radar in a limited test 
operations status due to affordability reasons, but we will be prepared 
to activate the SBX if indications and warnings of an advanced threat 
from Northeast Asia become evident. MDA is working with the Joint Staff 
and STRATCOM's Joint Functional Component for Integrated Missile 
Defense to determine the appropriate timeline for activation 
contingencies.
    DOD will begin upgrading the Clear Early Warning Radar in Alaska 
for full missile defense capability by 2016. We are requesting $347.0 
million in fiscal year 2013 for BMDS sensors development for Homeland 
defense, including support of the Cobra Dane Radar and the Upgraded 
Early Warning Radars (UEWR) at Beale AFB (California), Fylingdales 
(United Kingdom), and Thule (Greenland). We are requesting $192.1 
million to operate and sustain these radars and $227.7 million to 
procure additional radars and radar spares in fiscal year 2013.
    Based on DOD's robust support of current fielded and future 
sensors, the ability to reactivate SBX, if the threat warrants, 
minimizes the risks to the overall GMD performance.

                   MEDIUM EXTENDED AIR DEFENSE SYSTEM

    77. Senator Begich. Secretary Panetta and General Dempsey, the NDAA 
for Fiscal Year 2012 limited availability of Medium Extended Air 
Defense System (MEADS) funds to 25 percent until DOD submitted a plan 
to use the funds as final obligations for a restructured program or 
termination costs. So why is DOD seeking another $400.9 million in 
fiscal year 2013 for this program, a program the United States does not 
intend to buy?
    Secretary Panetta. The administration has requested funding in the 
fiscal year 2013 budget to complete the MEADS Design and Development 
(D&D) PoC effort with Germany and Italy. DOD is seeking $400.9 million 
in fiscal year 2013 funds to honor the final year of our MEADS D&D 
Memorandum of Understanding (MOU) commitment that will enable 
completion of the MEADS development phase as it is currently planned. 
The PoC effort enables all three nations to obtain benefit from our 
collective program investment to date and will bring the development 
program to an orderly conclusion. Failure to fund our fiscal year 2013 
commitment will be viewed by our allies as reneging on our promises.
    During the Chicago NATO Summit on May 20, 2012, NATO allies 
achieved a major breakthrough on missile defense--10 years in the 
making--by declaring an interim ballistic missile defense (BMD) 
capability as an initial step toward establishing a NATO missile 
defense system. The European Phased Adaptive Approach (EPAA) will be a 
major contributor to NATO missile defense and is designed to protect 
the U.S. Homeland, U.S. deployed forces, and our allies against the 
increasing threats posed by the proliferation of ballistic missiles. 
Where BMD was once a controversial subject within the alliance, we have 
reached consensus to operationalize this capability and have the allies 
share the burden of deterring and defending against those who could 
threaten us with ballistic missiles. This is a major achievement of 
U.S. policy; a decision by Congress to prohibit any additional funding 
for MEADS at this late date would diminish the consensus reached in 
Chicago.
    The United States relies on allies to share the burden of 
peacekeeping and defense in coalition activities and the development of 
effective defense capabilities that are of direct benefit to the United 
States. In this context, I believe it is important to live up to our 
commitments to our allies. We made a commitment to two of our closest 
allies--Germany and Italy--to develop MEADS cooperatively to achieve 
those objectives. Failure to meet our MEADS MOU fiscal year 2013 
funding obligations could negatively affect the willingness of our 
allies to join future cooperative endeavors, bilaterally or through 
NATO, that have been strongly supported by the administration and 
Congress at a time when cooperation through concepts, such as Smart 
Defense, is critical to ensuring NATO and its members are developing 
needed capabilities for the future. In addition, failure of the United 
States to provide funding for fiscal year 2013 would likely lead to a 
dispute with Germany and Italy, both of which have indicated that they 
would assert that the United States has unilaterally withdrawn from the 
MOU. On the other hand, full funding of the final year of the MEADS PoC 
would ensure that the United States receives a return on its 8-year 
investment in the form of a data archival package for future potential 
use on other U.S. air and missile defense improvements. We must act now 
to avoid a situation that would cause harm to our relationships with 
two of our closest allies.
    General Dempsey. In accordance with the NDAA for Fiscal Year 2012, 
DOD has repeatedly consulted and attempted to negotiate with our 
international partners, Germany and Italy, regarding development of a 
plan to further restructure the program in the event that Congress does 
not authorize or appropriate fiscal year 2013 funding to complete our 
MEADS D&D MOU obligations.
    DOD believes that completing the MEADS PoC and securing the benefit 
of the development program is the correct course of action under the 
current constraints. The MEADS elements (advanced 360 degree radars, a 
lightweight launcher with the PAC-3 Missile Segment Enhancement (MSE) 
missile, and a battle management system), if fully realized and 
validated by PoC, would add to the capabilities available to advance 
U.S. air and cruise/terminal BMD architectures.
    While DOD understands the need to make difficult choices in the 
current fiscal environment concerning funding for all of our 
activities, we also note that failure to meet our MEADS MOU funding 
obligations for fiscal year 2013 could negatively affect our allies' 
implementation of current transatlantic projects and multinational 
cooperation--as well as their willingness to join future cooperative 
endeavors with the United States--that are strongly supported by the 
administration and Congress.

    78. Senator Begich. Secretary Panetta and General Dempsey, what 
efforts did both of you personally engage in to terminate or 
restructure the program to ensure last year's appropriation was the 
final obligation in accordance with the law?
    Secretary Panetta. In accordance with the requirements of section 
235 of the NDAA for Fiscal Year 2012, DOD has consulted with the German 
and Italian participants regarding development of a plan to restructure 
the program further in the event that Congress does not authorize or 
appropriate fiscal year 2013 funding for these purposes. We have 
informed the German and Italian participants that there is significant 
risk that fiscal year 2013 funding may not be made available by 
Congress. In response to our attempts to engage in discussions, the 
German and Italian participants have consistently stated that they 
remain fully committed to their MOU obligations and expect that all 
three participants will provide funding in 2013 to complete the PoC 
effort. Although we have engaged with the German and Italian 
participants to seek to complete MEADS MOU efforts using only fiscal 
year 2012 funding, we cannot force them to agree to this course of 
action.
    During his recent visit to the United States, I personally 
discussed this matter with the German Minister of Defense (MoD). I will 
continue to engage my German and Italian counterparts on this issue.
    General Dempsey. In accordance with the NDAA for Fiscal Year 2012, 
DOD has repeatedly consulted and attempted to negotiate with our 
international partners, Germany and Italy, regarding development of a 
plan to further restructure the program in the event that Congress does 
not authorize or appropriate fiscal year 2013 funding to complete our 
MOU obligations. Secretary Panetta met with the German MoD in February 
where the German MoD reiterated his unequivocal support for completing 
the MEADS PoC.
    We have advised Germany and Italy that there is significant risk 
that fiscal year 2013 funding may not be made available. In response, 
our partners have made clear to DOD, and Germany has advised Senator 
Levin directly, that they remain fully committed to their MOU 
obligations and expect that all partner nations will provide their 2013 
funding to complete the PoC effort. They have also made clear that we 
are too late in the development effort to change course again and that 
we jeopardize our ability to realize the benefits of the program if we 
withdraw from our 9-year agreement near the end of the eighth year.

    79. Senator Begich. Secretary Panetta and General Dempsey, in these 
austere budget times, how can DOD justify a half a billion dollar 
investment in a program the warfighters will not use, and justify a 
request in violation of law?
    Secretary Panetta. The administration has requested funding in the 
fiscal year 2013 budget to complete the MEADS D&D PoC effort with 
Germany and Italy. DOD is seeking $400.9 million in fiscal year 2013 
funds to honor the final year of our MEADS D&D MOU commitment that will 
enable completion of the MEADS development phase as it is currently 
planned. The PoC effort enables all three nations to obtain benefit 
from our collective program investment to date and will bring the 
development program to an orderly conclusion. Failure to fund our 
fiscal year 2013 commitment will be viewed by our allies as reneging on 
our promises.
    During the Chicago NATO Summit on May 20, 2012, NATO allies 
achieved a major breakthrough on missile defense--10 years in the 
making--by declaring an interim BMD capability as an initial step 
toward establishing a NATO missile defense system. The EPAA will be a 
major contributor to NATO missile defense and is designed to protect 
the U.S. Homeland, U.S. deployed forces, and our allies against the 
increasing threats posed by the proliferation of ballistic missiles. 
Where BMD was once a controversial subject within the alliance, we have 
reached consensus to operationalize this capability and have the allies 
share the burden of deterring and defending against those who could 
threaten us with ballistic missiles. This is a major achievement of 
U.S. policy; a decision by Congress to prohibit any additional funding 
for MEADS at this late date would diminish the consensus reached in 
Chicago.
    The United States relies on allies to share the burden of 
peacekeeping and defense in coalition activities and the development of 
effective defense capabilities that are of direct benefit to the United 
States. In this context, I believe it is important to live up to our 
commitments to our allies. We made a commitment to two of our closest 
allies--Germany and Italy--to develop MEADS cooperatively to achieve 
those objectives. Failure to meet our MEADS MOU fiscal year 2013 
funding obligations could negatively affect the willingness of our 
allies to join future cooperative endeavors, bilaterally or through 
NATO, that have been strongly supported by the administration and 
Congress at a time when cooperation through concepts, such as Smart 
Defense, is critical to ensuring NATO and its members are developing 
needed capabilities for the future.
    In addition, failure of the United States to provide funding for 
fiscal year 2013 would likely lead to a dispute with Germany and Italy, 
both of which have indicated that they would assert that the United 
States has unilaterally withdrawn from the MOU. On the other hand, full 
funding of the final year of the MEADS PoC would ensure that the United 
States receives a return on its 8-year investment in the form of a data 
archival package for future potential use on other U.S. air and missile 
defense improvements. We must act now to avoid a situation that would 
cause harm to our relationships with two of our closest allies.
    General Dempsey. In accordance with the NDAA for Fiscal Year 2012, 
DOD has repeatedly consulted and attempted to negotiate with our 
international partners, Germany and Italy, regarding development of a 
plan to further restructure the program in the event that Congress does 
not authorize or appropriate fiscal year 2013 funding to complete our 
MEADS D&D MOU obligations.
    DOD believes that completing the MEADS PoC and securing the benefit 
of the development program is the correct course of action. The MEADS 
elements (advanced 360 degree radars, a lightweight launcher with the 
PAC-3 MSE missile, and a battle management system), if fully realized 
and validated by PoC, would add to the capabilities available to 
advance U.S. air and cruise/terminal BMD architectures.
    Failure to meet our MEADS MOU funding obligations for fiscal year 
2013 could negatively affect our allies' implementation of current 
transatlantic projects and multinational cooperation--as well as their 
willingness to join future cooperative endeavors with the United 
States--that are strongly supported by the administration and Congress.

                       DOMESTIC SUPPORT MISSIONS

    80. Senator Begich. Secretary Panetta and General Dempsey, Congress 
has vocalized concerns about DOD resourcing domestic support missions 
repeatedly for the last several years. For fiscal year 2013, the Air 
Force is proposing to retire the Joint Cargo Aircraft and the Army will 
proceed with divestiture of the Sherpa. These actions leave the 
National Guard in many States without needed capability and resources 
to fulfill domestic support missions. How is DOD ensuring domestic 
support missions are not undermined?
    Secretary Panetta. Although the C-27 divestiture and subsequent 
Army C-23 divestiture will reduce National Guard airlift, sufficient 
airlift capacity remains (over 1,000 rotary-wing and over 400 fixed-
wing aircraft) and is spread across the 10 Federal Emergency Management 
Agency (FEMA) regions that States may leverage in response to an 
emergency. In situations where State resources are overwhelmed, the Air 
Force will provide assistance to civil authorities in accordance with 
the Stafford Act or as directed by the President. As such, the analysis 
which formed the rationale for the force structure adjustment included 
supporting civil authorities when requested as part of a larger FEMA-
led Federal response.
    The 2013 presidential budget request reduced the C-130 fleet size 
to 318 aircraft to meet the requirement that was outlined in the newly-
articulated strategy presented by the President and the Secretary of 
Defense. When determining the number of airlift aircraft required to 
meet the new strategy, forces are being sized to meet one large-scale 
campaign internationally, as well as support two domestic missions, a 
major regional disaster, and a Homeland defense event. As a follow-on 
measure, the 2012 NDAA-directed airlift study, due at the end of 2012, 
will further refine plans to support domestic missions without the C-23 
Sherpa.
    General Dempsey. Defending the Homeland and providing support of 
civil authorities is a primary mission of the U.S. Armed Forces. As 
such, DOD carefully considered domestic support missions in our 
analysis of requirements for the fiscal year 2013 budget submission. 
Although not every State will retain organic airlift capability, the 
DOD Total Force remains fully capable of meeting our domestic 
requirements while at the same time deterring and defeating aggression 
by any potential adversary. When called upon, we will leverage existing 
National Guard capabilities along with additional Active and Reserve 
Forces needed to ensure the safety and security of our citizens.

    81. Senator Begich. Secretary Panetta and General Dempsey, how did 
domestic support missions factor in to decisionmaking?
    Secretary Panetta. One of the primary missions of the U.S. Armed 
Forces is to defend the Homeland and provide support to civil 
authorities. With regard to airlift, the Air Force routinely conducts 
defense support of civil authorities and assists at all levels in 
preventing, protecting against, mitigating the effects of, and 
responding to manmade or natural disasters when directed by the 
President or approved by DOD.
    DOD conducted the Mobility Capabilities and Requirements Study 2016 
and Case 3 (270 C-130s) of the study is consistent with the new Defense 
Strategic Guidance. This analysis includes airlift to support two 
domestic missions, a major regional disaster, and a Homeland defense 
event to form the 270 intra-theater aircraft requirements. In support 
of the Homeland defense mission, the Air Force continues to meet 
mission requirements/taskings through the joint Global Force Management 
process that prioritizes all combatant commanders (i.e., Northern 
Command, CENTCOM, PACOM, et cetera) requirements.
    General Dempsey. In last year's Comprehensive Review of the Future 
Role of the Reserve Component, DOD examined Reserve component support 
for Homeland defense and Defense Support of Civil Authorities (DSCA). 
This report concluded that, although Homeland defense and DSCA are 
Total Force responsibilities, ``the Nation needs to focus particular 
attention on better using the competencies of National Guard and 
Reserve component organizations. The National Guard is particularly 
well-suited for DSCA missions.'' The report added that ``except in rare 
circumstances, the National Guard can be expected to support civil 
authorities at the direction of State Governors.''
    DOD's response to the BCA was to provide a balanced force that best 
protects the Nation, both at home and abroad. Although we necessarily 
reduced National Guard forces along with those of Active Duty and 
Reserve, we did so in a manner which allows us to provide capabilities 
adequate for our domestic support mission. Because many domestic 
missions emerge in response to unforeseen crises, when called upon we 
can leverage other State capabilities with the consent of those States' 
Governors on an as-needed basis. Should a national emergency arise, we 
will augment the National Guard using capabilities found within the 
Active component as permitted by Title 10 and, as a last resort, the 
Civil Reserve Air Fleet.

                 U.N. CONVENTION ON THE LAW OF THE SEA

    82. Senator Begich. Secretary Panetta and General Dempsey, do you 
support the Law of the Sea Treaty?
    Secretary Panetta. I strongly support the United States' accession 
to the 1982 U.N. Convention on the Law of the Sea (UNCLOS). DOD's 
civilian and military senior leadership have been strong proponents in 
favor of U.S. accession for more than a decade.
    General Dempsey. I strongly support the United States' accession to 
the 1982 UNCLOS.

    83. Senator Begich. Secretary Panetta and General Dempsey, how will 
accession to the UNCLOS enhance our strategic interests and national 
security?
    Secretary Panetta. Accession to the 1982 UNCLOS would enhance the 
United States' strategic interests and national security in several 
ways. These include the following:

         As a treaty party, the United States can best protect 
        the navigational freedoms enshrined in the 1982 UNCLOS that are 
        key to U.S. global force presence and power projection 
        capability. The current status of the United States requires us 
        to assert our rights through customary international law, 
        subject to change based on state practice.
         The United States would have access to the benefits 
        afforded to treaty parties, which importantly include the 
        UNCLOS's institutions and meetings. The United States would no 
        longer be relegated to observer status and could fully 
        participate in the ongoing development and interpretation of 
        the 1982 UNCLOS. In fact, nearly every maritime power, our NATO 
        allies, and the other permanent members of the U.N. Security 
        Council are already treaty parties. Being a party would allow 
        the United States to exert a level of influence that is 
        reflective of its status as the world's foremost maritime 
        power.
         Accession would solidify a truly massive increase in 
        the United States' resource and economic jurisdiction, not only 
        to 200 nautical miles off our coasts, but to a broad 
        continental margin beyond that.
         Accession would ensure the United States' ability to 
        take advantage of the opening of the Arctic, including the 
        enormous natural resource potential of the Arctic.
         China continues to flex its muscles in the South China 
        Sea at a time when the United States is rebalancing toward the 
        Asia-Pacific region. Lack of accession continues to put the 
        United States in a weaker position in critical bilateral and 
        multilateral discussions--whereas China seeks to use its status 
        as a treaty party to its advantage. Accession would strengthen 
        the United States' hand in regional discussions as we seek to 
        build upon the depth and breadth of regional partnerships and 
        access.

    General Dempsey. Becoming a Party to the UNCLOS would enhance our 
strategic interests and national security by preserving our strategic 
influence as the world's foremost maritime power and strengthening our 
ability to lead developments in global maritime security. The United 
States would also be able to reinforce the UNCLOS's freedoms of 
navigation and overflight, and the other lawful uses of the sea related 
to those freedoms, that are essential to the global presence and 
mobility of our Armed Forces. This includes movement of forces and 
materiel through strategic international straits such as the Straits of 
Gibraltar, Malacca, Hormuz, and Bab el-Mandeb. In addition, becoming a 
party would strengthen combined operations with coalition partners that 
are treaty parties and advance important national security initiatives 
such as the Proliferation Security Initiative. Accession would also 
allow the United States to take better advantage of emerging 
opportunities in the Arctic related to navigation, resources, and other 
activities, as well as enhance our credibility in a large number of 
Asia-focused multilateral venues where we are seeking to diffuse 
tensions and encourage the peaceful resolution of disputes in the South 
China Sea.
                                 ______
                                 
             Questions Submitted by Senator Joe Manchin III

                   DEPARTMENT OF DEFENSE CONTRACTORS

    84. Senator Manchin. Secretary Panetta, how many contractors does 
DOD employ?
    Secretary Panetta. DOD provides this data to Congress annually in 
the Inventory of Contracts for Services required by section 2330a, 
title 10, U.S.C., as amended by section 807 of the NDAA for Fiscal Year 
2008. On August 28, 2011, DOD submitted the Fiscal Year 2010 Inventory, 
reporting 622,722 contractor full-time equivalents for the fiscal year.

    85. Senator Manchin. Secretary Panetta, what is the average salary 
of a DOD contractor?
    Secretary Panetta. DOD awards contracts for a wide range of goods 
and services. The salaries of DOD contractor employees similarly span a 
wide range. Contractor salaries are affected by a number of factors, 
including an individual's experience, training, expertise, and the 
location of performance. DOD endeavors to maximize use of competitive 
procurements. In competitive procurements, the contract award amount is 
generally a function of the market price and therefore contractor 
salaries are influenced by competitive market pressures. Except in 
limited circumstances, such as contracts subject to the Service 
Contract Act or the Davis-Bacon Act, DOD does not dictate private 
sector salaries. Although DOD does not maintain a database of 
contractor employee salaries, our contracting officers use Defense 
Contract Management Agency negotiated labor and overhead rate 
agreements with DOD contractors as a basis for negotiating contracts at 
a fair and reasonable price.

                            FORCE STRUCTURE

    86. Senator Manchin. General Dempsey, having served as a governor, 
I have seen firsthand the value of the Total Force Policy and the cost-
effective value of a multi-missioned force such as the National Guard 
that is rooted in our Nation's communities where we need support. Have 
you effectively evaluated the cost efficiencies of the Army and Air 
National Guard?
    General Dempsey. Yes, and DOD continues to evaluate the cost 
effectiveness of not only the Army and Air National Guard, but all 
Active and Reserve components from all Services. While this task is 
accomplished primarily within the Services themselves, the Joint Staff 
and OSD monitor and provide oversight of the evaluation process, and 
frequently coordinate and/or sponsor their own studies to validate the 
work performed by the Services.

    87. Senator Manchin. General Dempsey, wouldn't it be advisable to 
wait on the data from these reports before making any force structure 
changes?
    General Dempsey. Both OSD and the Joint Staff conducted assessments 
of the Joint Force prior to submitting the current budget. The 
programmed force structure for 2017, which includes force structure 
changes, was assessed against our strategy and we determined that the 
resultant military forces would be sufficient to meet the needs of our 
Nation.

                  AIR FORCE BUDGET--GUARD AND RESERVES

    88. Senator Manchin. Secretary Panetta, the fiscal year 2013 Air 
Force budget disproportionately cuts the Guard and will necessitate 
losing the expertise gained by pilots and capabilities over a decade of 
war. Are you confident that this budget meets the requirements to 
``surge and regenerate forces and capabilities'' that the President 
spelled out in your Priorities for the 21st Century Defense?
    Secretary Panetta. Yes. The new Defense Strategic Guidance for DOD 
articulates priorities for a 21st century defense that sustains U.S. 
global leadership. The Air Force approached this challenging task 
guided by the following principles: ensure the Total Force can fulfill 
surge requirements; maintain a balance between components that allows 
us to fulfill continuing rotational requirements at sustainable rates; 
retain the recruiting, training, and operational seasoning base 
required to sustain the Total Force's needs into the future; and ensure 
the Reserve component remains relevant and engaged in both enduring and 
evolving missions. Maintaining the appropriate mix of forces between 
the Active and Reserve components is critical to sustaining Air Force 
capabilities for forward presence, rapid response, and high-rate 
rotational demands within a smaller overall force. The Air National 
Guard and Air Force Reserve are integrated into all major Air Force 
mission areas, train to the same high standards as the Active 
component, and are invaluable partners in helping meet the Air Force's 
many and varied commitments.

    89. Senator Manchin. Secretary Panetta, the Air Force leadership 
has called this an effort to balance the size of the Active and Reserve 
components. But this seems to work contrary to your plan to ``maintain 
a strong National Guard'' to provide the ``concept of reversibility.'' 
Did the Air Force consider alternative plans that you have said 
``reduce the cost of doing business,'' such as relying more heavily on 
the National Guard and Reserves?
    Secretary Panetta. The Air Force developed a force structure based 
on several important objectives, most importantly ensuring the Air 
Force can provide the capability to accomplish the missions outlined in 
the new Defense Strategic Guidance with a risk-balanced force in the 
context of fiscal reductions. It would be ill-advised to make 
``proportional'' cuts to the Active component and Reserve component for 
the sake of being ``fair'' or return to some Active component/Reserve 
component ratio from days gone by. It is important that we build the 
force with an Active component/Reserve component ratio that sustains 
the symbiotic relationship between the Active component/Reserve 
component and is based on maximizing our capabilities and balancing the 
risk across the assigned missions in the new Defense Strategic Guidance 
with the given funding. This is what the Air Force did in its budget 
request. Relying more heavily on the National Guard and Reserves does 
not necessarily reduce costs if either the demand cannot be met or the 
symbiotic balance to sustain the Total Force cannot be maintained.
    The Air Force rigorously evaluated the mix of Active and Reserve 
component forces to sustain the symbiotic relationship of the 
components while ensuring the Total Force is postured to meet both 
surge and post-surge demands in the new strategy as well as the current 
and near-term demand for forces from the combatant commanders. This 
deliberate and considerable effort provides the best way to set the 
conditions for success in the new strategy through a properly sized 
Total Force, to include maintaining a strong National Guard, Reserve, 
and Active Force.
                                 ______
                                 
             Questions Submitted by Senator Jeanne Shaheen

                          DON'T ASK DON'T TELL

    90. Senator Shaheen. Secretary Panetta, you may be aware, despite 
the repeal of Don't Ask Don't Tell, a number of policies and programs 
within DOD continue to exclude same-sex couples. I understand the 
limitations imposed by the Defense of Marriage Act (DOMA), however 
there are a number of DOD policies that could be modified immediately 
to alleviate many of the lingering inequalities. The Servicemember's 
Legal Defense Network (SLDN) has identified 11 of these discriminatory 
policies, which I have included here. Please provide DOD's feedback on 
the feasibility of altering these policies in a manner consistent with 
the spirit of the repeal of Don't Ask/Don't Tell.
       
    
    
      
    
    
      
    
    
      
    Secretary Panetta. Following the effective date of repeal, 
September 20, 2011, DOD began a deliberative and comprehensive review 
of the possibility of extending eligibility for benefits, when legally 
permitted, to same-sex partners. The joint team responsible for this 
review is examining the benefits, including those on the SLDN list, 
from a policy, fiscal, legal, and feasibility perspective. This review 
is ongoing, and the team will report its findings and recommendations 
to me once the review is completed.

                    FORCES IN THE PACIFIC AND EUROPE

    91. Senator Shaheen. Senator Panetta, though I understand DOD's 
assessment of the geo-political landscape and the need to rebalance our 
forces toward the Pacific, I remain committed to working with our 
allies to ensure the strength of the NATO alliance and collective 
European defense. To that end, I believe the upcoming NATO summit in 
Chicago will provide an excellent opportunity to reassure our allies 
that despite the realignment of our forces, the United States remains 
committed to both NATO and Europe. Will you make that a priority for 
the upcoming summit?
    Secretary Panetta. Yes. The United States remains committed to both 
NATO and Europe.
    NATO remains of vital importance, and is a net provider of global 
security. As President Obama has said, ``Europe remains the cornerstone 
of our engagement with the world,'' and NATO is ``the most capable 
alliance in history.'' Our NATO allies are our most reliable and 
capable partners for advancing our shared international security 
objectives. The transatlantic relationship is critical to confronting 
the challenges of a complex, dangerous, and fast-changing world. The 
President, Secretary Clinton, and I have been emphasizing this to 
allies since we announced our new Defense Strategic Guidance in January 
and will continue to do so during the NATO summit in Chicago.

    92. Senator Shaheen. Secretary Panetta, in your view, what can 
Congress to do help achieve that objective?
    Secretary Panetta. DOD appreciates Congress' support for the United 
States' commitment to Europe and to working with allies to ensure the 
strength of the NATO alliance. The U.S. defense strategy reaffirms the 
enduring importance of NATO. We appreciate congressional support for 
the upcoming NATO summit in Chicago, including support for achieving 
our objectives in the next phase of transition in Afghanistan, 
reforming NATO so that it has the capabilities it needs, and 
strengthening partnerships beyond NATO's borders.

                           FORCE FLEXIBILITY

    93. Senator Shaheen. Secretary Panetta, obviously, our strategic 
shift toward the Asia-Pacific region prioritizes assets in that AOR. 
However, as recent operations in Libya highlighted, we must maintain 
the capability to quickly respond to contingencies on the Atlantic side 
of the country as well. Considering the uncertain and complex world of 
threats we face today, how important is it to maintain flexibility and 
balance in making sure a renewed focus on the Asia-Pacific region does 
not leave us vulnerable on the Atlantic side of the country?
    Secretary Panetta. U.S. forces will continue to be capable of 
protecting the Homeland--from the Pacific to the Atlantic coasts--and 
U.S. security interests in every region of the world.
    As the Chairman of the Joint Chiefs of Staff and I have said, we 
are at a strategic turning point. DOD conducted an intensive, strategy-
driven review to guide defense priorities and spending over the coming 
decade. One result of this review is that the United States will 
emphasize the Asia-Pacific and the Middle East. Yet, even in a 
resource-constrained era, we remain committed to the strength and 
security of our allies and partners across Europe. One example of this 
is the increased missile defense capabilities we are implementing in 
Europe.
    We will maintain a military presence that meets our enduring NATO 
Article 5 security commitment, deters aggression, and promotes enhanced 
capacity and interoperability. The real measure of U.S. commitment to 
Europe is the ability and will to work together to promote shared 
regional and global interests, and to build and employ collective 
capabilities as an alliance, as we did in Libya.
    Additionally, building partnership capacity globally remains 
important for sharing the costs and responsibilities of global 
leadership. We will seek to be the security partner of choice by 
strengthening existing alliances and partnerships and pursuing new 
partnerships with a growing number of nations--including those in 
Africa and Latin America.

    94. Senator Shaheen. Secretary Panetta, what are your priorities 
and objective capabilities for U.S. forces remaining in Europe?
    Secretary Panetta. Even in this resource-constrained era, we remain 
committed to the strength and security of our allies and partners 
across Europe. The peace and prosperity of Europe are critically 
important to the United States, and Europe remains our security partner 
of choice for military operations and diplomacy around the world. Our 
priorities include promoting regional security and Euro-Atlantic 
integration, strengthening NATO, maintaining our Article 5 commitments 
to allied security, and promoting enhanced capacity and 
interoperability for coalition operations. The evolving inventory of 
U.S. forces in Europe will provide the Commander of U.S. European 
Command with the needed capability to meet operational and training 
requirements, including activities to ensure that European allies and 
partners have the capability to conduct expeditionary operations in 
defense of our common interests. The allocation of a U.S.-based brigade 
to the NATO Response Force to bolster the training and exercises we 
conduct with allies is an example of this. Our focus on the evolving 
security environment includes investing in BMD capability for Europe in 
response to the emerging threats.
                                 ______
                                 
           Questions Submitted by Senator Kirsten Gillibrand

                         RAPID INNOVATION FUND

    95. Senator Gillibrand. Secretary Panetta, Congress has been very 
supportive of the Rapid Innovation Fund (RIF), which is intended to 
increase research and development of new innovative technologies 
important for our military. This is such a great program. It is my hope 
that it fosters more U.S.-made nano and other chip-related technologies 
to address the very serious insecurity in our IT procurement. Yet DOD 
has been very slow to roll out contracting for this funding, putting 
only about $100 million out, out of $600 million. And this year's 
budget has no additional funding. Please explain why DOD does not seem 
to support this program to foster American innovation in cutting edge 
military technologies.
    Secretary Panetta. Congress directed the Secretary of Defense to 
establish the RIF in section 1073 of the Ike Skelton NDAA for Fiscal 
Year 2011, Public Law 111-383, and identified $520 million ($460 
million research, development, test and evaluation (RDT&E); and $60 
million in procurement) for the RIF in DOD and Full-Year Continuing 
Appropriations Act, 2011, which was signed into law on April 15, 2011. 
Section 1073 establishes a funding limitation of $3 million and 24-
month completion per award.
    In response to section 1073, DOD issued guidelines in August 2011 
for implementation of the RIF, directing the use of open, competitive, 
and merit-based processes. DOD subsequently published 4 Broad Area 
Announcements (BAA) during the period September to November 2011 to 
solicit proposals; more than 3,500 responses were received.
    Given the large number of responses, the source selection period 
has been justifiably longer than anticipated. Each proposal received a 
fair and thorough evaluation using source selection criteria included 
in the four public solicitations. However, DOD intends to obligate all 
of the fiscal year 2011 $460 million RDT&E funds prior to October 2012. 
We anticipate approximately 160 to 180 contract awards. None of the 
proposals received in response to the four BAAs met the criteria to use 
the $60 million procurement funds, and DOD is assessing plans to 
obligate these funds before they expire in September 2013.
    Congress identified another $200 million for the RIF in the 
Division A-DOD Appropriations, the Consolidated Appropriations Act, 
2012. DOD intends to issue solicitations this summer to use these 
funds.
    DOD worked to structure the RIF for success, but it is too early at 
this time to determine the overall effectiveness of the program in 
meeting the goals outlined in section 1073. Contract awards are a 
necessary but insufficient metric; we will also need to assess the 
number of RIF-funded projects that are successfully completed and 
transitioned to a DOD acquisition program. Early next year, DOD will 
assess the performance and transition potential of the contracts 
awarded via the fiscal year 2011 funds. At that time, DOD will 
determine whether it should program funds for the RIF in future budget 
requests.

                        BARRIERS TO SERVICEWOMEN

    96. Senator Gillibrand. Secretary Panetta, on February 9, 2012, DOD 
announced a change in the combat exclusion policy that bars women from 
formally serving in combat roles. The change was in part due to 
recommendations made by the Military Leadership Diversity Commission in 
their March 2011 report. Women are now able to formally serve in roles 
such as intelligence officer and medic at the battalion level, and 
receive credit for this service toward promotions; however, women are 
still barred from serving in the infantry, armor, and special 
operations forces. This new policy has the most direct impact on women 
serving in the Army and Marine Corps, as the Navy and Air Force have 
already opened up almost all positions to women. As stated in DOD's 
report to Congress ``the Department of Defense is committed to removing 
all barriers that would prevent servicemembers from rising to the 
highest level of responsibility that their talents and capabilities 
warrant.'' With this new step forward, what are DOD's future plans for 
eliminating all of the barriers to our servicewomen?
    Secretary Panetta. The Direct Ground Combat Assignment policy 
prohibits the assignment of women to certain units and occupational 
specialties. As documented in the Military Leadership Diversity 
Commission findings, changes to DOD policies will require time to 
implement fully. There are serious practical barriers, which if not 
approached in a deliberate manner, could adversely impact the health of 
our servicemembers and degrade mission accomplishment. Based on opening 
of the new positions to women, DOD will assess the direct ground combat 
unit assignment prohibition to inform future policy decisions. 
Additionally, DOD will review development of gender-neutral physical 
standards for occupational specialties.
    I have directed the Services to report back to me on their 
assessment of these newly opened positions in 6 months with an 
assessment of additional positions that can be opened and barriers to 
opening additional positions to qualified women.

    97. Senator Gillibrand. Secretary Panetta, the Coast Guard 
currently allows women to serve in all career fields. Could this be a 
model for the other branches of Service?
    Secretary Panetta. As the mission of each of the Services is 
significantly different, so are the elements of their specific position 
restrictions. Additionally, there is a wide variance among the Services 
in the number of occupations closed to women. Given the unique 
environment of military service, DOD is working to eliminate barriers 
with the goal of allowing all servicemembers to serve in any capacity, 
based on their ability and qualifications, and not constrained by 
gender restrictive policies.

                         HAZING IN THE MILITARY

    98. Senator Gillibrand. Secretary Panetta, over the last year, 
there have been several high-profile cases of hazing in the military, 
including those of Marine Lance Corporal Harry Lew, Army Private Danny 
Chen, and allegedly Marine Private Hamson McPherson, Jr. In the cases I 
highlighted, the hazing victim committed suicide immediately following 
a hazing incident. In the past month, both the Army and Marine Corps 
issued statements reinforcing their policy against hazing in their 
respective Service. Additionally, last week the Navy discharged eight 
sailors after video surfaced of a hazing incident aboard a Navy ship. 
What steps has DOD as a whole taken to address this issue and ensure 
that all types of hazing cease to occur in our military?
    Secretary Panetta. DOD takes hazing very seriously. As a result, we 
are examining responsive courses of action in three areas: (1) a 
reiteration of existing policy prohibitions of hazing across the chain 
of command; (2) increased emphasis in training; and (3) new reporting 
options. These proposed actions are all designed to improve our ability 
to prevent, identify, and take immediate action to address hazing 
before it leads to serious consequences.
    DOD's policy prohibiting hazing is unambiguous, and Service leaders 
have clearly stated that they take incidents of hazing very seriously. 
The following recent leadership statements reiterate that hazing is 
contrary to good order and discipline and is unacceptable behavior: the 
Secretary of Defense's message of December 2011, the Secretary of the 
Army's tri-signed message of January 2012, and the Marine 
Administrative Messages and the revised Marine Corps Order 1700.28A of 
February 2012. Leadership at all levels will continue to emphasize to 
subordinates that such behavior will not be tolerated.
    Second, DOD is examining methods of improving training to prevent, 
identify, and provide direction on how to respond to possible incidents 
of hazing. We are evaluating options including: raising awareness of 
both existing hazing policy and the associated offenses under the 
Uniform Code of Military Justice (UCMJ), training to identify leading 
indicators and to prevent or stop incidents from escalating, training 
resiliency, training peer groups, and emphasizing this issue at 
training courses administered by the Defense Equal Opportunity 
Management Institute (DEOMI).
    Third, DOD is considering options to identify hazing distinctly in 
surveys and reporting mechanisms. Potential courses of action in this 
area include: adding hazing to the Services' Serious Incident Report 
thresholds, adding hazing to law enforcement reporting codes, 
identifying reported incidents of hazing in UCMJ cases, Inspector 
General hotlines and databases, Sexual Assault Prevention and Response 
Office's Defense Sexual Assault Incident Database, the DEOMI 
Organizational Climate Survey, Defense Manpower Data Center Status of 
Forces Survey, and Services' peer programs.

    99. Senator Gillibrand. Secretary Panetta, given the remote 
locations of two aforementioned hazing cases, what systems are in place 
to protect a victim of hazing when their chain of command is either the 
perpetrator of the hazing or implicit to the acts of hazing?
    Secretary Panetta. The military chain of command is designed to 
function in remote locations.
    A fundamental function of the military chain of command is 
communication. Just as the command channel transmits orders from higher 
to lower levels, the command channel also extends upward to communicate 
official matters from subordinate to senior. If a servicemember 
believes he or she has been wronged by his or her superior, then the 
servicemember has a right to communicate the problem, or grievance, 
through formal or informal processes.
    Each Service has formal complaint procedures to bring issues to the 
attention of commander. The Services train their members in complaint 
and problem solving procedures as part of Initial Entry Training. For 
example, Article 138 (the right to request redress of grievances from a 
superior) procedures are explained to an Active Duty servicemember 
within 14 days after the member's initial entrance on Active Duty, 
again after completing 6 months of Active Duty, and again at the time 
when the member reenlists.
    Protecting servicemembers is also a fundamental function of the 
chain of command. If the chain of command believes that a servicemember 
may be at risk of retaliation, the chain of command may immediately 
apply administrative or operational procedures, including reassignment 
or removal of the victim to a safer location.
    In less isolated locations, servicemembers have several avenues to 
highlight complaints to personnel and offices other than their chain of 
command. These include: the Office of the Inspector General hotlines, 
legal assistance attorney, or law enforcement.

    100. Senator Gillibrand. Secretary Panetta, since the repeal of 
Don't Ask Don't Tell almost 6 months ago, gay and lesbian 
servicemembers have been serving openly without fear of discharge. This 
was a wonderful achievement for our military, and I commend DOD for 
continually reiterating its commitment that gay and lesbian 
servicemembers will be treated with respect and dignity. Are there 
plans for DOD to formally add sexual orientation to the DOD Human Goals 
Charter?
    Secretary Panetta. All servicemembers, regardless of sexual 
orientation, are entitled to an environment free from personal, social, 
or institutional barriers that prevent them from rising to the highest 
level of responsibility possible, dependent only on individual talent 
and diligence. Harassment or abuse based on sexual orientation is 
unacceptable and will be dealt with through command or Inspector 
General channels. Therefore, there are no plans to add sexual 
orientation as a class under the Military Equal Opportunity program, 
nor to the DOD's Human Goals Charter. Servicemembers will continue to 
be treated equally, regardless of sexual orientation.
                                 ______
                                 
               Questions Submitted by Senator John McCain

                            IRAQ INSTABILITY

    101. Senator McCain. General Dempsey, in your opinion, is al Qaeda 
a significant military threat in Iraq?
    General Dempsey. Al Qaeda in Iraq (AQI) does not have the capacity 
to overthrow the Government of Iraq, but the group has significant 
capabilities to strike Iraqi Government targets, including Iraqi 
Security Forces, as well as Shia civilians. AQI claims daily small-
scale assassination attacks, primarily using small arms and 
magnetically-attached bombs. These attacks suggest an increase in 
attack capability following U.S. force withdrawal. We anticipate AQI 
will maintain a heightened operational tempo in 2012, absent sustained 
increase in Iraqi counterterrorism pressure. Since the conclusion of 
Operation New Dawn in late 2011, AQI has claimed responsibility for 
multiple coordinated suicide and vehicle-borne IED attacks, including 
December attacks across Baghdad and January and March attacks 
throughout multiple Iraqi provinces.

    102. Senator McCain. General Dempsey, can you assess the threat 
posed by AQI, and whether that threat is growing or diminishing?
    General Dempsey. The threat from AQI has increased since the 
conclusion of Operation New Dawn in late 2011 and is growing. The 
absence of sustained effective counterterrorism pressure has allowed 
AQI to maintain an increased operational tempo inside Iraq. Although 
AQI primarily focuses attacks against the Iraqi Government, the group 
remains an active member of the broader al Qaeda associated movement 
and is committed to projecting its influence outside Iraq as part of 
its long-term strategy. The United States and Europe are standing 
targets for potential AQI attacks and are a recurring theme in its 
public statements. On 25 January, AQI indicated publicly it would 
strike the United States abroad now that U.S. forces have departed 
Iraq--an allusion similarly made in AQI's August 2011 video eulogy for 
al Qaeda leader Osama bin Ladin.

                    U.S. FORCE LEVELS IN AFGHANISTAN

    103. Senator McCain. Secretary Panetta, the administration's 
announcement to end combat operations in Afghanistan in 2013 sends 
exactly the wrong signal to our friends and enemies in this conflict. 
It continues the administration's policy of publicly telegraphing exit 
plans in a way that fundamentally undermines our overall strategy and 
our determination to succeed. What incentive can the Taliban possibly 
have to negotiate meaningfully with the Afghanistan Government or with 
us when they know that the United States is leaving regardless?
    Secretary Panetta. In 2013, coalition forces will continue to 
transition security responsibilities to the ANSF, and will assume a 
supporting role as part of the Security Force Assistance strategy. 
Coalition forces will continue to operate side-by-side with their ANSF 
counterparts while providing key enabler support to combat insurgent 
threats. Coalition forces' transition to a supporting role in 
Afghanistan is a critical and necessary step toward mission 
accomplishment. Doing this with less coalition combat power on the 
ground will increase ANSF confidence and lead to their success while 
reducing insurgent capacity. As the ANSF grows in capacity, capability, 
and confidence, fewer coalition forces will be required.
    At the end of 2014, U.S. forces will complete their drawdown and 
end combat operations; however the U.S. Government will continue to 
support the ANSF. The Strategic Partnership Agreement, which is 
currently under negotiation, will specify the U.S. role in Afghanistan 
after 2014, and outline the U.S. Government's long-term commitment to 
Afghanistan.

    104. Senator McCain. Secretary Panetta, reportedly, the top 
military commander in Afghanistan privately recommended holding off new 
U.S. troop reductions until 2014. Is this true and, if so, why did you 
decide to announce a plan that does not take the views of our military 
commanders into account?
    Secretary Panetta. I know of no such private recommendation 
concerning U.S. forces reductions. The force reductions that have 
occurred and will occur are part of the recovery of the U.S. surge 
forces, first ordered into Afghanistan at the time of the President's 
2009 West Point speech. DOD's recommendations concerning these 
reductions as well as future force reductions will be made in full 
cooperation with the Commander, U.S. Forces-Afghanistan. His 
recommendations will be key to any decision regarding U.S. force 
strength.

    105. Senator McCain. Secretary Panetta, exactly what conditions on 
the ground will be assessed to determine the pace of combat force 
reductions?
    Secretary Panetta. The campaign plan calls for several conditions 
to be met before completion of the transition in Afghanistan. The 
ability of the Afghanistan National Security Forces (ANSF) to provide 
suitable and sustainable security for a given area will be a key factor 
in determining U.S. and coalition forces presence.

    106. Senator McCain. General Dempsey, in your opinion, what is the 
military value of announcing a U.S. combat force withdrawal schedule as 
it pertains to the operations of the Taliban?
    General Dempsey. The administration stated we will reduce 23,000 
additional troops by October 2012, thereby fully recovering the surge 
force ordered by the President at his December 2009 West Point speech. 
Beyond the surge force, we have not specifically laid out the timeline 
of further reductions as these will be based on conditions on the 
ground. We believe the reductions that have been planned support our 
goal of transitioning lead for security to ANSF. Transitioning security 
lead will be an orderly process and will ensure the ANSF can retain the 
hard fought security gains even in the most contested areas of the 
country. The transition must signal to the Taliban that there will be a 
capable, indigenous force that will maintain security for the long-
term.

    107. Senator McCain. General Dempsey, wouldn't quickly cutting U.S. 
troop levels below 68,000 make it harder to clear and hold insurgent 
havens and complicate efforts to protect supply lines and bases ahead 
of the scheduled 2014 handover?
    General Dempsey. General Allen presented the plan to recover the 
33,000 member surge force to the President, which will bring the number 
of U.S. forces in Afghanistan to 68,000. The plan for further 
reductions will be based on conditions on the ground. There are several 
initiatives in place that will serve to counter insurgent havens and 
protect supply lines. Developing a capable and sustainable ANSF will 
provide long-term security for Afghanistan. Pursuing programs such as 
the Afghan Local Police will serve to maintain security gains, and 
building the Afghan Public Protection Force will provide security at 
bases and along supply routes.

    108. Senator McCain. General Dempsey, is there a risk of a troop 
withdrawal below 68,000 before 2014 negatively affecting the rapid-
response capabilities that now allow the military to evacuate wounded 
soldiers to combat hospitals within 1 hour of their injuries?
    General Dempsey. We currently plan on drawing down to 68,000 with 
no further plans to go below 68,000 until conditions on the ground 
allow. Regardless of the number of boots-on-the-ground, enablers such 
as medical evacuation (MEDEVAC) will be of key importance not only to 
U.S. troops, but our coalition partners as well. In February, MEDEVAC 
response times were well below 1 hour in 90 percent of operations.

                             SEQUESTRATION

    109. Senator McCain. Secretary Panetta, as you may know, the 
President's proposal to address sequestration with an alternative of 
tax increases and entitlement adjustments may not make it through 
Congress. Other than this proposal, this budget proposal does not 
account for the current spending cap imposed by sequestration for 
defense programs in fiscal year 2013. You have described the 
consequences of sequestration as catastrophic. Exactly how would these 
consequences be catastrophic? Please be specific.
    Secretary Panetta. DOD is concerned that the sequestration process 
would have significant consequences due to the uncertainty surrounding 
the process and the rigid formula which Congress has prescribed for its 
application. Assuming the fiscal year 2013 Defense Appropriations Act 
Conference Report contains language similar to the Joint Explanatory 
Statement of the Committee of Conference accompanying Division A-DOD 
Appropriations Act, 2012, DOD would be forced to reduce each line item 
within each procurement appropriation by the same percentage and each 
program element within each research and development appropriation by 
the same percentage. This percentage would be calculated based on the 
total budgetary resources, primarily the enacted fiscal year 2013 
appropriation and any unobligated balances carried forward at the end 
of fiscal year 2012. Some obvious examples of the problems this method 
would cause are found in line items such as those for a ship, where it 
is not feasible to buy a fraction of a ship, or in a line item funding 
a multiyear contract where a fraction of the funding would not be 
sufficient to pay the negotiated cost of the multiyear contract. With 
over 1,500 individual line items in these accounts, DOD could not fix 
all of these issues with the transfer authority that Congress typically 
provides; this would leave broken programs across DOD. Additionally, 
sequestration would force an immediate reduction in our operation and 
maintenance accounts which could damage readiness. Funding provided for 
OCO is also not excluded from sequestration.

    110. Senator McCain. Secretary Panetta, will you exempt military 
personnel from sequestration?
    Secretary Panetta. The President's budget makes the necessary 
budget constrictions to avoid devastating DOD through sequestration. If 
sequestration becomes an inevitability, DOD will evaluate all options 
available to comply with the law.

    111. Senator McCain. Secretary Panetta, when will you provide to 
Congress a detailed impact of sequester on the fiscal year 2013 budget?
    Secretary Panetta. Congress should enact comprehensive, balanced 
deficit reduction legislation that avoids sequestration. The 
President's budget offers one path for doing so. If and when necessary, 
the administration will address important technical questions 
concerning sequestration. If there were to be a sequester, a detailed 
impact of sequester could not be provided until we know what the actual 
funding level would be for fiscal year 2013 by account and program.

    112. Senator McCain. Secretary Panetta, when will the Military 
Services be able to provide Congress with a list of programs and 
accounts to be reduced or terminated as a result of imposing 
sequestration caps for the fiscal year 2014 budget?
    Secretary Panetta. The fiscal year 2014 budget will be developed 
using DOD's Planning, Programming, Budgeting, and Execution process. 
This process will be implemented in coordination with the White House 
and OMB. Any changes to our budget required by revised caps on the 
defense budget will be developed through this process and delivered to 
Congress in February 2013.

    113. Senator McCain. General Dempsey, in your opinion, what impact 
will the cuts have on our ability to carry out operational plans in 
support of national security interests around the world?
    General Dempsey. The across-the-board cuts called for by 
sequestration would pose unacceptable risk in the execution of 
operational plans. These cuts would significantly reduce military 
readiness, investment, and force structure, hollowing the force and 
degrading U.S. military power.

    114. Senator McCain. General Dempsey, will you provide the 
President with an operational risk assessment on the impact of 
sequestration before the end of the fiscal year?
    General Dempsey. All strategies and their associated budgets carry 
some risk, but sequestration goes beyond the level of acceptable risk. 
Sequestration would likely result in a smaller force structure that is 
ill-equipped, ill-trained, and ill-prepared to meet future challenges. 
Because of its wide-ranging impact on the health of the force, 
sequestration would require a complete reevaluation of our defense 
strategy and priorities to determine the true operational risks 
involved.

    115. Senator McCain. General Dempsey, will you also provide this 
assessment to Congress so that it will be available to inform debate on 
the issue?
    General Dempsey. All strategies and their associated budgets carry 
some risk, but sequestration goes beyond the level of acceptable risk. 
Sequestration would likely result in a smaller force structure that is 
ill-equipped, ill-trained, and ill-prepared to meet future challenges. 
Because of its wide-ranging impact on the health of the force, 
sequestration would require a complete reevaluation of our defense 
strategy and priorities to determine the true operational risks 
involved.

    116. Senator McCain. General Dempsey, the President has indicated 
that he will veto any legislation that undoes sequestration without tax 
increases. Have you raised your concerns on this matter to the 
President?
    General Dempsey. The administration and the military and civilian 
leadership of DOD are united behind the strategy and budget that we 
have presented. Sequestration, however, would subject DOD to roughly 
another $500 billion in cuts across all accounts and would hollow out 
the force, driving unacceptable risk to national defense.

    117. Senator McCain. General Dempsey, do you support proposed 
congressional legislation to protect defense accounts from being 
affected by sequestration?
    General Dempsey. The administration and the military and civilian 
leadership of DOD are united behind the strategy and budget that we 
have presented. Sequestration, however, would clearly pose unacceptable 
risk by significantly reducing U.S. military readiness, investment, and 
force structure, hollowing the force and degrading U.S. military power. 
We will continue to work with OMB and Congress to properly resource the 
capability to defend our Nation and our allies.

    118. Senator McCain. Secretary Panetta, the BCA in August 2011 did 
not actually mandate a specific reduction to defense budgets of $487 
billion over 10 years. The administration stated on July 31, 2011, 
that: ``The deal puts us on track to cut $350 billion from the defense 
budget over 10 years. These reductions will be implemented based on the 
outcome of a review of our missions, roles, and capabilities that will 
reflect the President's commitment to protecting our national 
security.'' The reduction of $487 billion in defense budgets was 
provided to you by OMB in November 2011 after imposing an arbitrary 10 
percent reduction to all Federal agencies. The administration's goal 
was for more than half of the first tranche of reductions in total 
discretionary spending ($917 billion) imposed by the BCA caps to come 
from the national security accounts. Given the significant increase to 
the risk to our national security from the cuts to military personnel 
end strength and force structure, why do you believe a $487 billion 
reduction is acceptable to incur?
    Secretary Panetta. The defense budget cuts we are absorbing are 
difficult but manageable. Specific reductions were guided by a 
comprehensive DOD strategic review which identified missions and 
capabilities essential to safeguarding U.S. and allied security 
interests in light of the most likely challenges posed by the future 
global environment. While U.S. Armed Forces will be smaller in number, 
we will ensure that they are ready, agile, flexible, and capable 
forces, with a forward presence that positions them to respond quickly 
in the event of threats or contingencies. The budget also preserves or 
enhances investments in key areas of continuing urgency, such as 
counterterrorism efforts and counter WMD, and areas that will grow in 
prominence in coming years, such as space, cyber, and missile defense.

    119. Senator McCain. Secretary Panetta, did you have an opportunity 
to advocate to the OMB or the President for a smaller reduction than 
$487 billion in cuts over 10 years?
    Secretary Panetta. The fiscal year 2013 budget reflects the results 
of a comprehensive DOD strategic review which identified missions and 
capabilities essential to safeguarding U.S. and allied security 
interests in light of the most likely challenges posed by the future 
global environment. This strategic shift would have occurred regardless 
of the Nation's fical situation. DOD's most senior leaders led the 
review, which included extensive engagement by the National Security 
Staff and the President. Given the size and mandatory missions of the 
other national security agencies, the President was limited in making 
significant funding allocations among agencies within the security 
category cap imposed by the BCA. DOD employed a strategy-based process 
in formulating its fiscal year 2013 budget request. OMB and the White 
House were represented throughout the process. The budget resulting 
from this process is adequate to meet our current requirements.

    120. Senator McCain. Secretary Panetta, aside from the issue of 
sequestration, do you anticipate that DOD will be asked by this 
administration to cut defense budgets even deeper than you have 
proposed in the fiscal year 2013 FYDP or deeper than the $487 billion 
in cuts you have proposed over the next 10 years?
    Secretary Panetta. We currently do not anticipate a further 
reduction in defense spending in future budgets, provided Congress 
enacts a deficit reduction package and avoids sequestration and the 
further impact of the BCA. If no action is taken to change the 
provisions of the BCA, DOD's 2014 budget would be required to be 
reduced further to meet the revised security limit provided in the Act. 
The fiscal year 2013 President's budget reflects the administration's 
national defense plan for the next 10 years. The plan calls for DOD's 
base budget to grow, albeit slowly, over that period.

                          ASIA-PACIFIC REGION

    121. Senator McCain. Secretary Panetta, on February 8, 2012, the 
Governments of the United States and Japan issued a joint statement on 
the U.S. strategic review of its defense posture in Asia. The two 
governments have officially started discussions to change the terms the 
2006 agreement. What is the new plan and timeline for the relocation of 
marines from Okinawa?
    Secretary Panetta. Since February, we have been engaged in 
intensive discussions with the Government of Japan regarding U.S. plans 
to relocate some U.S. marines from Okinawa to Guam. The size of the 
U.S. Marine Corps force we establish on Guam will be smaller than 
previously planned, and this change will be made in the context of our 
overall laydown of Marine Corps forces in the Asia-Pacific region. The 
new plan and timeline is pending the outcome of our current discussions 
with the Government of Japan and the completion of necessary 
environmental studies.

    122. Senator McCain. Secretary Panetta, what are DOD's estimates 
for costs to build facilities at new locations?
    Secretary Panetta. The Navy has provided the response via a 
classified briefing to Senate Armed Services Committee staff.

    123. Senator McCain. Secretary Panetta, are all of these costs 
included in the current budget or the FYDP?
    Secretary Panetta. No. The Marine Corps continues to generate, 
revise, and analyze projected costs associated with Marine Corps force 
posture revision and bilateral negotiations. As outlined in section 
2207 of the NDAA for Fiscal Year 2012, we will present a master plan 
for construction once completed.

    124. Senator McCain. Secretary Panetta, how is the President's 
strategic direction to rebalance toward the Asia-Pacific region 
actually reflected in the budget proposal for fiscal year 2013?
    Secretary Panetta. The fiscal year 2013 budget request protects 
and, in some cases, increases investments that are critical to our 
ability to rebalance toward the Asia-Pacific region, to include our 
ability to project power. For instance, this budget funds the 
development of next-generation bomber and new aerial refueling 
aircraft. Additionally, the Navy will invest in a design for Virginia-
class submarines that will allow these submarines to carry 
significantly more cruise missiles, and potentially provide an undersea 
conventional prompt strike capability. This budget also invests 
resources in increasing stocks of our most capable cruise missiles; 
purchasing advanced maritime patrol aircraft; upgrading avionics and 
communications systems in our current bomber fleet; and enhancing 
capabilities in space, cyber, electronic warfare, missile defense, and 
ISR systems.
    The strategy envisions more elements of the Joint Force postured 
forward in the Asia-Pacific region--reinforcing our stabilizing and 
deterrence presence in the region, as well as increasing potential 
combat power. The budget request funds the rotational deployment of 
marines and U.S. Air Force aircraft to Australia and the potential for 
rotational deployment of Littoral Combat Ships to Singapore. The Navy 
will also rebalance its fleet so that a greater percentage is in the 
Pacific, and all the Services will continue to maintain significant 
force structure in the region as they look to increase interaction with 
allies and partners.

    125. Senator McCain. Secretary Panetta, since announced plans call 
for Marine Corps forces to rotate to Australia or Guam, 8,700 marines 
and their families will be leaving Okinawa to be stationed somewhere 
else--where will they go?
    Secretary Panetta. Many of the marines based in Okinawa are 
rotational. These marines deploy to Okinawa unaccompanied under the 
Unit Deployment Program (UDP). Their family members remain behind at 
the unit's home base, either in Hawaii or CONUS. Under DOD's current 
plan, some of these UDP units will continue to deploy to Okinawa, some 
will deploy to Guam, and others will rotate through Australia. These 
rotational forces will be supported by small headquarters and logistics 
elements that will be permanently stationed at these locations and may 
be accompanied by their families. The planned numbers of marines and 
their family members at each location is currently under review and has 
not been finalized.

    126. Senator McCain. Secretary Panetta, since the U.S. Government 
has signaled its intent to delink tangible progress on the construction 
of a replacement facility for Marine Corps Air Station (MCAS) Futenma 
on Okinawa from other actions to relocate marines from bases in the 
southern part of Okinawa, what is DOD's plan for the future of the MCAS 
Futenma?
    Secretary Panetta. The February 8, 2012, U.S.-Japan Joint Statement 
confirmed the continued mutual support for the current Futenma 
Replacement Facility (FRF) plan as the only viable alternative to 
continued operation of MCAS Futenma. Recognizing that even under the 
best scenario, the realization of that plan is several years away, we 
are currently discussing with the Government of Japan conditions under 
which they can contribute to the sustainment of operations at MCAS 
Futenma until the FRF is complete.

    127. Senator McCain. Secretary Panetta, will DOD abide by the 
requirements in section 2207 of the NDAA for Fiscal Year 2012?
    Secretary Panetta. We will abide by the requirements in section 
2207 of the NDAA for Fiscal Year 2012. I look forward to the 
opportunity to update the committee on our progress for these 
requirements later in the year.

                    NAVY FORCE STRUCTURE REDUCTIONS

    128. Senator McCain. Secretary Panetta and General Dempsey, 
although DOD's new Defense Strategic Guidance emphasizes a rebalance to 
the Asia-Pacific region--predominantly a maritime theater--the 
administration's plan calls for the Navy to retire seven cruisers and 
two other major amphibious ships needed by the Marine Corps earlier 
than planned. In addition, the administration plans to delay buying a 
large-deck amphibious ship, a Virginia-class attack submarine, two 
Littoral Combat Ships, and eight high-speed transport vessels. What 
effect will fewer cruisers, submarines, and amphibious ships have in 
responding to crises in the Asia-Pacific theater--especially a large-
scale one, with an equal or near-equal peer?
    Secretary Panetta. While the fleet size will fall slightly in the 
next few years, it will return to its current level by the end of the 
FYDP and even grow slightly into the early 2020s. The Navy will 
continue to prioritize readiness, and our fiscal year 2013 budget 
submission fully funds ship maintenance and midlife modernization 
periods. We are also investing in shipbuilding and aircraft 
construction to ensure that the Navy will evolve to remain the world's 
preeminent maritime force in the face of emerging threats and our 
shipbuilding and aircraft construction investments form the foundation 
of the future fleet. In developing our aircraft and ship procurement 
plans, we focused on three approaches: sustaining serial production of 
today's proven platforms, rapidly fielding new platforms in 
development, and improving the capability of today's platforms through 
new payloads of weapons, sensors, and unmanned vehicles.
    The Navy can meet the Defense Strategic Guidance with the current 
and projected force structure provided in the Navy's President's budget 
submission for 2013. Consistent with the Defense Strategic Guidance, 
the Navy will posture continuous, credible combat power in the Western 
Pacific and the Arabian Gulf/Indian Ocean to protect our vital 
interests, assure friends and allies, and deter potential adversaries. 
Naval forces remain flexible and agile, able to swing rapidly in 
response to emergent high priority requirements in other theaters, as 
well as to surge from U.S. homeports in the event of crises. The Navy 
can meet these challenges under our current operational tempo and 
deployment lengths.
    General Dempsey. Specific resourcing decisions were made through a 
comprehensive strategic review that included detailed analysis by the 
Joint Staff, the Services, and OSD. These decisions were made with 
serious consideration of the risk and our ability to mitigate the risk 
by balancing fleet forces across the globe.
    Planned naval force structure maintains the ability to conduct a 
large-scale naval campaign in one region while denying the objectives 
of an opportunistic aggressor in a second region. The strategic review 
and long-range shipbuilding plan accepted risk in generating the 30 
operationally available ships necessary to conduct a two-Marine 
Expeditionary Brigade forcible entry operation, but lowered risk by 
building to an average active inventory of 32 amphibious ships in the 
long-range shipbuilding plan. The 21st Century Battle Force will be 
informed by the completion of a formal Force Structure Assessment and 
the ongoing DOD review of operational plans for potential regional 
contingencies.

    129. Senator McCain. Secretary Panetta and General Dempsey, the 
Marine Corps has a standing requirement for 38 amphibious ships to 
support its amphibious assault mission, which has not changed as a 
result of the new Defense Strategic Guidance. The Marine Corps and the 
Navy have accepted risk by allowing the number of amphibious ships to 
remain at 33. Further reductions below 33 amphibious ships is 
inconsistent with the Marine Corps mission to maintain a viable 
amphibious assault capability and is particularly unjustified with a 
renewed focus on a rotational presence in the Asia-Pacific region. 
Please describe how decommissioning ships early and delays in buying 
new ships--as proposed in the proposed budget request--is consistent 
with: (1) the President's new Defense Strategic Guidance; and (2) the 
maritime mobility needs of the Pacific and the forces needed to oppose 
anti-access area denial strategies in the Asia-Pacific region, 
including China.
    Secretary Panetta. The decision to decommission seven Ticonderoga-
class cruisers and two amphibious ships was made to ensure sufficient 
resources were available for readiness while maintaining the proper mix 
of capability in the battle force in a fiscally constrained 
environment. The Navy selected ships for decommissioning based on an 
analysis of the costs required to sustain their material condition and 
update their combat capability. The selected ships had little or no 
previous modernization completed, were the oldest ships in their class 
and would become increasingly expensive to maintain, operate, and 
upgrade to remain relevant to evolving threats.
    The Navy has certified to the Secretary of Defense that we will 
meet the fiscal year 2013 Global Force Management Allocation Plan and 
requirements in the Defense Strategic Guidance. From fiscal year 2013 
through fiscal year 2020, the Navy ship inventory and extrapolated 
force presence will increase in the Asia-Pacific and Arabian Gulf 
regions.
    General Dempsey. Resourcing decisions were made through a 
comprehensive strategic review that was aligned to the President's 
strategic guidance. The review included detailed analysis by the Joint 
Staff, the Services, and OSD.
    The strategic review focused primarily on sustaining Amphibious 
Readiness Groups and Marine Expeditionary Units forward in the Western 
Pacific and Arabian Gulf in a crisis response role. It took risk in 
generating the 30 operationally available ships necessary to conduct a 
two-Marine Expeditionary Brigade forcible entry operation. To lower 
risk, the long-range shipbuilding plan strives to maintain an average 
active inventory of 32 amphibious ships.

                      EARMARKS IN THE DEFENSE BILL

    130. Senator McCain. Secretary Panetta, the Fiscal Year 2012 
Defense Appropriations Bill contained approximately 100 items and slush 
funds that were neither requested by DOD nor authorized in the NDAA. 
These programs, earmarked by the Appropriations Committees, totaled 
over $3.5 billion. The proposed reductions of $487 billion over 10 
years does not include rolling back the earmarks that were not top DOD 
priorities. Since you are restricted from reprogramming earmarked funds 
to higher DOD priorities by provisions in Defense Appropriations bills 
that require you to carry out the earmark at the exact levels of 
funding provided, and given the fiscal constraints you are under, will 
you work with me to remove these provisions from future appropriations 
bills in order to provide the flexibility to spend funds on urgent, 
unforeseen requirements actually validated by DOD?
    Secretary Panetta. 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, DOD executes the enacted 
programs, complying with reprogramming and transfer authorities.

    131. Senator McCain. Secretary Panetta, 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 Panetta. 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.

                          JOINT STRIKE FIGHTER

    132. Senator McCain. Secretary Panetta, how well the JSF program 
does under its contract for the fourth block of low-rate initial 
production (LRIP-4) aircraft by the end of the year was supposed to 
indicate how much the program is on track. But, with only about 50 
percent of that work completed to date, we are already expecting a 
total overrun (including concurrency costs) of almost $500 million. In 
addition, on November 29, 2011, DOD's F-35 JSF Concurrency Quick Look 
Report called for serious reconsideration of procurement and production 
planning. And, just a few weeks ago, DOD's Chief Operational Tester 
reported that a team consisting of the Services' operational test 
agencies found that the F-35 program is not on track to meeting 
operational effectiveness or operational suitability requirements. I 
know we don't pay for all of the projected overrun on Lot 4, but with 
that estimate and the assessments I just described, how can taxpayers 
be confident that we're headed in the right direction?
    Secretary Panetta. The strategic and budget reviews carried out 
last fall reaffirmed the importance of the JSF program to the future 
joint force. A number of steps were taken to align the program with the 
outcomes of the these reviews of the Quick Look Report, including the 
decision to slow the production ramp rate and align it with advances in 
program maturity. Control of production costs is being achieved in part 
by movement from cost-plus to fixed-price-type contracts and 
developmental maturity progress. The F-35 program team achieved a 
number of accomplishments over the past year, including the delivery of 
13 aircraft and completion of initial F-35B sea trials on the USS Wasp. 
The program completed F-35C static structural testing and improved the 
schedule and cost performance of assembled wings and forward fuselage 
deliveries to the production line mate station. Production F-35A and F-
35B have started Local Area Flights at Eglin AFB.
    The F-35 LRIP Lot 4 contracts were negotiated as fixed-price 
incentive-fee (firm target)-type contracts. The prime contractor, 
Lockheed Martin Aeronautics Company (LM Aero), is projected to overrun 
LRIP 4 costs by approximately 7 percent. This overrun percentage is 
approximately half the overrun experienced on the F-35 LRIP Lots 1 to 3 
cost-reimbursement-type contracts. On the LRIP Lot 4 contracts, overrun 
costs on the aircraft and engines are shared equally between the 
Government and the contractor until the overrun exceeds 20 percent of 
the target cost, at which point the contractor is responsible for all 
additional overrun costs.
    Overall, there is much work ahead, but, through the multiple 
successful reviews and corresponding adjustments in the past year, I 
believe DOD has put the program on sound footing for the future. DOD's 
assessments over the past year give me reason to believe the basic 
aircraft designs are sound and will deliver. The remaining development 
is focused on testing and integration. Schedule and resource 
adjustments made to the remaining development program underpin a 
realistic plan to deliver the required capability. While there is still 
risk in the program, I have confidence in the resilience of the plan to 
absorb expected further learning and discovery and stay on track as 
long as it remains sufficiently resourced.

    133. Senator McCain. Secretary Panetta, why, given these recent 
developments, did you believe that lifting the F-35B from probation 1 
year early was appropriate?
    Secretary Panetta. In January 2011, Secretary Gates placed the F-
35B on what he referred to as probationary status because it was 
experiencing significant technical issues. F-35B testing was decoupled 
from the other two variants, allowing the program to increase focus on 
F-35B-specific issues while testing on the other variants progressed. 
Of the five specific technical issues identified by Secretary Gates in 
2011, two have been resolved and three have temporary fixes in place 
while efforts to develop permanent solutions are ongoing. All three 
variants improved their testing performance in 2011. In particular, the 
F-35B successfully completed more flights (333 completed/293 planned) 
and more test points (2,636 completed/2,272 planned) than planned.
    I made the decision to lift probation of the F-35B because it is 
now demonstrating development, test, and production maturity comparable 
to and not substantively different from the other variants. As with the 
other variants, some additional technical issues have been identified 
on the F-35B since probation began; however, these are consistent with 
the kinds of issues to be expected in a development program.

    134. Senator McCain. Secretary Panetta, is there a Plan B for the 
F-35 JSF if both procurement and sustainment costs are not controlled 
and if so, what could those options be?
    Secretary Panetta. Currently, we are focused on reducing 
procurement and sustainment costs. The Under Secretary of Defense for 
Acquisition, Technology and Logistics (USD(AT&L)) has directed 
procurement affordability targets that will help ensure that, as the F-
35 program reaches the point that it is ready for full-rate production, 
DOD will be able to afford to procure the quantities it needs. 
Similarly, the USD(AT&L) established sustainment affordability targets 
that will allow us to communicate expectations to the contractor so we 
can control the cost to operate each aircraft, the annual costs to the 
Services, and how much investment will be required over the total life 
cycle of the F-35 program.
    These affordability targets, and more importantly the actual costs 
that we realize over the coming years, will provide us a better 
understanding of whether we can afford to buy, fly, and sustain the 
current total requirement.
    If we are unable to reach affordable F-35 procurement and 
sustainment costs, our first option would be to reduce the total 
planned procurement quantities. Currently, the total planned 
procurement for DOD is 2,443 F-35 aircraft. If the Services and DOD 
determine that this plan is unaffordable, we would have to look at a 
reduction to the total buy that is affordable. A reduction in the total 
procurement quantity would also reduce total sustainment costs. Any 
review of the total quantity would be conducted by assessing 
affordability projections and capability requirements.
    From a capability perspective, there is no alternative to the F-35. 
The fifth generation capabilities that the F-35 will provide are 
essential to accomplishing many of the primary missions identified in 
the National Security Strategy. An affordable F-35 program will allow 
DOD to replace legacy aircraft with fewer, more capable multi-role 
strike fighter aircraft well-suited to meet the leaner requirements of 
the new Defense Strategic Guidance.

                              HEALTH CARE

    135. Senator McCain. Secretary Panetta and General Dempsey, the 
budget proposes further TRICARE reforms which have been endorsed by 
senior military leaders. What are the risks to DOD--in budget and 
readiness terms--if Congress fails to enact the administration's 
proposed health care reforms?
    Secretary Panetta. If Congress does not provide us with needed 
support, DOD's new Defense Strategy Guidance will be at risk. Without 
the needed authority to implement these reforms, DOD will face further 
cuts in forces and investment to be consistent with the BCA. DOD's 
budget proposal already makes substantial reductions in the investment 
accounts, so further cuts might fall mostly on forces. This could mean 
cutting additional Active Duty and Reserve Forces by fiscal year 2017 
to such an extent that DOD's ability to carry out the new Defense 
Strategic Guidance could be jeopardized.
    General Dempsey. If Congress fails to enact the proposed health 
care reforms, DOD will be forced to shoulder the increasing cost of 
military health care, likely at the expense of force structure and in 
modernization. DOD's budget proposal already makes substantial 
reductions in the investment accounts so further cuts could mean 
cutting additional Active Duty and Reserve Forces, which would impact 
DOD's ability to pursue the new Defense Strategic Guidance.

    136. Senator McCain. Secretary Panetta and General Dempsey, what 
additional reforms are necessary to better manage the current and 
future costs of military health care benefits?
    Secretary Panetta and General Dempsey. DOD will continue to 
aggressively pursue all possible avenues to better manage the current 
and future costs of military health care. Changes in beneficiary cost-
sharing represent only one of the key steps that we are taking to 
improve health care and reduce the rate of growth in health care costs. 
We are also employing other approaches, including: (1) Moving from 
healthcare to health, investing in initiatives that keep our people 
well while promoting healthy lifestyle; (2) maximizing internal 
efficiencies that reduce the administrative overhead of our military 
health system; and (3) reforming provider payments by responsibly 
paying private care providers and aligning with Medicare reimbursement 
levels, as required by law.

                  CARE MANAGEMENT FOR WOUNDED WARRIORS

    137. Senator McCain. Secretary Panetta, 5 years have passed since 
revelations by the press of substandard care management for wounded 
warriors at the Walter Reed Army Medical Center, which brought disgrace 
on our Nation and our Government. Since that time, many reforms have 
been instituted, and yet, according to recent testimony by the GAO, 
implementation of reforms intended to streamline the care management 
for the wounded, especially those transitioning to civilian life, 
continue to be plagued by bureaucratic turf battles between DOD and the 
VA, such that, according to GAO `` . . . the intended purpose of these 
programs--to better manage and facilitate care and services--may 
actually have the opposite effect . . . .'' What steps has DOD taken to 
respond to the recommendations of GAO, as well as the Wounded Warrior 
Care Coordination Summit, and numerous other studies to improve care 
management for the wounded?
    Secretary Panetta. First, in response to GAO's findings and 
recommendations in the March 2011 Report titled ``Federal Recovery 
Program Continues to Expand, but Faces Significant Challenges,'' a 
majority of them pertained to implementation and oversight of the VA's 
Federal Recovery Coordination Program. There are, however, two areas of 
the report that directly involve DOD:

         Duplication of case management efforts between VA and 
        DOD
         Lack of access to equipment at installations
Duplication of Case Management Efforts between VA and DOD
    DOD policy is that recovering servicemembers have the service of a 
Recovery Care Coordinator (RCC), and that some may have a Federal 
Recovery Coordinator (FRC) closer to when it is known that the 
servicemember will transition out of the military and become a veteran. 
The Service Wounded Warrior programs, in coordination with the Federal 
Recovery Coordination Program, have drafted policy to implement a 
referral process that is consistent with the Services desire to retain 
responsibility for their recovering servicemembers.
Lack of Access to Equipment at Installations
    Currently, there are 11 FRCs located at 5 major military medical 
treatment facilities. These FRCs have designated workspaces and 
equipment access.
    Second, the Wounded Warrior Care Coordination Summit consisted of 
four chartered working groups, each focused on a key area:

    1.  Education and Employment
    2.  FRC/RCC Collaboration
    3.  In Pursuit of Excellence--Documenting Best Practices
    4.  Wounded Warrior Family Resilience

    Working group participants included multiple Federal agencies (VA, 
Department of Labor, DOD's Offices of Wounded Warrior Care and 
Transition Policy (WWCTP), and Military Community and Family Policy 
(MCFP)), as well as representatives from each of the Military Services.
    Several recommendations are currently being carried out by the 
Recovery Coordination Program or its component programs. Additional 
recommendations are being carried out by other participating agencies.
    The outcomes of the Education and Employment Work Group were 
expected to be: the achievement of a comprehensive strategy to provide 
recovering servicemembers career-focused transition support early in 
their rehabilitation; development of policy and guidance, including the 
provision of resources when necessary; and establishment of outcome 
measures and synchronization and leveraging of existing efforts to 
ensure a consistent experience by all recovering servicemembers who 
seek education or employment opportunities.
    FRC/RCC collaboration resulted in five recommendations for better 
integration and synchronization across these two programs. All have 
been implemented as well as better communication among program 
leadership and participation in each other's program training venues.
    Recommendations of the Best Practices working group are being 
implemented with the goal of achieving a consistent experience for all 
recovering servicemembers across the continuum of care, including equal 
access to resources; and the adaptation of support services to meet the 
potential changing needs of servicemembers and families.
    The Wounded Warrior Family Resiliency Working Group came up with 
several recommendations, most of which are actively being implemented 
by the combined efforts of the two DOD offices, MCFP and WWCTP, charged 
with coordinating and executing these programs.

    138. Senator McCain. Secretary Panetta, do you have confidence that 
the Senior Oversight Committee of DOD and VA is capable of 
strengthening and improving these systems of care for our wounded or is 
there a more efficient mechanism that should be established in its 
place?
    Secretary Panetta. Yes, there is a more efficient mechanism that 
has replaced the Senior Oversight Committee. On January 19, 2012, the 
Joint Executive Committee Co-Chairs, who are the DOD Under Secretary of 
Defense (Personnel & Readiness) and VA Deputy Secretary, agreed to 
consolidate the SOC and JEC forums based on the recommendation from the 
DOD Recovering Warrior Task Force. The new consolidated Joint Executive 
Committee was given the guidance to:

         Clearly articulate wounded, ill, and injured 
        servicemember issues
         Include the appropriate level of senior leadership
         Maintain former Senior Oversight Committee Wounded, 
        Ill, and Injured programs

    In order to maintain a high level of visibility, the membership of 
the new Joint Executive Committee now includes the Services Under 
Secretaries and Vice Chiefs, Special Operations Command, the DOD 
Comptroller, the ASDs for Health Affairs, and Reserve Affairs, and from 
the VA the Under Secretaries for Health and Benefits, Principal Deputy 
Under Secretary for Benefits, VA Assistant Secretaries for Information 
Technology, and Policy and Planning, among other senior level members.
    To ensure that systems of care for our wounded, ill, and injured 
are maintained, strengthened, and improved:

         All ongoing Senior Oversight Committee issues, 
        programs, and initiatives have been identified and 
        appropriately handed off to the Joint Executive Committee for 
        continued oversight and support.
         In order to ensure any new and emerging recovery 
        warrior issues are quickly and adequately addressed, a new 
        joint Wounded, Ill, and Injured Subcommittee has been created 
        under the Joint Executive Committee to oversee these matters.
         Emerging Wounded Warrior issues are now addressed 
        bimonthly at Joint Executive Committee meeting and quarterly 
        with DOD and VA Secretaries.

    The integration of DOD and VA into a single team under the Joint 
Executive Committee allows a world class continuum of care for our 
wounded, ill, and injured warriors in such areas as:

         Integrated Disability Evaluation System
         Caregivers
         Environmental/Toxic Exposures
         Integrated Mental Health Strategy
         Suicide Prevention
         Electronic Health Record
         Benefits

    Some of the accomplishments to date include:

         Increased sharing of health information between DOD 
        and VA
         Implementation of new approaches to support patients, 
        their families, and caregivers
         Development of new approaches to address suicide, 
        Traumatic Brain Injury, and Post-Traumatic Stress Disorder
         Developed and implemented a Disability Evaluation 
        System pilot aimed toward one disability rating system 
        administered by both DOD and VA
         Coordinated health care, rehabilitation, and delivery 
        of services that resulted in facilitating the highest level of 
        support ever to the wounded, ill, and injured
         Comprehensive legislative and public affairs efforts 
        to keep servicemembers, veterans, family members, the public, 
        DOD/VA leadership, and Congress informed of new developments in 
        care

                 non-competitive health care contracts
    139. Senator McCain. Secretary Panetta, DOD is required by law to 
enter into sole source, non-competitive contracts with six commercial 
health plans, known as the Uniformed Services Family Health Plan 
(USFHP) that provide health care services to a small portion of DOD 
family members and retirees at a cost of approximately $1.2 billion per 
year. Do the contracts in effect today comply with the statutory 
requirement for cost neutrality? If not, why not?
    Secretary Panetta. Based on the most current data available to DOD 
(fiscal year 2011), the negotiated rates provided to the USFHP plans 
currently exceed the amounts mandated under Sec 726(b) of Public Law 
104-201.
    Beneficiaries Under Age 65--For beneficiaries under the age 65, DOD 
estimates that the average cost per USFHP Prime enrollee was about 13 
percent higher than the average cost per non-USFHP Prime enrollee, even 
after adjusting for both geography and age/gender mix differences. This 
cost difference is due to the fact that the fiscal year 2011 USFHP 
rates were based on fiscal year 2009 costs trended to fiscal year 2011. 
During the fiscal years 2009 to 2011 period, TRICARE Management 
Activity introduced the Outpatient Prospective Payment System (OPPS) 
rates which decreased non-USFHP Prime costs significantly. In addition, 
TRICARE Management Activity started to receive significant retail 
pharmacy rebates which also decreased the costs for Prime enrollees. As 
a result, costs for non-USFHP Prime enrollees increased more slowly 
from fiscal years 2009 to 2011 than projected. The USFHP rates 
incorporate the impact of pharmacy changes like OPPS and policy rebates 
on a lagged basis. As a result, the USFHP rates for future years will 
reflect these policy changes.
    Beneficiaries Age 65 and Over--For beneficiaries age 65 and over, 
with adjustments for geography or the age/gender mix, the USFHP costs 
per enrollee were about 29 percent higher than the costs of the average 
TRICARE For Life (TFL) beneficiary. The key reason for this 29 percent 
difference is that the fiscal year 2011 USFHP rates were based upon the 
costs of Medicare fee-for-service beneficiaries, rather than the costs 
of TFL beneficiaries. Now that reliable and accurate TFL data are 
available for both the DOD and Medicare portions of TFL beneficiary 
costs, the government has proposed to use actual TFL experience rather 
than non-DOD Medicare experience to calculate the fiscal year 2013 
ceiling rates, which we expect will lead to a significant decrease in 
rates for this cohort. A second factor is that the fiscal year 2011 
USFHP rates were based upon TRICARE pharmacy costs in fiscal year 2009. 
Since fiscal year 2009, DOD has started to receive large retail 
pharmacy rebates. These rebates are incorporated into the USFHP rates 
on a lagged basis.

    140. Senator McCain. Secretary Panetta, please provide a comparison 
of the per beneficiary costs for those enrolled to the USFHP with: (1) 
those for whom DOD pays for comparable health benefits under TRICARE 
Prime for under age 65 beneficiaries under its competitively awarded 
TRICARE contracts; and (2) over 65 USFHP enrollees compared to 
Medicare/TFL.
    Secretary Panetta. After accounting for differences in both 
geography and the age/gender mix, the average USFHP cost per enrollee, 
both under and over 65, was higher than the average cost per non-USFHP 
Prime enrollee in fiscal year 2011. Due to ongoing contract 
negotiations, the exact differences are not provided above; however DOD 
is willing to provide additional data for the committee's use in a non-
public forum.

    141. Senator McCain. Secretary Panetta, if there is any further 
postponement of transition of future Medicare eligible enrollees to 
Medicare/TFL, what would be the impact on the DOD budget in fiscal year 
2013 and over the FYDP?
    Secretary Panetta. The impact on the DOD budget would depend on the 
specific period of delayed transition, and whether a pattern of 
changing this date is perceived. The Medicare Eligible Retiree Health 
Care Fund (MERHCF) Board of Actuaries responsible for approving the 
methods and assumptions used to calculate the budget impact must adhere 
to professional standards, which requires consideration of 
historically-enacted legislative changes and the past practice or 
pattern of plan changes. If the Board determines a pattern of delay in 
the transition date, it will decide to change assumptions regarding the 
impact of the legislation that will result in a significant increase in 
cost for the DOD budget in required contributions to the MERHCF. 
Additionally, any delay in the effective date of the changes enacted 
last year would increase mandatory spending from the MERHCF during the 
period of delay.

              COST NEUTRALITY OF THE TRICARE PRIME BENEFIT

    142. Senator McCain. Secretary Panetta, under current law, the 
TRICARE Prime benefit for retirees is required not to exceed the costs 
of civilian care obtained under TRICARE Standard. Does the cost of 
TRICARE Prime comply with current law for cost neutrality? If not, why 
not?
    Secretary Panetta. The Prime benefit is no longer cost neutral 
compared to Standard/Extra plans. Under current law, the TRICARE Prime 
is supposed to be cost neutral--that is, government costs for Prime 
should not exceed the government costs for TRICARE Standard. Section 
731(c) of the NDAA for Fiscal Year 1994 required that the benefit that 
became known as TRICARE Prime ``shall be administered so that the costs 
incurred by the Secretary under the TRICARE program are no greater than 
the costs that would otherwise be incurred to provide health care to 
the members of the uniformed services and covered beneficiaries who 
participate in the TRICARE program.''
    When TRICARE was implemented in 1996, the Prime enrollment fee was 
set at a level higher than the standard fee in order to: (1) offset the 
substantially reduced out-of-pocket costs, including the elimination of 
the Standard deductible, the near-total elimination of the 25 percent 
Standard inpatient co-pay, and the substantial reduction of outpatient 
co-pays; and (2) make Prime cost neutral to the government. Subsequent 
enactments regarding TRICARE for Active Duty family members have 
superseded the NDAA for Fiscal Year 1994 requirement for Active Duty 
family members, but not for Prime-eligible retirees.
    Over the intervening years, a significant disparity in the cost to 
government between Prime and Standard developed. This disparity was 
recognized in 2005 and resulted in proposals to adjust cost shares to 
both Prime and Standard/Extra. DOD was largely prohibited from changing 
fees and co-pays until fiscal year 2012. The net result is that Prime 
is not cost neutral in relation to the Standard/Extra plans. For a 
working retiree family of three, the cost to DOD of providing health 
care in fiscal year 2011: Prime--$13,442; Standard--$11,267. Prime 
enrollment fees or other cost-sharing would need to be adjusted to make 
Prime cost-neutral to Standard.

    143. Senator McCain. Secretary Panetta, is cost neutrality an 
appropriate test, and if so, what steps should be taken to restore it?
    Secretary Panetta. Cost neutrality is a laudable goal and our 
efforts should try to move in that direction. However, we cannot get to 
complete cost neutrality without significantly increasing the cost 
shares under Prime above the levels proposed in the President's budget. 
The proposed increases in the Prime enrollment fee are one part. We 
also believe that increases in utilization management envisioned under 
the Patient Center Medical Home concept that we are implementing will 
bring the cost of Prime closer to Standard.

                       FEDERAL CIVILIAN WORKFORCE

    144. Senator McCain. Secretary Panetta, this budget requests a 
precipitous and dangerous drop in military end strength which I believe 
puts our Nation's security at risk. Why is there little or no reduction 
planned for DOD's Federal civilian workforce?
    Secretary Panetta. DOD's fiscal year 2013 budget reflects a 
balanced workforce that decreases overall spending on military end 
strength and DOD's Federal civilian workforce, as well as on contract 
services. It reflects our best judgment today and represents a 
carefully coordinated approach based on DOD's strategy and policy that 
balances operational needs and fiscal reality without placing national 
security and our overall defense posture at risk. Proposed reductions 
in the military personnel levels reflect declines in our current 
overseas commitments; revised strategy, posture, and operational 
planning; and changes to our force structure. Additionally, the budget 
request includes proposed civilian reductions that are proportional, as 
a percentage of the overall civilian workforce, to proposed reductions 
in the military's end strength. Reductions in civilian personnel are 
predominantly associated with ongoing organizational assessments and 
mission/function prioritization in an effort to reduce administrative 
workload. It is important to note that DOD's civilian workforce 
performs key enabling functions for the operating forces, such as 
critical training and preparation to ensure readiness, equipment 
modernization and reset, medical care, family support, and base 
operating and infrastructure services--all vital services that support 
our men and women in uniform and help meet the Nation's security needs.

    145. Senator McCain. Secretary Panetta, what is the current policy 
for hiring new employees?
    Secretary Panetta. DOD fills its positions following Merit Systems 
Principles and Regulations developed by the Office of Personnel 
Management (OPM). Within these parameters, DOD strives to be a fair and 
equitable employer offering equal employment opportunity to all 
qualified citizens. Because of its size and the diversity of its 
missions, DOD uses a wide range of authorities to fill positions in 
both the Competitive and Excepted service in virtually every occupation 
imaginable. Our agencies hire applicants from the public and private 
sectors, and we place special emphasis on hiring veterans, military 
spouses, students, and people with disabilities. We strive to be 
innovative and responsive in our efforts to recruit and retain the best 
talent available to meet our mission objectives in supporting our 
warfighters, and appreciate the support we receive from Congress to 
further this effort.

    146. Senator McCain. Secretary Panetta, why is the administration 
seeking a pay raise for Federal employees who, according to a January 
30, 2012, report from the Congressional Budget Office, are compensated 
16 percent higher than their private sector counterparts, and enjoy a 
48 percent advantage in benefits?
    Secretary Panetta. The pay raise for civilians included in the 
budget request is not set by DOD, but rather is based on a government-
wide determination by OPM on behalf of the President. With the current 
freeze on salary cost-of-living adjustments for Federal workers, the 
Federal Government's benefits package is a necessary factor in 
remaining competitive for a variety of occupations and locations. While 
the Federal Government may lead the market in the area of benefits, it 
still lags the market with regard to salaries for some occupations. It 
is important to note that DOD's civilian workforce performs key 
enabling functions for the operating forces, such as critical training 
and preparation to ensure readiness, equipment modernization and reset, 
medical care, family support, and base operating and infrastructure 
services--all vital services that support our men and women in uniform 
and help meet the Nation's security needs. Further salary freezes are 
not in the best interest of DOD and will have an adverse impact on 
readiness, mission capability, and could result in increased reliance 
on contracted services and increased fiscal obligations.

                     ARMY AND MARINE CORPS DRAWDOWN

    147. Senator McCain. General Dempsey, I am concerned that a rapid 
reduction in the end strength of the Army and the Marine Corps will 
degrade the readiness of the combat forces and break faith with an All-
Volunteer Force that defeated the insurgency in Iraq, that continues to 
fight in Afghanistan, and may be called on again to defend this Nation 
against its enemies. I would like you to explain--with specificity, 
year-by-year--how you foresee the Army reducing its Active Duty 
strength by 70,000 soldiers in 5 years?
    General Dempsey. As part of the new Defense Strategic Guidance, the 
Army will downsize approximately 79,000 soldiers to 490,000 in the 
Active component, and will reduce its Reserve components by 9,000 from 
358,200 to 350,200 in the Army National Guard and from 206,000 to 
205,000 in the U.S. Army Reserve by the end of the FYDP. Temporary end 
strength increase for the Active component was authorized by Congress 
in 2009. By the end of September 2013, the Army will reduce the 22,000 
temporary end strength increase and return back to a permanent Active 
component end strength of 547,400. Generally, the Army will reduce an 
average of 11,000 soldiers per year.

    148. Senator McCain. General Dempsey, how do you envision achieving 
these cuts using the manpower management tools available to shape the 
force with incentives and early retirements?
    General Dempsey. The Army's preliminary strategy provides a high 
quality, mission-capable force, using precision, care, and compassion 
to achieve end strength reductions without jeopardizing readiness. A 
key precept of planning is that the Army will make the choices, to the 
greatest extent possible, on who will remain and who will separate from 
service. Although DOD's force reduction objectives include guidance to 
maximize the use of voluntary separations, the Army's intent is to 
apply lessons learned from the 1990s drawdown when the magnitude of the 
voluntary separations made it difficult for the Army to control the 
quality of those servicemembers choosing to separate. To ensure a 
quality force following the drawdown and maintain faith with soldiers, 
the Army intends to meet DOD's force reduction objectives by 
selectively offering voluntary incentives (such as Temporary Early 
Retirement Act) to soldiers whom the Army deems fully qualified but do 
not meet the highest standards for continued service.

    149. Senator McCain. General Dempsey, do you have a plan to address 
the nondeployable population of our combat forces, such as about 25,000 
Active Duty Army soldiers?
    General Dempsey. Over 10 years of persistent and protracted 
conflict has placed stress on the Army. The strain has increased the 
rate of nondeployers at latest arrival date or date of deployment in 
our BCT from 10 percent to 16 percent between fiscal year 2007 to 
fiscal year 2011. From a tactical perspective, commanders at all levels 
are actively engaged in identifying non-deployable soldiers and, in the 
case of temporary non-deployable conditions, linking the soldier with 
the requisite resources necessary to resolve the non-deployable 
condition. From a strategic perspective, the Army staff is focused on 
policy and implementation decisions necessary to reduce the non-
deployer rates in our units and to gain better visibility on the health 
of the force. The Army established a Non-Deployable Campaign Plan in 
April 2011 to develop systemic and policy changes aimed at reducing 
this population. While we are only half way through fiscal year 2012 
and there remain challenges with the units yet to deploy, we have seen 
a reduction to just fewer than 13 percent so far this year. Since 
medical issues continue to be the greatest contributor to non-
deployables, we are focusing on the Disability Evaluation System to 
enhance, standardize, and establish measures of performance.

    150. Senator McCain. General Dempsey, how do you envision Army 
leaders will accomplish this without demoralizing the force and 
breaking faith with soldiers who have sacrificed greatly?
    General Dempsey. The Army is a values-based organization. The basic 
values of dignity and respect were integral to its drawdown planning. 
First, the Army intends to use reduced accessions and minimize the 
number of currently serving soldiers being asked to leave the Service. 
Second, the Army will use our proven centralized selection board 
processes to identify both commissioned and NCOs with the greatest 
potential for continued service as it shapes the force by grade and 
specialty. Finally, commanders will be empowered to retain only the 
highest quality soldiers. When feasible, fully qualified soldiers 
identified as excess due to strength limitations will be afforded the 
option to volunteer for reclassification into a shortage skill. In lieu 
of involuntary separation, voluntary options (when applicable) will be 
afforded to fully-qualified soldiers targeted to leave the Service.

                             REVERSIBILITY

    151. Senator McCain. General Dempsey, I am concerned that returning 
to pre-September 11 personnel levels within 5 years may damage 
readiness and create structural problems within the Services, while 
subjecting military members to an economy that hardly is in a position 
to welcome them with open arms. You have indicated that ``the Army will 
retain more mid-grade officers and NCOs even as their overall end 
strength decreases to ensure we will have the structure and experienced 
leaders necessary to regrow the force quickly.'' This has been referred 
to as reversibility. I am concerned that at the basic infantry level, 
this will degrade combat capability over time. Can you explain what 
reversibility means and how it will be achieved?
    General Dempsey. The new Defense Strategic Guidance released in 
January 2012 notes that since we cannot predict how the strategic 
environment will evolve with absolute certainty, we need to manage the 
force in ways that protect its ability to regenerate capabilities 
should they be needed to meet future unforeseen demands. The strategy 
also notes that we need to retain intellectual capital and rank 
structure that can be utilized to expand key elements of the force. The 
Army is examining strategies, policies, and investments that would 
posture the Army to slow down and reverse drawdowns of Army end 
strength and formations, and regenerate end strength over the course of 
a number of years in response to a future crisis.
    This will involve reexamining the mix of elements in the Active and 
Reserve components, maintaining a strong National Guard and Army 
Reserve, retaining a healthy cadre of experienced noncommissioned and 
midgrade officers, and preserving the health and viability of the 
Nation's defense industrial base.

    152. Senator McCain. General Dempsey, how will you avoid the repeat 
of the poorly executed drawdown of the 1990s, which slashed recruiting 
and first-term soldier strength, thus creating gaps that hurt the 
Army--in order to retain more mid-career personnel?
    General Dempsey. The Army's intent is to meet the fiscal year 2017 
end strength targets with precision (by grade and skill) while 
maintaining a high level of readiness and capability with an All-
Volunteer Force. We will minimize induced losses by lowering accessions 
without jeopardizing future Army requirements. We will not sacrifice 
our investment in leader development and will continue to shape 
policies to support the Army's leader development strategy. We will 
promote best-qualified soldiers to meet requirements. We will empower 
commanders with the ability to retain soldiers with the greatest 
potential for continued contributions. We will treat soldiers and their 
families (both those who stay and those who leave) fairly.
    The Army will target select NCOs (by means of a centralized 
selection process) for involuntary separation when their grade/skill is 
either projected over-strength or when promotion stagnation jeopardizes 
viable career development paths in select career fields. Drawdown of 
the force begins in fiscal year 2014 and continues over a 4-year 
period. To ensure we prevent talent loss and to retain those 
individuals with the greatest potential for future contributions, the 
Army will decide who stays and who leaves; offering voluntary 
separation options in lieu of involuntary separation when such 
authority exists.
    We will sequentially apply the levers of reduced accessions, 
selective retention, force shaping boards, and voluntary incentives to 
ensure that we retain high quality personnel as we achieve mandated end 
strengths. We will also pursue qualified soldiers for transition to the 
U.S. Army Reserve and National Guard where they can continue to serve.

    153. Senator McCain. General Dempsey, would it not make more sense 
to plan for a 10-year, conditions-based plan or one that adheres to the 
original plan to reduce end strength by 49,000 soldiers?
    General Dempsey. As part of the new Defense Strategic Guidance, the 
Army will downsize approximately 79,000 soldiers to 490,000 in the 
Active component by the end of fiscal year 2017. Initial planning for 
the reduction noted three assumptions that must be achieved: (1) the 
drawdown in Iraq will continue and that it will be completed by 
December 31, 2011, (accomplished); (2) forces in Afghanistan will be 
drawn down in accordance with current administration policy (on track); 
and (3) Army forces will not be involved in a protracted conflict in 
the immediate future (not expected). The Army's deliberate and 
responsible drawdown plans will take into consideration operational 
demands and unit readiness. It will proceed at a pace necessary to 
ensure mission success and retain the flexibility to respond to 
unforeseen demands at a tempo that is predictable and sustainable for 
our All-Volunteer Force. After conducting extensive analysis, the Army 
concluded that maintaining end strength at 490,000 will meet the 
demands described in the new Defense Strategic Guidance.

                    NUCLEAR WEAPONS COMPLEX FUNDING

    154. Senator McCain. Secretary Panetta, last October you told the 
House Armed Services Committee that you opposed attempts by some to 
reduce the funding necessary for achieving the President's nuclear 
modernization plan. When asked about a possible cut by the 
Appropriations Committee, you stated: ``I think it is tremendously 
shortsighted if they reduce funds that are absolutely essential for 
modernization . . . if we aren't staying ahead of it, we jeopardize the 
security of this country. So, for that reason, I certainly would oppose 
any reductions with regards to the funding.'' The fiscal year 2013 
budget for the National Nuclear Security Administration (NNSA) makes a 
number of significant changes to the President's nuclear weapons 
complex modernization plan. I understand many within DOD, including 
STRATCOM, are opposed to these cuts. Do you still agree that a failure 
to honor the carefully crafted modernization plan risks, as you stated 
just 3 months ago, jeopardizing the security of this country?
    Secretary Panetta. Modernization efforts remain critical to 
ensuring a safe, secure, and effective deterrent for the long-term; it 
will take years of sustained funding and effort to achieve this goal. 
Infrastructure modernization, in particular, will offer opportunities 
to reduce the number of reserve warheads needed to hedge against a 
potential technical failure of a warhead type. The Nuclear Posture 
Review of 2010 and the reports to Congress, pursuant to section 1251 of 
the NDAA for Fiscal Year 2010 and section 1043 of the NDAA for Fiscal 
Year 2012, contain detailed and well-supported modernization plans. 
Current fiscal realities, however, have driven DOD and NNSA to make 
difficult decisions in prioritizing plans and funding for these 
efforts, including the deferral or delay of programs and deliverables. 
Such decisions were made to allow the two departments to shift 
resources to certain projects and programs that meet the Nation's most 
pressing nuclear weapons requirements. We are confident that these 
decisions allow us to continue the necessary support to achieve the 
goal of maintaining a safe, secure, and effective deterrent, while also 
supporting the long-term commitment to modernization of the nuclear 
weapons enterprise.

                      2-YEAR DELAY OF THE SSBN(X)

    155. Senator McCain. Secretary Panetta, I understand the budget 
proposes delaying the replacement ballistic missile submarine for 2 
years and estimates doing so will save $4.3 billion. Given prior year 
statements from the Navy claiming that the schedule for procuring the 
12 follow-on ballistic missile submarines is ``inextricably linked to 
legacy [i.e. Ohio-class] ballistic missile submarine (SSBN) 
retirements'' and that there is ``no leeway in this plan to allow a 
start or any delay in the procurement plan,'' I am interested in 
understanding why you now believe that a delay is possible?
    Secretary Panetta. To comply with the BCA, the 2-year delay defers 
and extends design efforts, freeing up $4.3 billion in the FYDP, as 
well as reduces the available SSBN force to 10 ships during the 
transition from the Ohio-class to the Ohio replacement. The absence of 
extended overhauls during this transition period (2029 to 2042) helps 
mitigate this reduced force level, which will meet at-sea presence 
requirements with moderate operational risk during the transition 
period. Unforeseen issues with construction of the Ohio-replacement or 
emergent material problems with the aging Ohio-class could present 
challenges. Full funding for continued design and construction of Ohio-
replacement to ensure on-time delivery and on-time Strategic Patrol 
(lead ship in 2029) and properly resourced maintenance of the Ohio-
class will be crucial to minimizing operational risk during the 
transition (2029 to 2042).
    With the 2-year delay (fiscal year 2019 to fiscal year 2021) to the 
Ohio replacement SSBN, there is no margin for further delay. Additional 
delay would prevent meeting current sea-based strategic deterrent 
requirements. The Navy will be closely managing risk during the 
transition period.

    156. Senator McCain. Secretary Panetta, does a delay instill 
additional risk in the Navy's ability to maintain the same at-sea 
availability rates required under current nuclear force posture? If 
not, please be specific as to why.
    Secretary Panetta. There is some additional risk during the 
transition from Ohio class to Ohio replacement. To comply with the BCA, 
the 2-year delay defers and extends design efforts, freeing up $4.3 
billion in the FYDP as well as reduces the available SSBN force to 10 
ships during the transition from the Ohio-class to the Ohio 
replacement. The absence of extended overhauls during this transition 
period (2029 to 2042) helps mitigate this reduced force level, which 
will meet at-sea presence requirements with moderate operational risk 
during the transition period. Unforeseen issues with construction of 
the Ohio replacement or emergent material problems with the aging Ohio-
class could present challenges. Full funding for continued design and 
construction of Ohio replacement to ensure on-time delivery and on-time 
strategic patrol (lead ship in 2029) and properly resourced maintenance 
of the Ohio-class will be crucial to minimizing operational risk during 
the transition (2029 to 2042).
    With the 2-year delay (fiscal year 2019 to fiscal year 2021) to the 
Ohio replacement SSBN, there is no margin for further delay. Additional 
delay would prevent meeting current sea-based strategic deterrent 
requirements. The Navy will be closely managing risk during the 
transition period.

    157. Senator McCain. Secretary Panetta, does the current strategy 
include any margin for design or development challenges?
    Secretary Panetta. The 2-year delay (fiscal year 2019 to fiscal 
year 2021) allows some additional time to mature designs and address 
the programmatic risks associated with designing new systems and 
integrating existing technology. To control cost and risk, the Ohio 
replacement SSBN is planned to maximize reuse of Virginia- and Ohio-
class components and designs where feasible. Overall design maturity at 
construction start will be no less than originally planned, 
commensurate with the funding provided. However, any further delay to 
Ohio replacement would result in fewer operational ships than necessary 
to meet today's at-sea deterrent requirements during the transition 
(2029 to 2042) from Ohio-class to Ohio replacement. Full funding for 
Ohio replacement design and construction to ensure on-time delivery and 
on-time strategic patrol (lead ship in 2029) is essential to preventing 
further delays.

    158. Senator McCain. Secretary Panetta, does this delay in any way 
infuse additional risk in our national ability to meet our current 
strategic requirements in the future?
    Secretary Panetta. There is some additional risk during the 
transition from Ohio-class to Ohio replacement. To comply with the BCA, 
the 2-year delay defers and extends design efforts, freeing up $4.3 
billion in the FYDP, as well as reduces the available SSBN force to 10 
ships during the transition from the Ohio-class to the Ohio 
replacement. The absence of extended overhauls during this transition 
period (2029 to 2042) helps mitigate this reduced force level, which 
will meet at-sea presence requirements with moderate operational risk 
during the transition period. Unforeseen issues with construction of 
the Ohio replacement or emergent material problems with the aging Ohio-
class could present challenges. Full funding for continued design and 
construction of Ohio replacement to ensure on-time delivery and on-time 
strategic patrol (lead ship in 2029) and properly resourced maintenance 
of the Ohio-class will be crucial to minimizing operational risk during 
the transition (2029 to 2042).
    With the 2-year delay (fiscal year 2019 to fiscal year 2021) to the 
Ohio replacement SSBN, there is no margin for further delay. Additional 
delay would prevent meeting current sea-based strategic deterrent 
requirements. The Navy will be closely managing risk during the 
transition period.

                      AFGHAN SECURITY FORCES FUND

    159. Senator McCain. General Dempsey, U.S. Forces in Afghanistan 
are to draw down to around 68,000 by September of this year. Secretary 
Panetta recently announced that the administration seeks to transition 
lead combat responsibilities to the Afghan security forces in mid- to 
late-2013--an enormous responsibility for a force that still faces 
shortcomings in its ability to conduct operations. You have stated: 
``Key to long-term stability in Afghanistan is the development of the 
Afghan Security Forces.'' Yet, the budget request for the Afghan 
Security Forces Fund (ASFF)--the primary tool for the training and 
equipping of the Afghan Security Forces--is cut nearly in half from 
what was enacted for fiscal year 2012. What is the reasoning behind 
such a significant cut to the ASFF, particularly given the increased 
role Afghan forces are to assume next year?
    General Dempsey. The decrease in the fiscal year 2013 ASFF budget 
is due to the fact that we are approaching the end of ANSF force 
generation, equipment fielding, and facility construction. We are now 
moving to a force development phase. The cost of training required in 
the force development phase decreases for the following reasons: we are 
no longer building a force from the ground up, so the number of 
personnel that require training will decrease; and ANSF training 
facilities are almost finished construction, so facility costs will 
decrease. We are now beginning to transition ANSF training programs to 
Afghan control. All of the ANSF's basic training courses, NCO, and 
officer development courses are currently taught by ANSF personnel. The 
number of Afghan Master Skill Instructors in the branch schools 
continues to grow. The current projection is that the entire Afghan 
training system will be under Afghan control with coalition monitoring 
by the end of fiscal year 2013. This means that overall cost of 
training will decrease dramatically as we move from contract to ANSF 
instructors.

    160. Senator McCain. General Dempsey, do you believe the Afghan 
Security Forces will be capable of assuming lead responsibility for 
combat operations in 2013?
    General Dempsey. Yes. In 2013 when the ANSF assume the lead, we 
will still be standing shoulder-to-shoulder with them. Our forces will 
still be present to advise and assist the ANSF. This will allow the 
ANSF to expand their capabilities and capacity without losing access to 
the resources and enablers that U.S. and coalition forces provide.

    161. Senator McCain. General Dempsey, what capability gaps pose the 
greatest risk to the ability of the Afghan Security Forces to assume 
lead responsibility for combat operations in Afghanistan?
    General Dempsey. The ANSF logistics system is our greatest 
challenge at the moment. Improving their capability in this area is 
critical to the long-term success of the ANSF as they assume lead for 
security.
                                 ______
                                 
             Questions Submitted by Senator Roger F. Wicker

                                 SYRIA

    162. Senator Wicker. Secretary Panetta and General Dempsey, the 
situation in Syria continues to deteriorate. Thousands of innocent 
Syrians have been brutally murdered and countless have been wounded. 
President Obama said in his State of the Union Address that in Syria, 
he has ``no doubt that the Assad regime will soon discover that the 
forces of change can't be reversed, and that human dignity can't be 
denied.'' How do you judge the capabilities of the Free Syrian Army 
(FSA)?
    Secretary Panetta. (Deleted.]
    General Dempsey. The capabilities of the FSA have steadily grown in 
recent months; however, the organization remains beset by logistical 
shortfalls and lack of unity among its leadership. Several of the FSA's 
leaders have taken part in a public feud over the future leadership of 
the movement, with some officers backing its founder, Colonel Riyad al-
As'ad, and others pledging loyalty to Brigadier General Mustapha al-
Shaykh. Both men have attempted to put aside their differences in 
recent weeks by publicly announcing the unification of their efforts to 
overthrow the Asad regime. FSA leadership unity continues to be 
evaluated as a bellwether of the movement's capabilities.
    The ability, or inability, of the FSA to exercise operational 
control over the armed opposition bears continued monitoring. In recent 
months, the FSA has issued several calls for the armed opposition 
operating within Syria to unite under the FSA's banner, suggesting the 
group has had difficulties exercising control over disparate armed 
groups throughout Syria.
    FSA members are actively seeking military aid from foreign 
sponsors, including ammunition, small arms, and advanced weapons 
systems.

    163. Senator Wicker. Secretary Panetta and General Dempsey, members 
of the administration have stated that we will exhaust all diplomatic 
options in an effort to avoid any military confrontation though there 
have been reports that the United States is beginning to rethink its 
military strategy and support. What would this entail?
    Secretary Panetta. The President has said that Assad must halt his 
campaign of killing and crimes against his own people, step aside, and 
allow a democratic transition to proceed immediately.
    A political solution is the best means to achieve a stable, 
democratic transition; military action should always be a last resort. 
We are acting along several tracks. First, through the Department of 
State and the U.S. Agency for International Development, we are 
providing humanitarian relief to the Syrian people. Thus far, we have 
provided more than $25 million to the U.N. High Commission for Refugees 
(UNHCR), the World Food Program (WFP), the International Committee of 
the Red Cross (ICRC), and both local and international nongovernmental 
organizations to provide assistance to those who need it most. Second, 
the Department of State is leading diplomatic efforts to isolate and 
weaken the regime by building international consensus through the U.N. 
Security Council, the Arab League, and the Friends of Syria Group. The 
Department of the Treasury is doing its part by cutting off the 
regime's revenue through sanctions. Third, we are assisting the 
political opposition to strengthen and unite under a clear democratic 
transition plan that brings together Syrians of all creeds and 
ethnicities.
    Even as we continue to examine and revise military options, I would 
like to underscore that there are no simple solutions to the situation 
in Syria, and that military action is not advisable at this time.
    General Dempsey. We remain committed to supporting the 
administration's efforts to achieve a diplomatic solution to the 
situation in Syria. The President has said that U.S. unilateral action 
would be a mistake and we do not believe that military operations--such 
as air strikes or other forms of intervention--are advisable at this 
time. It is important that we continue to shape efforts within the U.N. 
Security Council and with our regional partners in order to achieve a 
positive outcome. The military, in conjunction with the U.S. 
Interagency, continues to explore the provision of non-lethal 
assistance to members of the peaceful opposition. We are reviewing all 
possible additional steps, including military options, but this 
planning does not equate to an intent or recommendation to execute a 
particular plan.

    164. Senator Wicker. Secretary Panetta and General Dempsey, what is 
the extent of the Syrian chemical stockpile?
    Secretary Panetta. Syria's chemical warfare program is well-
established, with a stockpile of chemical warfare agents that can be 
delivered by aerial bombs, ballistic missiles, and artillery rockets. 
Syria has the facilities and expertise domestically to produce, store, 
and deliver chemical agents, and we believe Syria is likely to continue 
to seek to improve its chemical warfare capability for the foreseeable 
future.
    General Dempsey. Syria has a sophisticated chemical weapons program 
that dates back several decades. Over that time, Syria acquired the 
capability to develop and produce blister and nerve agents, including 
mustard gas, sarin, and possibly VX nerve agent. Syria is still 
dependent on foreign sources for some dual-use equipment and precursor 
chemicals for agent production.

    165. Senator Wicker. Secretary Panetta and General Dempsey, what 
can be done to secure the chemical stockpile if the Assad regime loses 
control?
    Secretary Panetta. We remain very concerned about the security of 
chemical and conventional weapons in Syria. We have developed options 
to address those concerns, and we are consulting with allies and 
regional partners about how to address this potential proliferation 
challenge.
    General Dempsey. The United States continues to work very closely 
with the U.N. to support Kofi Annan's U.N. Six-Point Peace Plan. These 
efforts combined with the Friends of Syria Group provide the proper 
international context for stability in Syria should the Assad regime 
lose control. We have plans in place that cover a wide range of 
potential scenarios and options to address those scenarios. We also 
continue to work with our allies and regional partners to share 
information and coordinate activities as we closely watch the security 
and disposition of Syria.

    166. Senator Wicker. Secretary Panetta and General Dempsey, are we 
working with the Israelis to ensure these weapons do not get into the 
wrong hands?
    Secretary Panetta. This issue is of the highest concern to us, the 
Israelis, and the rest of the international community. We are 
cooperating with allies and regional partners across a range of 
potential options to prevent the proliferation of weapons, both 
chemical and conventional weapons. In addition--and in the midst of 
growing instability in the region--the United States has continued to 
strengthen the U.S.-Israel relationship in all aspects of cooperation.
    General Dempsey. Ensuring Syrian chemical and biological warfare 
does not fall into the wrong hands is clearly a shared security 
interest with Israel. From past dialogues with Israeli leadership, I 
know our understanding of the severity of the situation and possible 
consequences of proliferation or use, whether inadvertent or 
deliberate, is aligned. We are leveraging our longstanding and close 
military-to-military cooperation with the Israeli Defense Forces to 
make certain both of our militaries have an accurate assessment of 
Syrian chemical and biological warfare capabilities and 
vulnerabilities. I am confident that should the need to act arise, the 
United States will be able to deconflict or to coordinate with the 
Israeli Defense Forces as the situation demands.

    167. Senator Wicker. Secretary Panetta and General Dempsey, what, 
if any, military options do you see for DOD?
    Secretary Panetta. A core function of DOD is to conduct military 
planning as crises evolve in order to provide options to the President. 
In doing so, DOD looks into a variety of military options for various 
contingencies. I cannot get into the specifics of these options in open 
session, but I will reiterate that, although we continue to examine and 
revise military options, there are no simple solutions to the situation 
in Syria, and military action is not advisable at this time.
    General Dempsey. U.S. unilateral action or military operations are 
not advisable at this time. However, we continue to plan for a wide 
range of potential scenarios and provide options to address those 
scenarios. The Syrian crisis poses complex challenges ranging from 
control of chemical and biological weapons to humanitarian assistance. 
It is imperative that we continue to work with our allies and regional 
partners to share information and coordinate activities within this 
spectrum. The international community is closely monitoring the Syrian 
situation and we support shaping any multilateral responses within U.S. 
Government objectives.

                   TROOP WITHDRAWAL FROM AFGHANISTAN

    168. Senator Wicker. Secretary Panetta and General Dempsey, I do 
not see any tactical or diplomatic sense in your recent announcement 
about telling the enemy the date we are going to pull out troops. This 
gives the enemy an advantage on the ground and also eliminates any 
incentive for the Taliban to engage in substantive political 
negotiations with the Afghan Government. Our strategy in Afghanistan 
must be based solely on the conditions on the ground and not on the 
politics of the 2012 election. How does DOD plan to execute this 
announced withdrawal while not further endangering the lives of our 
troops and while still meeting operational demands?
    Secretary Panetta. The administration announced that the U.S. 
forces surge recovery will be completed by October 2012. We are 
currently working with commanders in the field to determine additional 
force reductions after October 2012. Plans for further reductions are 
developing and not ready for final decision at this time. However, 
future reductions will be tied to conditions on the ground and the 
ability of the ANSF to provide security as they assume the lead for 
security. The safety of our forces and the success of our mission are 
the primary concerns in our planning efforts.
    General Dempsey. We announced completion of surge recovery by 
October 2012. We are currently working with commanders in the field to 
determine further troop reductions post October 2012. Further options 
are being developed and not ready for final decision. Future reductions 
will be tied to conditions on the ground and ANSF capability to provide 
security as they assume lead for security. The safety of our troops and 
success of our mission are the primary concern in our planning efforts.

                       ELECTRONIC MEDICAL RECORDS

    169. Senator Wicker. Secretary Panetta, I recently met with the 
senior leadership of the VA to discuss the ongoing integration of the 
VA database with the DOD database in order to reduce duplication of 
efforts. What current delays is DOD facing on the integration of 
electronic medical records with the VA and when do you anticipate this 
merger will be completed?
    Secretary Panetta. VA and DOD have agreed to an overarching 
strategy for the integration of health record data. VA and DOD are 
currently working on the specific implementation plan for execution of 
the strategy.

                 TRANSITION OF TROOPS TO CIVILIAN LIFE

    170. Senator Wicker. Secretary Panetta, you propose a decrease of 
forces by 22,000 in fiscal year 2013 and 102,000 in the fiscal year 
2013 FYDP. This reduction will take place amidst an American economy 
with a consistent 8 percent unemployment rate. As such, what 
initiatives do you plan to initiate in order to ensure a smooth 
transition for our servicemembers to civilian careers?
    Secretary Panetta. Realizing the state of the economy, the 
requirement to decrease the number of our forces, and the need to 
ensure a smooth transition of our military members into the civilian 
sector, DOD has launched several initiatives that will aid separating 
servicemembers. The initiatives include the:

         Veterans Employment Initiative Task Force: In August 
        2011, the President called for the creation of a Task Force led 
        by the DOD and VA, with the White House economic and domestic 
        policy teams and other agencies, including DOL, to develop 
        proposals to maximize the career readiness of all 
        servicemembers. In coordination with these partners, DOD's role 
        involves implementing and sustaining a comprehensive plan to 
        ensure all transitioning servicemembers have the support they 
        need and deserve when leaving the military. This includes 
        working with other agencies in developing a clear path to 
        civilian employment; admission into and success in an academic 
        or technical training program; and successful start-up of an 
        independent business entity or non-profit organization. This 
        effort is fully aligned with 10 U.S.C. Chapter 58 as amended by 
        the Veterans Opportunity to Work (VOW) to Hire Heroes Act of 
        2011 and is consistent with DOD's commitment to keeping faith 
        with all of our military members and their families, providing 
        them a comprehensive set of transition tools and support 
        mechanisms as they complete their service to our Nation.
         New Transition Service Delivery Model: DOD's long-term 
        aim for a new transition service delivery model is to embed the 
        servicemembers' preparation for transition throughout their 
        Military Life Cycle--from accession through separation, from 
        Active Duty service and reintegration, back into civilian life. 
        This will require thoughtful goal setting and planning to apply 
        military experience to longer-term career goals in the civilian 
        sector, whether after a single enlistment or a 20-plus-year 
        military career. Servicemembers and military leadership will be 
        engaged in mapping and refining development plans to achieve 
        post-military service goals--a significant culture change.

      POST-MILITARY COMMISSION--TRAINING COSTS AND SCHEDULE DELAYS

    171. Senator Wicker. Secretary Panetta, my staff has been working 
with your staff on determining cost and schedule delays for newly 
commissioned military officers. How much money is being spent across 
the Services on personnel between their post-commission and pre-
specialty training?
    Secretary Panetta. Assessment of a cost of handling the annual 
accession surge is not readily available and difficult to calculate 
because of the varied number of valid and meaningful assignments, the 
large number of military training pipelines, and the number of 
personnel within those pipelines who may be delayed due to various 
reasons (medical, weather, et cetera) rather than pipeline 
inefficiencies.
    The wait time a new officer experiences before starting training 
does not directly correlate to down time or poor use of the officers. 
Each of the Services works to maximize the utilization of officers 
awaiting training through meaningful assignments which provide the new 
officer with valuable professional experiences. The following methods 
are used across the Services to stagger input to training:

         Stagger ROTC accessions--law and policy allow the 
        Services to commission ROTC Cadets/Midshipmen and delay their 
        Active Duty start for up to 12 months and serve in a non-
        drilling status in their Services' Reserve component
         Temporarily assign to vacant positions during the time 
        they are awaiting training
         Temporarily assign to supplement recruiting programs
         Temporarily assign to augment staffs and operations to 
        cover work load increases or manning shortages (caused by 
        deployments)
         Assign to ultimate position awaiting training
         Permit the use of extended leave (up to 90 days)
         Complete administrative training courses required for 
        future assignment

    172. Senator Wicker. Secretary Panetta, additionally, what measures 
has DOD implemented to reduce the amount of time and costs associated 
with this down time?
    Secretary Panetta. About two-thirds of DOD's annual officer 
accessions graduate and are commissioned each year in May/June from the 
Service Academies and Reserve Officers Training Corps (ROTC) programs. 
This presents a huge personnel/training logistical challenge--
sequencing over 8,000 initially accessed officers into constrained 
specialty training pipelines without causing a training backlog or 
pool. That sequencing execution is not simple and requires many 
different methods to attempt to mitigate back-ups. However, the wait 
time a new officer experiences before starting training does not 
directly correlate to down time or poor use of the officer. The 
Services strive to maximize the utilization of officers awaiting 
training through meaningful assignments which provide the new officer 
with valuable professional experiences. The following methods are used 
across the Services to stagger input to training:

         Stagger ROTC accessions--law and policy allow the 
        Services to commission ROTC Cadets/Midshipmen and delay their 
        Active Duty start for up to 12 months and serve in a non-
        drilling status in their Services' Reserve component
         Temporarily assign to vacant positions during the time 
        they are awaiting training
         Temporarily assign to supplement recruiting programs
         Temporarily assign to augment staffs and operations to 
        cover work load increases or manning shortages (caused by 
        deployments)
         Assign to ultimate position awaiting training
         Permit the use of extended leave (up to 90 days)
         Complete administrative training courses required for 
        future assignment

    Training facilities are planned on steady state requirements. Over 
the last few years, increases in end strength have caused some 
unusually long backlogs in some training pipelines due to facility 
limitations. These backlogs are being alleviated and have been reduced 
by as much as 50 percent. The most common delay in specialty training 
is caused by weather. For example, in aviation training, an unusually 
wet season can produce a backlog that may take several months to clear. 
Each pipeline and schoolhouse is encouraged to minimize time-to-train, 
and each training commander is evaluated on his/her training 
efficiency.
                                 ______
                                 
             Questions Submitted by Senator Scott P. Brown

                             MEADS PROGRAM

    173. Senator Brown. Secretary Panetta, I understand USD(ATL) 
Kendall is currently engaged in discussions with his German 
counterparts to negotiate the termination of the MEADS program. When 
can I expect a report from DOD on the program's reduced scope?
    Secretary Panetta. On April 26, 2012, DOD provided to the 
congressional defense committees the plan required by section 235 of 
the NDAA for Fiscal Year 2012 that describes DOD's use of fiscal year 
2012 funds as the U.S. final financial contribution under the MEADS 
program.

    174. Senator Brown. Secretary Panetta, last year's NDAA fenced 25 
percent of funds for MEADS until such a report was delivered. Roughly, 
how much of the fiscal year 2012 funding has been spent to date?
    Secretary Panetta. Prior to delivery of the NDAA for Fiscal Year 
2012 section 235 report on MEADS, DOD provided $85 million to the NATO 
MEADS program office, which is less than 25 percent of the $390 million 
in fiscal year 2012 funding authorized and appropriated for MEADS. Upon 
delivery of the report to the congressional defense committees in late 
April, DOD provided an additional $250 million to the NATO MEADS 
program office.

                              GLOBAL HAWK

    175. Senator Brown. Secretary Panetta, with respect to DOD's 
decision to terminate the Global Hawk Block 30 program, what were the 
findings of sustainment cost comparisons between the U-2 and the Global 
Hawk?
    Secretary Panetta. When we initially invested in the Global Hawk 
Block 30 program, it held the promise of providing essentially the same 
capability as the U-2 manned aircraft for significantly less money to 
both buy and operate. As the program has matured, these cost savings 
have not materialized. In this 5-year budget, the cost of the Global 
Hawk program was projected to exceed the cost of the U-2, so we 
cancelled Global Hawk Block 30 and extended the U-2 program, avoiding 
the cost to complete the Global Hawk Block 30 program and saving 
roughly $2.5 billion over the 5 years.

    176. Senator Brown. Secretary Panetta, can the U-2 alone provide 
the ISR necessary in order to meet current and future operational 
requirements?
    Secretary Panetta. For high-altitude airborne ISR, the U-2 meets 
current and future operational multi-intelligence requirements.

         There are two different types of sensors on the U-2 
        and Global Hawk. When comparing sensors, the U-2 imagery sensor 
        suites are more capable than the Global Hawk sensors, whereas 
        the U-2 and Global Hawk Signals Intelligence sensors are 
        comparable.
         High-altitude ISR is only one part of an aggregate 
        capability of space, airborne, and ground systems. These 
        systems operate together to sufficiently meet contingency and 
        enduring ISR needs.
                                 ______
                                 
               Questions Submitted by Senator Rob Portman

                         GROUND COMBAT VEHICLES

    177. Senator Portman. General Dempsey, what shortcomings do you 
feel exist in our ground combat vehicle fleet to operate effectively on 
future battlefields?
    General Dempsey. Current legacy platforms are aging and were 
originally designed within the construct of linear, force-on-force 
battle against conventional threats. They do not possess a sufficient 
combination of force protection, survivability, payload, 
transportability, command and control (C2), and reliability, 
availability, and maintainability (RAM) required to operate in the full 
spectrum of potential conflicts against existing and emerging hybrid 
threats. Current add-on protection systems reduce payload, RAM, and 
mobility needed to meet future operational requirements and add-on C2, 
intelligence, and sensor systems exceed the size, weight, power, and 
cooling constraints of current vehicle platforms. Development programs 
such as ground combat vehicle, JLTV, and amphibious combat vehicle will 
address identified shortcomings.

    178. Senator Portman. General Dempsey, based upon the development 
of Command, Control, Communications, Computers, Intelligence, 
Surveillance and Reconnaissance (C4ISR) systems across the Joint Force, 
do our GCVs possess the necessary capabilities to integrate into these 
systems?
    General Dempsey. The current design of ground combat platforms did 
not envision the sophistication of today's C2 systems. Where feasible, 
these legacy ground combat systems have been integrated into the C4ISR 
network, but are often limited by size, weight, power, and cooling 
constraints. With regard to new systems in development, the Joint Staff 
has updated the Network Ready overarching Key Performance Parameters to 
ensure programs in development are designed to be interoperable and 
supportable with existing C2 programs and other programs under 
development.

    179. Senator Portman. General Dempsey, what risks are associated 
with the reduction of Heavy BCTs from the Army?
    General Dempsey. The Army is carefully managing the force structure 
reduction, ensuring that the resultant force is capable of meeting the 
anticipated future requirements. We have assessed the planned reduction 
in Army BCTs against the strategic guidance for DOD, and the programmed 
inventory of Heavy BCTs is sufficient to meet the demands of our 
strategy.

                        INDUSTRIAL BASE CONCERNS

    180. Senator Portman. General Dempsey, the reduced funding profiles 
in the President's proposed budget along with proposed program 
cancellations will put a strain on different parts of the defense 
industrial base across the spectrum, from the largest prime contractors 
all the way down to third-tier vendors. You stated in your Defense 
Budget Priorities and Choices Guidance, that in support of the 
President's strategic guidance tenet of reversibility, the budget 
sustains segments of the industrial base to regenerate capability, if 
necessary. What criteria did you use to determine which parts of the 
industrial base were sustained?
    General Dempsey. DOD used information from AT&L's S2T2 assessment 
project and insights from other internal and external sources to 
characterize industrial base niches according to their criticality 
(characteristics that make a product or service difficult to replace, 
if disrupted) and fragility (characteristics that make small deviations 
in the status quo likely to have substantial effects on the industrial 
niche).

    181. Senator Portman. General Dempsey, where do you see the 
vulnerabilities and what decisions did you make that were particularly 
influenced by industrial base concerns?
    General Dempsey. Key vulnerabilities that may hinder our global 
posture rebalance are: (1) a potential for atrophy and loss of key D&D 
capabilities in the aviation industrial base; (2) a potential lack of 
engineering and manufacturing skills necessary to support long-range 
missile development; (3) low volume production in our Nation's 
shipyards making it difficult for U.S. shipyards to match improvements 
in technology and productivity seen in international shipyards; and (4) 
disruption to the space industrial base related to solid rocket motors 
due to the retirement of the Space Shuttle.
    The space industrial base is a good example of DOD's efforts to 
mitigate industrial base concerns. Multiple DOD components participate 
in the Space Industrial Base Council Critical Technology Working Group 
(CTWG). The CTWG is an interagency organization tasked to assess 
structural issues in key domestic space industrial base sectors and 
coordinate mitigation activities in areas of shared concern across 
multiple government space agencies. This coherent, systematic effort is 
focused on ensuring continued and reliable access to critical cross-
cutting space technologies, including associated launch vehicles and 
support systems for the U.S. Government space community. DOD has also 
employed authorities of the Defense Production Act to co-finance 
capital expenditures to mitigate technical and business risks 
associated with niche government-unique capabilities, including certain 
batteries, solar cells and arrays, traveling wave tube amplifiers, 
focal plane arrays, and star trackers.

    182. Senator Portman. General Dempsey, how do you intend to monitor 
the health of the industrial base to ensure reversibility, if 
necessary, can be implemented in the future?
    General Dempsey. DOD has adopted an initiative focused on 
developing a more complete understanding of the complexity of the 
defense industrial base. This initiative, known as the S2T2 assessment, 
is a multi-pronged and comprehensive approach for monitoring the health 
of the defense industrial base. It seeks to identify areas of 
criticality (characteristics that make a product or service difficult 
to replace, if disrupted) and fragility (characteristics that make 
small deviations in the status quo likely to have substantial effects 
on the industrial niche) that might require DOD intervention and 
mitigation.

    183. Senator Portman. General Dempsey, as program decisions are 
made over the next 5 years, how will the impacts to the industrial base 
be taken into consideration and if so, how will the assessment be 
incorporated into the overall program decision?
    General Dempsey. DOD continuously considers industrial base impacts 
and adjusts accordingly. For example, prior to eliminating a defense 
contract bidder in our acquisition process, we evaluate the competitive 
marketplace and the consequences to the competitors. At Milestones B 
and C decisions, through the acquisition strategy, the program assesses 
the industrial base's ability to produce, support, and improve/upgrade 
products to meet the program's cost, schedule, and performance 
requirements--including all key sub-tier suppliers, as well as the 
prime contractor. When there is an indication that a necessary 
industrial capability is endangered, DOD will determine if it needs to 
take action to preserve that capability.

                  COMPETITION IN PROCUREMENT PRACTICES

    184. Senator Portman. General Dempsey, the value of competition in 
our procurement practices is critical to achieving the best-value for 
our Government and its taxpayers. It has been noted, to achieve the 
long-term savings of competition, occasionally near-term investments 
are required, something that may be an easy target of the budget axe 
with long-term implications. Your documents outline some strategies to 
overcome these challenges, like dissimilar competition, self-
competition, competition for profit, and other alternatives to classic 
head-to-head, and they also outline some shortcomings in 2011 from 
achieving the goals: delays from the contractors; the award of several 
major weapon system programs; and delays and greater fidelity in data. 
Despite these issues in 2011, we had a high in 2008 of 64 percent of 
contracts competitively awarded, with a multi-year trend down to 58.5 
percent in 2011. You have some modest goals of increasing this number 
by single digit percentages in the coming years. What are the causes of 
this downward trend and how do you plan to keep programs to their 
competition strategies in the face of budget challenges?
    General Dempsey. Much of the drop in the overall competition rate 
is due to an increase in non-competitive contract actions involving 
requirements with only one responsible source for major systems, such 
as the LPD-26, the DDG-1000 ships, the Virginia-class submarine, and 
several aircraft programs such as the F-22, C-17, C5, JSF, and P-8. 
While these contracts were competitively awarded initially, the 
contract actions issued in 2011 were follow-on efforts that were 
carefully reviewed and determined to be non-competitive, with approved 
sole-source justifications. Despite the drop in the overall competition 
rate, there were several high-dollar major-system contracts 
competitively awarded in 2011 such as the Littoral Combat Ships and the 
DDG 114-116 Arleigh Burke-class destroyers.
    DOD is placing renewed emphasis on promoting real competition and 
improving competition rates under the Better Buying Power Initiative. 
In order to encourage competition at the prime and subcontract level, a 
policy was recently put in place that requires program managers to 
present a competition strategy at each program milestone. Senior 
leadership in AT&L reviews each of these strategies for Major Defense 
Acquisition Programs and requires the Component Acquisition Executives 
to do the same for programs under their cognizance. These initiatives 
will facilitate DOD's ability to meet the goals established for the 
upcoming years.
                                 ______
                                 
               Questions Submitted by Senator John Cornyn

                             SEQUESTRATION

    185. Senator Cornyn. Secretary Panetta and General Dempsey, 
according to recent reports, DOD Comptroller Robert Hale has told 
reporters that DOD is not planning for sequestration, explaining, ``I 
know nobody believes us, but I'd know if we were.'' According to these 
reports, this is due to the fact that OMB has not told DOD to do so. 
Can you confirm that DOD has been so directed by the administration?
    Secretary Panetta. Consistent with direction from OMB, DOD did not 
reflect the effects of the sequestration in its fiscal year 2013 budget 
submission. The President's budget proposes over $4 trillion in 
balanced deficit reduction, which Congress could enact and avoid 
sequestration. DOD is not currently planning for sequestration. OMB has 
not directed agencies, including DOD, to initiate any plans for 
sequestration.
    General Dempsey. Per OMB's direction last fall, this budget 
complies with the BCA caps established by Congress. We will continue to 
work with OMB and Congress to properly resource the capability to 
defend our Nation and our allies.

                     REVERSIBILITY OF DEFENSE CUTS

    186. Senator Cornyn. Secretary Panetta and General Dempsey, in your 
strategic guidance announcement last month, both of you highlighted the 
need to build in reversibility as these significant cuts to our 
Nation's defense budget are made. The strategic guidance document also 
states, ``the concept of reversibility--including the vectors on which 
we place our industrial base, our people, our Active/Reserve components 
balance, our posture, and our partnership emphasis--is a key part of 
our decision calculus.'' Reversibility sounds like a euphemism for 
``we're not totally sure that these cuts represent sound policy.'' Is 
it realistic to think that, within a reasonable time frame, we could 
reverse decisions as monumental as downsizing our ground forces by 
nearly 100,000 troops (close to pre-September 11 levels), delaying or 
cancelling major acquisition programs, and retiring significant numbers 
of current aircraft and ships?
    Secretary Panetta. Reversibility represents a recognition that the 
security environment is continually changing. DOD will be responsible 
for a range of missions and activities across the globe of varying 
scope, duration, and strategic priority. This will place a premium on 
flexible and adaptable forces that can respond quickly and effectively 
to a variety of contingencies and potential adversaries. The Joint 
Force of 2020 will be such a force and I am confident that we will have 
the ability to mobilize and regenerate forces and capability as needed.
    General Dempsey. Reversibility is intended to deal with evolutions 
in the strategic environment. Implementing reversibility will certainly 
require vigilance to provide sufficient time to adapt to changes. By 
considering the need for flexibility and the mechanisms to execute 
future adjustments, we will be better prepared to do what is necessary.
    DOD is developing an analytical framework in support of the concept 
of reversibility. We are beginning to apply this framework to 
investment decisions now and in the future.

                     DOWNSIZING OF U.S. LAND FORCES

    187. Senator Cornyn. Secretary Panetta and General Dempsey, 
according to the Defense Strategic Guidance document, the new strategy 
must ``protect key investments in the technologically advanced 
capabilities most needed for the future . . . [and] no longer size 
Active Forces to conduct large and protracted stability operations 
while retaining the expertise of a decade of war.'' As a result, you 
have proposed eliminating about 100,000 soldiers and marines from the 
force. Although weapons development can usually be accelerated, there 
is no real way to accelerate the development of quality military 
leaders during times of crisis. Our force has such leaders in it today, 
including many thousands of NCOs who learned the hard lessons of Iraq 
and Afghanistan. But once they leave the force, in most cases they 
cannot be replaced. Following every war since World War II, the United 
States has significantly reduced Army and Marine Corps levels while 
focusing on developing air and sea forces. In recent decades, when 
confronted with the next crisis--including Korea, Vietnam, and the 
Persian Gulf--we have been forced to try to regenerate sizeable land 
forces. How do you plan to ensure that we retain the expertise and 
experience garnered by our NCOs and other leaders over the past decade, 
preserving it for the next conflict, while making such drastic 
reductions to our Army and Marine Corps?
    Secretary Panetta.
Army
    The new Defense Strategic Guidance released in January 2012 notes 
that since we cannot predict how the strategic environment will evolve 
with absolute certainty, we need to manage the force in ways that 
protect its ability to regenerate capabilities that may be needed to 
meet future, unforeseen demands. The Strategy also notes that we need 
to retain intellectual capital and rank structure that could be called 
up to expand key elements of the force. The Army is examining 
strategies, policies, and investments that would posture the Army to be 
able to slow and reverse a planned drawdown of Army end strength and 
formations, and rapidly expand over the course of a number of years in 
response to a future crisis. To retain intellectual capital and rank 
structure, the Army is identifying billets in its Generating Force that 
can support such expansion.
Marine Corps
    The planned reduction in the end strength of the Marine Corps 
results in an increase in the percentage of staff noncommissioned 
officers (SNCO), NCOs, and field grade officers. Additionally, we did 
not reduce the size of our Reserve Force; this will provide an 
opportunity for many to continue to serve and remain prepared for the 
future.
    These NCOs, SNCOs, field grade officers, and Reserve marines are 
exactly the populations that have the expertise and experience garnered 
from the last decade. Their expertise and professionalism will ensure 
the next generation will receive the best training.
    Perhaps as important as retaining the leaders is the plan to reduce 
the force in a deliberate measured way that remains committed to 
today's warriors. Maintaining the trust and confidence of today's 
marines will go a long way to retain the confidence that is held by the 
average American citizen. If and when the time comes for growth--
America's sons, daughters, mothers, and fathers will be eager to be 
associated with the U.S. Marine Corps.
    General Dempsey. Our NCO corps provides a great value to our Joint 
Force and in winning our Nation's wars. On the heels of Afghanistan and 
Iraq, reshaping our personnel across the Services will impact our 
officers and junior enlisted community as well as our NCOs. Over the 
next 5 years, as the Services implement their separation and retirement 
processes to meet new authorized end strengths, we will ensure that we 
maintain levels of experience and capacity in both our Active component 
and operational reserve.
    The Secretary made it perfectly clear during the budget rollout 
strategy that the Services need to ensure mechanisms are in place to 
retain our mid-grade NCOs and officers, so our pool of experience 
remains balanced, relevant, and ready. My promise to the force in 
keeping the faith is to ensure that our men and women are properly 
trained and educated to meet any emerging requirements as may be 
directed from our Commander in Chief.

    188. Senator Cornyn. Secretary Panetta and General Dempsey, given 
that we are still fighting a land war in Afghanistan, coupled with our 
historical inability to predict the next conflict, on what do you base 
the conclusion that we will rely more heavily on air and sea 
capabilities in the future?
    Secretary Panetta. All Services will play integral roles in 
addressing future U.S. security challenges across all domains.
    The new Defense Strategic Guidance noted that, ``given that we 
cannot predict how the strategic environment will evolve with absolute 
certainty, we will maintain a broad portfolio of military capabilities 
that, in the aggregate, offer versatility across a wide range of 
missions.'' DOD's decision not to divest in the capability to conduct 
any mission reflects this recognition that the future security 
environment is uncertain. Given this unpredictability, the new Defense 
Strategic Guidance commits to managing the force in ways that protect 
its ability to regenerate capabilities that might be needed to meet 
future, unforeseen demands.
    The abilities of our ground forces to ensure access, reassure 
allies, deter adversaries, build security capacity and interoperability 
with partners, and ultimately, respond to and succeed in crises and 
contingencies, are indispensable and distinguishing features of U.S. 
military capabilities. The nature of the future strategic environment 
will require even greater flexibility and agility in projecting power 
to accomplish the Nation's security objectives. As the U.S. Armed 
Forces increase their operational focus on enhanced presence, power 
projection, freedom of action, and deterrence in the Pacific--while 
placing a premium on U.S. and allied military presence and support of 
partner nations in the Middle East--air and sea forces offer distinct 
strengths in accomplishing these global joint missions, alongside a 
range of mutually-reinforcing U.S. ground forces' activities in these 
regions. In other regions also, the complementary efforts of all the 
Services across land, air, and sea, and increasingly, space and cyber 
domains, are necessary to protect U.S. and allied security interests.
    General Dempsey. As we draw down from the operation in Afghanistan, 
and reduce our budget to help protect our Nation's economy, we have 
assessed risks in keeping our Homeland safe and in our ability to 
sustain leadership abroad. After weighing numerous options, an area 
where we accept additional risk is in the size of our land forces--we 
will not be sized to conduct long-term stability operations within the 
Active component.
    Any campaign we are likely to wage in the future will be fully 
joint. After a decade of relying heavily on our ground forces, we must 
ensure that we maintain our decisive edge in the air and maritime 
domains against future challenges. Many of these sea and air 
capabilities you speak of are not combat platforms; they are key 
enablers and essential to power projection of the entire Joint Force, 
to include ground forces--tankers, high-speed vessels, and ISR 
platforms. Many of the air and sea combat systems that are being 
fielded will enable cross-domain strike operations or in the case of 
BMD, joint protection. In an unpredictable strategic environment, the 
ability to project power anywhere on the globe is critical to rapidly 
and effectively responding to emerging threats. Robust air and naval 
capabilities are, and will continue to be, essential to maintaining 
that ability.

                     ASIA-PACIFIC REGION AND CHINA

    189. Senator Cornyn. Secretary Panetta and General Dempsey, last 
month you announced the U.S. military would pivot its focus to the 
Asia-Pacific region. Yet, the significance of this announcement seems 
to have been undermined by the cuts that were announced simultaneously. 
Although the President has said that defense cuts ``will not come at 
the expense of the Asia-Pacific,'' this promise seems hollow. These 
deep and broad defense cuts will impact every aspect of our Nation's 
defense capability and quantitatively reduce the overall capabilities 
and forces that are available in the PACOM AOR. At the same time our 
defense budget is bearing the brunt of our Nation's fiscal woes, China 
is investing substantial funds in the modernization and build-up of its 
military forces. According to DOD, China's official defense budget has 
grown by an average of 12.1 percent each year since 2000. Analysts at 
Jane's Defence have reported they expect China's defense spending to 
accelerate substantially in the next 3 years, at a combined annual rate 
of 18.7 percent per year. At the same time, Secretary Panetta's 
prepared testimony notes that, ``when reduced war-related funding 
requirements are included, we expect total U.S. defense spending to 
drop by more than 20 percent over the next few years . . . '' What is 
your assessment of the risk the United States assumes by making such 
drastic cuts to our defense spending while China grows its defense 
budget and continues its military modernization efforts at an 
unprecedented rate?
    Secretary Panetta. The United States is a resident power in the 
Asia-Pacific region with enduring interests in the region. We will 
maintain, and in some areas enhance, our military presence in the Asia-
Pacific region by making our posture more geographically distributed, 
operationally resilient, and politically sustainable. The United States 
will retain the capacity to deter conflict and, if necessary, prevail 
in any contingency. We are investing in those capabilities most 
relevant to preserving the security, sovereignty, and freedom of the 
United States and that of our allies and partners.
    Despite reductions in the U.S. defense budget, we are improving 
capabilities that maintain our military's technological edge and 
freedom of action, in the Asia-Pacific region and globally. We are 
increasing investments in both defensive and offensive cyber 
capabilities. In terms of power projection, we increased or protected 
investment in capabilities such as the development of a new bomber, 
cruise missile capacity of Virginia-class submarines, a conventional 
prompt strike option from submarines, and electronic warfare 
capabilities. We have sustained Army and Marine Corps force structure 
in the Pacific, and we are increasing our rotational presence--for 
example, through the deployment of marines to Darwin, Australia.
    At the whole-of-government level, reducing risk to U.S. interests 
is a function of all elements of national power. As stated in the new 
Defense Strategic Guidance, we will emphasize our existing alliances 
and expand our networks of cooperation with emerging partners 
throughout the Asia-Pacific region to ensure collective capability and 
capacity for securing common interests.
    General Dempsey. Given our current economic and fiscal situation, 
reduced defense budgets are and will be a fact of life not just for 
DOD, but for the U.S. Government as a whole. The defense budget will of 
necessity be reduced and everyone will be asked to do as much or more 
with fewer available resources. Our military forces are not exempt from 
this reality. However, we should also remain aware that managing risk 
is not simply a matter of how much money we spend on defense.
    Reducing risk to U.S. interests is a function of all elements of 
national power, to include our diplomatic and cooperative efforts. Our 
relationships with Asian allies and key partners are critical to the 
future stability and growth of the region. We will emphasize our 
existing alliances, which provide a vital foundation for Asia-Pacific 
security. We will also expand our networks of cooperation with emerging 
partners throughout the Asia-Pacific to ensure collective capability 
and capacity for securing common interests. It is primarily through 
these efforts that we can best ensure long-term stability in the Asia-
Pacific region and protect U.S. national interests.
    However, we are also continuing to make necessary capability 
investments and adjustments to our force posture in the Asia-Pacific 
region in order to preserve our ability to project power in denied 
environments should the need arise. Additionally, we are also 
protecting other key components of the Joint Force, including Special 
Operations Forces; unmanned air systems; sea-based unmanned ISR 
systems; advanced ISR with increased capabilities; and all three legs 
of our nuclear deterrent. Our focus is to ensure the we are fully 
prepared to meet any threats to the security of the United States, its 
citizens, allies, and partners.

    190. Senator Cornyn. Secretary Panetta and General Dempsey, 
according to DOD's 2011 report, ``Military and Security Developments 
Involving the People's Republic of China,'' China's long-term, 
comprehensive military modernization improves China's capacity to 
conduct high-intensity regional military operations, including anti-
access and area denial operations. What is your assessment of the 
intent behind China's military modernization, both in the region and 
globally?
    Secretary Panetta. (Deleted.]
    General Dempsey. [Deleted.]

    191. Senator Cornyn. Secretary Panetta and General Dempsey, in 
recent years, our Nation has experienced an increasing volley of cyber 
attacks and cyber theft emanating from China, and this is of great 
concern to many Senators. According to an October 2011 report by the 
Office of the National Counterintelligence Executive, ``Chinese actors 
are the world's most active and persistent perpetrators of economic 
espionage.'' The report goes on to highlight that ``computer networks 
of a broad array of U.S. Government agencies . . . were targeted by 
cyber espionage; much of this activity appears to have originated in 
China.'' What is your assessment of this growing threat?
    Secretary Panetta. I agree with the findings of the Biennial Report 
to Congress on Foreign Economic Collection and Industrial Espionage, 
2009-2010: ``Foreign Spies Stealing U.S. Economic Secrets in 
Cyberspace,'' prepared by the Office of National Counterintelligence 
Executive. The threats to our Nation in cyberspace continue to grow at 
an alarming rate. In particular, the extensive cyber-enabled 
exploitation of U.S. intellectual property and trade secrets is a 
direct threat to vital U.S. economic and national security interests, 
including DOD's ability to field the most technologically advanced 
force. DOD is working closely with its interagency partners, including 
the Departments of State, Homeland Security, Justice, and Commerce, to 
facilitate a coordinated approach to cyber threats, not only from 
China, but from others actors as well. We must develop options to 
respond to and impose costs on cyber threat actors to deter future 
exploitation and attack. The President stated in his International 
Strategy for Cyberspace that the United States reserves the right to 
use all necessary means--diplomatic, informational, military, and 
economic--as appropriate and consistent with applicable international 
law--in order to defend our Nation, our allies, our partners, and our 
interests against hostile acts in cyberspace.
    General Dempsey. The number of cyber intrusions appearing to 
originate in China is extensive, and U.S. businesses and government 
agencies will continue to see this type of activity in the coming 
years. China is likely using its computer network exploitation 
capability to support intelligence collection against the U.S. 
diplomatic, economic, and defense industrial base sectors that support 
U.S. national defense programs. The targeted information could 
potentially be used to benefit China's defense industry, high 
technology industries, foreign policy decisionmakers, and military 
planners, who likely are building a picture of U.S. defense networks, 
logistics, and related military capabilities that could be exploited 
during a crisis. Observed intrusions have varied in sophistication and 
Chinese cyber actors appear to have the capability to adapt their 
methods depending on the cyber defenses of the target.

    192. Senator Cornyn. Secretary Panetta and General Dempsey, do you 
agree that such aggression is unacceptable and does serious damage to 
U.S.-China relations?
    Secretary Panetta. I agree with the findings of the Biennial Report 
to Congress on Foreign Economic Collection and Industrial Espionage, 
2009-2010: ``Foreign Spies Stealing U.S. Economic Secrets in 
Cyberspace,'' prepared by the Office of National Counterintelligence 
Executive. The threats to our Nation in cyberspace continue to grow at 
an alarming rate. In particular, the extensive cyber-enabled 
exploitation of U.S. intellectual property and trade secrets is a 
direct threat to vital U.S. economic and national security interests, 
including DOD's ability to field the most technologically advanced 
force. DOD is working closely with its interagency partners including 
the Departments of State, Homeland Security, Justice, and Commerce, to 
facilitate a coordinated approach to cyber threats, not only from 
China, but from others actors as well. We must develop options to 
respond to and impose costs on cyber threat actors to deter future 
exploitation and attack. The President stated in his International 
Strategy for Cyberspace that the United States reserves the right to 
use all necessary means--diplomatic, informational, military, and 
economic--as appropriate and consistent with applicable international 
law--in order to defend our Nation, our allies, our partners, and our 
interests against hostile acts in cyberspace.
    General Dempsey. As cyber events carry the potential to affect 
civilian infrastructure and military readiness, it is important that we 
communicate our concerns regarding the negative impacts of ongoing 
cyber security risks. We are working to engage China on this issue to 
strongly reinforce the potential benefit to our overall relationship by 
improving efforts to curtail cyber attacks emanating from the mainland.

                            ISRAEL AND IRAN

    193. Senator Cornyn. Secretary Panetta, in terms of meeting the 
Iran threat, the United States has certain military capabilities that 
Israel and other allies do not. How are we working with Israel to 
narrow the gaps between our respective capabilities and helping to 
ensure that Israel is able to defend herself against potential threats 
from Iran?
    Secretary Panetta. The U.S.-Israel defense relationship is strong, 
and we are working with Israel more closely than ever before in areas 
such as missile defense technology, counterterrorism, and across a 
range of military exercises--to ensure that Israel is always secure. We 
are engaged in a regular dialogue with senior Israeli officials to 
understand their security requirements and maintain Israel's 
qualitative military edge. A critical element of this is providing 
Israel with the most advanced technology in the region, including the 
fifth generation JSF. Through a combination of providing Israel 
technology like this, and our extensive work with Israel on missile 
defense, we are ensuring that Israel can defend itself.

                            FUTURE OF EGYPT

    194. Senator Cornyn. Secretary Panetta and General Dempsey, just 
over a year ago, the Egyptian people took to the street and overthrew 
President Hosni Mubarak. Today, it appears that Islamist factions are 
poised to take control of the Egyptian Government and the country's 
future. What is your assessment of the Muslim Brotherhood?
    Secretary Panetta. (Deleted.]
    General Dempsey. (Deleted.]

    195. Senator Cornyn. Secretary Panetta and General Dempsey, what 
impact will a Brotherhood-led government have on the longstanding 
relationship between the U.S. military and the Egyptian military?
    Secretary Panetta. DOD and the Egyptian military have been close 
partners for many decades, and the United States is committed to a 
robust bilateral relationship with Egypt today and following the July 
transition to civilian rule. Through annual military exchanges, foreign 
military assistance, combined exercises, and other engagement efforts, 
we look forward to maintaining and strengthening this partnership for 
decades to come. Regardless of political changes, DOD believes that the 
fundamentals of this strategic relationship remain strong.
    The United States expects that Egypt will maintain its 
international security commitments, including its treaty obligations 
with Israel. The Muslim Brotherhood has provided public assurances of 
its commitment to the international obligations undertaken by the 
Government of Egypt.
    General Dempsey. This is a new Egypt and we will need to build new 
partnerships, even as we sustain the old ones. We intend to engage in a 
comprehensive review of how our assistance can best meet the needs of 
the Egyptian people and advance our shared interests and aspirations. 
This is best accomplished through broad-based consultations with all of 
the institutions of the new government. The United States and Egyptian 
militaries have been strong partners, and we expect that partnership to 
continue.

    196. Senator Cornyn. Secretary Panetta and General Dempsey, how are 
we strategically adapting to the new role the military is taking within 
the Egyptian Government?
    Secretary Panetta. The United States is committed to a robust 
bilateral relationship with Egypt today and following the July 2012 
transition to civilian rule.
    We will take steps both to strengthen old partnerships and build 
new ones. DOD will engage in close dialogue with Egyptian military and 
civilian officials on the wide range of security and defense issues of 
mutual interest to our governments.
    Events of the Arab Awakening have clearly demonstrated that 
military-to-military partnerships are critical for protecting enduring 
U.S. security interests, and also for providing a channel through which 
U.S. defense officials can discuss the importance of reform. To this 
end, we will use annual military exchanges, foreign military 
assistance, combined exercises, and other engagement efforts, to 
strengthen our partnership with the Egyptian military and promote 
reform for years to come.
    General Dempsey. The strength of our military relationship with 
Egypt is a source of influence. We saw the importance of the 
relationship in the early days of the revolution during which the 
United States urged Egyptians to refrain from violence. The United 
States now supports the Supreme Council of the Armed Forces and the new 
parliament in the successful completion of the transition. We need a 
strong, stable Egypt as our partner. From here, the only path to 
sustainable stability in Egypt is a successful democratic transition.
    Egypt has made important progress toward democracy over the past 12 
months. For the first time in 60 years, Egyptians have elected a 
representative parliament, which now exercises legislative authority, 
and presidential elections are scheduled for May. These are important 
milestones in Egypt's transition to civilian government. We look to 
Egypt for everything from maintaining its peace treaty with Israel, to 
joint counterterrorism and anti-weapons smuggling efforts, to 
preferential access for U.S. ships transiting the Suez Canal. The 
Egyptian military's role in Egypt will continue to change. As that 
happens, we want to ensure that we protect our longstanding 
relationships and build new ones.

    197. Senator Cornyn. Secretary Panetta and General Dempsey, there 
has been a great deal of discussion in Congress that military 
assistance to Egypt should be cut because of the Egyptian Government's 
actions against American pro-democracy nongovernmental organizations 
(NGO). In your opinion, should this be a factor when determining future 
levels of aid to Egypt?
    Secretary Panetta. The administration remains concerned about the 
ongoing trial of NGO employees, as well as the ability of civil society 
organizations to work in Egypt. Both publicly and in private 
conversations with Egyptian officials, General Dempsey and I have 
discussed the importance of allowing civil society organizations to 
operate freely in Egypt.
    Our strategic relationship with Egypt remains one of the most 
important in the region. U.S. security assistance to Egypt is an 
important demonstration of our commitment to supporting Egypt at this 
moment of historic challenges and remains a cornerstone of our security 
cooperation and partnership on regional security issues.
    Foreign Military Financing (FMF) plays a critical role in efforts 
to professionalize the Egyptian military, so that the armed forces can 
better serve the interests of the Egyptian people and jointly advance 
our mutual security priorities. Notably, the decision by the Egyptian 
military in January 2011 to avoid firing on peaceful demonstrators and 
to side with protesters demanding the resignation of former president 
Hosni Mubarak in February 2011, was a vital step in allowing Egypt's 
democratic transition to take place.
    U.S. bilateral assistance to Egypt is guided by the need to 
safeguard our strategic interests in maintaining a critically important 
bilateral partnership with Egypt and in supporting the success of a 
democratic transition for Egypt that meets the aspirations of all 
Egyptians.
    General Dempsey. First and foremost, our security partnership with 
Egypt, reinforced by FMF, remains critical to our interests across the 
region. We look to Egypt for everything from maintaining its peace 
treaty with Israel to joint counterterrorism and anti-weapons smuggling 
efforts, to preferential access for U.S. ships transiting the Suez 
Canal. Disrupting FMF right now could put these critical interests at 
risk. We also have a powerful interest in a successful democratic 
transition. We need a strong, stable Egypt as our partner. From here, 
the only path to sustainable stability in Egypt is a successful 
democratic transition.

    198. Senator Cornyn. Secretary Panetta and General Dempsey, what is 
the strategic thinking behind the continued provision of U.S. military 
assistance to Egypt?
    Secretary Panetta. Our strategic relationship with Egypt is one of 
the most important in the region. U.S. military assistance to Egypt 
remains an important demonstration of our commitment to supporting 
Egypt at this moment of historic challenges, and reflects the vital 
U.S. interest in continued security cooperation with Egypt, whose peace 
with Israel is a cornerstone of regional stability.
    U.S. bilateral assistance to Egypt is guided by the need to 
safeguard our strategic interests in maintaining this important 
bilateral partnership and in supporting the success of a democratic 
transition for Egypt that meets the aspirations of all Egyptians.
    General Dempsey. Continued U.S. military assistance allows us to 
protect our core national security interests in Egypt. For over 30 
years, Egypt's peace treaty with Israel has been a cornerstone of peace 
and stability as well as security along the Egyptian-Israeli border. 
FMF supports our critical partnership with Egypt on counterterrorism 
and their efforts to stop arms smuggling. Lack of success in either 
mission has the potential to destabilize the region. Issuing this 
waiver allows Egypt's military to maintain its readiness and 
interoperability with U.S. forces, which is essential for effective 
cooperation on regional threats. The recent FMF waiver supports 
America's force posture across the region which relies heavily on 
overflight rights and priority access to the Suez Canal.

                            MILITARY VOTING

    199. Senator Cornyn. Secretary Panetta, the Military and Overseas 
Voter Empowerment (MOVE) Act, enacted by Congress as part of the NDAA 
for Fiscal Year 2010, requires DOD to create a motor voter-style voting 
assistance office on every military installation, thereby providing 
military servicemembers and their families with critical voting 
assistance, regardless of how far they might be from their hometowns. 
As the 2012 elections fast approach, I am concerned that the Military 
Services have dragged their feet on fully implementing this 
requirement. This provision was passed in order to provide 
servicemembers the same level of assistance that civilians receive 
under the Federal motor voter law--the National Voter Registration 
Act--I know you agree that their service and sacrifice demand no less. 
Why has DOD failed, to date, to fully comply with this requirement?
    Secretary Panetta. The first Installation Voting Assistance (IVA) 
Office was established in November 2009 and the final IVA Office was 
established in August 2011. Before finalization of the IVA Office 
regulations, DOD aggressively moved to support the Services with 
training programs and assistance visits. Draft copies of these 
regulations were provided to the Services throughout that regulatory 
coordination process both for the Services' comment and for their IVA 
Office establishment preparation.
    DOD also promptly moved to support the Services before finalization 
of the regulations with IVA Office-in-a-Box training programs, visiting 
36 military concentration areas in August and September 2010, providing 
complete IVA Office training packages, templates, and draft documents, 
copies of which will be provided to this committee and your office. DOD 
also initiated its biennial Voting Assistance Office Workshops this 
spring, with a special training module for IVA Office personnel. During 
those workshop visits, DOD personnel are also conducting assist-and-
assess visits at local IVA Offices to determine compliance with 
departmental regulations and Federal laws, and to provide direct 
assistance for IVA Office personnel. Forty assist-and-assess visits 
have already been conducted this year, and approximately four more are 
conducted every week. A list of those IVA Offices already visited and 
to be visited will be provided to this committee and to your office. 
Additionally, the Services are reporting quarterly on their IVA Office 
utilization, those reports are posted on the FVAP.gov website, and 
copies of those reports will be provided to this committee and to your 
office.

    200. Senator Cornyn. Secretary Panetta, are you willing to get 
personally involved to ensure the Military Services comply with the 
MOVE Act and the motor voter law on every military installation, as 
required?
    Secretary Panetta. Yes, and I share your desire to provide our 
military voters timely and effective voting assistance. I welcome the 
opportunity to work with you and this Committee to assess whether to 
allow the Services to execute this voting assistance at the unit vice 
installation level, increase voter assistance utilization, reducing 
costs to the Services, and providing voters a seamless unit level 
voting assistance process.

                      FINANCIAL MANAGEMENT REFORM

    201. Senator Cornyn. Secretary Panetta, you have shown an 
unprecedented commitment to making DOD audit-ready. It is my hope that 
future Secretaries of Defense will share that impressive level of 
commitment on this important issue. DOD was previously required by law 
to be audit-ready for the first time in 2017. Last year, you raised the 
bar and stated a more ambitious goal for DOD to achieve audit readiness 
of the Statement of Budgetary Resources for general funds by the end of 
2014. What progress has been made to date in achieving this goal?
    Secretary Panetta. In October 2011, I directed DOD to accelerate 
achievement of several goals in DOD's Financial Improvement and Audit 
Readiness (FIAR) Plan and place greater emphasis on the overall effort. 
In response to my October directive, each of the Services and Defense 
Agencies has reviewed their FIAR Plans and adjusted them to speed 
progress. They are now hard at work implementing their plans to achieve 
the accelerated SBR audit readiness date.
    The Service Secretary and Chief of Staff for each Military Service 
have committed to achieving specific near-term goals in support of 
their plans for achieving auditable financial statements. I have 
reviewed these commitments and plans and am holding civilian and 
military senior leaders from across DOD accountable for progress 
against those plans. Senior executives, both inside and outside the 
financial management community, now have audit goals in their 
individual performance plans and we are working to include them in 
General and Flag Officer performance plans as well. Actual performance 
against these plans will be assessed each year during annual 
performance appraisal cycles. This will ensure those under their 
leadership are getting the message that better control over resources 
has a big effect on mission success, and everyone has a part to play.
    I'd offer some recent accomplishments as examples of both our 
commitment and progress:

         DISA achieved a clean opinion on its $6.6 billion 
        working capital fund operations for fiscal year 2011 and it is 
        moving forward with an audit of its fiscal year 2012 general 
        fund business.
         Contract Resource Management of the TRICARE Management 
        Activity received an unqualified opinion on its fiscal year 
        2011 financial statements.
         The Medicare-Eligible Retiree Health Care Fund 
        received a qualified opinion on its fiscal year 2011 financial 
        statement.
         In November 2011, an examination of five business 
        processes at the initial General Fund Enterprise Business 
        Systems Wave 1 sites rendered a qualified opinion, establishing 
        a benchmark for expanding the Army's audit readiness program.
         In November 2011, a commercial audit examination 
        validated that the Air Force could successfully balance its 
        Treasury funds at the transaction level.
         In January 2012, an examination validated the Navy's 
        existence and completeness audit readiness assertion for ships 
        and submarines, Trident missiles, and satellites.

    Leadership commitment from the highest level is setting the tone 
and priority for audit readiness. Auditability is a goal that every 
commander, every manager, and every functional specialist must 
understand and embrace to improve efficiency and accountability within 
DOD.
                                 ______
                                 
              Questions Submitted by Senator David Vitter

                        BARKSDALE AIR FORCE BASE

    202. Senator Vitter. General Dempsey, in your statement submitted 
today, you say, ``We must retrain our personnel on skills used less 
often over the last decade.'' I support this, and I also believe that 
in line with this we must make cuts that do not negatively affect the 
joint effort of our overall training system that has led the United 
States to become the highly effective elite fighting force it is today. 
Which brings me to the Air Force announcement to cut all 24 A-10s from 
Barksdale AFB (21 eliminated, 3 transferred) according to Air Force 
documents. It is my understanding that the Air Force plans to largely 
reduce the total number of A-10s. I believe this hugely effects 
fundamental joint operations. These aircraft were specifically moved to 
Barksdale AFB to support joint training at the Joint Readiness Training 
Center (JRTC) at Fort Polk. My concern is that the A-10s slated to be 
cut entirely from Barksdale AFB are used to support the joint training 
mission of the Army in Fort Polk. Have the joint operational training 
aspects been considered in this decision?
    General Dempsey. Yes, the Air Force continues to source requests 
for close air support (CAS) training at Fort Polk, tasking specific 
units to support various exercises, with the 47th Fighter Squadron 
fulfilling the requirement once over the last 3 fiscal years. The Air 
Force has coordinated with the Army and will continue to provide CAS 
capability as required by our Joint Partners at the JRTC.
    The new Defense Strategic Guidance states that U.S. forces will no 
longer be sized to conduct large-scale, prolonged stability operations. 
Analysis based on scenarios consistent with the Strategic Guidance 
resulted in a reduced requirement for tactical combat aircraft overall 
and a greater utility for multi-role fighters to provide the most 
flexible capability within each scenario. As a result, A-10 retirements 
were selected in greater numbers than other combat aircraft and the Air 
Force made the difficult choice to retire 5 A-10 squadrons comprised of 
102 A-10 aircraft. Previous reductions in fighter force structure 
shifted the Total Force ratio toward Reserve component forces, and Air 
Force decisions in the fiscal year 2013 President's budget request 
rebalanced that ratio to create a more sustainable Total Force 
structure over the long term.
    To meet this end, our Reserve component used the following four 
Capstone principles: (1) ensure aircraft reductions do not negatively 
impact operational support to combatant commands; (2) ensure force 
structure movements do not create any new Air Force bills; (3) ensure 
risk is minimized by optimizing crew ratios to exploit expected 
increases in mission capability rates; and (4) consider locations that 
continue to have an Air Force mission due to the presence of another 
Air Force component. Thus, the Air Force opted to divest A-10s at 
Barksdale versus the only other alternative; Whiteman AFB. The Air 
Force Reserve maintains a B-52 training wing and classic association 
with operational B-52s at Barksdale, and can therefore absorb some of 
the A-10 personnel into the B-52 wing. Additionally, since the Air 
Force Reserve can absorb personnel into the B-52 mission, it preserves 
the potential to migrate them back should the Air Force decide it needs 
additional A-10 Formal Training Unit support. At Whiteman AFB, the Air 
Force Reserves' only presence is an A-10 wing and if the wing were to 
be divested, the personnel assigned to this unit would have limited 
possibilities to continue their service.

    203. Senator Vitter. General Dempsey, additionally, I would like to 
know if you are aware of any consultation between the Army and the Air 
Force regarding the removal of this mission from Fort Polk? If so, I 
would like to see the cost savings to DOD of bringing A-10s into 
Louisiana for training when the nearest planes needed for Army training 
would now be located in Georgia, Florida, Idaho, or Arizona.
    General Dempsey. The Air Force has coordinated with the Army and 
will continue to provide CAS capability as required by our Joint 
Partners at the JRTC. The Air Force has not performed a specific cost 
analysis of using aircraft outside of Louisiana. The Air Force 
continues to source requests for CAS training at Fort Polk, tasking 
specific units to support various exercises. Over the last 12 months, 
the 47th Fighter Squadron has provided 14 percent of the CAS 
requirements for nine JRTC exercises while other CAS was provided from 
outside the State of Louisiana.

    204. Senator Vitter. Secretary Panetta, as a follow-up on the joint 
operations aspect in Fort Polk, this action would appear, instead of 
reducing overall military spending, to oppose your own recent guidance 
to reexamine our programs in pursuit of greater efficiencies and 
affordability to defense operations. I fully understand and support 
improving efficiencies within the U.S. Government. However, in your own 
words you have stated, while not specifically addressing the A-10s, 
that cuts of this nature would do serious damage to DOD's ability to 
``protect this country for the future . . . and we must avoid a hollow 
force, and maintain a military that will always be ready, agile, 
deployable, and capable.'' It is my opinion that we cannot have it both 
ways. We cannot strip away the A-10s from Barksdale while also 
maintaining the force necessary at Fort Polk without increasing cost of 
operations. I am aware there will be A-10s remaining in the inventory 
should the Air Force retire the ones stationed at Barksdale AFB. But of 
all the units to be disbanded, it appears to me that the A-10s located 
at Barksdale AFB were strategically located there to satisfy a specific 
requirement that is not going away. Is it fair to say that the A-10 
training mission at Fort Polk is an existing requirement that is not 
going away anytime in the near future?
    Secretary Panetta. The new Defense Strategic Guidance states that 
U.S. Forces will no longer be sized to conduct large-scale, prolonged 
stability operations. Analysis based on scenarios consistent with the 
Strategic Guidance resulted in a reduced requirement for tactical 
combat aircraft and a preference for multi-role fighters to provide the 
most flexible capability within each scenario. As a result, A-10 
retirements were selected in lieu of other combat aircraft and the Air 
Force made the difficult choice to retire 5 A-10 squadrons comprised of 
102 A-10 aircraft. Previous reductions in fighter force structure 
shifted the Total Force ratio toward Reserve component forces, and Air 
Force decisions in the fiscal year 2013 President's budget request (20 
A-10s from Active Duty, 61 from the Air National Guard, and 21 from the 
Air Force Reserves) rebalanced that ratio to create a more sustainable 
force structure over the long term. In conjunction with Air Force 
Reserve leadership, the Air Force made the difficult decision to select 
Barksdale AFB as the sole Air Force Reserve A-10 unit closure.
    The Air Force does not anticipate any impacts to support training 
operations at the JRTC. We will continue to fill U.S. Army training 
requests for air-to-ground support through the normal Global Force 
Management Allocation process, matching requirements with available 
CAS-capable units across the Air Force, versus a specific squadron and 
type of aircraft.

    205. Senator Vitter. Secretary Panetta, Global Strike Command at 
Barksdale AFB was stood up in December 2009 to improve the safety, 
security, and effectiveness of the Nation's nuclear-capable assets 
following the 2007 nuclear weapons incident. As DOD reinvests in key 
areas across the nuclear enterprise, I would imagine Global Strike 
Command will have a prominent role, including in the development of the 
new bomber program. What are your thoughts on the triad in general and 
the Air Force's commitment to keeping Global Strike Command as an 
independent command at Barksdale AFB, given some of the lessons we have 
learned?
    Secretary Panetta. Maintaining the nuclear triad is essential to 
U.S. national security. Each leg of the triad provides characteristics 
that, combined in a balanced manner, create a synergy producing a total 
deterrent effect. Air Force Global Strike Command, as the major command 
with operational responsibility for land-based ICBMs and nuclear-
capable heavy bombers, plays an essential role in providing the 
deterrent effects contributing to strategic stability.
    Since Air Force Global Strike Command falls under the Air Force's 
Title X organize, train, and equip responsibilities, any decisions 
regarding Air Force Global Strike Command as an independent command 
would be an internal Air Force decision. With the stand-up of Air Force 
Global Strike Command, the Air Force aligned its strategic operational 
nuclear units under a single command to best carry out organize, train, 
and equip functions. As the Air Force's newest major command, its 
positive impact was confirmed by the April 2011 Defense Science Board's 
independent assessment of the Air Force nuclear enterprise stating, 
``The formation of Air Force Global Strike Command has produced a 
nearly universally positive response in the nuclear operating forces.''

    [Whereupon, at 1:50 p.m., the committee adjourned.]


DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR 
               2013 AND THE FUTURE YEARS DEFENSE PROGRAM

                              ----------                              


                       TUESDAY, FEBRUARY 28, 2012

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

          U.S. PACIFIC COMMAND AND U.S. TRANSPORTATION 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, Reed, 
Akaka, Webb, Hagan, Blumenthal, Inhofe, Chambliss, Wicker, 
Brown, Ayotte, and Cornyn.
    Committee staff members present: Richard D. DeBobes, staff 
director; and Leah C. Brewer, nominations and hearings clerk.
    Majority staff members present: Richard W. Fieldhouse, 
professional staff member; Creighton Greene, professional staff 
member; Michael J. Kuiken, professional staff member; Jason W. 
Maroney, counsel; Roy F. Phillips, professional staff member; 
and Russell L. Shaffer, counsel.
    Minority staff members present: Ann E. Sauer, minority 
staff director; Adam J. Barker, professional staff member; 
Pablo E. Carrillo, minority investigative counsel; Paul C. 
Hutton IV, professional staff member; Daniel A. Lerner, 
professional staff member; Lucian L. Niemeyer, professional 
staff member; and Diana G. Tabler, professional staff member.
    Staff assistants present: Kathleen A. Kulenkampff, Brian F. 
Sebold, and Bradley S. Watson.
    Committee members' assistants present: Brian Burton, 
assistant to Senator Lieberman; Carolyn Chuhta, assistant to 
Senator Reed; Nick Ikeda, assistant to Senator Akaka; Gordon 
Peterson, assistant to Senator Webb; Patrick Hayes, assistant 
to Senator Manchin; Chad Kreikemeier, assistant to Senator 
Shaheen; Ethan Saxon, assistant to Senator Blumenthal; Anthony 
Lazarski, assistant to Senator Inhofe; Clyde Taylor IV, 
assistant to Senator Chambliss; Joseph Lai, assistant to 
Senator Wicker; William Wright, assistant to Senator Brown; 
Brad Bowman, assistant to Senator Ayotte; and Dave Hanke, 
assistant to Senator Cornyn.

       OPENING STATEMENT OF SENATOR CARL LEVIN, CHAIRMAN

    Chairman Levin. Good morning, everybody. Today we receive 
testimony on the posture of U.S. forces in the Asia Pacific and 
the status of the U.S. military strategic global distribution 
and deployment capabilities.
    On behalf of the committee, I'd like to welcome Admiral 
Robert F. Willard, Commander, USN, U.S. Pacific Command 
(PACOM), and General William M. Fraser III, USAF, Commander, 
U.S. Transportation Command (TRANSCOM). The committee 
appreciates your years of faithful service and the many 
sacrifices that you and your families make for our Nation. 
Likewise, we greatly appreciate the service of the men and 
women, military and civilian, who serve with you in your 
commands. Please convey to them our admiration and our 
appreciation for their selfless dedication.
    Admiral Willard, this will be, in all likelihood, your last 
hearing before this committee after a full and productive tour 
as commander of our forces in the Pacific. On behalf of the 
Senate Armed Services Committee, I'd like to thank you for your 
service and your leadership in this important assignment.
    Before and beyond that, your decades of selfless and 
devoted service to our Nation included assignments as Commander 
of the U.S. Pacific Fleet, Vice Chief of Naval Operations, 
Commander of the U.S. Seventh Fleet, and Commanding Officer of 
the air carrier USS Abraham Lincoln.
    I note that your wife, Donna, is here this morning, as she 
has been in past hearings. I'd also like to especially thank 
her for her many contributions and sacrifices. We all know very 
well the importance of our military families to the success of 
our Armed Forces and we wish you and the entire Willard family 
the very best in the future.
    This is General Fraser's first hearing as Commander of 
TRANSCOM. As we heard from the Secretary of Defense (SECDEF) 
and the Chairman of the Joint Chiefs of Staff earlier this 
month, the President's recently unveiled defense strategic 
guidance includes a reemphasis on the Asia Pacific, a region 
that is impacted by what has been called the tyranny of 
distance, which puts a premium on the capabilities provided by 
TRANSCOM. Capabilities that have been stressed and honed over 
more than 10 years of military operations in Iraq and 
Afghanistan. So we also look forward to General Fraser's 
testimony on the status of TRANSCOM and its important global 
mission.
    Relative to the Asia Pacific, the United States has been, 
and will continue to be, present and active in the region 
because of our commitments to our allies and our partners, and 
also because of the clear U.S. national interests there.
    The leadership change in North Korea occasioned by the 
recent death of long-time dictator Kim Jong Il opens new 
questions about possible future threats from an oppressive 
regime that has shown little interest in cooperating with the 
international community and little concern for the well being 
of its people. We are mindful that the security situation on 
the Korean Peninsula remains tense and as of yet there are no 
indications that the situation will improve under the new 
regime. North Korea continues to pursue its nuclear and 
ballistic missile programs and, with its history of deadly 
unprovoked military attacks on South Korea, there is little 
reason for optimism for a prompt resolution of the tensions on 
the peninsula. In fact, over the weekend North Korea issued its 
usual threats in response to the military training exercises 
conducted by the United States and South Korea every year at 
this time.
    China's rising global influence and rapid military growth, 
coupled with the overbreadth of its claims in the South China 
Sea and the East China Sea, and its increasing propensity for 
challenging conflicting claims of its regional neighbors, 
unsettles the region and raises concerns about the prospects of 
miscalculation. There are also growing concerns about China's 
exploration of cyber space for military and for nonmilitary 
purposes, such as the use of the Internet by Chinese entities 
to conduct corporate espionage. In the current National Defense 
Authorization Act (NDAA), we acted against counterfeit 
electronic parts in defense systems, most of which came from 
China. Nonetheless, it is important that we continue efforts to 
engage with the People's Liberation Army (PLA) and to attempt 
to find common ground and to address common concerns.
    There are many other challenges facing PACOM, such as 
preventing the proliferation of weapons of mass destruction 
(WMD), countering violent extremism, providing humanitarian 
assistance and disaster relief, and protecting critical sea 
lanes of communication.
    Against the backdrop of these developments, the Department 
of Defense (DOD) has been working to realign U.S. military 
forces in countries like South Korea and Japan and also to 
posture our forces further to the south in countries like 
Australia, Singapore, and possibly the Philippines. As we 
rebalance and realign our presence in the Asia Pacific, it is 
important that we get it right, not only in terms of strategy, 
but also in terms of sustainability.
    With respect to the realignment of U.S. marines on Okinawa, 
Senator McCain, Senator Webb, and I have advocated changes to 
the current plan in ways that support the strategic goals of 
the U.S. military posture in the region, while also accounting 
for the fiscal, political, and diplomatic realities associated 
with long-term sustainability. The recent announcement that the 
United States and Japan are reconsidering elements of the plan 
is welcome news. But the new thinking is not yet adequate.
    For instance, there is apparently no intention yet to 
reconsider the plan to build the unaffordable Futenma 
Replacement Facility at Camp Schwab on Okinawa. Nor does it 
appear that the Air Force bases in the region are being 
considered as part of the solution. It is important that any 
changes be jointly agreed upon and jointly announced, with the 
goal of achieving a more viable and sustainable U.S. presence 
in Japan and on Guam.
    So, Admiral, we will look forward to your testimony on our 
strategy in your area of responsibility (AOR) and how the 
fiscal year 2013 budget request adequately addresses the 
threats that you face and how it reflects the reemphasis on the 
Asia Pacific.
    General Fraser, we know that things have been busy for you 
as well ever since you assumed your job at TRANSCOM. TRANSCOM 
continues to play a vital role in transporting our military men 
and women and the supplies and equipment that they need to 
Afghanistan and other overseas contingency operations. In 
carrying out this mission, TRANSCOM faces numerous challenges, 
included among them,uncertain lines of supply due to the 
disruption or closure of routes through Pakistan. TRANSCOM has 
successfully shifted much of the delivery of non-lethal 
supplies and equipment headed for Afghanistan to the Northern 
Distribution Network (NDN) through Eastern Europe, the 
Caucasus, and Central Asia.
    During the past year, TRANSCOM forces were involved in 
supporting forces engaged in operations in Libya and 
humanitarian relief efforts such as those supporting victims of 
the Japanese earthquake and tsunami. We applaud all of these 
efforts.
    With the drawdown of U.S. surge forces and further 
reductions of U.S. forces in Afghanistan through 2014, TRANSCOM 
now faces the daunting task of managing the redeployment home 
of these forces and their equipment. We know that TRANSCOM 
performed commendably in managing the removal of millions of 
pieces of equipment from Iraq by the December 31, 2011, 
deadline, consistent with the U.S. obligations under the U.S.-
Iraq strategic agreement. We would be interested, General, in 
learning how the lessons learned from the withdrawal from Iraq 
inform TRANSCOM's planning and operations as U.S. forces are 
drawn down in Afghanistan.
    A number of other issues confront TRANSCOM. One is 
modernizing the force. One acquisition program supporting 
TRANSCOM has received a lot of visibility and that's the 
Strategic Tanker Modernization Program. There have been 
indications that the contractor may overrun the original 
development contract price, which we will discuss with the Air 
Force at the Air Force posture hearing later this month.
    TRANSCOM has received congressional additions to the budget 
to buy C-17 aircraft in excess of what DOD and TRANSCOM said 
were needed to support wartime requirements. Last year, the Air 
Force was granted authority to retire additional C-5A aircraft 
as it was taking delivery of those added C-17s. This year, the 
Air Force is seeking authorization to retire all remaining C-5A 
aircraft because they believe that they do not need the extra 
aircraft under the new DOD strategic planning assumptions and 
that they cannot afford to operate them.
    We need to be sure that the Air Force's planned retirements 
do not leave us short of the strategic lift capability that we 
need, and General Fraser, you can speak to that issue.
    TRANSCOM is also facing other, less well-known 
modernization challenges. The Ready Reserve Force (RRF), a 
group of cargo ships held in readiness by the Maritime 
Administration, is aging and will need to be modernized with 
newer ships at some point in the not too distant future. 
Sealift may not be quite as glamorous as airlift operations, 
but sealift support is critical to our Nation's capabilities. 
We have relied on sealift to deliver more than 90 percent of 
the cargo to Iraq and Afghanistan, and that is similar to 
previous contingencies.
    So, Admiral, General, it's a pleasure to have you with us 
this morning. We look forward to your testimony on these and 
other challenging topics; and I now call on Senator Inhofe.

              STATEMENT OF SENATOR JAMES M. INHOFE

    Senator Inhofe. Thank you, Mr. Chairman, and thank you, 
Admiral Willard and General Fraser, for your selfless service 
for so many years and your willingness to cooperate and have 
personal conversations. Thank you so much.
    Admiral Willard, I agree with everything you wrote in your 
final assessment of the strategic environment in the Asia-
Pacific region and its significance to the U.S. security. 
However, I am concerned about what appears to me to be a shift 
in focus to Asia and to the Pacific. The United States is a 
global power. We have global threats out there and we need to 
be on all fronts. History has taught this Nation that it can't 
ignore its global responsibilities and threats.
    I am deeply concerned about the proposed $487 billion cut 
in defense in the next 10 years. When you stop and think about 
it, the possibility of sequestration could double that amount. 
It's very disturbing to me. I think these cuts jeopardize reset 
of equipment and delay modification and maintenance of key 
equipment, cut overall research and development (R&D), delay 
modernization, and increase the burden on a shrinking military 
force.
    Our military must possess the ability to deter aggression 
and, if required, aggressively defeat any threat against our 
citizens at home and around the world. Both TRANSCOM and PACOM 
are essential elements to our national defense strategy and 
must be manned, equipped, and maintained to ensure our national 
interests throughout the world.
    In PACOM's AOR, I am increasingly concerned about North 
Korea and the rising power in China, both economically and 
militarily. North Korea has historically proved difficult for 
the intelligence community to gather information. I will have 
some specific questions about that, some of the things that 
have happened in the past, and I want to get your assurance as 
to where we're going to be going in the future. We're obligated 
by law to support Taiwan. We all want to do that anyway. We 
have to continue to sell advanced military equipment to them to 
ensure their safety and security.
    General Fraser, your statement portrays a very active 
supporting commander role. TRANSCOM and its components--the Air 
Mobility Command (AMC) and the Military Sealift Command (MSC)--
have accelerated the redeployment of over 60,000 troops from 
Iraq and Afghanistan. It continues to provide logistical 
support to Afghanistan forces and to deploy and redeploy troops 
and cargo worldwide. It has supported military operations in 
Libya and delivered relief support in response to natural 
disasters at home and around the world. No other country could 
provide such in-depth support anywhere.
    While President Obama's 2013 budget submission represents a 
snapshot of the Services' overall requirements, it also raises 
several questions about our military airlift and sealift 
programs. Is the Air Force taking appropriate action to 
mitigate the potential gap in airlift and the operational 
implications of that gap? What is the risk in TRANSCOM's 
ability along with its maritime component, MSC, to provide 
logistics around the globe in response to the combatant 
commanders' requirements? How does the proposed force structure 
cut fit with the findings of the mobility, capabilities, and 
requirements study of 2016, written in 2009?
    Given the current climate for fiscal austerity, we have to 
do our part in executing our jobs more efficiently. It's very 
disturbing to a lot of us that when we have the President's--
now that all the results are in on his budget, that he's 
actually given us this $5.3 trillion deficit and the only area 
that I can see where we've had reductions in capability and in 
funding are in the area of military. So it's something that's 
very disturbing to me. I know in these hearings it's hard to 
get down to these things, but I do enjoy the personal 
conversations and the concern that's been expressed by a lot of 
our military that I run into here as well as abroad with what's 
happening to our military right now.
    So I'm looking forward to this hearing, Mr. Chairman. Thank 
you.
    Chairman Levin. Thank you very much, Senator Inhofe.
    Admiral.

   STATEMENT OF ADM ROBERT F. WILLARD, USN, COMMANDER, U.S. 
                        PACIFIC COMMAND

    Admiral Willard. Thank you, Chairman Levin. Mr. Chairman, 
in order to accommodate the committee's questions sooner, I'll 
keep my remarks brief and ask that my full statement be 
included for the record.
    Chairman Levin. It will be. All statements will be 
included.
    Admiral Willard. Chairman Levin, Senator Inhofe: Thank you 
for this opportunity to appear before you to discuss PACOM and 
the Asia-Pacific region. I'd like to begin by thanking you for 
recognizing my wife, Donna, who's present here today and has 
been by my side for nearly 38 years. She's an outstanding 
ambassador for our Nation and a tireless advocate for the men 
and women of our military and their families. Together we've 
thoroughly enjoyed this experience with our counterpart foreign 
friends and with all of you who advocate for our men and women 
in uniform.
    I'd like to acknowledge this committee's enduring support 
for our joint forces and by your actions their contribution to 
our Nation's security. Your visits to the region have been and 
will continue to be an important reminder of U.S. interests 
there.
    President Obama and SECDEF Panetta recently reaffirmed the 
strategic importance of the Asia-Pacific region and our 
Nation's future focus on its security challenges in the 
document titled ``Sustaining U.S. Global Leadership, Priorities 
for the 21st Century Defense.'' It appropriately addressed the 
opportunities and challenges that PACOM faces in a region 
covering half the world and containing the majority of great 
powers, economies, populations, and militaries.
    Importantly, our five treaty allies, Australia, Japan, 
South Korea, Republic of the Philippines, and Thailand, 
together with many regional partners, represent the greatest 
opportunities for the United States and PACOM to contribute to 
a broad security association in the region. Of particular note, 
we seek to advance our important relationship with India in 
South Asia.
    We're making progress in adjusting PACOM's force posture 
towards Southeast Asia following overtures from Australia, 
Singapore, and the Philippines to help enable an increased 
rotational U.S. military presence in this important sub-region.
    As was evidenced by U.S. support to Japan during their epic 
triple disaster last March, close military cooperation, 
frequent exercises, and interoperable systems merged to enable 
rapid and effective combined military responses under the most 
trying conditions.
    In contrast, North Korea, the world's only remaining nation 
divided by armistice, continues to threaten peace and security 
in northeast Asia, now under the leadership of a 29-year-old 
son of Kim Jong Il. We're observing closely for signs of 
instability or evidence that the leadership transition is 
faltering. As General Thurman will attest when he testifies, we 
believe Kim Jong Eunto be tightly surrounded by Kim Jong Il 
associates and for the time being the succession appears to be 
on course. That said, we also believe Kim Jong Eun will 
continue to pursue his father's course of strategy that 
embraces nuclearization, missile development, WMD 
proliferation, provocations, and totalitarian control over 
North Korean society.
    Management of the U.S.-China relationship continues to be a 
challenge at many levels. Our military-to-military relationship 
is not where it should be, although a strategic-level exchange 
of views with DOD persisted during 2011. The PLA continues to 
advance its military capabilities at an impressive rate. It's 
growing bolder with regard to their expanded regional and 
global presence, and China continues to challenge the United 
States and our partners in the region in the maritime, cyber, 
and space domains. Nonetheless, we remain committed to evolving 
this security relationship, with the objective of coexisting 
peacefully and both contributing constructively to regional 
security.
    Throughout the Asia Pacific, numerous transnational threats 
such as violent extremist organizations, proliferation, 
trafficking, piracy, and perpetual natural and manmade 
disasters challenge our Nation and our allies and partners in 
the region. Across this wide spectrum of current and potential 
future threats, PACOM must provide persistent overwatch, 
ensuring our Nation retains continued strategic access and 
freedom of movement in the global commons there.
    Amidst these challenges, every day our soldiers, sailors, 
airmen, marines, and civilians devote their efforts to 
contributing to Asia Pacific security. Their success has long 
been enabled by this committee's enduring support, including 
the resources and quality of life you provide them to 
accomplish their important missions.
    During the 2\1/2\ years that I've been in command, you've 
allowed me and my commanders to share our perspectives with 
you, sought to understand the dynamics of this complex region, 
and traveled and met with our military families and foreign 
partners. Yours has been a powerful message in demonstration of 
United States commitment to the 36 nations within the PACOM 
AOR. On behalf of the more than 330,000 men and women of PACOM, 
thank you for your support and for this opportunity to testify 
one final time.
    I look forward to your questions.
    [The prepared statement of Admiral Willard follows:]

            Prepared Statement by ADM Robert F. Willard, USN

                              INTRODUCTION

    Chairman Levin, Senator McCain and distinguished members of the 
committee, thank you for this opportunity to present an update on U.S. 
Pacific Command (PACOM). I consider myself fortunate to have served as 
its commander for the last 2\1/2\ years and look forward to providing 
what will be my final assessment of the strategic environment in the 
Asia-Pacific region. The President has directed his national security 
team to make America's ``presence and mission in the Asia Pacific a top 
priority.'' The testimony that follows will highlight the opportunities 
we seek to illuminate and address the challenges we must overcome to 
sustain U.S. leadership in this critical area of the world.

               STRATEGIC ENVIRONMENT IN THE ASIA PACIFIC

    The security of the PACOM Area of Responsibility (AOR) is of vital 
national interest to the United States--a fact underscored by the 
President's hosting of last year's Asia Pacific Economic Cooperation 
(APEC) Leaders Meeting. The region contains the world's three largest 
economies and supports over $10 trillion of annual bilateral 
merchandise trade, including more than $1 trillion of U.S. commerce.
    The Asia Pacific also hosts the world's largest populations, 
largest militaries, and includes three nuclear armed states (excluding 
the United States) and the Democratic People's Republic of Korea (DPRK) 
which aspires to be a nuclear power. While the Asia Pacific has 
remained relatively peaceful and stable for the past 6 decades, myriad 
challenges to its future security will try U.S. resolve, raise the 
magnitude of our relationships with five treaty allies and many 
strategic partners, and test PACOM as a principle guarantor of security 
in the region.
    Seven major security challenges confront the United States across 
this region, which encompasses half of the Earth's surface, including:

         Defense of the Homeland, U.S. territories, and compact 
        states in the Pacific.
         The need to continuously manage and optimize U.S. 
        alliances and strengthen regional partnerships, in particular, 
        advancing the relationship with India.
         The threat posed by the DPRK's nuclear aspirations, 
        proliferation, provocations, and potential to cause regional 
        instability.
         China's military modernization--in particular its 
        active development of capabilities in the cyber and space 
        domains--and the questions all these emerging military 
        capabilities raise among China's neighbors about its current 
        and long-term intentions.
         Three nuclear armed states, including Russia, China, 
        and India, and North Korea's nuclear aspirations, together with 
        the threat of weapons of mass destruction proliferation.
         Numerous transnational threats, ranging from 
        proliferation, trafficking of narcotics and persons, and 
        piracy, to persistent natural and manmade disasters.
         Challenges to freedom of access to, and security 
        within, maritime and air domains, and space and cyberspace, by 
        both state and non-state actors.

    By contrast, the Asia Pacific also affords immense opportunities, 
particularly through strong ally and partner associations, that can 
lead to a cooperative and constructive security environment for the 
foreseeable future. In large measure, cooperative engagement activities 
leveraging PACOM posture and presence contribute to advancing military 
self-sufficiency and security contributions by our partners in the 
region.

Force Posture Assessment
    Generally, PACOM has been well served with regard to on-hand, ready 
forces with the ability to respond to the demands in the Asia-Pacific 
region. This has occurred despite a decade of wars in the Middle East, 
to include the Command's continual contributions to those wars. As a 
consequence of both history and the nature of challenges in Northeast 
Asia, PACOM forward, permanently based forces are concentrated in Japan 
and the Republic of Korea. While affording a strong deterrent against 
challengers such as North Korea, this has placed a premium on PACOM's 
ability to deploy and sustain forces elsewhere in order to maintain the 
required presence in sub-regions such as Southeast Asia, South Asia, 
and Oceania.
    PACOM's input to the most recent Global Posture Review expressed a 
need to redistribute postured forces closer to Southeast Asia and South 
Asia, in order to more efficiently meet the force presence and response 
demands of those Asia Pacific sub-regions. The recent decisions to 
rotationally operate a Marine Air Ground Task Force (MAGTF) from 
Darwin, Australia and to operate U.S. air forces from Australia's 
northern air bases were initial efforts to rebalance PACOM force 
posture for the future.
    While the Asia Pacific is often regarded as inherently maritime and 
contains some of the world's most expansive archipelagos, strategic 
chokepoints and largest seas and oceans, its militaries tend to be 
army-focused. For PACOM, this generates posture and presence 
considerations to both adapt forces to the maritime challenges of the 
region and to account for the necessary and effective role that Army, 
Marine Corps, and Special Forces play in engaging with the dominant 
foreign services of our regional partners.

                             NORTHEAST ASIA

    Northeast Asia (NEA) contains many of the most significant 
economies and militaries in the Asia Pacific and the world, including 
Japan, South Korea, China, and Russia. U.S. forward presence, permanent 
basing in Japan and South Korea, habitual accesses, and host nation 
support in this important sub-region enable PACOM's front line of 
homeland defense, extended deterrence for allies Japan and South Korea, 
regional deterrence against actors such as North Korea, and rapid 
response to natural disasters and other contingencies that occur in the 
Asia Pacific.
    The DPRK continues to pose one of the most likely and persistent 
threats to the United States, its allies, and to peace and security in 
Northeast Asia. North Korea's conventional military threat to the 
Republic of Korea remains of serious concern and its nuclear program, 
missile development, proliferation activities, and asymmetric military 
provocations are destabilizing. Collectively, these threats demand that 
PACOM Intelligence, Surveillance, and Reconnaissance (ISR) capabilities 
and capacities be sufficiently robust to view across the DPRK's 
military apparatus and warn of unfavorable developments. North Korea's 
continuing pursuit of nuclear weapons and advanced ballistic missile 
systems places a premium on PACOM ballistic missile defenses and close 
cooperation with allies. Japan and the Republic of Korea are strong 
U.S. allies that host U.S. forces, benefit from U.S. extended 
deterrence, and stand with the United States in containing DPRK 
aggression in addition to meeting other regional and global security 
challenges.

Japan
    The 52-year-old alliance between the United States and Japan 
remains a cornerstone of security in the Asia Pacific. As was evident 
in U.S. support to the Japanese Self Defense Forces (JSDF) during the 
epic triple disaster in eastern Honshu last year, the extremely close 
association and inherent interoperability between tenant U.S. forward 
forces and their Japanese hosts enable prompt and extremely effective 
contingency responses under the most trying of circumstances.
    Despite delays in implementing some elements of the Defense Policy 
Review Initiative (DPRI), including the Futenma airfield replacement 
facility in Okinawa, which has occupied policymakers for nearly 20 
years, the alliance remains strong and is a powerful strategic 
stabilizing force in the region. It is important to note that of the 19 
separate elements contained in DPRI, the vast majority are on track and 
progressing.
    In the past year, Japan has increased its regional engagements and 
association with partners such as Australia, India, Singapore, 
Indonesia, and the Republic of Korea, to name a few.

Republic of Korea
    The U.S.-Republic of Korea alliance remains a strong and visible 
deterrent to war on the peninsula. This alliance is also transforming 
in a variety of ways to remain current and relevant in the midst of an 
ever-evolving Asia-Pacific region, changing leadership in North Korea 
and as a consequence of lessons learned following the deadly 
provocations by the DPRK in 2010.
    Current alliance initiatives are underpinned by the planned 
transition of wartime operational control from the Combined Forces 
Command to the Republic of Korea in December 2015. Ongoing 
transformation also includes the repositioning of on-peninsula U.S. 
forces, headquarters, and bases.
    Like the JSDF, Republic of Korea military forces are engaging 
throughout the Asia Pacific at an increasing rate, and contributing to 
international security initiatives, such as peacekeeping, 
counterpiracy, and counterproliferation efforts.

Trilateral Cooperation
    While modest in scope, trilateral cooperation between the United 
States, Japan, and the Republic of Korea continues to progress. This 
important initiative seeks to strengthen the natural synergy among 
three powerful and interoperable Northeast Asia allies. While the 
countries will have to overcome longstanding historical, cultural, and 
political dynamics to fully realize the potential of trilateral 
cooperation, policy advances and increasingly frank dialogue among the 
three allies are encouraging.

Russia
    Russia's Pacific armed forces are very gradually emerging from 
their diminishment following the end of the Cold War. Increased naval 
and strategic air force operations, cyberspace activities, and arms 
sales throughout the Asia Pacific are signaling Russia's emphasis on 
improved posture in the region. PACOM enjoys a generally positive 
military-to-military relationship with Russia, particularly between 
respective Pacific fleets. In coordination with U.S. European Command 
and in accordance with the bilateral Military Cooperation Work Plan, 
PACOM seeks improved engagement with Russia's Pacific forces in areas 
such as counterterrorism (CT), peacekeeping, and search-and-rescue 
operations.

Mongolia
    Mongolia is a small but important partner in Northeast Asia. Its 
active military pursues close engagement with PACOM through our annual 
Khan Quest exercise series and contributes effectively to coalition 
efforts in Afghanistan as well as global peacekeeping operations. With 
Russia to the north and China to the south, Mongolia must finesse its 
relationships in NEA with its broader security interests. As a 
consequence of its experience as part of the Soviet bloc in the 20th 
century, the Mongolian armed forces continue to maintain ties to 
European nations such as Germany and even the DPRK, making them a PACOM 
partner with unique and insightful perspectives.

The People's Republic of China
    China's growing presence and influence in Asia, and the 
opportunities and uncertainties that have resulted from it pose the 
greatest test for PACOM among its seven challenge areas.
    In January 2011, President Obama and Chinese President Hu Jintao 
agreed to ``build a cooperative partnership based on mutual interest 
and mutual respect,'' which also included a commitment to develop 
``continuous, stable, and reliable military-to-military relations.'' To 
meet this mandate, PACOM is effectively positioned to contribute to 
advancing military engagement with the PRC. However, military-to-
military relations continue to lag well behind other U.S.-China 
engagements for three main reasons: differences in philosophy regarding 
the purpose of military-to-military relations in which China emphasizes 
strategic dialogue and the United States seeks comprehensive military 
contact from the strategic to tactical levels as a way to build 
confidence; China's tendency to suspend military-to-military following 
U.S. arms sales to Taiwan and, more generally, its linkage between 
certain U.S. defense policies and continuous bilateral military 
relations; and inherent Chinese distrust of U.S. regional intentions 
resulting in demands that perceived impediments to the relationship be 
conceded before military relations can advance.
    Despite these challenges, China's increasing participation in 
regional and international security activities and forums such as 
multi-lateral exercises, counter piracy operations, and peacekeeping 
can foster informal, but useful U.S.-China military engagement.
    Improvements in China's military capabilities and the regional 
uncertainties this has created also test PACOM's ability to manage the 
evolving security dynamics in the Asia Pacific. Areas in which U.S. 
national interests or those of U.S. allies and partners are being 
challenged include cyberspace and space as well as maritime security in 
the international waters around China. China's anti-access/area denial 
(A2/AD) capabilities extend well into the South China Sea. China 
asserts these military developments are purely defensive in nature and 
that it poses no threat to neighbors in the region. Yet, combined with 
broad maritime and sovereignty claims and incidents with lawful 
operators in the South China Sea and East China Sea, there is ongoing 
international concern regarding China's activities in the South China 
Sea.

Taiwan
    Following Taiwan's recent Presidential and Legislative Yuan 
elections in January 2011, many analysts are hopeful that improvements 
in cross-Strait relations will continue, with a focus on building 
economic and cultural ties. This is in the security interests of the 
United States and of Asia. It is important to note, however, that 
Taiwan remains the most acute sovereignty issue for China and the main 
driver of its military modernization programs. The military balance 
across the Taiwan Strait continues to shift in favor of China. PACOM 
engages regularly with Taiwan's military within policy guidelines and 
in accordance with tenets of the Taiwan Relations Act and three 
communiques.

                             SOUTHEAST ASIA

    Southeast Asia (SEA) is an extremely diverse sub-region, rich in 
natural resources, and strategically located at the crossroads of the 
Pacific and Indian Oceans. It is host to a mix of democratic and 
authoritarian governments, varied economies, contrasting military 
capabilities, and mixed cultures. Prospects for continued economic 
growth are promising, mainly due to China's substantial economic 
influence, steady U.S. regional investment and trade, and universal 
global interest, by the European Union and others, in capitalizing on 
Asia's rise. Many advancing U.S. partnerships and two U.S. treaty 
allies, the Republic of the Philippines and the Royal Kingdom of 
Thailand, are concentrated in this sub-region. Further, the Association 
of Southeast Asian Nations (ASEAN) and its numerous forums, together 
with the East Asian Summit (EAS) and APEC, have advanced to become the 
most effective Asia Pacific multilateral organizations.
    That said, SEA is not without its challenges. Disputed islands and 
features in the South China Sea, including territorial disputes with 
China, have generated broad unease in SEA, and maritime security has 
become a regular theme in multilateral forums. Transnational threats, 
including violent extremist organizations (VEOs) such as Abu Sayyaf 
Group (ASG) and Jemaah Islamiya (JI); trafficking in narcotics and 
humans; piracy; proliferation; and natural and manmade disasters 
regularly combine to challenge PACOM, U.S. allies and partners in this 
sub-region. Resources such as water, food and energy are being 
pressurized across the region, as illustrated by the Mekong River Delta 
crisis. Geography is also a factor as SEA contains some of the most 
extensive archipelagos in the world, including Indonesia and the 
Philippines, and some of the world's most strategic choke points, such 
as the Strait of Malacca. Despite this vast maritime domain where naval 
capabilities and capacities are called for, most SEA militaries are 
army-centric and assigned internal security responsibilities. 
Consequently, few nations are self-sufficient militarily. PACOM's has 
focused its engagement on advancing the self-sufficiency of the partner 
militaries in the region. Programs such as International Military 
Education and Training (IMET) are vital to enhancing the education 
level of military leaders and promoting a network of military-to-
military relations that contribute to broader security cooperation in 
SEA.

Philippines
    Underpinned by the 1951 Mutual Defense Treaty, the U.S.-Philippines 
alliance is an important strategic icon in SEA. Adjoining the South 
China Sea, this vast island nation straddles several strategic sea 
lines of communication (SLOCs) and chokepoints, claims a number of 
disputed islands and features in the South China Sea, and contends with 
several internal insurgent movements and VEOs, such as JI and ASG, with 
assistance from U.S. forces. Possessing an army-centric military as a 
result of its internal security challenges, the Philippines has 
recently begun to focus on improving the ability of its navy and air 
forces to secure the vast maritime area defined by the Philippine 
archipelago. As a consequence, PACOM security assistance is focused 
primarily on supporting the Armed Forces of the Philippines (AFP) in CT 
efforts in southern Mindanao and the Sulu archipelago, and advancing 
AFP naval and air capabilities. Improving maritime domain awareness is 
another primary focus of U.S. security assistance, and we hope to 
provide a second Hamilton-class Coast Guard cutter to the Philippines 
this year.
    Joint Special Operations Task Force-Philippines has operated in a 
strictly non-combat role in support of the AFP for the past 8 years in 
the largely successful efforts to contain ASG and JI VEOs. 
Additionally, PACOM engages with the Philippines through the Joint 
Staff-sponsored exercise Balikatan, as well as through annual military-
to-military consultations, periodic Pacific Partnership missions, and 
numerous Service component-led exercises.
    We welcome recent U.S.-Philippine discussions regarding 
opportunities to increase joint training with our AFP counterparts, 
possibly supported by enhanced rotational access to AFP facilities by 
PACOM forces.

Thailand
    I would begin by offering my personal condolences to the Thai 
people for the losses they suffered in 2011 during the most devastating 
flood their country has experienced in 50 years. Their response to this 
disaster, particularly with regard to containment of potential 
infectious diseases, was a testament to Thailand's resilience and self 
sufficiency.
    Thailand is an enduring U.S. ally in SEA and a valuable security 
partner. They are co-host (with PACOM) to the largest multilateral 
exercise series in SEA, Cobra Gold, and provide liberal access and 
logistics support for transiting PACOM aircraft and ships at their 
military facilities. The United States and Thailand have twice 
partnered to combat piracy off the Horn of Africa, deploying Thai naval 
vessels with U.S. Navy personnel onboard to Combined Task Force-151, 
which Thailand will take command of in the coming year. Additionally, 
the Royal Thai Army assisted U.N. humanitarian relief operations in 
Darfur with a battalion of peacekeepers.
    Despite facing challenges such as land and maritime border disputes 
with neighboring, Cambodia, refugee incursions from Burma, a 
longstanding ethnic insurgency in the south, and transnational 
challenges such as narcotics and human trafficking, the Thai armed 
forces are capable and generally self-sufficient.

Singapore
    Our bilateral relationship with Singapore continues to strengthen 
and broaden. Singapore armed forces comprise a small, but extremely 
capable military. Their main focus continues to be security within the 
Strait of Malacca and Singapore Strait and they cooperate with 
Indonesia, Malaysia and Thailand in conducting security patrols within 
the Straits against piracy and other illicit activities. Singapore's 
armed forces are also deployed to Afghanistan, working alongside 
coalition partners to develop the Afghan National Security Forces. 
Within the context of the 2005 Strategic Framework Agreement, both 
militaries are seeking to increase engagement across all PACOM Service 
components. Singapore's offer to host U.S. Littoral Combat Ships (LCS) 
at Changi naval station will enhance PACOM's SEA posture.

Indonesia
    As the relationship between the United States and Indonesia--the 
world's fourth most populous nation, third largest democracy, and 
largest Muslim-majority country--continues to advance, the PACOM-TNI 
relationship is progressing, as well. Following a decade of political, 
economic, and military reform, Indonesia has surfaced as a vibrant 
democracy, an emerging economy, and a competent military power. In 
areas such as disaster risk reduction, CT, Humanitarian Assistance/
Disaster Relief (HA/DR), and peacekeeping operations, Indonesia is 
increasingly recognized for its leadership role. Indonesia and the 
United States were recently designated co-chairs of the Experts Working 
Group on Counterterrorism for the ASEAN Defense Ministers Meeting-Plus. 
This initiative seeks to encourage greater regional CT cooperation, 
build capacity, and collectively address regional security issues in an 
open consultative forum.
    Following a 12-year hiatus, PACOM has reestablished security 
cooperation activities with the Indonesian Kopassus army special 
forces. The measured pace with which this engagement has advanced has 
included key leader dialogues and small-scale subject matter experts 
exchanges in areas such as military decisionmaking, medical planning 
and law of war/human rights. More activities of this type are planned 
for 2012 and will gradually expand at a pace commensurate with the 
demonstrated progress in Indonesian Armed Force transparency and 
institutional reform.

Vietnam
    Military relations with Vietnam continue to grow in areas such as 
disaster management, search and rescue, conflict resolution, personnel 
recovery and medical operations. Vietnam is modernizing its military 
and looks to the United States as a partner in maintaining security and 
stability in SEA, particularly in the South China Sea. Vietnam's 
successful chairmanship of ASEAN in 2010 affirmed its emerging role as 
a leader and spokesman among SEA nations, as has been evidenced by 
their current role in lower Mekong River delta HA/DR initiatives. 
Vietnam and China have a long history of competition in the South China 
Sea. Both nations' disputes over islands and features, as well as 
natural resources, have led to confrontations in the past. Vietnam's 
continued leadership among SEA nations will be a critical component of 
eventual conflict resolution in this highly important and strategic 
area. PACOM will carry on working closely with Vietnam to advance our 
military relationship and cooperation in providing security across the 
Asia Pacific while remaining mindful of concerns about human rights.

Malaysia
    Malaysia's vibrant economy, advanced military, strategic position 
near Malacca and the Singapore Straits, bordering both the South China 
Sea and Indian Oceans, and regional leadership combine to define it as 
an important partner for the United States and PACOM, and a key actor 
within SEA. Malaysia contributes to Strait of Malacca patrols, maritime 
security in the South China Sea, and efforts to contain transnational 
threats, such as piracy, and VEOs, such as ASG and JI. Its direct 
action against pirates in the Gulf of Aden was evidence of increased 
confidence and capability. In 2011, Malaysia conducted its second 
deployment of medical support units to Afghanistan and remains 
committed to supporting coalition efforts there until 2014. U.S. naval 
vessels frequently call in Malaysian ports, and military-to-military 
exchanges and joint training have expanded over recent years.

Cambodia, Laos, Brunei and Timor-Leste
    The United States has extensive interests across the rest of SEA, 
and PACOM seeks to continue advancing military relations with Cambodia, 
Laos, Brunei, and Timor-Leste. Cambodia has been a strong supporter of 
U.S. military engagement in recent years and demonstrates a strong 
desire to increase military-to-military activities with PACOM. Military 
engagements with Brunei, Laos and Timor-Leste have expanded, albeit 
modestly, over the past year with particular emphasis on relationship-
building and enhanced regional cooperation.

Burma
    To the extent that any military-to-military relationship exists 
with Burma, it is extremely limited due to U.S. policies and sanctions 
directed at the former junta and its actions. However, the Burmese 
Government steps towards credible political and economic reform and 
working toward ceasefires with armed ethnic groups in the past several 
months together have improved U.S.-Burma ties, resulting in several 
initiatives announced during Secretary Clinton's December trip to 
Burma. Prisoner of War (POW)/Missing in Action (MIA) recovery 
operations, is the first opportunity for military-related engagement 
with Burma since 2004. It is estimated that the WWII remains of as many 
as 730 Americans may be present there. Burma's assimilation into the 
broader Asia-Pacific regional security order would be a positive event.

                               SOUTH ASIA

    South Asia as a whole is of major strategic importance to the 
United States. Anchored by India and containing major SLOCs for the 
transport of energy and other commerce to Asia and the Americas from 
the Middle East and Europe, South Asia security partnerships are 
increasingly vital to PACOM's mission.
    South Asia is home to a confluence of challenges, including nuclear 
armed rivals India and Pakistan, numerous transnational VEOs such as 
Lashkar-e-Tayyiba (LeT), piracy, trafficking in narcotics and persons, 
disputed borders, and insurgent movements that have plagued India, 
Nepal, and Sri Lanka. South Asia is particularly prone to natural 
disasters, including cyclones, tsunamis, and earthquakes. Bangladesh 
has long suffered from annual cyclones and flooding and Nepal is 
expected to suffer a major earthquake in the coming years. PACOM 
engages throughout South Asia, assisting its militaries to counter and 
contain VEOs such as LeT, cooperating in maritime security activities 
such as counter piracy, conducting disaster response planning and 
training, and exercising extensively, service-to-service.

India
    Pursuing a U.S.-India strategic partnership through a close 
alignment of respective regional security interests is a priority for 
the U.S. Department of Defense and PACOM. Our security relationship 
involves strategic to tactical-level dialogues, increasingly robust 
military exercises, security assistance, and personnel exchanges. The 
United States and India have made steady progress in military-to-
military cooperation over the past decade.
    It is important that the leaderships and staffs of PACOM and U.S. 
Central Command continue to coordinate our respective military 
activities in this sub-region, especially as they concern India and 
Pakistan.

Bangladesh
    Bangladesh has emerged as a particularly effective partner in the 
fight against terror, cooperating with India as well as the United 
States to counter VEO activity by actors such as LeT. Further, 
Bangladesh's military is advancing its capabilities and contributes 
broadly to U.N.peacekeeping operations. Also, the Bangladesh army is 
primarily responsible for and has achieved major advancements in the 
protection of its citizens during the annual cyclone season and the 
inevitable flooding and related disasters with which Bangladesh 
repeatedly contends.

Maldives, Nepal, Sri Lanka
    Although South Asian nations share similar concerns and challenges, 
they are uniquely individual.
    Due to its proximity to major commercial sea lanes, the Maldives is 
concerned with piracy and other illicit activity in its Exclusive 
Economic Zone (EEZ). For that reason, it is striving to advance its 
maritime security capabilities by reshaping its coast guard, marine and 
special operations forces. Further, curbing recruitment of its youth 
into VEOs and narcotics trafficking and addiction are Maldives' areas 
of focus.
    Nepal has emerged from a lengthy Maoist insurgency in 2006 and is 
seeking to integrate some of the former insurgents into the Nepal Army. 
In partnership with PACOM, Nepal's armed forces are preparing to 
respond to a future earthquake.
    Sri Lanka, too, is focused on developing its maritime security 
capabilities while preventing a resurgence of the Liberation Tigers of 
Tamil Elam. Sri Lanka's military forces continue to assist in de-mining 
and other recovery operations following 25 years of civil war. PACOM's 
engagement with Sri Lanka will continue to be limited, until the 
Government of Sri Lanka demonstrates progress in addressing human 
rights allegations.
    Each of these nations' militaries partner with PACOM at varying 
levels, including leadership exchanges, exercise series, PACOM Assist 
Team CT capacity building actions and activities, and security 
assistance.

LeT
    While several VEOs conduct facilitation, recruitment, and seek safe 
havens throughout South Asia, LeT presents a particularly acute 
problem. Responsible for many attacks in India, including the horrific 
attacks into Mumbai, LeT is headquartered in Pakistan, affiliated with 
al Qaeda and other VEOs, and contributes to terrorist operations in 
Afghanistan and aspires to operate against Asia, Europe, and North 
America. PACOM's fiscal year 2011 Indian Engagement Initiative that 
resourced and hosted Mumbai CT specialists for training, exercises, and 
exchanges throughout the United States, together with capacity-building 
activities with South Asian partners are mainly focused on containing 
LeT and contributing to CT self-sufficiency of the sub-region's 
militaries.

                                OCEANIA

    The U.S. alliance with Australia anchors PACOM's strategy in 
Oceania. Australia, with additional contributions from New Zealand, 
invests extensively in security and assistance efforts in this sub-
region. The Australian continent notwithstanding, most of Oceania is 
comprised of Pacific Island nations spread across the vast expanse of 
the South Pacific Ocean. Security challenges associated with natural 
resources in this sub-region tend to predominate. In particular, 
illegal fishing, resource damage attributed to climate change and 
global warming, and the susceptibility of low lying island nations to 
typhoons and tsunamis define PACOM and U.S. Coast Guard approaches to 
engagement in Oceania, often in concert with Australian and New Zealand 
actions. Two new Shiprider Agreements with the Pacific Island nations 
of Nauru and Tuvalu together with those already in place with the 
Marshall Islands, Micronesia, Palau, Tonga, and Kiribati enable 
transiting U.S. ships to assist in characterizing the maritime domains 
and providing a mechanism for shiprider-nation responses to 
irregularities within these island nations' territories.
    Oceania is also home to the Compact of Free Association nations of 
the Republic of Palau, the Federated States of Micronesia, and the 
Republic of the Marshall Islands, each of which PACOM is obligated to 
defend as part of Compact arrangements putting their territory off 
limits to all armed forces except those of the United States (and other 
countries we have invited). Compact agreements with these three nations 
provide PACOM a strategic buffer along the southern flank of the highly 
strategic U.S. territory of Guam. PACOM is increasing its collaboration 
with the Department of the
    Interior which administers Federal policy in U.S. territories in 
Oceania and administers assistance funds to the Compact Nations. We 
soon expect to have a liaison officer from Interior join the PACOM 
staff.

Australia
    The U.S.-Australia alliance, our most significant partnership in 
Oceania, benefits from two new force posture initiatives, the 
rotational deployment of a Marine Air Ground Task Force (MAGTF) to 
Darwin and enhanced access to airfields in northern Australia. These 
initiatives will enable deeper interoperability of our respective 
forces, expand training opportunities with third countries in the 
region, and improve access to SEA and Oceania. Australia is also the 
largest non-NATO contributor of forces to the coalition efforts in 
Afghanistan.
    A trilateral relationship between Australia, Japan, and the United 
States continues to advance and has the potential to enable 
multilateral approaches to the region's challenges. Bilaterally, the 
U.S. and Australian militaries collaborate extensively in areas such as 
information sharing; ISR; HA/DR; combined arms training in exercise 
Talisman Saber; and space and cyber security.

New Zealand
    New Zealand is also a recognized leader in Oceania. It is a strong 
partner of the United States, and in accordance with the forward-
looking spirit of the 2010 Wellington Declaration, PACOM will continue 
to look for ways to further strengthen the relationship despite 
differences over nuclear policy. The United States and New Zealand 
share many security concerns and are cooperative partners in areas such 
as intelligence sharing, HA/DR and maritime security. In the interest 
of advancing the partnership, New Zealand is participating fully in the 
Rim of the Pacific (RIMPAC) exercise for the first time in 2012.
    We value New Zealand's contributions to Afghanistan. New Zealand 
also supports stabilization efforts in Timor-Leste and the Solomon 
Islands, Armistice enforcement in Korea, and UN peacekeeping efforts 
globally.

                    EXERCISE AND ENGAGEMENT PROGRAMS

Exercises
    In order to maintain ready forces and to plan, train, and exercise 
to accomplish the full range of military contingencies, PACOM requires 
annual congressional support for the Combatant Command Exercise and 
Engagement (CE2) program. PACOM's portion of this essential program 
consists of 18 major exercises involving joint military forces, 
interagency activities, and 27 of 36 PACOM partner nations. CE2 
directly impacts PACOM's ability to conduct Joint training exercises 
and theater security engagement events across the Asia Pacific, and 
therefore plays a vital role in contributing to security of the AOR.

Engagement Programs
    Two very significant engagement programs are Pacific Partnership 
and Pacific Angel. In 2011, the USS Cleveland, with personnel from 11 
nations, conducted a 4-month deployment to Tonga, Vanuatu, Papua New 
Guinea, Timor Leste, and Federated States of Micronesia. Combining 
medical, dental, and engineering support, the mission treated over 
38,000 patients, conducted scores of community relations projects, and 
completed much needed engineering and infrastructure repairs. Likewise, 
Pacific Angel 2011, utilizing C-17 aircraft, cared for thousands of 
patients and completed numerous civic action projects in Mongolia, 
Cambodia, Timor Leste, and Indonesia.
    Both of these engagement programs serve to improve regional 
partnerships, while enhancing the resiliency of object nations to deal 
more effectively with their own humanitarian crises due to natural 
disasters or other causes. Moreover, the experience that our Service 
components gain by working alongside nongovernmental organizations and 
other participating militaries in these controlled conditions improves 
their abilities to conduct disaster response when time is of the 
essence and lives are on the line. PACOM considers Pacific Partnership 
and Pacific Angel to be high payoff engagements in the Asia-Pacific 
region.

                    GLOBAL SECURITY CONTINGENCY FUND

    The Global Security Contingency Fund is a new tool available for 
PACOM and country teams to develop and deliver security sector 
assistance in a coordinated fashion, enhancing the capabilities of 
military forces, other security forces, and relevant government 
agencies. The fund also supports the justice sector (including law 
enforcement and prisons), rule of law programs, and stabilization 
efforts.

                          PACOM ORGANIZATIONS

    The following direct-reporting units uniquely contribute to the 
PACOM mission:

Asia Pacific Center for Security Studies
    Asia Pacific Center for Security Studies (APCSS) fills a unique 
role in multi-national security cooperation and capacity-building 
efforts by equipping and empowering APCSS fellows and alumni to make 
substantive changes to their countries' security architectures. APCSS 
brings together communities of interest and influence, comprised of 
presidents, vice presidents, ministers of defense and foreign affairs, 
chiefs of defense, and ambassadors, to enable collaborative solutions 
to critical regional security challenges. Because the APCSS engages 
regularly and often concurrently with Chinese on both sides of the 
Taiwan Strait, as well as Hong Kong, it is uniquely positioned to 
assist in moving the U.S.-China military-to-military relationship 
towards a ``sustained and reliable'' level of contact.

Joint Intelligence Operations Center
    The PACOM and the U.S. Forces Korea-Combined Forces Command (USFK-
CFC) Joint Intelligence Operations Centers (JIOC) deliver 
strategically-focused, operationally-relevant, and predictive 
intelligence products to support Commander PACOM and our subordinate 
commands. The JIOCs operate within a larger PACOM intelligence 
federation that capitalizes on national intelligence, surveillance, and 
reconnaissance capabilities as well as two-way information sharing 
activities with allies and partners. The JIOCs serve as a focal point 
of intelligence collaboration in close coordination with PACOM 
Component Commands; National, Defense, and Service agencies; other 
combatant commands; subunified commands; and allies and partners. This 
federated approach to intelligence provides for invaluable theater 
situational awareness and advanced threat warning to enable 
decisionmaking.

Joint Interagency Task Force West
    Through the execution of PACOM's counternarcotics program, Joint 
Interagency Task Force West (JIATF West) has significantly affected 
illicit methamphetamine precursor chemical trafficking originating in 
Asia ultimately bound for the Western Hemisphere by focusing its 
efforts on Asian, Iranian, Eurasian, and other transnational criminal 
organizations in the PACOM AOR. In fiscal year 2011, JIATF West's 
support to U.S. and partner nation law enforcement agencies resulted in 
the seizure of over 1,000 metric tons of illicit chemicals used in meth 
production. The seizures were critical in interrupting distribution 
within the United States and contributed to the disruption of Asian and 
Mexican drug trafficking organizations.

Joint POW/MIA Accounting Command
    Joint POW/MIA Accounting Command (JPAC) successfully accomplished 
58 investigation and recovery operations globally last year and is 
projected to execute 78 investigation and recovery operations in 2012.
    Expanded operations begin in fiscal year 2012 as JPAC resumes 
investigation and recovery operations in the DPRK. JPAC is also 
preparing to resume discussions with the government of Burma to renew 
personnel accounting efforts there during fiscal year 2013. JPAC 
accounting operations are ongoing in the People's Republic of China, 
while discussions between JPAC and the governments of India and the 
Philippines continue in an effort to resume investigation and recovery 
operations in those countries.

                               CONCLUSION

    As characterized by the President, the United States ``face[s] an 
inflection point.'' The evolving geopolitical climate and shifting 
fiscal environment, which are significant factors in this change, point 
toward the Asia Pacific and emphasize the ever increasing consequence 
of this theater. The preceding testimony highlights the importance of 
optimizing U.S. posture in this region and underscores the specific 
challenges PACOM faces, as well as the opportunities PACOM seeks. I 
have spent the majority of my career in the Asia Pacific and have never 
been more convinced of its remarkable nature, partnership capacity, and 
criticality to U.S. security.
    In closing, your assistance has enabled the more than 300,000 
members of PACOM to accomplish their mission. Further, your personal 
interest in, and visits to the Asia Pacific have sent a strong signal 
to this region regarding U.S. national interests and staying power. On 
behalf of every PACOM member, thank you for your enduring support for 
our Armed Forces and for this unique and important part of the world.

    Chairman Levin. Thank you so much, Admiral. Thanks for your 
statement and again for all you and your family have done for 
this Nation.
    General Fraser.

STATEMENT OF GEN. WILLIAM M. FRASER III, USAF, COMMANDER, U.S. 
                     TRANSPORTATION COMMAND

    General Fraser. Chairman Levin, Senator Inhofe, and 
distinguished members of this committee: It is indeed my 
distinct privilege to be here with you today representing 
TRANSCOM. We are a total force team of approximately 150,000 
men and women, military and civilian, dedicated to deploying, 
sustaining, and then returning home our Nation's most precious 
resource, our men and women in uniform. TRANSCOM is a lean, 
dynamic organization which plays a critical role in supporting 
our joint force around the world.
    Today I am privileged to be here with my good friend, 
Admiral Bob Willard, Commander, PACOM, whom I've had the honor 
of partnering with closely over many years. As already 
mentioned, I know Admiral Willard will be retiring in the near 
future and I would publicly like to personally thank him for 
his many years of dedicated service to our Nation and his 
wife's continued sacrifices and dedication. Sir, it has been 
indeed an honor and a privilege to serve with you.
    During 2011, TRANSCOM added a new command, the Joint 
Enabling Capabilities Command (JECC), led by Rear Admiral Scott 
Stearney, to our component command leadership team, which is 
comprised of AMC, led by General Ray Johns, MSC, led by Rear 
Admiral Mark Buzby, and the Surface Deployment and Distribution 
Command (SDDC), led by Major General Kevin Leonard.
    Over the last month I have witnessed firsthand the spirit 
and ingenuity of our subordinate commands during my travels 
throughout the United States, Afghanistan, Central Asia, the 
Pacific, and Antarctica, just to name a few. This past year has 
been particularly challenging as our team of Active Duty, 
Guard, Reserve, civil servants, merchant mariners, and 
commercial partners maintain an unusually high operations 
tempo, supporting combat operations, sustainment efforts, 
humanitarian relief, and crisis action responses both at home 
and abroad.
    These efforts from the evacuation in Japan following the 
devastating earthquake and tsunami, to supporting the 
warfighter in Afghanistan, to our withdrawal from Iraq at the 
end of 2011, were made possible by the amazing TRANSCOM 
professionals, who are committed to ensuring our joint force 
maintains global logistics dominance.
    As we now enter a very challenging fiscal environment 
focusing on capabilities needed for the 21st century, as 
defined in the President's defense strategy, our challenge is 
to continue to find fiscally responsible efficiencies to 
deliver the required capability. TRANSCOM strongly supports 
this transition and will remain focused on supporting our 
forces around the world. This will not be an easy task. The new 
strategic guidance requires a military that is smaller and 
leaner, while at the same time being more agile, flexible, and 
ready.
    Having an integrated distribution system will be important 
to our Nation, and TRANSCOM will meet the challenges of this 
new environment. We will continue to build our relationships 
with the interagency, our other nongovernmental organizations, 
commercial, and international partners. Together we will ensure 
our Nation's ability to project national military power and be 
able to confront other national challenges any time and 
anywhere.
    Since taking command last fall, I've been amazed to see the 
unique capabilities that are inherent in the command. I could 
not be prouder of the TRANSCOM team and our partners. No one in 
the world can match our Nation's deployment and distribution 
capability. The foundation of this enterprise is the 
enthusiasm, the dedication, and efficiency of the TRANSCOM 
team.
    Chairman Levin, Senator Inhofe, and all the members of this 
committee, I want to thank you for your continued superb 
support of TRANSCOM and of all of our men and women in uniform. 
I am grateful for the opportunity to appear before this 
committee today and I ask that my written statement be 
submitted for the record. I now look forward to your questions.
    Thank you.
    [The prepared statement of General Fraser follows:]

            Prepared Statement by Gen. William Fraser, USAF

                          MISSION/ORGANIZATION

    It is my privilege as the Commander of the U.S. Transportation 
Command (TRANSCOM) to present you my posture statement for 2012. Our 
Total Force team of Active Duty, Guard, Reserve, civilian, commercial 
partners, and contractors leads a world-class Joint Deployment and 
Distribution Enterprise (JDDE) that provides unfailing support to our 
warfighters and their families around the globe. Through efficient and 
effective execution of our transportation and supply chain distribution 
mission, the TRANSCOM team is revolutionizing military logistics to 
meet the challenges of the 21st century, while adapting to the 
President's Defense Strategy. Our team of dedicated and trained 
professionals working in unison with our joint, commercial, and 
international partners is ready to meet those challenges today and in 
the future.

                      SUPPORTING GLOBAL OPERATIONS

    Our Nation's greatest asymmetric advantage is our ability to 
project and sustain our forces across the globe supported by the 
political, military, and business relationships that enable this 
expansive network. To maintain this advantage, the President assigned 
TRANSCOM the Global Distribution Synchronizer responsibility to 
synchronize planning for global distribution operations. This new 
responsibility enables the Department of Defense (DOD) to shape the 
distribution environment to meet growing access challenges and ensure 
sufficient distribution lanes across multiple theaters to underwrite 
our Nation's ability to successfully project and sustain forces 
globally. Collaboratively, we will ``knit the distribution seams'' 
among multiple Combatant Commands (COCOM) to ensure support for their 
theater campaign and contingency plans. To this effort, our vision is 
to achieve a global network that anticipates demands, maximizes 
strategic flexibility, mitigates potential risks, and provides 
resilient end-to-end distribution.
    While TRANSCOM leads the enterprise, our component commands execute 
the mission. In 2011, Air Mobility Command (AMC) and its Air Force 
Reserve and Air National Guard partners maintained a high operations 
tempo supporting Operations Unified Protector (OUP), New Dawn (OND), 
Enduring Freedom (OEF), and other crises around the world. At the peak 
of global air mobility operations in 2011, AMC deployed a rotational 
force of over 60 C-130 tactical airlift aircraft, plus 120 KC-135 and 
KC-10 aerial refueling aircraft. AMC also employed an additional 21 C-
17s in dedicated support of U.S. Central Command (CENTCOM). 
Additionally, across all COCOMs on a daily basis, at least one third of 
AMC's air mobility fleet was utilized in support of global operations.
    On the surface, the Military Sealift Command (MSC) and the Military 
Surface Deployment and Distribution Command (SDDC) moved over 19.9 
million tons of cargo worldwide. MSC's tankers delivered 1.6 billion 
gallons of fuel to support global operations. SDDC expanded into 
multimodal operations by moving over 3,500 pieces of mission essential 
cargo by commercial liner sealift with follow-on airlift into 
Afghanistan.
    Our newest subordinate command, Joint Enabling Capabilities Command 
(JECC), deployed more than 750 personnel to support four Humanitarian 
Assistance/Disaster Relief (HA/DR) operations and seven contingency 
operations worldwide. The Geographic Combatant Commands (GCC) and U.S. 
Special Operations Command employed the JECC's expertise for a variety 
of real-world missions including Odyssey Dawn, Tomodachi, Pacific 
Passage, Continuing Promise, Odyssey Guard, OUP, OEF, and OND. Though 
the missions were of varying size, scope, and complexity, in each 
instance the JECC provided immediate, short-duration support to 
increase the effectiveness of joint command and control at the 
operational level.

                    SUPPORT TO U.S. CENTRAL COMMAND

    In 2011, the President directed the final drawdown in Iraq by 31 
December 2011 and the start of the Afghanistan surge recovery. Through 
partnership with CENTCOM and aggressive scheduling, TRANSCOM and its 
component AMC accelerated the redeployment of over 60,000 troops (over 
50,000 from Iraq and 10,000 from Afghanistan) returning 99 percent home 
by 24 December and 100 percent by the New Year.
    Equipment retrograde was highlighted by the aggressive push to 
redeploy over one million pieces of equipment from Iraq in calendar 
year 2011. In addition, TRANSCOM and our interagency partners have 
received permissions from some governments of European, Central Asian, 
and Baltic countries to start retrograding materials from Afghanistan 
through the Northern Distribution Network (NDN).
    The Pakistan Ground Lines of Communication (PAK GLOC) provide 
logistical support through the movement of cargo to Afghanistan. In 
2011 more than 35,000 containers were delivered on the PAK GLOC by 
surface transportation. When open, the PAK GLOC remains the quickest 
and most cost-effective route.
    The NDN provides an additional route for cargo to Afghanistan. Over 
the past year, we moved an average of 40 percent of all cargo in 
support of OEF through the NDN's multiple truck, water, rail, and air 
routes in an expanding distribution network. In 2011 a total of 27,000 
containers were delivered by surface transportation on the NDN, an 
increase of 15 percent from 2010. TRANSCOM will continue to work with 
the interagency and governments of the NDN countries to expand NDN 
routes and permissions. This expansion will increase velocity and the 
number of new routes into and out of Afghanistan.

             SUPPORT TO OTHER GEOGRAPHIC COMBATANT COMMANDS

    TRANSCOM supported all GCCs, responding to their unique 
requirements, often testing the ingenuity of the team to develop new 
and complex transportation solutions. In March 2011, TRANSCOM provided 
a top priority movement to all six GCCs--a TRANSCOM first.
    In U.S. Southern Command's area of responsibility (AOR), TRANSCOM 
continues to support the transport and security of detainees during 
detainee movement operations (DMO). Since 2002, TRANSCOM in 
coordination with the Office of the Secretary of Defense, the Office of 
the Secretary of State, Joint Staff, and supported COCOMs has 
successfully completed 88 DMO missions, transporting 1,206 detainees 
without incident.
    In U.S. European Command's (EUCOM) AOR, TRANSCOM deployed and 
redeployed more than 3,500 troops and 1,400 tons of cargo in support of 
the Kosovo Balkan force, providing a safe and secure environment in the 
region.
    In U.S. Africa Command's (AFRICOM) AOR, TRANSCOM deployed and 
redeployed 2,491 troops and 1,340 short tons of cargo in support of 
Commander Joint Task Force Horn of Africa.
    Supporting both AFRICOM and EUCOM and in response to the United 
Nations Security Council resolution to end Libya's military advance on 
its civilian population, TRANSCOM provided tankers and other lift 
assets to support Operations Odyssey Dawn and Unified Protector.
    U.S. tankers flew 435 sorties delivering 23 million pounds of fuel 
to coalition strike aircraft. TRANSCOM also directed 63 time-critical 
airlift missions delivering 886 passengers and 2,220 short tons of 
cargo.
    In U.S. Pacific Command (PACOM) AOR, TRANSCOM responded within 
hours to the immediate needs of the Japanese people, who were 
devastated from the earthquake and tsunami and follow-on nuclear 
crisis, with Operation Tomodachi. TRANSCOM delivered relief supplies, 
nuclear response equipment, a 50-person JECC team, search and rescue 
teams, and disaster response experts totaling over 3,400 short tons and 
over 6,700 passengers as part of that operation. TRANSCOM 
simultaneously supported Operation Pacific Passage, the voluntary 
authorized departure of DOD dependents from Japan, by evacuating more 
than 7,800 passengers on over 25 missions.
    Each year, TRANSCOM provides airlift and sealift assets to 
transport personnel, equipment, and supplies in support of the National 
Science Foundation's (NSF) research in Antarctica as part of Operation 
Deep Freeze. Using unique capabilities such as the Air National Guard's 
ski-equipped LC-130s, TRANSCOM delivered more than 3,250 passengers, 
10,000 short tons of cargo, and five million gallons of fuel to McMurdo 
Station, Antarctica. In 2011, TRANSCOM assets airlifted the King of 
Malaysia and the Prime Minister of Norway to Antarctica in recognition 
of the 100 year anniversary of man's first expedition to the South 
Pole.
    In U.S. Northern Command's (NORTHCOM) AOR, TRANSCOM supported 
training exercises that provided realistic homeland defense and defense 
support to civil authorities training for joint and interagency 
partners. TRANSCOM also deployed the Modular Airborne Fire Fighting 
System (MAFFS) equipped C-130 aircraft to fight fires in Texas, New 
Mexico, Arizona, and Mexico in support of the National Interagency Fire 
Center. The MAFFS aircraft flew 396 sorties and released more than 9.7 
million pounds of fire-retardant during their 74 days of deployment.
    TRANSCOM's WC-130 Hurricane Hunter aircraft flew 129 sorties into 
30 storms to collect valuable hurricane data for the National Oceanic 
and Atmospheric Administration during the 2011 hurricane season. In 
addition to collecting storm data, TRANSCOM airlifted the Federal 
Emergency Management Agency Region II Defense Coordination Officer 
emergency response vehicle to Puerto Rico to assist with monitoring 
Tropical Storm Emily.

                      IMPROVING BUSINESS PRACTICES

    To reduce transportation costs, TRANSCOM continues to pursue both 
military and commercial multimodal transportation solutions. Multimodal 
transportation solutions use both surface and air assets, e.g., moving 
Mine Resistant Ambush Protected (MRAP) vehicles by ship to a major port 
and using cargo airplanes for the final delivery to the warfighter. By 
embracing multimodal transportation solutions, TRANSCOM manages the 
supply chain, controls cost, and creates efficiencies.
    In 2011, commercial multimodal operations began in the CENTCOM AOR. 
Multimodal operations into theater included contracted sealift carriers 
and airlift services through the commercial seaports and airports in 
Dubai, United Arab Emirates, and Aqaba, Jordan. Commercial multimodal 
transportation routes maximize the use of commercial carrier 
capabilities from origin to destination while ``freeing up'' vital 
military capabilities. Multimodal hubs proved invaluable when the PAK 
GLOC routes were no longer available for use in late November. Several 
hundred containers from 39 different ships bound for forces in 
Afghanistan were diverted to Dubai and Aqaba where they were stored and 
then airlifted as needed into Afghanistan to ensure sustained support 
to combat operations.
    Afghanistan's mountainous terrain and poor infrastructure require 
an increased reliance on aerial delivery. In 2011, over 80 million 
pounds of cargo were airdropped, up 20 million from 2010, making 2011 a 
record year. We continue to add new capabilities like Low-Cost, Low-
Altitude Delivery and to explore an extracted container delivery system 
capability to improve aircraft survivability and aerial delivery 
accuracy.
    Piracy continues to threaten our commercial partners, predominantly 
in the Horn of Africa region. TRANSCOM and its component, MSC, continue 
to be active participants in interagency and industry efforts to reduce 
the vulnerability of the U.S. commercial fleet. TRANSCOM is a strong 
advocate for the use of private security teams aboard commercial 
vessels.

        PRESERVING THE JOINT DEPLOYMENT AND DISTRIBUTION PROCESS

    The DOD supply chain is a vast, interdependent enterprise reliant 
on infrastructure availability across the globe. To safeguard this 
infrastructure, we work closely with entities across the DOD and 
Intelligence Community to stay apprised of threats to our 
transportation and distribution assets and to provide global strategic 
force protection oversight for these assets. Our relationships and 
planning efforts with GCCs facilitate threat mitigation and risk 
reduction of vulnerabilities and hostile/criminal activities.
    Preserving and improving our strategic en route infrastructure 
system remains a critical requirement. A relatively small number of en 
route airfields and seaports are available to support global mobility 
operations, so we must champion these ``enduring bases'' that enable 
seamless movement across the various areas of responsibility. TRANSCOM 
advocates for military construction projects that maintain and improve 
the capabilities and capacities of the military's deployment and 
distribution infrastructure. Using analytical data, TRANSCOM's En Route 
Infrastructure Master Plan (ERIMP) identifies construction projects 
that will improve the military's global routes. Adequate infrastructure 
and access agreements allow the United States to maintain the ability 
to project forces globally.
    With the Defense Logistics Agency (DLA), TRANSCOM continues to lead 
DOD supply chain transformation efforts through a series of 
Distribution Process Owner Strategic Opportunities (DSO) initiatives. 
Since 2009, five focused process improvement initiatives generated $400 
million in cost savings and cost avoidance. The initiatives enhanced 
readiness, improved velocity, and reduced costs, while delivering 
higher levels of service to the warfighter.

                       BUILDING TOWARD THE FUTURE

    As TRANSCOM continues to improve our processes across the 
deployment and distribution enterprise, we stand ready to support the 
President's Defense Strategy that maintains a full spectrum force ready 
to deter conflict, project power, and win wars anywhere on the globe.
    In the Pacific, Guam is critical to U.S. national defense as a 
strategic security and stability location providing TRANSCOM access to 
global lines of communications. Guam is a key multimodal logistics node 
to mobility success in the region and has been analytically validated 
in the Global Access and Infrastructure Assessment, TRANSCOM's ERIMP, 
and AMC's En Route Strategy White Paper. TRANSCOM supports 
infrastructure improvements on Guam to ensure successful distribution 
operations in East Asia and Oceania. We have partnered with the DLA 
and, with congressional approval, invested $101.3 million in the 
recapitalization of the fuel hydrant infrastructure and $61 million in 
a JP-8 pipeline between Apra Harbor and Andersen Air Force Base.
    A key element of the President's Defense Strategy is to strengthen 
defense cyber capabilities to operate effectively in cyberspace and to 
counter cyber attacks. Because of TRANSCOM's strong reliance on 
commercial partners, over 90 percent of the distribution and deployment 
transactions are handled in cyberspace. TRANSCOM strives to ensure both 
the integrity of our data and availability for our users and 
essentially serves as an information broker for deployment and 
distribution operations across the globe.
    TRANSCOM is partnering with U.S. Cyber Command (CYBERCOM), 
industry, and educational institutions to introduce innovative new 
technologies and methodologies to protect our essential command and 
control systems and information from attack. Collaborating with 
military and commercial partners to define standards for the process 
and handling of data allows us to improve the security of our 
information and its accuracy. Implementation of these standards will 
streamline our information flow, improve transparency to authorized 
users, and leverage new technologies. The result is trusted and timely 
information supporting a more responsive transportation enterprise 
while reducing costs.
    TRANSCOM's Agile Transportation for the 21st Century (AT21) 
initiative will use industry best practices plus government and 
commercial off-the-shelf optimization and scheduling tools to deliver 
best value, end-to-end deployment and distribution. Business process 
reengineering will improve transportation planning, forecast accuracy, 
and on-time delivery of forces and sustainment to COCOMs at a lower 
cost. Corporate Services Vision will align IT systems with reengineered 
business processes to create a one-stop IT shop.
    TRANSCOM is DOD's lead proponent for In-Transit Visibility (ITV) of 
cargo, equipment, and personnel during deployment and distribution 
options. ITV enables a more effective and efficient supply chain by 
tracking the total volume of supplies moving through the logistics 
pipeline. Active Radio Frequency Identification (RFID) remains the 
primary automatic identification technology for large consolidated 
shipments in the defense transportation system while incorporation of 
passive RFID tags provides great benefits in warehousing, 
prepositioning, and tracking of DOD materiel. We continue to expand 
capabilities with our ITV systems/portfolio.

                 REALIGNING ORGANIZATION AND PERSONNEL

    The disestablishment of U.S. Joint Forces Command reassigned the 
JECC to TRANSCOM on July 1, 2011. The JECC's Joint Planning Support 
Element (JPSE), Joint Communications Support Element (JCSE), and the 
Joint Public Affairs Support Element (JPASE) provide mission tailored 
joint capability packages to COCOMs. These units facilitate rapid 
establishment of Joint Force Headquarters enabling Global Response 
Force execution and the bridging of joint operational requirements.
    The JECC employs a Total Force mix to deliver scalable mission 
tailored packages providing immediate, short duration support 
establishing and organizing a joint force headquarters. The JPSE is an 
employment package composed of experienced personnel in the planning 
and execution of joint military operations. The JCSE delivers secure 
command, control, communications, and computer capabilities. The JPASE 
provides an early entry capability enabling the Joint Force Commander 
to gain and maintain the initiative in the information domain.

                         TRAINING AND EXERCISES

    TRANSCOM Combatant Commander's Exercise Engagement (CE2) program 
directly supports U.S. national security interests by increasing 
military capabilities, strengthening alliances, and retaining strategic 
access around the globe. CE2 enables joint force readiness by enhancing 
interoperability of the JDDE. The CE2 program has maintained strategic 
access for the DOD in an era where many forward deployed capabilities 
are becoming CONUS based. The program allows Combatant Commanders to 
exercise quick deploying contingency capabilities in response to real 
world crises like contingencies and HA/DR operations and allows DOD's 
strategic reserve fleet to remain ready, while saving resources by 
reserving operating capabilities.
    TRANSCOM participated and supported COCOMs in 20 top priority 
command post and field training exercises, including 147 secondary 
training events in 2011. During the exercises, TRANSCOM provided 
command and control, deployed strategic mobility personnel and assets, 
and provided ITV, including patient movement tracking systems and 
global air transport. TRANSCOM also partnered with NORTHCOM, Federal 
agencies, and State and local emergency planners in the development and 
execution of a staff and patient movement exercise as part of the 
National Level Exercise.

                         AIR MOBILITY READINESS

    The President's Defense Strategy relies on rapid global reach and 
rapid global response to deter aggression and deliver worldwide 
capability. An important linchpin to U.S. military dominance in any 
conflict is maintaining the airlift and air-refueling capability 
required for rapid delivery of the Joint Force Team over long 
distances, guaranteeing access to any location in the world. Our 
initial analysis shows the planned air mobility force structure meets 
the strategic airlift and air-refueling requirements for a single large 
scale operation, while maintaining the flexibility and adaptability to 
support the Joint Force in another region.
    C-17s will continue to meet TRANSCOM's future requirements through 
currently funded purchases, upgrade programs, and fleet rotation. The 
newest C-17s arrive with the latest capability and reliability 
improvements installed, while the older aircraft enter into the Global 
Reach Improvement Program to increase their capability and 
sustainability. Aircraft are monitored and analyzed for stress and 
rotated to maintain structural integrity of the fleet.
    The C-5 fleet is critical to our oversized and outsized air cargo 
capability and management of the fleet focuses on retirement of some of 
the oldest aircraft and increased reliability for the remainder. The 
Reliability Enhancement and Re-Engining Program (RERP) increases the C-
5 fleet mission capable rate (MCR) from 55 to 75 percent. All C-5 Bs 
and Cs and 1 C-5A will undergo RERP for a total of 52 C-5Ms. The Air 
Force's new programmed depot maintenance process changed from a 
``failure of major components'' to a preventative replacement process. 
C-5A retirements will improve aircraft availability by removing 
maintenance intensive jets from the fleet.
    Last year the Air Force awarded a contract for the engineering and 
manufacturing development phase of the KC-46A program. The KC-46A will 
replace a portion of the Air Force's aging fleet of KC-135 
Stratotankers and will provide the DOD and allied nation coalition 
aircraft with more aerial refueling capacity, improved efficiency, and 
increased capabilities for cargo, passengers, and aeromedical 
evacuation. These 179 KC-46A tankers are the first increment of a 
three-phased tanker recapitalization approach driven by fleet size and 
fiscal constraints.
    The C-130 continues as an in-theater workhorse supporting 
humanitarian, peacekeeping, disaster relief, and combat operations. 
TRANSCOM supports DOD and Air Force plans to size the tactical airlift 
fleet to align with the President's Defense Strategy and to meet the 
warfighter's demand for intratheater and Direct Support airlift 
missions. Our initial analysis of the planned total purchase of 134 C-
130Js, plus 184 modernized C-130Hs, shows the Air Force fleet of 318 C-
130s will be sufficient to support the warfighter's demands.
    To operate our mobility aircraft safely in threat environments, I 
strongly support continued defensive systems such as the Large Aircraft 
Infrared Countermeasures system and continued development of the 
Advanced Situational Awareness and Countermeasures capability for 
operations in low to medium threat environments.
    The Joint Operational Support Airlift Center (JOSAC) develops and 
implements CONUS Operational Support Airlift (OSA) solutions to provide 
movement visibility for the DOD. The small passenger aircraft provide 
quick, cost-effective transportation for senior officials and special 
cargo. Recently, the JOSAC assumed the responsibility of scheduling OSA 
aircraft in support of the NORTHCOM AOR, including parts of Alaska, 
Canada, and Mexico.
    Operational Support Airlift and Executive Airlift (OSA/EA) is a key 
component of our Global Air Mobility Enterprise. From the President to 
senior civilian and military leaders, immediate airlift is required to 
carry out diplomatic and military missions across the spectrum of 
activities supporting our National Security, National Defense, and the 
National Military Strategies. While we continue to modernize the OSA/EA 
fleet, we plan to develop a single scheduling and management system 
with a common multiservice database and operational picture. The goal 
is to achieve total and real-time asset visibility of worldwide senior 
leader and OSA/EA movements to enable all stakeholders, including key 
leadership to exercise command and control of their fleet assets within 
their area of responsibility.
    TRANSCOM's Civil Reserve Air Fleet (CRAF) is a force enabler, 
providing us the ability to rapidly deploy forces and equipment in 
response to global events. The institution of incentives for commercial 
carriers directed in the 2009 National Defense Authorization Act have 
proven successful in transitioning the CRAF to a more modern fleet that 
increases reliability, improves fuel efficiency, and lowers contract 
rates. TRANSCOM continues to incentivize the use of modern CRAF 
aircraft while eliminating the aging, less efficient aircraft. The CRAF 
Executive Working Group (EWG) of TRANSCOM, AMC and commercial aviation 
leaders has been a continuing success by allowing open discussion of 
fleet modernization, Federal Aviation Administration flightcrew duty 
and rest requirements, fleet reliability, and supporting operations.
    Routing mobility airlift over the polar ice cap opens an additional 
corridor to the CENTCOM AOR mitigating the threat to single lines of 
communication and saves time, fuel, maintenance, and personnel costs. 
West coast bases' routing KC-135 swap outs over the North Pole saves 20 
percent in time and costs over the traditional European-Caucasus 
routing, while long-range cargo aircraft routed over the polar ice caps 
save up to 14 percent. In 2011, TRANSCOM directed AMC and its 
commercial partners to utilize polar routing in order to improve 
operational experience and capability.
    Air Force Contingency Response (CR) forces provide an essential 
capability to support rapidly evolving contingencies throughout the 
world. AMC maintains four Contingency Response Groups and additional 
expeditionary Global Mobility forces to support the airbase opening and 
Joint Task Force-Port Opening missions. These forces directly support 
TRANSCOM and Joint Force Commanders' expeditionary mobility 
requirements by expanding options for early entry force application and 
sustainment. Rapid response capability along with opening and operating 
from distant and austere bases with a small footprint and minimum 
support requirements is a tremendous force enabler. CR forces can 
deploy within 12-hours notice to quickly assess airbase capabilities 
and begin the base opening process to achieve full mission capability 
in the shortest possible time. CR forces provide combatant commanders 
with initial air base opening and global air mobility support 
capability during wartime, contingency or humanitarian assistance/
disaster response operations.
    In 2011, TRANSCOM performed 24,410 safe and rapid aeromedical 
global patient movements, transporting 14,678 patients to definitive 
care. In the days after the liberation of Libya, TRANSCOM, through the 
Global Patient Movement Requirements Center, supported a Department of 
State request and transported wounded Libyan personnel by military 
airlift to medical facilities in Europe and the United States.
    TRANSCOM continues to increase its ability to meet the DOD's 
expanding patient movement mission requirements. We have matched 
advanced in-flight medical care teams to the specific medical needs of 
our Wounded Warriors, forged and field tested unique DOD Health and 
Human Services deployable air evacuation staging facilities, and 
standardized and integrated theater patient movement regulating 
centers. These improvements will build a safer, more agile, and 
efficient world-wide patient movement system.

                           SEALIFT READINESS

    Sealift is the primary means for delivering the preponderance of 
equipment and sustainment for ground forces, and is essential to 
building up combat power and seizing the initiative during major combat 
operations. In a typical operation, over 90 percent of all cargo is 
delivered by sealift. As one of the largest single shippers of ocean 
cargo worldwide, DOD spent approximately $2 billion in fiscal year 2011 
on commercial transportation through our Universal Services Contract. 
By partnering with commercial carriers, we gain beneficial access to 
their global infrastructure. In return, they benefit from our long-term 
commitment to their ships and networks. When necessary, we activate our 
government-owned vessels from the Maritime Administration's (MARAD) 
Ready Reserve Force (RRF) and MSC's Surge Fleet.
    TRANSCOM's partnership with the U.S. commercial sealift industry 
and the Department of Transportation (DOT) has been vital in developing 
new routes for conveying cargo around the globe, particularly to 
regions with undeveloped infrastructure. Through formal programs such 
as the Maritime Security Program (MSP), Voluntary Intermodal Sealift 
Agreement (VISA) and the Voluntary Tanker Agreement (VTA), DOD gains 
critical access to U.S. commercial capabilities, while ensuring the 
availability of a viable U.S. flag maritime industry and U.S. citizen 
mariner pool in times of national emergency.
    The MSP was recently extended an additional 10 years to 2025. 
TRANSCOM looks forward to working with members of Congress to continue 
to refine the program between now and its implementation date in 2015. 
The most critical vessels in our fleets are the Roll-On/Roll-Off (RORO) 
vessels. TRANSCOM also looks forward to working with our partners in 
developing a joint approach to recapitalize our organic fleet through 
the purchase of vessels available at minimal cost due to the declining 
worldwide markets. Doing so keeps U.S. citizens operating these 
vessels, thereby strengthening our maritime base and generating 
business for U.S. shipyards to complete all conversion and life-cycle 
maintenance work on these ships. Additionally, preserving DOD's organic 
fleet of nine Large Medium-Speed Roll-On/Roll-Off (LMSRs) and 48 Ready 
Reserve Force ships is vital to having the surge sealift capacity 
necessary to meet future contingencies.
    TRANSCOM works closely with DLA Energy to meet DOD's fuel 
requirements. Early in 2011, MSC assumed operational control of the 
second of two U.S. built, U.S. flagged State Class tanker vessels. 
These new double hulled 331,000 barrel ships replaced four older T-5 
tankers that have served us well for the past 25 years. The Motor 
Vessel (MV) Empire State and her sister ship, MV Evergreen State, will 
carry refined petroleum products primarily between commercial 
refineries and DOD storage and distribution facilities worldwide. 
Additionally, I support MARAD's proposed Tank Vessel Security Fleet 
which, if approved, would replace the VTA and provide incentives for 
U.S.-flagged tankers to operate in U.S. foreign commerce in return for 
assured access to DOD in support of worldwide operations.
    Finally, I urge continued congressional support of the National 
Defense Sealift Fund and the MSP. TRANSCOM is working diligently with 
Navy, MSC, and MARAD to instill efficiencies and cost savings in the 
way these critical assets are managed. Support of the MSP, in addition 
to supporting a U.S. flagged commercial fleet, is critical to 
maintaining the U.S. merchant mariner base which provides the manpower 
needed for surge operations.
    The delivery of fuel to combat forces is an absolutely critical 
component to any modern combat operation. As we plan for contingencies 
we must always consider the possibility that the normal fuel 
infrastructure may not be in place or may be unusable. The Offshore 
Petroleum Discharge System on MV Wheeler is one unique way to ensure 
fuel support. This system provides up to 1.7 million gallons of fuel 
from up to 8 miles offshore. This one of a kind vessel is programmed 
for purchase in August 2012, and will become part of the organic fleet 
to ensure continued support to the warfighter.

                           SURFACE READINESS

    The declining condition and operation of our highway infrastructure 
between military installations and ports is a concern for the DOD. 
TRANSCOM will continue to work with DOT to identify DOD's rail, 
highway, and port requirements so they are thoroughly integrated into 
the civil sector planning cycle and maintained for the JDDE.
    In addition to maintaining the infrastructure, DOD must also 
maintain railcar capacity to meet military transportation requirements. 
We are working closely with industry to ensure contracted railcar 
capacity is available to augment government-owned railcar capacity in 
the event of any contingency lift requirements.
    Infrastructure improvement projects at the U.S. Army Military Ocean 
Terminal Concord (MOTCO), in Concord, CA, are essential to TRANSCOM's 
support of PACOM's operational plans and DOD's military capability in 
the Pacific theater. Due to the nature and size of this military 
mission, no suitable alternatives to MOTCO exist on the West Coast. We 
continue to work within DOD to find necessary resources to alleviate 
any ammunition throughput issues in the Pacific Theater.
    TRANSCOM also manages the Defense Personal Property System (DPS). 
DPS is a next generation web-based system designed to manage personal 
property shipments and help improve the move experience for 
servicemembers through procurement of best value transportation 
services. In addition, DPS achieves other key Defense Personal Property 
Program objectives to include: Full Replacement Value protection, 
streamlined direct claims settlement between the customer and the 
Transportation Service provider (TSP), faster automated payments to 
TSP, 24/7 self-counseling, on-line status tracking, and reduced storage 
costs. In fiscal year 2011, DPS executed more than 532,000 shipments 
and can now accommodate approximately 90 percent of all household goods 
shipments for DOD military and civilian personnel and their families.

                      DEVELOPING NEW CAPABILITIES

    TRANSCOM is overcoming deployment challenges to enhance our global 
response capabilities. Joint High Speed Vessels (JHSVs) represent a 
transformational sealift capability by offering an enhanced logistics 
response to military and civil contingencies around the globe. These 
vessels close the gap between high-speed low-capacity airlift and low-
speed high-capacity sealift. Forward deployment of JHSVs in combination 
with warehoused stocks of equipment and supplies will leverage their 
speed and capacity into quick delivery of needed cargos for Service, 
joint, and interagency efforts. We are analyzing ways to further 
capitalize on this capability with the Services and other COCOMs.
    With delivery by airdrop nearly doubling yearly since 2005, 
TRANSCOM's investment in a High Speed Container Delivery System (HSCDS) 
will increase airdrop accuracy and payload weights supporting forward 
deployed warfighters. This capability also enhances threat avoidance 
and tactical maneuverability to aircraft and aircrews. HSCDS has 
successfully completed technology demonstrations with a summer 
operational assessment planned.

                           FISCAL STEWARDSHIP

    The JDDE generated $786.9 million in cost avoidance predominately 
through the use of multimodal operations (the cost-effectiveness of 
ships and the flexibility of the C-17s) and forward based warehousing 
in fiscal year 2011. A continuing example of multimodal operations is 
the movement of Mine Resistant Ambush Protected All Terrain Vehicles 
(MATVs) to Afghanistan. The vehicles were shipped to seaports in 
theater then airlifted five at a time aboard C-17s into country. 
TRANSCOM delivered the majority of the 850 MATVs from October 2010 
through September 2011 using multimodal operations.
    TRANSCOM is committed to being part of the DOD solution to long-
term deficit-reduction challenges by continuing to lead the 
certification effort for alternative fuels. AMC C-17s underwent flight 
tests and certification on cutting-edge renewable bio-jet fuel blended 
with JP-8 in August 2011. Additionally, all aircraft in AMC's fleet are 
approved to fly on a synthetic blend of coal or natural gas-based fuel 
and regular jet fuel.
    Additional efficiency efforts include the Mission Index Flying 
Tool, the Next Generation Cargo Capability Program, and other mission 
area enhancements. The Mission Index Flying Tool has allowed AMC to 
reduce aviation fuel consumption beyond expectations. The Next 
Generation Cargo Capability program standardizes air cargo build-up 
from depot suppliers and AMC aerial ports to maximize volume/weight 
utilization, increasing operational effectiveness, and reducing fuel 
costs while meeting the end customer's delivery requirements. 
Collaboration with our supported customers has moved more materiel via 
surface modes to our CONUS strategic aerial ports, thus minimizing 
aircraft costs while effectively meeting warfighter requirements. 
Finally, to optimize over-ocean shipments and reduce enterprise 
operating costs, we continue to identify opportunities to aggregate 
cargo at appropriate locations.

                             FINAL THOUGHTS

    While the Nation and TRANSCOM face significant challenges at home 
and abroad, we recognize there are great opportunities for positive 
change. Such changes will improve effectiveness and efficiency for the 
warfighters and for the citizens who have entrusted us with the 
responsible use of our Nation's resources. The dedicated men and women 
of the TRANSCOM team take enormous pride in providing the world's best 
deployment and distribution support to our great Nation. ``Together, we 
deliver.''

    Chairman Levin. Thank you so much, General.
    Let's try a first round of 7 minutes. We have pretty good 
attendance, so we probably won't have time for a second round.
    Admiral, let me start with you. The United States and Japan 
are reconsidering certain terms of the 2006 roadmap agreement 
to move U.S. marines off of Okinawa. Specifically, we 
apparently now have agreed to de-link the movement of 8,000 
marines off Okinawa from the development of a Futenma 
Replacement Facility. However, the plan to build the 
replacement facility at Camp Schwab apparently still remains 
unchanged.
    Senators McCain and Webb and I believe that the plan to 
build that replacement facility at Camp Schwab is unrealistic 
and is unworkable and unaffordable. Earlier this week the 
Japanese Prime Minister met with the Governor of Okinawa and 
the Governor apparently has reiterated his opposition to that 
replacement facility plan and has repeated his call for the 
airfield to be located outside of Okinawa.
    So it seems clear that we need an alternative to the plan 
to build a replacement facility at Camp Schwab. Otherwise, the 
current Futenma Air Station is going to stay open and 
operational for the foreseeable future.
    Now, in the NDAA we have a number of requirements relative 
to this issue that will need to be met before any funds, 
including funds that are provided by the Government of Japan, 
may be obligated or expended to implement realignment. There is 
the Marine Corps Commandant's submission of a report of his 
preferred force laydown. There's a requirement that we see a 
master plan for the construction of the facilities and 
infrastructure necessary to implement the Commandant's 
preferred force laydown. We need a certification by the SECDEF 
that tangible progress has been made on the replacement 
facility, and a number of other requirements.
    Are you participating or have you participated in meeting 
those requirements that are laid out in our defense 
authorization bill?
    Admiral Willard. We are participating, yes.
    Chairman Levin. In each of them?
    Admiral Willard. Yes.
    Chairman Levin. Do you know how far along they are? When do 
we expect that that will be filed with us?
    Admiral Willard. I don't have a date for you, Senator. I 
can tell you that the deliberations have been continuous. In 
fact, before those conditions were laid down to DOD we were 
offering a variety of options to the SECDEF as events in the 
Okinawa area were stalled over the past couple of years. So 
PACOM has been involved in sharing about 25 options with DOD 
over time and the preferred laydown that you refer to is one of 
those. So we are very much engaged and will continue to assist 
in determining the final answers to your questions. Obviously, 
the Japanese get a vote in this in terms of progress.
    Chairman Levin. Right. Whatever we do, we intend to do it 
jointly with the Japanese, and that's an important part of our 
intent.
    Relative to China, you've testified a bit on the growth of 
the Chinese military. What do you expect the effect of the 
administration's refocus on Asia to be on China's military 
growth and posture in the region?
    Admiral Willard. We've not seen China's military growth 
affected by the announcement, nor do we expect it to be. It has 
continued relatively unabated. The Chinese are obviously very 
interested in the statement that the United States intends to 
focus on the Asia-Pacific region. I think they see themselves 
in that statement, perception or not, and will continue to 
observe very closely the actions that the United States takes 
to back up those words.
    Chairman Levin. Admiral, you've made reference to the 
strategic guidance that was released by the administration 
recently. Do you support that new strategy?
    Admiral Willard. I do.
    Chairman Levin. Are you satisfied that the fiscal year 2013 
budget supports that new strategy?
    Admiral Willard. I am. As we look at the budget submission, 
the strategy establishes global priorities. The budget 
establishes force structure in terms of acquisitions across the 
Services. How that acquisition strategy is applied to the 
strategic priorities globally will, in effect, answer the 
strategy or not. So this is about the application of what we 
buy, I think, more than anything.
    Chairman Levin. Admiral, you have, I believe, indicated 
that you support the United States becoming a party to the 
United Nations Convention on the Law of the Sea (UNCLOS). I 
would like to press you, because this is your last hearing 
before us, a bit more on that. Can you tell us whether, in your 
judgment, joining this treaty, this convention, will support 
our military operations in the Asia Pacific and whether not 
being a party to that convention disadvantages the United 
States?
    Admiral Willard. Thank you, Mr. Chairman. I think it's a 
great question and timely. I do think that not being a signator 
disadvantages the United States in a particular way. I would 
offer that since 1994 the U.S. Armed Forces have been adhering 
to the legal framework that is consistent with the UNCLOS, and 
we continue to, and we continue to share UNCLOS issues and 
debate UNCLOS legal definitions with our counterparts 
throughout the Asia Pacific.
    Chairman Levin. ``UNCLOS'' is Law of the Sea?
    Admiral Willard. Law of the Sea.
    What the United States doesn't have as a non-signator is a 
seat at the table when the convention is debated or as the 
convention evolves by the various countries that have ratified 
it. I think it's important that the United States have a seat 
at that table. At the end of the day we believe that the 
elements that caused the convention to be set aside in the 
1980s, generally in the area of the commercial-related articles 
within it, have all been corrected and should at this point be 
candidate for ratification. We, again because UNCLOS is so 
important as a framework for determining the actions that all 
nations take in the maritime domain around the world, believe 
strongly that the United States must have a voice in this and a 
seat at the table when we debate UNCLOS in the future.
    Chairman Levin. Does China have a seat at the table?
    Admiral Willard. They do.
    Chairman Levin. Thank you.
    Senator Inhofe.
    Senator Inhofe. Thank you, Mr. Chairman.
    First, let me just respond to the last line of questioning. 
I want to make sure our witnesses know that I'm probably not 
the only one on this side of the table here who disagrees with 
the administration's position on UNCLOS. In fact, I'd like to 
make a formal request, and I will do so in writing, Mr. 
Chairman, that we actually have a hearing on this treaty. I 
think that would be very appropriate to have.
    I know that about 10 years ago we had two hearings, one by 
this committee and the other by the Environment and Public 
Works Committee that I was chairing at that time. But I won't 
get into that now.
    I would like to have you send me something for the record, 
Admiral Willard, as to what specific things have changed since 
the 1980s, actually in two shifts, since the 1980s and the 
1990s, that should change our position on UNCLOS, if you would 
do that for the record.
    [The information referred to follows:]

    The legal regime reflected in United Nations Convention for Law of 
the Sea (UNCLOS) promotes two fundamental tenets of the U.S. strategic 
perspective on security and stability in the world: (1) preservation of 
freedom of access and use of the seas, and (2) the rule of law.

         The Convention preserves freedom by codifying the 
        rights, freedoms, and uses of the sea for all nations, 
        including the United States. This, in turn, promotes our 
        economic and security interests.
         The Convention upholds the rule of law by effectively 
        balancing the interests of coastal states and user states, 
        through precise terminology and concise legal rules. As a 
        coastal state and user state, the United States benefits from a 
        stable legal regime, immune to easy manipulation by others.

    U.S. accession to the Convention would send a strong message to the 
world that we are serious about preserving maritime freedoms and 
upholding the rule of law.

         In the U.S. Pacific Command (PACOM) area of 
        responsibility (AOR), nations with longstanding excessive 
        maritime claims (e.g., Philippines and Vietnam) are modifying 
        those claims, consistent with UNCLOS.
         These member-states cite upholding the rules-based 
        approach of the Convention to resolving the South China Sea 
        disputes as a reason for their efforts.
         Throughout the PACOM AOR, my staff, my component 
        commanders, and I are often asked, ``will the United States 
        ever join UNCLOS?'' We interpret this question as a call by our 
        allies and partners to support efforts to uphold the Convention 
        against those who seek to manipulate it and the underlying 
        customary international law.
         U.S. accession would send a strong message to the 
        nations of the Asia-Pacific region that the rule of law 
        reflected in the Convention is worth upholding and preserving.
         U.S. accession could encourage other nations in the 
        region to reform their excessive maritime claims as Vietnam and 
        the Philippines have begun to do.

    Continuing to operate as an outsider to the legal regime 
significantly undermines our credibility when we attempt, on a 
recurring basis, to challenge and protest the failure of other nations 
to adhere to international rules governing uses of the oceans.

         We routinely cite the rules contained in UNCLOS, 
        regarding maritime navigation, maritime safety, sovereignty, 
        and jurisdiction, among others as being universally applicable.
         We rely on the rules in UNCLOS when criticizing 
        nations for various actions that we find inconsistent with 
        international law in the maritime domain.
         The effectiveness of our challenges to violations of 
        international law regarding uses of the oceans, are handicapped 
        by the fact that members of UNCLOS respond ``How can you 
        lecture us about failing to comply with UNCLOS when you are not 
        even a party to it?''
         Consequently, U.S. objections are often ignored or 
        dismissed.
         Becoming a party to UNCLOS would significantly 
        strengthen our standing and credibility when demanding 
        adherence to international law in the uses of the oceans.

    The United States faces a different world today in which some 
rising nations seek to challenge the existing rules-based international 
order.

         When UNCLOS was negotiated, the United States shared a 
        converging interest with its leading competitor (i.e., the 
        Soviet Union) in preserving the rights, freedoms and uses of 
        the sea.
         Today, there are rising nations (e.g., China) that do 
        not share this converging interest in preserving these 
        freedoms. Moreover, those nations also do not fully respect the 
        concepts behind adherence to the rule of law. Instead, they 
        view the law as a tool to be used when useful and ignored when 
        necessary. China refers to this concept as ``Legal Warfare.''
         In our view, the best way to prevent that manipulation 
        of the law is to guard it closely from within the system.
         So long as the United States remains outside the 
        established rule-set of the Convention as a non-party, we face 
        an unnecessary impediment to our ability as a nation, 
        diplomatically and militarily to preserve the rules embodied in 
        the Convention.

    The United States cannot preserve freedoms and uphold the rule of 
law by our military presence or activities alone.

         Unlike conventional law, customary law is constantly 
        subject to change and evolution over time through state 
        practice of all nations.
         Critics of U.S. accession who argue that U.S. military 
        superiority alone can uphold the legal regime reflected in 
        UNCLOS as customary law ignore the reality that the United 
        States cannot depend solely on one element of national power to 
        protect national interests.
         Relying on the U.S. military as the sole means to 
        protect U.S. interests sends the wrong message to rising 
        nations, such as China, that they too should rely upon their 
        militaries to resolve international disputes, such as those in 
        the South China Sea.
         To maximize the likelihood of achieving our strategic 
        objectives, the United States should leverage all elements of 
        national power, including diplomatic, informational, and legal.

    The primary concern of President Reagan with the final text of the 
Convention involved the issue of deep sea-bed mining. According to 
President Clinton, and as agreed to by Presidents Bush and Obama, those 
concerns were effectively mitigated between the time that President 
Reagan decided not to sign the Convention in 1982 and 1994 when changes 
to the Convention were agreed.

         President Clinton submitted the revised Convention to 
        the Senate for ratification in 1994, stating that the changes 
        addressed President Reagan's concerns.
         Presidents Bush and Obama implicitly agreed with 
        President Clinton when they supported Senate ratification.

    According to Presidents Clinton, Bush, and Obama, all of our 
national security interests were preserved in the final text of the 
Convention.

         When the Convention was negotiated in the 1970s and 
        early 1980s, the United States was a leading nation at the 
        table throughout.
         Three successive Presidents, from both parties and 
        leaders of the U.S. military have consistently supported U.S. 
        accession to the Convention.

    As described above, U.S. accession would bolster, not impede, 
global U.S. military activities.

         Codifies rights, freedoms and uses of the sea critical 
        to the global mobility of our military forces, including the 
        rights of innocent passage, transit passage, archipelagic sea 
        lanes passage, the freedoms of navigation and overflight, and 
        ``other internationally lawful uses of the sea'' (e.g., 
        military activities, operations, and exercises).
         The U.S. military will not be subject to compulsory 
        dispute settlement procedures (i.e., international courts or 
        arbitration).

                 The Convention expressly permits member-states 
                to opt out of those procedures for ``disputes 
                concerning military activities.''

         The Convention expressly exempts foreign ``warships, 
        naval auxiliaries, and other vessels or aircraft owned or 
        operated'' by a member-state from coastal state regulations of 
        the marine environment.

    Senator Inhofe. Admiral Willard, I have always been 
concerned about the quality of our intelligence on North Korea. 
There have always been a lot of surprises there. I won't repeat 
the details: my observation back in August 24, 1998, when we 
asked the question how long it would be until North Korea would 
pose an Intercontinental Ballistic Missile threat and they were 
talking about around 3 to 5 years, and it was 7 days later, on 
August 31, 1998, that they actually did fire one. It was a 
Taepodong 1.
    I'm concerned about their progress now and the three-stage 
rocket that they actually were able to launch in 2009. So I 
guess I'd just ask you, are you satisfied with the quality of 
the intelligence we're getting on North Korea?
    Admiral Willard. Senator, we know a great deal about the 
various structures in North Korea, including the efforts 
they're making to nuclearize and develop ballistic missile 
delivery capabilities. That said, there is never perfect 
information with regard to North Korea in virtually any area.
    I'm also satisfied with the emphasis that's being placed on 
North Korea, given the importance of what you've suggested, and 
the efforts specifically by the entire intelligence federation 
to provide me the kind of information that we require to track 
North Korean developments day to day.
    Senator Inhofe. Okay, I think that's significant.
    In terms of the 29-year-old replacement for Kim Jong Il, my 
impression is that it's just more of the same and perhaps not 
really going to be a major change in terms of decisionmaking. 
What is your opinion of Kim Jong Eun?
    Admiral Willard. We think that in general he's a Kim and 
he's surrounded by----
    Senator Inhofe. He's a Kim, yes.
    Admiral Willard. He's surrounded by an uncle and Kim Jong 
Il's sister and others that I think are guiding his actions. So 
in that sense we would expect, as you suggest, more of the 
same. The strategy has been successful through two generations. 
It wouldn't surprise us to see an effort to make the strategy 
work for a third.
    That said, he's a young man and relatively untested and 
those around him may have some differences of opinion regarding 
the direction that North Korea heads. So we are interested in 
seeing the influence of a treaty ally like China or the 
direction that they take in various security areas, including 
proliferation and nuclearization.
    Senator Inhofe. All right, I appreciate it. I'm going to 
ask you something about what you said on China, but first I 
want to ask General Fraser.
    I've had a particular interest in Africa and U.S. Africa 
Command (AFRICOM) for quite some period of time. I'd like to 
ask you, what type of support is TRANSCOM able to give AFRICOM 
in their AOR today?
    General Fraser. Thank you, Senator. As we look to AFRICOM, 
we've managed to meet all their requests and their 
requirements. That has come in the form of support to the 
Libyan operations, where we were able to provide both lift and 
tanker support. They had follow-on requests for Libya, which we 
provided some support for. We sailed in some ships to provide 
equipment into Libya. That's one form. We still provide support 
also to the Combined Joint Task Force for the Horn of Africa, 
meeting those requirements.
    But also our new command, the JECC, has had several 
requests for our planners. So Admiral Stearney and his folks 
have moved forward to help out General Hamm in some of the 
planning that he's been doing. So we have not failed to meet 
any of the requests from AFRICOM.
    Senator Inhofe. Is it your opinion that AFRICOM is getting 
adequate resources to carry out the mission?
    General Fraser. Yes, sir, it is.
    Senator Inhofe. If you find that it's not, if you'd let us 
know it would be very helpful.
    Getting back to something that maybe I misunderstood, in 
terms of China's military buildup, we know that it's been an 
average of what, 18.75 percent a year now. I remember back 
during the Clinton administration when they were even more 
aggressive than that. Did I understand you to say that you 
don't witness the growth in their capabilities or you do? Would 
you clarify your statement as to your observation of China's 
threat and capabilities?
    Admiral Willard. I think I tried to characterize it as 
growth unabated, so they continue to advance their capabilities 
and capacities in virtually all areas.
    Senator Inhofe. In all areas. That's something significant 
because it's conventional forces, and then they seem to be 
having it all. I look at that as a great threat. I remember 
early on when I was first elected. Actually, that was over on 
the House side. There was a book by Anthony Kubek called, 
``Modernizing China.'' I don't know whether you've ever read it 
or not, but I think for anyone who is dealing with China and 
Taiwan, it would be worthwhile reading that.
    Let me ask you, do you still feel the same way about my 
favorite programs, 1206, 1207, 1208, International Military 
Education and Training (IMET) and these programs?
    Admiral Willard. We do, very strongly, Senator. 1206 in 
particular because of the work that we're doing with the 
Philippines and others in counterterror has been very helpful, 
and we continue to rely very heavily on those funds.
    I would just comment that we think IMET is a most powerful 
tool in terms of exposing our foreign counterparts not only to 
U.S. education, military education, and standards and values, 
but also in bringing the nations, the allies, and partners 
together in the region as alumni. So these are very, very 
important programs as it relates to strengthening our allies.
    Senator Inhofe. The IMET program has been so successful in 
our change in focus that we recognize we're not doing them the 
favor, really they're doing us the favor. Once an allegiance, a 
close relationship, is established, it stays forever.
    Admiral Willard. I agree.
    Senator Inhofe. Yes, sir.
    Thank you, Mr. Chairman.
    Chairman Levin. Thank you very much, Senator Inhofe.
    Senator Lieberman.
    Senator Lieberman. Thanks, Mr. Chairman.
    Thanks, Admiral Willard and General Fraser, for your 
service.
    Admiral, thanks for all your years of service, and to your 
wife also. You've really given great service to our country and 
great leadership in the years I've come to know you through my 
membership on this committee. I must say that I've been 
impressed over the years that you've not only proven yourself 
to be an exceptional military leader, but I think you've always 
had an ability, while carrying out the details of your military 
responsibilities, to see the larger picture in which you and 
the United States have been operating, and I've always found my 
conversations with you to be very instructive.
    So I appreciate that very much and wish you the best in 
your next chapter.
    Admiral Willard. Thank you.
    Senator Lieberman. So let me begin, having said that, with 
a larger picture statement and question, which is that in the 
travels over the last year that I've been able to do in the 
PACOM AOR, and meeting people here as they come from the 
region, it strikes me that this rebalancing of our foreign and 
military policy toward the Asia Pacific is not just an 
initiative on our part in pursuit of our economic and security 
interests, but it is really a reaction to a kind of demand from 
within the region that we be more involved.
    It's striking, I think, and perhaps not appreciated enough 
by people around the country, at a time when there's a lot of 
concern about America being in decline, America the unpopular, 
that not only among the more traditional allies has our 
relationship grown stronger, but that there are whole new 
groups of countries that are seeking stronger relations with 
us, such as Vietnam and Myanmar, for instance.
    So I wanted to ask you at the beginning if you agree that 
that's the case and, if so, why? Is it just about fear of China 
and the hope that we will balance China as part of our 
rebalancing? Or is there more to it than that?
    Admiral Willard. Thank you. I do agree with your statement, 
and I think I've testified in the past, the amount of 
encouragement that has come from the region, from virtually all 
the actors in the region, with regard to their desire for U.S. 
staying power and influence in the region and increased 
engagement.
    There was a perception over the course of the last decade 
of warfare that our presence in the Asia-Pacific region was 
diminished, and, in fact, our ground force presence was 
decremented by about 10 percent as we in PACOM rotated forces 
in and out of the theater of wars over the past 10 years. But 
our ship presence, and our aircraft presence, remained 
relatively steady, albeit working the ships and airplanes hard 
to do it. So we've maintained a presence, but there was a sense 
in the region that the U.S. commitment to the region had been 
somewhat diminished for a variety of reasons.
    I think that refrain has not stopped. I don't think it's 
just about China. I do think that the fact that China has 
advanced its military capacities to the extent that it has 
certainly is one element of that. But I think there has been a 
desire, a strong desire in the Asia-Pacific region, 
continuously for U.S. engagement economically and otherwise.I 
think they regard a U.S. presence there as unquestionably 
contributing to the security and stability of the Asia-Pacific 
region.
    It's not lost on anyone that for nearly the past 6 decades 
we've enjoyed relative security and growing prosperity.
    Senator Lieberman. Right.
    Admiral Willard. So I think there's a desire for U.S. 
engagement regardless, and certainly there is, I think, a great 
deal of optimism in the region as a consequence of the recent 
announcements that have been made.
    Senator Lieberman. That, in fact, the role that America has 
played in providing stability and security in the Asia-Pacific 
region over the last 6 decades, as you've said, has been one of 
the preconditions of the enormous growth and prosperity in the 
region over that time.
    Admiral Willard. Absolutely.
    Senator Lieberman. Is it fair to also say that part of what 
draws a lot of people and countries in the Asia Pacific toward 
us may well be our form of government, that during this period 
of time not only has there been an economic prosperity growing 
in the Asia Pacific, but democracy has expanded as well?
    Admiral Willard. It has. I think when you look at countries 
like India and the engagement that's ongoing between the United 
States and India; Indonesia, which has a relatively nascent 
democracy, that has been very successful, and its desire for 
increased engagement with the United States, and others, that 
you are right. There are a lot of U.S. values that are highly 
regarded in the region and I think our form of governance is 
one of them.
    Senator Lieberman. So in the midst of all that, I worry 
that as we get this move toward us and urging us to be more 
involved for mutual economic security, even political 
governance interests, that we're sending a message out by the 
cuts in defense that are part of the Budget Control Act (BCA), 
leaving aside sequestration, that maybe we're not going to be 
able really to deliver on our promise of increased involvement 
or, at worst, that people in the region and countries will 
think it's rhetoric.
    So I wonder how you feel about whether the cuts required 
under the BCA of last year, not the potential sequestration, 
could impose risks on our strategy in the PACOM AOR, and 
whether you've heard any of those concerns from political or 
military leaders in the region.
    Admiral Willard. I think the region broadly recognizes two 
things: one, that post-two wars a decade long that, as the 
United States has in the past, a reduction in the defense 
budget following those wars has generally always occurred and 
is occurring once again. I think when you combine that fact 
with the fiscal circumstances and challenges that our country 
faces in debt and deficit, it does raise questions in the 
region regarding what the true extent of cuts to the defense 
budget could be.
    I think the second dimension to this issue is how in a 
reduced budget environment the Asia Pacific will be attended to 
with regard to force structure and readiness in the future. So 
I think on the one hand it's not particularly surprising to 
anyone in the region that our defense budget is being reduced, 
sequestration aside, but I think that it has raised questions 
and we're asked to clarify how in the reduced budget 
environment that's being widely publicized that we will meet 
our requirements in the Asia-Pacific region. Again, I would 
offer that the answer to that is, regardless of the adjustments 
in force structure that take place, how we emplace that force 
structure, bias that force structure into regions of the world 
that matter most, is I think in the end, what will answer the 
mail.
    Senator Lieberman. Well, to me that's a significant answer, 
and it's one that I hope we will keep in mind as we go forward 
with our work on the defense authorization bill and our 
colleagues in the Appropriations Committee do the same on the 
DOD budget. I hope we can find ways to add on to what the 
administration has requested pursuant to the BCA.
    I thank you very much again for your service, your 
leadership, and your testimony today.
    Admiral Willard. Thank you, Senator Lieberman.
    Chairman Levin. Thank you, Senator Lieberman.
    Senator Chambliss.
    Senator Chambliss. Thanks, Mr. Chairman.
    Admiral, to you, let me just echo what others have said 
with respect to thanking you for your service to our country. 
You have certainly served in multiple roles of leadership 
during the time that you have served America and you're to be 
congratulated for that. Thanks also to your wife for her 
commitment. I'm just pleased to hear you've made the wise 
decision of retiring to the Atlanta area. I look forward to 
continuing to take advantage of you and your expertise since 
you'll be close by.
    Let me talk to you for a minute about China. You discussed 
in your statement the continuing growth of China and their 
increasing military power, obviously. Specifically, you comment 
that China's military modernization, and in particular its 
active development of capabilities in cyber and space domains, 
and the question all these emerging military capabilities raise 
among China's neighbors about its current and long-term 
intentions, is one of the main security challenges confronting 
the United States across the region.
    China is developing anti-access and area denial 
capabilities that may shift the balance of power in the region. 
The types of platforms and capabilities that China is 
developing have been interpreted by some to limit freedom of 
movement by potential adversaries and also to require potential 
adversaries to conduct military operations at increasing 
distances.
    Can you comment on what you believe needs to be done in the 
Pacific theater to preserve the United States' and our allies' 
freedom of movement and access across the region?
    Admiral Willard. Thank you, Senator. I think first of all 
it needs to be understood that in terms of U.S. military 
presence, we remain present throughout the region and in all 
areas wherefreedom of action is required. So whether we're 
talking the South China Sea, East China Sea regions, Philippine 
Sea, or elsewhere in the Asia Pacific, the United States 
remains present.
    In terms of operations in what could be a potentially 
denied environment, I think it's very important that the United 
States make the necessary investments to ensure its military 
access to those regions. I would just offer that in the South 
China Sea alone the sea lines of communication carry $5.3 
trillion of regional commerce, of which $1.2 trillion is U.S. 
commerce, and the U.S. military must be present there to ensure 
the security of those sea lines of communication and that 
important economic commerce for the United States and for our 
regional allies and partners.
    So we will be present, and it's important that we make the 
necessary investments to assure that presence even in a denied 
area scenario.
    Senator Chambliss. In that same vein, part of the assets 
that you have in the inventory there now are a limited number 
of F-22s, limited by the fact that we only have a limited 
number that have been produced. We've maintained air 
superiority and air dominance in that region since the Korean 
War and it's a vital part of our defensive mechanisms and 
posture there. Now, with those limited number of F-22s and it 
looks like potentially a slowdown of the production of F-35s, 
are you concerned long-term? I realize short-term maybe not, 
but long-term do you foresee this as a problem when it comes to 
maintaining air dominance and air superiority?
    Admiral Willard. Sir, I'm satisfied with, as you suggest, 
short-term, the number of F-22s that are on hand and available 
to us. I think we're all somewhat concerned long-term to see 
that the F-35, in its development, provides the kind of 
capabilities to our Air Force, Navy, and Marine Corps that it 
was designed to. So very interested to see that program remain 
healthy and deliver the capabilities that we require out there.
    Senator Chambliss. Would you consider that weapons system 
imperative for the long-term capability of air dominance and 
air superiority?
    Admiral Willard. I would. I think fifth generation 
capability is mandated. We have others in the world that are 
developing those capabilities and, as you suggest, if we 
requiredominance in the air in the event of a contingency, then 
certainly the fifth generation fighter capability is part of 
that equation.
    Senator Chambliss. General Fraser, the President's 2013 
budget plans to cut strategic airlift and retire over 200 
aircraft in fiscal year 2013 and nearly 300 aircraft over the 
Future Years Defense Program. The President's budget will 
reduce mobility capacity by retiring all C-5As, retiring or 
cancelling procurement of all planned C-27Js, and retiring 65 
C-130s. After these retirements there will be a fleet of 275 
strategic airlifters and 318 C-130s. In addition, the Air Force 
will retire 20 KC-135s and maintain a fleet of 453 air 
refueling aircraft.
    With such a reduction of strategic mobility and airlift and 
the cancellation of a whole airplane program, how do you plan 
to maintain supply, personnel transport, and logistics chains 
that require significant airlift capabilities? What additional 
airlift requirements do you foresee in the future for the 
various theaters in which TRANSCOM operates, and how confident 
are you that you're going to have the airlift capabilities that 
you need?
    General Fraser. Senator, thank you very much. First off, I 
would start by saying that we have a new strategy. The force 
structure that is put forth supports that strategy and it is 
also backed by some analysis that we have actually completed in 
looking at that strategy, and also in working with the 
combatant commanders.
    With respect to specific platforms that you talked about 
there, I would comment first on the tankers. You mentioned a 
20-tanker reduction. I certainly support that. What we have 
seen that isactually enabling more capability and capacity with 
respect to tankers is that depots have gotten better. So as we 
look to the future and they have streamlined their processes, 
we're seeing fewer aircraft in the depot, which certainly 
allows us to take out some of the more costly aircraft there 
and therefore the reduction with respect to those tankers.
    Historically, as I recall, they've always planned on about 
19 percent of the force being in depot and we're seeing 
something more along the lines of 10 percent in the future. So 
that's added capability, coupled with the contract, the KC-46, 
which is key to the future, and bringing that system online, 
will give us both air refueling and some lift capability as we 
transition that aircraft into the Active Duty and are able to 
support the various theaters around the world. So the KC-46 is 
a part of that movement to the future and modernizing that 
fleet.
    There's also a modernization effort on the KC-135s that we 
need to continue, which enables them to continue to perform in 
the future. They're going to have to bridge to the future 
tanker assets as they come aboard.
    As I look at the 130s, the numbers that they're talking 
about are supportable. When I look at the 318, that also 
includes approximately 50 C-130s to continue to provide direct 
support to the Army, which is something that the Air Force has 
moved in over time and has shown that we can do that in the 
theater. I think, based on my discussions with the commanders 
in the field, they are very pleased with the support that they 
are getting with the assets that are there.
    The C-27, I had the opportunity recently to be in the 
theater. I talked to the folks there. It's performing well and 
I'm very proud of the service and what those men and women are 
doing. But I'd also comment that it's a costly platform. It's a 
niche platform. So as we look at the strategy and we look to 
move into the future in a multi-capable aircraft, something 
like the C-130, a modernized C-130J as we look to the future, 
something that's going to give us more capability at reduced 
cost, which is something that is certainly worth considering.
    So when I look at that from a holistic standpoint, it's 
certainly supportable. The C-130Hs are going to be modernized. 
That's a program that is ongoing and the Air Force needs to do 
that as they enter into some items that are on that aircraft 
that are going to time out and give them access. So as they 
optimize that fleet of the future, it will be a very capable 
force, a modernized force of 318 C-130 aircraft.
    To the strategic lift, looking at that, I am supportive of 
the strategy that's put forth, and as we evaluated those 
numbers and looking at the positive things that are happening 
with the C-5M, for instance, it has a higher mission capability 
rate, which gives us greater capacity and capability. It's 
currently the only aircraft that we can actually fly the polar 
routes on. You can't do that with the C-5As, for instance, and 
load much on it. So there's great capacity in these Ms as we 
move to the future.
    So modernizing the C-5s and going to 52 C-5Ms in the future 
gives us greater capacity and capability, with increased 
mission capable rates, from what we're seeing currently on the 
As now, around 55 percent, to about 75 percent. So there's 
greater capacity there, and so that's very positive with 
respect to the strategic airlift.
    Also along the same lines, the C-17s continue to perform 
magnificently in the theater. Every time we have turned to the 
C-17, it has always been there. So as we move to the future 
with the C-17s that we have, there will be plenty of them, and 
so that's how we're able to come up with the strategic airlift 
to be able to support the theaters in the future.
    It will support the strategy as I mentioned, and the two-
war construct remains in effect. We just have to manage those 
forces, it's what we'll have to do, and that's what you were 
talking about there. We in TRANSCOM will ensure that we do that 
to support the combatant commanders' requirements.
    Senator Chambliss. Thank you, Mr. Chairman.
    Chairman Levin. Thank you, Senator Chambliss.
    Senator Reed.
    Senator Reed. Thank you very much, Mr. Chairman.
    First let me begin by thanking and commending Admiral 
Willard and Mrs. Willard for their extraordinary service to the 
Navy and to the Nation. Thank you, sir, for what you've done. 
Ma'am, thank you too, and your personal kindness also.
    Let me just quickly follow on the point that Senator 
Chambliss made, General Fraser, about strategic airlift. I 
think it should be noted that Senator Ayotte played a very 
critical role last year in addressing this issue of C-5As, and 
we lowered the threshold to 301. Now your proposal, as you 
indicated, is 275 strategic airlifters.
    Just to follow on the points you made, which I thought were 
excellent, it is not just a question of supporting current 
operations, but also the obligation to reconstitute quickly, if 
necessary. Are you prepared to reconstitute and increase 
efforts if called upon, given the proposed 275?
    General Fraser. Sir, we are postured well to support any of 
the requirements that we have. As you are aware, we have had 
pop-up requirements, and with the flexibility that we have 
within our system as the distribution process owner and 
synchronizer we're able to reach in and get assets when we need 
them. I could give examples of where we're able to do that, 
reaching in with the ability to pull in-service or in-transit 
aircraft to do a different mission.
    A case in point would be support for aeromedical airlift 
that we were asked to do out of Libya. After Libya operations, 
we were asked to find the necessary assets and, using those in-
service assets, diverted and utilized a C-17 to actually pick 
up some critically injured individuals and bring them back to 
the United States with a critical care team. The other thing 
that we were able to do was work with U.S. European Command, 
utilize some of their assets that they actually had for C-130s, 
to bring other injured back.
    We have a very flexible, a very resilient system and 
process to be able to respond to these pop-ups.
    Senator Reed. Is it fair to say that, rather than just the 
number of platforms, it's the capability of individual 
platforms and the system you use that that gives you advantages 
and gives you the comfort that you can reduce the number of 
platforms?
    General Fraser. It is, sir. It's also the support, the 
tremendous support that we actually get through the Civil 
Reserve Air Fleet (CRAF) program. The CRAF and our commercial 
partners play a big role. An example of that is how they were 
able to turn and support us when we were asked to bring the 
troops out of Iraq before the holidays. That's a very busy time 
of the year, and with the accelerated timeline that we were 
given, we were able to get 99 percent of the troops back to the 
United States before the holiday period. That last 1 percent 
came home before the end of the year as they were turning in 
some final equipment.
    So that's the flexibility that we have within the system 
for both organic and our commercial aircraft.
    Senator Reed. Thank you.
    Let me change topics. General Fraser, the NDN is 
increasingly key to our operations in Afghanistan. Primarily at 
this point it's a one-way system, but you and your colleagues 
are trying to make it a two-way system, not only delivering 
material into the country, but also planning to withdraw 
material out. Can you comment on the status and the potential 
importance and growth of the NDN through Kyrgyzstan and other 
countries?
    General Fraser. Sir, thank you very much. We have had 
tremendous support through the NDN. Currently, with the border 
closed in Pakistan, we're able to continue to support ongoing 
operations in Afghanistan and we can continue to do that 
because of the NDN, which is allowing us to bring goods in.
    But I would also comment along the same lines, it's not 
just the NDN that's allowing us to do that. It's the other 
aspects that we have with multi-modal. Multi-modal is allowing 
us to move our assets to the theater via surface and then fly 
them in there at the end. So we have a resilient system that 
gives us more than one way to support the theater, which is not 
allowing us to have a single point of failure.
    Along the lines of the retrograde, it's a daunting task, I 
will admit that. But I'll also say that one of the first trips 
that I made was to Central Asia back in December, a very 
positive trip, and had a very good outcome from that trip. We 
now have two-way approval to move non-lethal equipment back out 
of Afghanistan. In fact, we have already set ourselves up for a 
proof of principle and have received approval from the 
countries to do this through what we call the KKT route, which 
is through Kyrgyzstan, Kazakhstan, and Tajikistan. Also, Russia 
has approved this and Uzbekistan recently approved this. Not 
only have Russia, et cetera, approved the non-lethal, but we 
also have approval to do wheeled armored vehicles. This is 
something that we didn't have before.
    We continue to develop these relationships, and so that was 
a very profitable visit going over there. So now we'll run this 
proof of principle to check the processes, to check the 
procedures, but also check the velocity of what could be in the 
future.
    I will also comment, though, that with the amount of 
equipment, and working with the folks on the ground there, we 
need the Pakistan Ground Lines of Communication (PAK GLOC) open 
because of the large numbers that we're talking about that we 
need to bring out in a timely manner. We're tasked this year to 
bring another 23,000 troops out by the 1st of October. We're 
already identifying excess equipment now with the commanders on 
the ground. We have approval to set up a materiel recovery 
element team that's in theater, which is going to help 
facilitate this.
    The other thing I would comment on is, we're also setting 
up some multi-modal operations, where we are now being more 
flexible with all aircraft that are flying in the theater. As 
every aircraft goes in, if it has pallet positions and it has 
capacity on it, then we are making sure that we put something 
on that aircraft and bring it back out, in order to maximize 
that lift and try to get ahead of it as best we can.
    We have a number of things that are going on, two-way 
flows, all those other things that I mentioned.
    Senator Reed. Thank you.
    Admiral Willard, if I may, you have many challenges in the 
Pacific and you can categorize them in general terms in many 
different ways. But one is basically access. One impression I 
have is that for surface ships access is more problematic 
because of the ability to detect ships and engage with 
precision weapons, and that as a result submarines in the 
Pacific have a greater capability to access places. Is that a 
fair generalization?
    Admiral Willard. It is.
    Senator Reed. So that makes, in your view, the submarine a 
key aspect of your strategy and your ability to gain access in 
contested areas?
    Admiral Willard. It does.
    Senator Reed. Thank you very much.
    Chairman Levin. Thank you, Senator Reed.
    Senator Brown.
    Senator Brown. Thank you, Mr. Chairman.
    So, General Fraser, is it true that we're having difficulty 
going through Pakistan to provide transport.Is it more 
difficult now?
    General Fraser. Sir, the PAK GLOC is shut down at this 
time.
    Senator Brown. Right. We give them billions of dollars in 
aid. That's why, Mr. Chairman, I'm floored that we're giving a 
country billions of dollars in aid and they can't accommodate 
us to allow for the safe transport of goods through their 
country. So that's something I hope, Mr. Chairman, we try to 
address. That's not for you, but it's more for us, sir.
    I just want to take it a little step further. What level of 
risk do we assume by reducing the C-5 fleet, particularly in 
the area of oversized air cargo capability?
    General Fraser. Sir, backed by analysis and against the new 
strategy that has been put forward, we think that any increased 
risk is manageable as we look to the future. Oversized/outsized 
cargo, when we look at the scenarios that we run, we can meet 
the mission.
    Senator Brown. Do you believe that having a robust 
strategic airlift capability on the east coast is part of that 
overall strategy?
    General Fraser. Sir, the inherent flexibility that we have 
with air is, of course, we can shift and we can swing it to 
where we need it. It is not uncommon for us to take forces from 
one theater to another dependent upon the operations that are 
needed, whether it's supporting a Haiti operation where we have 
support of aircraft out of the Pacific, or whether it's in 
support of a Libyan operation, where we engaged the total 
force, we have a number of volunteers to support the tanker 
bridge.
    These types of things, the flexibility of our air fleet we 
can position it where we need it.
    Senator Brown. But in particular with regard to the east 
coast of the United States, do you think that it's important to 
have a strategic airlift capability in this part of the 
country?
    General Fraser. Sir, again it's not about where it is 
located; it's the inherent flexibility that I have that I'm 
able to position it where I need it, and where it comes from is 
not something that I focus on.
    Senator Brown. Well, it's something that I focus on as a 
Senator, and especially when we have a base like Westover, that 
has incredible airlift capability, has a long and historic 
relationship providing those services, not only with great 
honor, but with great capability. So I was wondering if you 
could comment on how TRANSCOM's mission is affected if that 
capability is degraded?
    General Fraser. Sir, we'll still get the support as we work 
with AMC no matter where the assets are located. They've always 
stepped up and provided what we need.
    Senator Brown. Admiral Willard, the Littoral Combat Ship 
(LCS), how important is that ship with respect to meeting the 
regional threats?
    Admiral Willard. I think it will be very important. I think 
the ship has attributes that certainly we favor out there, 
including its speed, capacity, and shallow draft. So if the 
mission modules are properly adapted, I think it will have a 
wide range of capabilities that can be used in contingency or 
peacetime.
    Senator Brown. So do you think your mission will be 
affected by going below the acquisition program of 55 ships? If 
so, how?
    Admiral Willard. Capacity is a capability in and unto 
itself. I think it's important that we maintain the capacities 
of force structure where we need them. I think the total 
acquisition program is less important to PACOM than the number 
of LCSs that ultimately wind up in that AOR. So however we bias 
those ships, I think it's important that the LCS is there to 
meet the needs that PACOM has.
    Senator Brown. General Fraser, back to you. How does the 
reversibility plan factor into the overall strategy? In other 
words, do you feel comfortable that with 275 strategic 
airlifters we'd be prepared to transport troops and equipment 
to the region in response to unforeseen contingencies? If so, 
what sort of risks are involved in that decision?
    General Fraser. Sir, I am confident in the number 275. We 
also have to understand that we are backed by a tremendous 
commercial partnership that we have through the CRAF program 
and the ability to move both passengers and cargo. They have 
been instrumental in continuing to provide support to the 
theater, whether it's direct or actually through multi-modal 
operations.
    Senator Brown. Admiral, do you agree with that? Do you 
think that we need only 275 airlift mobility assets to meet the 
mission requirements?
    Admiral Willard. I agree with General Fraser's assessment 
of how we will make that number work, yes.
    Senator Brown. I'm deeply concerned about the Air Guard and 
Air Force Reserves, General Fraser. I know it's a big part of 
your operations, and as the Air Force begins to downsize some 
of the things I've heard from a lot of the Air Guard, 
especially concerns about the gutting of that asset--I'm 
wondering if you could maybe talk about that and how it 
affects, it factors into TRANSCOM's overall strategy, because I 
have always felt that that's where the best bang for the buck 
is, and I'd just like to get your thoughts on that.
    General Fraser. Sir, our Total Force--the Guard, Reserve, 
and Active Duty--have always come together to meet the mission. 
We very much value the contributions that our Guard and Resere 
continue to provide us. They have always been there when the 
call went out. I would use the operation in Libya again as an 
example, in that when we needed to set up the tanker bridge we 
turned to AMC, who then reached out to our Guard and Reserve. 
They looked for volunteers. They were ready, they raised their 
hand, and they went forward. So they've always been there and 
volunteered to support the mission.
    Senator Brown. Are you getting a handle on the container 
detention fees that resulted in millions of dollars in 
penalties, and can you comment on what has been done to 
mitigate these fees?
    General Fraser. Sir, we're taking a number of different 
actions with respect to the container detention fees. We 
continue to monitor it very closely. A couple of things that we 
have done recently, I have personally engaged the commanders 
not only at U.S. Central Command, but also I talked to General 
Allen about this when I was in the theater, as well as other 
commanders that are in the field in Afghanistan.
    We have learned some lessons from the past in Iraq with 
respect to our containers and how we manage them. A couple of 
things that we're doing is to try and make sure that when we're 
in Afghanistan, we try to use as many government-owned 
containers as we can and then return those that belong to our 
commercial carriers back into the system as rapidly as we can.
    There's an accountability process that we're also going 
through to make sure that we have a container management system 
that more accurately tracks where these containers are.
    We're actually going to address it in our next universal 
services contract (USC) as we move from what we call USC 6 to 
USC 7. So there are some actions that we're taking within that 
contracting vehicle to, one, give us more flexibility, in other 
words increasing the days of ``free-time'' before detention 
charges start accruing. Also, the fact that we'll go from a 
minimum of 90 days to 60 days before we can buy the container, 
which drives the container purchase price down. So these are 
things that we're working with commanders, with education on 
how important it is for commanders to get the containers back 
into the system. It's a holistic approach.
    Senator Brown. Thank you.
    Senator Lieberman [presiding]. Thanks, Senator Brown.
    Senator Inhofe. Just a unanimous consent request, if I 
could, Mr. Chairman.
    Senator Lieberman. Go right ahead.
    Senator Inhofe. Regarding my opposition to the UNCLOS, I 
ask unanimous consent that an article written by John Bolton 
that appeared in the Wall Street Journal on September 29, 2011, 
be made a part of the record.
    Senator Lieberman. Without objection. Thank you.
    [The information referred to follows:]
      
    
    
      
    
    
      
    Senator Lieberman. Senator Hagan.
    Senator Hagan. Thank you, Mr. Chairman.
    I just wanted to express my deep appreciation and thanks 
for your service, Admiral Willard and General Fraser, and 
particularly, Donna Willard, thank you for all of your 
commitment, hard work, and service to our country, too.
    Admiral Willard, China continues to assert its claim to the 
South and East China seas at the expense of its neighbors. 
Would you expand on the excessive maritime claims the Chinese 
are making in these waters, to include increases in aggressive 
behavior?
    Admiral Willard. Thank you, ma'am. I will, although I would 
offer that China is not the only claimant in those waters whose 
claims are regarded as excessive. So there are, as you'll 
recall, six claimants in the South China Sea: Taiwan and China, 
Philippines, Vietnam, Malaysia, and Brunei. All lay claim to 
features and/or islands in the South China Sea region. Some 
have submitted to UNCLOS their continental shelf claims and so 
on, and in many cases they're disputed.
    What makes China unique is that they've laid claim to 
virtually all of it. The assertion that the South China Sea 
writ large is China's historical water and that all the 
features and islands and consequent resources that are located 
there should be regarded as Chinese I think is the contentious 
issue within the region and among those contiguous nations that 
also claim many of those features.
    We've seen fewer confrontations in 2012 than we did in 
previous years. 2010 was quite a landmark in terms of the 
confrontations that were ongoing. That's not to say they're not 
occurring now.
    So China continues to challenge any vessels that are 
conducting resource surveys, oil and gas surveys for example, 
that are within their claimed space. They continue to often 
shadow military ships and activities that are occurring within 
that claimed space, and they're making continuouslegal 
assertions and demarches to reinforce their claims.
    So they remain aggressive. I would offer, Association of 
Southeast Asian Nations (ASEAN) is carrying out discussions 
with China and has been effective as a multinational forum in 
keeping maritime security and issues with regard to excessive 
claims in the South China Sea on the table, and they are in 
discussions with China.
    Senator Hagan. Why do you think the conflict has been less 
in 2012 versus 2010?
    Admiral Willard. I think that the reaction by the ASEAN 
members, the reaction by the United States in Secretary Clinton 
and Secretary Gates' very strong statements at the ASEAN 
regional forum and Shangri-La dialogues, combined with many 
ASEAN members protesting strongly, and the fact that it was 
made somewhat public I think took China aback and has caused 
them to reconsider that particular approach to their South 
China Sea claims, such that they are endeavoring to continue to 
pursue it, but in a more thoughtful manner.
    Senator Hagan. Let me follow up on China's impact in 
Southeast Asia. Their impact will only grow as its economy and 
drive for energy, raw materials, and markets expands. It's 
precisely this behavior that challenges various countries in 
Southeast Asia to debate their policies and look for regional 
and extra-regional allies. In effect, countries in the region 
are playing several strategic games at once, with each move 
requiring consideration of relationships that they have with 
China, the United States, and other regional actors.
    How can the United States maneuver in this environment to 
develop deeper ties and ensure a positive and organically 
integrated presence in the region to contribute to long-term 
stability?
    Admiral Willard. Thank you. I don't disagree with your 
summary statement in terms of the situation in Southeast Asia, 
although I would add that China's economic growth has benefited 
the entire region and has certainly benefited the United States 
and our economic ties to China. So I think it would be unfair 
to imply that China's influence in Southeast Asia should only 
be regarded from the standpoint of the challenge that it poses.
    I think Southeast Asian nations, most of whom now regard 
China as their number one trading partner, are benefiting 
greatly from that association, as is the United States. So from 
a standpoint of regional prosperity, I think China's rise has 
benefited us all, and we should continue to promote that rise 
and the advance of the Asia region for what it connotes.
    That said, the nations, as it relates to security and even 
as it relates, I think, to their economic reliance on any 
single partner, do desire to strike a balance between China, 
the United States, the European Union, and others, rising 
economies like India and established economies like Japan and 
South Korea.
    So there is a balance that has to be struck and the United 
States, I think, is accomplished in maneuvering in that space, 
where we're attempting to either sustain or obtain a greater 
share of market in areas where the United States can affect 
trade in either direction. Trans-Pacific Partnership is a 
fairly recent initiative to try and advance some of this, and 
we have as a consequence of the Asia Pacific Economic 
Cooperation and the East Asia Summit I think advances that have 
occurred there.
    Senator Hagan. Thank you.
    General Fraser, in your written statement you speak to a 
wide variety of missions, everything from humanitarian response 
to obviously supporting our warfighter. Would you highlight 
some of these missions and speak to how you are able to 
accomplish them, given a very constrained environment?
    General Fraser. Thank you, Senator. The mission that we 
have is indeed a global mission, and it is one that I am 
continually amazed at the flexibility that we have within the 
system to respond in many different areas. One area that we 
were most proud of was with the accelerated withdrawal out of 
Iraq and the ability to be able to partner together with our 
commercial partners, with our organic assets, to then 
accomplish the mission before the holidays was tremendous.
    We've also been able to continue to partner to support 
other organizations. I would highlight the National Science 
Foundation (NSF) recently. I made mention in my opening remarks 
about Antarctica. Something that a lot of people don't realize 
is the support that TRANSCOM gives to NSF.
    Recently, there were issues with the ice pier at the 
McMurdo Station and it was going to put NSF and their 
experiments at risk for next year, as well as the winter-over 
force that stays both at the South Pole and at McMurdo. Our 
people were asked to be innovative and so together we worked 
with the Army for a modular causeway system that had not been 
used like this before, in such a harsh environment, which we 
then used our Surface Deployment Distribution Command, who 
worked to move it from the east coast to the west coast. We 
worked with MSC to then get on contract with a contractor to 
load this onto a ship that also had the containers to take the 
supplies and NSF equipment to McMurdo.
    We then sailed down, NSF got the icebreaker in there, and 
we were able to then deploy the causeway system, offload the 
containers, and so we got mission success. That's another 
agency that we wind up supporting. So that's one end of the 
spectrum.
    We talked earlier about other support to operations, but 
I'd highlight the support that we give our commercial partners 
through piracy operations. This actually goes back to AFRICOM 
and support we give there. Working with our commercial 
partners, we work to ensure where we have military cargo headed 
towards the theater and transiting that area, that we put 
security teams aboard.
    Since we have been doing that, we have not had one of our 
ships pirated, and we are very supportive of the initiative in 
the international community to protect the ships. Normally 
those that are what they call high-board, above 25 feet, and 
moving at high speeds, above 20 knots, are not as much at risk, 
but recently we had one hijacked from another country just 
within the past week or so. So it's a dangerous environment. So 
these are other types of things that we do, not only just 
supporting our troops that are engaged in the theater, but a 
couple of quick examples of other operations that we're very 
proud of, of what we do, all while still supporting the 
warfighter, still doing the things that we're asked to do in 
the theater. They're not wanting for anything with respect to 
the current closure of the PAK GLOC, either. I'm very proud of 
them.
    Thank you.
    Senator Hagan. So supporting the private containers, and 
that's only when DOD supplies are on board?
    General Fraser. That's correct.
    Senator Hagan. As far as security forces on board?
    General Fraser. That's correct.
    Senator Hagan. Thank you. I really appreciate your help 
with the NSF. I think R&D goes a long way in everything we do, 
and your support in that area is outstanding.
    Thank you.
    Chairman Levin. Thank you, Senator Hagan.
    Senator Wicker.
    Senator Wicker. Thank you, Mr. Chairman, and thank you, 
gentlemen. We appreciate the service that both of you have 
provided and are providing.
    Let me begin with Admiral Willard. You were correct in your 
oral testimony to go quickly to the issue of Korea and North 
Korea, to mention the transition there and the uncertainty that 
it brings. Our allies in the Republic of Korea, South Korea, 
have a fleet of F-16s, which is known as the KF-16 in Korean 
service. They're eager to replace their mechanically scanned 
array radar with active electronically scanned array (AESA) 
radar, and you can't blame them for wanting to do that.
    Admiral, in case something broke out that involved a 
conflict, do you agree that air dominance will be a key 
differentiator for allied forces during the first 24 hours of 
any potential conflict, including the Korean Peninsula? If you 
do, do you then agree that cooperating with the Koreans and 
supporting their desire for expeditious Korean procurement of 
existing defense technology is a good idea so that they can 
meet their operational requirements?
    Admiral Willard. I do agree, particularly on the Korean 
Peninsula, on the importance of air dominance early in any 
particular conflict that would occur. I also agree that we 
should strive to maximize the level of cooperation between 
ourselves and our Republic of Korea allies with regard to the 
acquisitions they require to continue to advance their 
capabilities.
    Senator Wicker. So you agree that the U.S. Government 
should fully support the Republic of Korea's air force 
requirements and their acquisition timeline in acquiring United 
States export-compliant AESA?
    Admiral Willard. I support the level of cooperation that is 
required to advance the Republic of Korea's military 
capabilities, including their aviation capabilities. With 
regard to that, to whether AESA radar and the exchange of that 
particular technology is appropriate on Korea's timeline, I 
think that should continue to be subject to discussions between 
the two countries. There are certainly compliance requirements 
on the part of the Republic of Korea, as well as the 
releasability requirements on the part of the United States.
    This is not the first country we've had this discussion 
with. But in general, sir, to your assertion, I truly believe 
that we should strive to maximize the potential of our Republic 
of Korea ally, including their military capabilities. In fact, 
more important now perhaps than in the past, as we strive to 
reach December 2015 and operational control transition to the 
South Koreans.
    Senator Wicker. Thank you very much. Let me ask you then, 
staying with North Korea: U.S. and North Korean envoys met last 
week for talks on dismantling North Korea's nuclear 
programs;included in that will be discussions of food aid, 
economic help, diplomatic concessions from the United States of 
America.
    What is your current assessment of the humanitarian food 
situation in North Korea, and do you believe North Korea is 
being sincere and truthful and forthcoming in entering these 
negotiations with the United States?
    Admiral Willard. I think the food situation in North Korea 
is always an issue of global interest. World Food was in there 
conducting an assessment early last year, as I recall, trying 
to ascertain just what the extent of crop success was in North 
Korea. There is always a level of food shortage that exists 
there, and always humanitarian need, as we've witnessed it 
there.
    In terms of the negotiations that have been ongoing, I have 
been supportive of them with regard to the United States' 
proposals for conditional food aid into North Korea and the 
preconditions that have come with it, which now include 
discussions of cessation of nuclearization and ballistic 
missile testing and the allowance of the International Atomic 
Energy Association perhaps back into Yongbyon. So there are 
conditions that are going along with the negotiations with 
regard to the extent of food aid. They've received food aid 
from many other countries this year, and I remain supportive of 
the progress that we're making in the talks with North Korea to 
the extent that they occur.
    Senator Wicker. You don't blame some of us on this side of 
the panel for having a healthy degree of skepticism with regard 
to North Korea's intentions?
    Admiral Willard. I have a healthy degree of skepticism with 
regard to North Korea's intentions, and I think we need to 
observe both their actions and requests with a great deal of 
scrutiny. Certainly we've been through the cycle many times in 
the past, and I know, Senator, you're aware that these requests 
for concessions often lead into a breakdown and a resulting 
next provocation.
    So we are skeptical as well. But with regard to the extent 
of these current negotiations, I think particularly when 
there's a new regime or a new leader in place in North Korea, 
it will be important to ascertain any degree of success that we 
might obtain through these diplomatic channels.
    Senator Wicker. I suppose it's worth a try, but I'm not 
holding out much hope and remain very troubled, as I'm sure you 
are.
    Quickly, let me ask about the 30-year shipbuilding plan and 
the minimum sustaining rates contained therein. Many observe 
this could pose challenges to fulfilling the force requirements 
and possibly give rise to a sealift capability gap and an 
aviation lift gap in 2015. With the pivot to this vast Asia-
Pacific region and your AOR and the Navy's inability to meet 
its own requirement for 313 ships, how will this minimum 
sustaining rate affect your ability to protect American 
security interests?
    Did you support this in discussions with your superiors, 
and are you satisfied that you can fulfill the mission with 
this 30-year shipbuilding plan?
    Admiral Willard. Thank you, Senator. I would fall back on 
the statement that I made earlier. The total acquisition 
program that the Navy has put down to try and sustain itself 
and the capacities of our fleet and eventually grow those 
capacities over time is important and certainly as a naval 
officer something that I've observed with great interest over 
many years.
    But as the PACOM commander, it's more important with regard 
to how we bias those ships globally and whether or not the AOR 
that, as you suggest, is a vast maritime one in the Asia 
Pacific, is being adequately serviced. To date, I am well 
serviced with regard to the Navy. I think Navy capacities are 
very important. Our industrial base capacity is very important 
that they be sustained.
    These minimum sustained production rates that you're 
talking about are intended to maintain our minimum acceptable 
industrial base. All of these things are important for our 
Nation, certainly.
    In terms of PACOM, I think it's important that the right 
number of ships and the right type of ships be present there.
    Senator Wicker. Thank you.
    Chairman Levin. Thank you, Senator Wicker.
    Senator Akaka.
    Senator Akaka. Thank you very much, Mr. Chairman.
    I want to say aloha to the two military leaders before us 
today. It's good to see you.
    Gentlemen, first I want to say thank you so much for your 
dedicated service to our country and also to the communities 
that you've served. We have really gained from your 
responsibilities and your actions.
    Admiral Willard, I would like to add my appreciation to you 
and congratulations on your upcoming retirement, which is soon. 
I want to tell you that I agree 100 percent with your 
UNCLOSposition for our country. It's about time that we become 
serious about that. Also, I want to commend you for the balance 
which you've brought during your time as PACOM commander, and I 
would tell you, you've made a huge difference in the Pacific, 
so thank you for that, and to tell you that your departure will 
be a significant loss to the Navy and to our country.
    I want you to know, and Donna to know, that it has been a 
pleasure to work with you in Hawaii and for our country. You've 
served Hawaii and you've been there on multiple assignments. I 
think you know, I don't have to tell you, that you have a deep 
relationship and connection with the community in Hawaii. I 
want to congratulate you and wish you well in your future with 
Donna and the family.
    Admiral Willard. Thank you, Senator Akaka.
    Senator Akaka. Admiral Willard, it is impossible to 
overstate the importance of our military engagement in the 
Asia-Pacific region. As I said, I commend you for your 
nurturing of balance there in the entire area. If you look at 
continuing developments in the Pacific, our conventional 
adversaries are improving their capabilities, too, as we work 
together on this balance.
    My question to you, Admiral, is, given this rebalance to 
the Pacific and the responsibilities we have in the theater, 
how would you assess our force structure plans in relation to 
military and diplomatic goals for the region as we look to the 
future?
    Admiral Willard. Thank you, Senator Akaka. Before I answer 
your question, I would offer that the State of Hawaii and the 
City of Honolulu have been great supporters of the military 
families and members that are stationed there. Thank you for 
your continued support for us in the region.
    I think as we look at force structure there is the issue of 
the type of forces that are present in the Asia-Pacific region 
and there is the issue of posture and where they're present in 
order that we can maintain the continuous presence in the 
region that's so important to its security and long-term 
stability.
    The initiatives, such as the nation of Australia, the 
nation-state or city-state of Singapore, and now in discussions 
with the Philippines, that are occurring are going to assist us 
in the posture-related issue, which is getting the force 
structure where it can do the most good in terms of providing a 
mechanism to maintain the presence that we need in the region.
    As we view the acquisition programs and force structure of 
the future in this budgetary environment, we, like every other 
combatant, remain focused and guarded as we watch these defense 
reductions occur, to ensure that we don't cut into the kind of 
forces and the quantity of forces that our strategic priorities 
call for.
    We spent time very recently walking through a global 
laydown of forces and looking at the forces that this current 
program will deliver and our ability to meet the strategic 
needs of our Nation, including in the Asia Pacific, and I think 
collectively as combatant commanders and Service Chiefs we felt 
we could do that. I think it's an important study to maintain 
ongoing and there are two additional events that are presently 
scheduled. But I have been well-served in the Asia-Pacific 
region and I'm confident that the force structure that is 
envisioned can continue to serve PACOM well.
    Senator Akaka. Thank you very much.
    General Fraser, the recently announced rebalancing calls 
for a shift in focus to the Asia-Pacific region, a vast 
geographic area encompassing 9,000 square miles, 36 nations, 
and 16 time zones, all of which I'm sure Admiral Willard knows 
really well. My question to you, General Fraser, is, while the 
details of this strategic balancing, rebalancing, have yet to 
be finalized, do you have any preliminary thoughts on how a 
refocus to the Asia-Pacific region could impact TRANSCOM?
    General Fraser. Senator, thank you very much. As we look at 
this shift, we've already seen a lot of engagement in the PACOM 
theater of operations as we have continued to support ongoing 
exercises, as we've continued to support other types of 
engagements within the theater. I think as we come back out or 
have come back out of Iraq already, but as we further reduce 
the force out of Afghanistan, we'll free up some other assets 
maybe for other opportunities for engagement, and then we'll 
have the opportunity to do that.
    It is one that's going to take balance and it's going to 
take a lot of good planning on our part to make sure that we 
properly support each of our ground combatant commanders in 
their various theaters of operations. They all have theater 
engagement plans. We're taking a look at them to ensure that we 
provide the necessary support.
    One of the things that we are able to do in our command is 
not just with our organic assets; it's our commercial partners, 
both sea and air, that will allow us that flexibility in 
utilizing their networks and their connections to also continue 
to provide support. So as those forces are available for 
various engagements, it does not have to be just organic. So in 
peacetime versus wartime, we're able to utilize those assets, 
which is good for the economy, which keeps that industrial base 
alive, too, both across the sea and the air side of the 
business.
    So we're confident that we'll be able to provide that 
support.
    Senator Akaka. Thank you very much.
    Admiral Willard, with the new strategy rebalancing our 
forces with a focus in the Pacific, the need for strategically 
located maintenance facilities, like the Pearl Harbor Shipyard, 
appears critical to the readiness of our fleet. Can you discuss 
the role you see Pearl Harbor Shipyard playing with this 
rebalancing, as well as the importance of continuing the 
modernization efforts at the shipyard in order to support the 
fleet in the future?
    Admiral Willard. I can, thank you, Senator. You know as 
well as I do not only the strategic importance of Pearl Harbor 
Naval Shipyard, but also the other aircraft depots and 
shipyards throughout the Asia-Pacific region that we rely on, 
from the west coast of the United States to our ability to 
conduct voyage repairs in foreign ports such as Singapore.
    But I have stated for the past 5 years and I will continue 
to state the vital strategic importance of the Pearl Harbor 
Shipyard and what it provides. It's unique in the sense that it 
not only conducts the overhauls of our surface ships and our 
submarines, but it also conducts day-to-day maintenance and 
voyage repairs for the ships that are positioned forward.
    It's located, as we all know, in the middle of the Pacific 
Ocean, which is the largest ocean in the world, and provides 
ready access into the Asia Pacific. The three submarines that 
we have homeported in Guam utilize the Pearl Harbor Naval 
Shipyard for their maintenance and overhaul activities and 
rotate back, and don't have to go all the way back to the west 
coast of the United States to obtain that maintenance.
    So it is a vital and pivotal strategic asset for us. The 
need to keep it continually modernized is as important as any 
shipyard that we have in our Nation. It is, I think, a very 
important partner. When we talk about the industrial base, not 
just production but maintenance, it's a vital part of that 
industrial base.
    Senator Akaka. Thank you very much.
    Thank you, Mr. Chairman.
    Chairman Levin. Thank you, Senator Akaka.
    Senator Ayotte.
    Senator Ayotte. Thank you, Mr. Chairman. I appreciate it.
    General Fraser, I wanted to ask you, the Air Force is 
finalizing its KC-46A basing criteria for the Air Force. One of 
the concerns that I have, and I'm hopeful that the Air Force 
will do this, is that the criteria that comes out for the 
basing of the KC-46A will be objective and transparent, in 
terms of what criteria you're using in deciding who will 
receive the KC-46A first. I wanted to ask you about that 
process, where it was at, in particular what the balance will 
be between the Active Duty and the Guard bases, and whether it 
will be taking into account what I think is very, very 
important, which is some of our Guard units already have an 
existing partnership with the Active Duty, including my own, 
that I've been quite impressed with, and I think that will be 
important in terms of utilization. So can you help us with 
that?
    General Fraser. Senator, thank you very much. As you've 
stated, it's an Air Force process, which we are not a part of 
in TRANSCOM. But, having been in the Air Force when we were 
doing this, I think you accurately stated that it is an 
objective process, it's open, it's transparent, it's 
repeatable. The fact that they are very open about that and 
establishing the criteria as to what is going to be needed in 
those discussions that go on in a very open manner with a 
number of different locations, I think, is something that you 
can look forward to as they go through that process.
    You asked where the process is. I don't know where the 
process is right now. I know they are actively engaged in 
working with AMC discussing who will be the lead command for 
the KC-46.
    Senator Ayotte. Thank you. I had to raise the issue because 
when we were home I went up with our 157th Air Refueling Wing 
and had a chance to see them do their work up there, and have 
been incredibly impressed. We actually had the highest 
utilization rate in the entire Air National Guard at Pease Air 
National Guard Base last year for the KC-135, and we already 
have an Active Duty partnership established.
    So it's one of those situations where, I think, if we do 
this in an objective and transparent way to speak to the 
accomplishments of our own unit in New Hampshire, they have 
quite the objective accomplishments and close proximity to the 
refueling track. So I hope that you'll convey, obviously, to 
the Chief of Staff and to your commander how important it is 
that this be an open and objective process.
    General Fraser. Yes, ma'am.
    Senator Ayotte. Thanks so much, I appreciate that.
    I wanted to ask about, Admiral Willard, an issue that I was 
concerned about last year in the National Defense Authorization 
Request. It's something that I learned about that was of deep 
concern to me, and that's the Maritime Prepositioning Force 
(MPF). As I understand it, and this may be a better question 
for General Fraser, whichever of you it is the better question 
for, but last year the Navy announced plans to place 6 of its 
16 ships from the 3-squadron MPFs for the Marine Corps into 
reduced operating status beginning in fiscal year 2013.
    When I learned about this, I was concerned about what this 
would mean in terms of our readiness. I asked the Marine Corps 
about it and the Commandant of the Marine Corps felt that it 
needed additional analysis. So, in last year's NDAA, there is 
actually a requirement that the Marine Corps, as well as the 
Navy, submit an analysis about the readiness implications of 
reducing our MPFs. As I understand it, there may be further 
reductions there in the proposed 2013 budget.
    So I just wanted to ask both of you if you were aware of 
that portion of the Defense Authorization in 2012 and where 
that readiness assessment was and if you can share anything 
with respect to where we are with the MPFs?
    Admiral Willard. Thank you, Senator. From PACOM's 
perspective, yes, we're aware of the proposal to put one of the 
three squadrons in a reduced readiness status. Of importance, 
the two most active squadrons, one located in Guam and one 
located in Diego Garcia, are not candidates for that. So those 
that are there to respond to the major contingencies in the 
Asia-Pacific region remain intact and are, frankly, utilized 
frequently and exercised on a periodic basis in order to ensure 
their readiness.
    So from the standpoint of readiness in terms of Asia 
Pacific contingencies and the contingencies in the Middle East 
that these prepositioned ships service, we remain in pretty 
good shape.
    I can't answer to the tasker that the Services come 
together on their assessment of how this could impact longer-
term readiness as that third squadron is placed in a limited 
readiness status.
    Senator Ayotte. I certainly appreciated your answer and I'm 
hoping that we'll have a follow-up, which I will obviously 
pursue with the Navy, because the NDAA from 2012 requires 
thatthe Commandant of the Marine Corps provides a report 
assessing the impact of the move on military readiness, and the 
SECDEF has to certify that the risks to readiness from such a 
move are acceptable. So I think you'll be consulted, I would 
think, in that analysis.
    My concern is, particularly with what we see happening 
around the world right now, having those MPFs becomes very 
important because, unfortunately, we've been noticeably bad at 
predicting where the next conflict is going to come, and those 
MPFs become very, very critical in terms of our readiness 
posture.
    Admiral Willard. I think we agree with you that the MPFs 
are vital to us.
    Senator Ayotte. Great. Thank you so much for that.
    I just wanted to follow up. I believe at your confirmation, 
Admiral Willard, I'd asked you about the fiscal year 2013 
budget, and the Chief of Naval Operations (CNO) had said last 
spring that in order for us to meet all of our needs around the 
world that we needed a ship force of 313, and this budget 
really maintains us at 285. One of the concerns that I have is 
it delays, for example, production of one Virginia-class 
submarine, as well as some LCSs and some others in terms of 
where we are in production.
    One of the concerns I have is what the strategic analysis 
or strategic thinking was for not meeting the 313 and 
maintaining us at 285 and really delaying production of some of 
our important assets; and I just would like to follow up on 
that and ask you whether you have an answer to that, 
particularly with our shift now to the Asia Pacific?
    Admiral Willard. As you well know, the Navy surface force 
has maintained itself, pretty much sustained itself, at that 
280 to 285 number now for numerous years. In fact, for about 
the last decade we've been struggling to get above that and 
reach the 313 floor, or however it is currently being termed by 
our Navy, in terms of what we aspire to have, to meet all the 
global requirements that the Navy maritime strategy has 
determined we need.
    It's important that over time we recognize where we are 
decremented in comparison to the overall strategic design for 
the Nation as a Navy, as a military. The strategic priorities 
that have been established are intended, I think, to guide us 
in terms of where the maritime commitment should be and will 
pay off the greatest for the United States. The Asia-Pacific 
region has been called out as one of those areas, where it's 
not only vast and inherently maritime, but as a consequence of 
its economic importance to the United States and our allies and 
partners and many of the challenges associated there, it places 
a particular demand on maritime assets.
    So provided that within that body of 285 ships we're able 
to bias those forces properly into the right areas of the world 
where the payoff is great, then I'm satisfied. I think the CNO 
would tell you that in his longer-term view of shipbuilding 
that, while the 2013 budget and the programs that it represents 
doesn't show the 285 on the increase toward the Navy's goals, 
if you look at more than one program, if you look at this long-
term, that he does eventually begin to make some progress as a 
Navy in terms of shipbuilding.
    So I think it's important to recognize that we've been in 
this situation for a while. There is the cost of doing our 
business, of acquiring ships, that continually needs attention 
and gets great help from this committee. We need to reduce ship 
costs and other acquisition costs as we can. But I think what's 
most important is that we put the ships where they'll do the 
most good, and we think that the Asia-Pacific region is one of 
those areas of the world where that will happen. The Middle 
East is obviously going to continue to require our attention, 
too.
    Senator Ayotte. Thank you, Admiral.
    Thank you very much, General.
    Chairman Levin. Thank you, Senator Ayotte.
    Senator Shaheen.
    Senator Shaheen. Thank you, Mr. Chairman.
    Admiral and General, thank you both for being here today.
    I want to follow up, General Fraser, with Senator Ayotte's 
question about the basing criteria for the KC-46. We share an 
interest in that since we both represent New Hampshire. We 
don't often get the opportunity to double-team you all in quite 
the same way we are this morning, so I have to take advantage 
of that.
    In New Hampshire we believe that under any objective 
criteria our strategic location in the Northeast, our proximity 
to operational and training air refueling tracks, our current 
tanker task force mission, and our Active Duty association, 
that we would be a unique choice and would result in a very 
cost-effective utilization of the placement of the KC-46s. So 
we hope that it is a very transparent and open process. I won't 
ask you to comment on that since you've said you can't.
    Senator Ayotte talked about New Hampshire National Guard's 
157th Air Refueling Wing, which has been providing continuous 
operations since September 11th, both for Homeland defense and 
in support of overseas conflicts. Like other Air National Guard 
units, they've done so at a fraction of the cost of Active 
bases around the country. In fact, the Air National Guard 
represents only 6 percent of the Air Force budget, and yet it 
provides nearly 35 percent of its capabilities.
    We've seen in the last couple of days, concern expressed by 
49 Governors about the cuts to the Air Guard as part of the 
proposed budget from the Air Force. Again, I know you can't 
comment on that, but I wonder if you could comment on the role 
that our Air National Guard has played in providing critical 
transport for our operations around the world?
    General Fraser. Thank you, Senator. I do appreciate that. I 
can't tell you how much I do appreciate all that our Guard are 
doing. They've always been there when the call came, not only 
when they were mobilized, but when they were asked to volunteer 
and willing to support any mission that may arise.
    As you know and you commented on, we have been heavily 
tasked in a number of different areas. That's where I think the 
great strength comes, the balance that we have within the total 
force and the ability to use the Active Duty, the Guard, and 
the Reserve in this manner to meet the mission. Therefore, our 
commanders have not had to want for something else and not be 
supported.
    It's that total team effort to get this done. But you have 
to have the right balance. The Guard has been heavily tasked. 
They are also doing a lot more with respect to their boots-on-
the-ground (BOG)/dwell, as we call it, the BOG and the dwell 
time they get back at home, and it's not at the desired rate.
    So, hopefully, if we have the right balance and as we make 
some of these necessary adjustments, we'll then be able to get 
to the desired rates for both the Active Duty as well as the 
Guard and the Reserve. This is something that we're all 
striving to do as we look forward to the future. But we very 
much value and appreciate all the contributions they've made.
    Senator Shaheen. Thank you very much. I appreciate that. I 
think your point about the total force is an important one. I 
do share the concerns of the Governors in looking at the total 
budget reductions that would have the Air Guard absorbing 59 
percent of those aircraft budget reductions and about six times 
the per capita personnel reductions. So again, I know you can't 
comment on that, but I'm interested to hear the rationale at 
the appropriate time.
    Admiral Willard, India has become a much more prominent 
partner of the United States and potential ally on military-to-
military issues in the last several years. Last year, the 
United States cleared the way for the resumption of high 
technology defense and aerospace exports to India. However, it 
does seem that there is still room for growth in our 
relationship. I wonder if you could talk about what PACOM's 
priorities are for the U.S.-India security relationship and how 
those are affected by both China and Pakistan, recognizing that 
Pakistan isn't part of your purview, but critical, obviously, 
to what happens with India?
    Admiral Willard. Thank you very much, and thank you for 
raising India. It's a very important partner in the region and 
one that, as you suggest, there remains room for growth and 
advancement in our partnership. It has advanced in the past 
2\1/2\ years that I've been at PACOM, and in the previous 2\1/
2\ years as Pacific Fleet Commander we were very much engaged 
with India and attempting to advance the relationship then.
    If you range back to our history with India, we are in a 
fairly nascent stage of engagement nation-to-nation, given that 
this is the largest democracy in the world, like-minded in many 
ways, and in a troubled region of the world in South Asia, but 
a very important partnership.
    From a security standpoint, we are engaging across all our 
Services with India at an increasing rate every year. There are 
challenges in the relationship. We overcome still the trust 
deficit as it relates to having departed South Asia years ago 
and having terminated relationships with both India and 
Pakistan following nuclear tests in the late 1990s. But I think 
that the current dialogue that is from the President on down 
and certainly at a military level is very robust in overcoming 
all of this. There is certainly a China factor in India. They 
have a long-term border dispute that continues to be a 
challenge for both countries, and they fought a war over it in 
1962.
    China is a very strong partner of Pakistan and Pakistan-
India have the relationship that we're all aware of, both 
nuclear-armed and with a long-term history of animosity between 
the two of them.
    To India's credit, they're maintaining ministerial-level 
dialogue with Pakistan and have for the past nearly 2 years, 
even post-Mumbai and all of the tension that that created.
    So, I think your emphasis on India and its importance is 
exactly the right one. From a security standpoint and a 
security assistance standpoint, they remain very important and 
a partner of focus for PACOM.
    Senator Shaheen. Thank you very much. My time has expired.
    Chairman Levin. Thank you, Senator Shaheen.
    Senator Cornyn.
    Senator Cornyn. Thank you, Mr. Chairman.
    Admiral, General, thank you for being here. Thank you for 
your service.
    I want to tell Senator Shaheen I appreciate her questions 
about the U.S.-India relationship, as one of the co-founders of 
the U.S.-India Caucus in the Senate, which has a strong and 
robust membership and a lot of interaction. I appreciate your 
acknowledgment and statement about the importance of that 
relationship from a security standpoint, an economic 
standpoint, and across the board.
    My questions, you'll have to forgive me, General, I'm going 
to ask Admiral Willard some questions about China and 
particularly Taiwan.
    Admiral, you say in your prepared testimony that: ``Taiwan 
remains the most acute sovereignty issue for China and the main 
driver for military modernization programs. The military 
balance across the Taiwan Strait continues to shift in China's 
favor.''
    Would you agree that were China to launch some sort of 
military offensive against Taiwan that such a scenario would 
have the potential to draw the United States into a dangerous 
large-scale conflict in the region?
    Admiral Willard. Thank you, Senator. Certainly the Taiwan 
Relations Act (TRA) and three communiques combined, but the TRA 
in particular, establishes the position the United States would 
take on such coercion were it to be launched against Taiwan, 
and it then becomes a decision by our President and by Congress 
to decide what the U.S. reaction to that would be.
    But does it have the potential? We regard the defense of 
Taiwan as a PACOM responsibility. So, yes, it would have the 
potential to draw the United States into conflict.
    Senator Cornyn. According to DOD, China's official defense 
budget has grown by an average of 12.1 percent since 2001. So 
it seems as we are talking about scaling back our defense 
budget, China has continued to grow by leaps and bounds.
    Would you agree that the likelihood of Chinese aggression 
against Taiwan becomes more likely as Taiwan's ability to 
defend itself deteriorates?
    Admiral Willard. I'm not sure that I would contend that. I 
think it's important and we've established the importance 
through policy for a long time that Taiwan should have a self-
defense capability, and our responsibility in working with DOD 
and in working with you is to ensure that the defense articles 
and services that we assist Taiwan with provide for that self-
defense.
    As we've seen the administrations change on Taiwan and the 
reelection of President Ma and his administration just this 
year, we would offer that the tensions across the Strait have, 
in fact, relaxed during his administration and that 
advancements in relations between the People's Republic of 
China (PRC) and Taiwan have occurred. So, I think it would be 
presumptive to assume that simply that imbalance in combat 
power would necessarily encourage conflict. That said, there's 
no question that the balance of combat power resides with the 
PRC.
    Senator Cornyn. I recently wrote a letter to President 
Obama--actually it was last November 18, 2011--and received a 
response on February 15, 2012, from James N. Miller, Acting 
Under Secretary of Defense for Policy. Mr. Chairman, I'd like 
to ask unanimous consent to have both letters made part of the 
record.
    Chairman Levin. They will be made part of the record.
    [The information referred to follows:]
      
    
    
      
    
    
      
    
    
      
    Senator Cornyn. Let me just quote a couple of sentences 
from this letter. Mr. Miller says: ``A key conclusion in the 
Report to Congress on Taiwan's Air Defense Force is that 
Taiwan's approach to defense cannot match the Mainland one-for-
one. Taiwan defense spending cannot match the Mainland's, nor 
can it develop the same type of military the Mainland is 
developing. The report concludes that Taiwan needs to focus its 
planning and procurement efforts on nontraditional, innovative 
and asymmetric approaches, and we are working with Taiwan to do 
so.''
    That was not a very encouraging letter I received from 
Secretary Miller. But let me just get down to some of the 
specifics with regard to operational combat aircraft. According 
to DOD, the PRC has 2,300 operational aircraft and the 
Government of Taiwan has only 490 operational aircraft. The 
administration recently notified Congress of its intent to 
upgrade some of the existing F-16 A and B versions, 145 of 
those, and I support the retrofit for these older F-16s.
    But it does nothing to replace the growing obsolescence of 
Taiwan's fighter jets. By 2020 it's estimated that virtually 
all of Taiwan's fighter jets will have to be retired except for 
the 145 F-16 As and Bs that we sold Taiwan during the George 
Herbert Walker Bush administration, and which are now the 
subject of this upgrade.
    Can you give me a little more confidence that we are 
meeting our obligations under the TRA and the three communiques 
you mentioned? Because it seems to me that China is growing its 
military capability while Taiwan is losing its military 
capability, and the United States, which is legally obligated 
to provide defensive material to Taiwan, is not meeting its 
full obligations to equip them with what they need to defend 
themselves against the potential of a Chinese attack.
    Admiral Willard. Thank you, Senator. I've been on the 
record in the past acknowledging that eventually Taiwan's 
aviation capability will have to be recapitalized. I too was 
encouraged when the F-16A-B upgrade was approved. I think that 
is the right thing to do. I think it does, in fact, enhance the 
reduction of their air forces. It was an upgrade much needed 
and it will improve their capabilities.
    I'm not sure that a comparison of combat capability or 
capacity with the PRC and Taiwan is a fair one to make. Nor do 
I believe that there is any reasonable desire for or ability to 
achieve parity between the two. China is as big as the United 
States, maintains a fighter fleet, as you suggest, of over 
2,000 aircraft, but has a lot of territory to cover. Taiwan's 
an island 200 miles long, maintains a fighter force of about 
450 aircraft.
    So an apples-to-apples comparison, I don't think, is 
necessarily the argument in this particular instance. The 
argument is whether or not Taiwan is sufficiently defensible in 
the context of the TRA and what was intended from a policy 
standpoint. We contribute to some of that at PACOM in our 
engagement with the Taiwanese military and trying to understand 
their needs. But we look more broadly than just their aviation 
needs and try to look across their armed forces and in all 
domains how well they are equipped and manned to defend 
themselves.
    I think that balance is important for us to recognize and 
also sufficiency in that regard across all of those various 
areas. So, I see the recapitalization needs having been in the 
near-term met. As you suggest, I'm not sure that in the 
longest-term it's going to meet all their needs in the aviation 
area. But in their other services, they have needs as well, and 
I think the defense budget of Taiwan needs to be reflective of 
a balanced approach to achieving a sufficient amount of 
defense.
    Senator Cornyn. If I can conclude, Mr. Chairman, just with 
this one comment.
    Thank you for your answer, but I'm concerned as I see China 
continuing to grow its military, Taiwan's military capability 
continues to recede in comparison, that that will cause perhaps 
a greater potential that the United States would be required to 
come to the aid of our ally under the TRA and the three 
communiques you mentioned.
    It strikes me that the more capable that Taiwan is to 
defend itself, the less the likelihoodthat the United States 
might be called upon to share in that defense in the event of 
an attack.
    Thank you both, gentlemen.
    Admiral Willard. Thank you, Senator.
    Chairman Levin. Thank you, Senator Cornyn.
    I just have a few questions for the second round. First, I 
was also glad, Admiral, to hear your answers relative to our 
relations with India, our security and military relations. It's 
a very significant partner in the region. The growing and 
robust relationship, I believe, is good news and the right way 
to go, and your answer is very reassuring to me, as it was to 
other members of the committee.
    Admiral, relative to North Korea, has the change in 
leadership of North Korea impacted the agreement which was 
reached in October 2011 with North Korea to allow U.S. 
personnel back in North Korea to resume the recovery of remains 
of U.S. servicemembers missing from the Korean War?
    Admiral Willard. Senator, there was a pause in discussions, 
but no pause in terms of initiative on our part to proceed with 
what was agreed to in terms of Joint Personnel Accounting 
Command (JPAC) returning to North Korea to seek additional 
remains. We currently have a ship in Nampo that has been 
offloading a first wave of equipment to support that.
    My concern is for the security of the personnel from JPAC 
that would execute these missions, and so I continue to view 
into North Korea carefully to assure DOD and myself that these 
individuals will be treated in accord with the agreement that 
we struck in 2011.
    Chairman Levin. Is there a timetable for that effort to 
take the next step?
    Admiral Willard. There is. This particular offload is 
occurring. We have another one scheduled. There are a series of 
steps that we have planned, and I'd be happy to provide those 
to you if that would be helpful.
    Chairman Levin. That would be good, if you would do that 
for the record.
    [The information referred to follows:]

    The attached slide lists Joint Personnel Accounting Command (JPAC) 
Democratic People's Republic of Korea (DPRK) critical milestones.
      
    
    

    Chairman Levin. Relative to the record, General, if you 
could for the record, give us some detail about the critical 
needs of TRANSCOM for cyber security. You made a comment in the 
press about TRANSCOM being the most cyber-attacked command in 
DOD, and if you could for the record, give us a list of your 
critical needs and whether those needs are being met, and 
whatever you can tell us in an unclassified way about attacks 
on your systems and progress that you might be making in 
defending those systems.
    It's a large question. It's an important one that we're 
grappling with in a major way here in Congress. So if you could 
give us kind of a whole review for the record, it would be 
helpful.
    General Fraser. Sir, thank you very much. I have stated 
that we are aggressively attacked. In fact, as we were looking 
at the numbers just this last year as it was wrapping up, from 
2010 to 2011, we have seen an increase of about 30 percent of 
the number of attempts to get within our systems.
    As this committee also knows, though, the majority of our 
business is done on the unclassified net. We are working very 
aggressively on a number of different fronts, though, and it's 
not only within TRANSCOM, but also with our commercial 
partners. Because of 90 percent of that business being done on 
the unclassified net, which is where our commercial partners 
are, we need to partner with them to strengthen our defenses. 
We're working that through contracting actions and looking 
forward to continuing to partner with industry.
    Within TRANSCOM, we aggressively have a program whereby we 
train all of our individuals. Before they get in and on, they 
have to go through initial training. Then there's annual 
training. In fact, I just finished completing it. It takes over 
an hour and you're not going to get out of it, because once 
you're into it you're going to go through the whole thing. It's 
very thorough.
    So we have to work that aspect of it. So there's a training 
piece to this as we harden our people and make them aware of 
what's going on.
    There's also another piece to this with respect to our 
systems. So with a corporate services vision for the future, we 
have a number of systems out there that we're trying to bring 
into our net so that we can collapse the net and not have as 
broad a base so that the bad guys will be able to attack us. 
It'll be easier to defend if we're able to collapse the net, 
have less hardware out there, and actually be able to control 
that.
    The other thing is that we're very aggressively certifying 
our net defenders. Over 99 percent of our net defenders that we 
have within TRANSCOM now have professional certification. So 
this is helping us.
    So I go back to the 30 percent increase. We do not know of 
any known successful attack into our systems this last year. We 
are working with our people and with the hardware piece to our 
system. There's some business practices out there that we're 
also bringing in. We continue to partner with the Defense 
Information Systems Agency. We partner with U.S. Cyber Command 
and also with U.S. Strategic Command, as well as the National 
Security Agency, as we try to strengthen the net as best we 
can.
    As the distribution process owner, looking forward to what 
we call a secure enclave, too. As we partner with these other 
organizations, they're very encouraged by what they're seeing 
and the initiatives that we're taking. We're working it from a 
holistic standpoint and we are properly funded within TRANSCOM 
right now.
    Chairman Levin. If you could keep this committee informed, 
we would appreciate it.
    General Fraser. Yes, sir, I will.
    [The information referred to follows:]

    Sir, during my earlier testimony you had asked for a list of U.S. 
Transportation Command's (TRANSCOM) critical needs and whether those 
needs were being met, and attacks on TRANSCOM systems and progress that 
we are making in defending those systems.
    I previously addressed the latter aspect and mentioned that we 
noted a 30 percent increase overall from 2010 to 2011 in attempts to 
penetrate our network. I had also briefly addressed our approach in 
defending against those threats by training and certifying our cyber 
defenders and overall workforce. I also mentioned another important 
part of our cyber strategy is regular engagement with our commercial 
transportation partners to make them aware of the common threat we 
face, as well as common solutions.
    Regarding your request for a list of TRANSCOM's critical needs and 
whether those needs were being met, we are holding the line today, but 
are working to improve cyber defense capabilities to ensure we remain 
adequately postured for the future. First, we need to ensure our 
commercial partners have the tools and business practices necessary to 
protect TRANSCOM information residing in their environments. We are 
continuing to reduce this vulnerability in partnership with our 
commercial partners, our internal cyber defense staff, Federally Funded 
Research and Development Centers, and other partner agencies. 
Additionally, we need to enhance protection of our high value command 
and control systems, and also provide a secure development environment 
in which our cleared defense contractors can develop software 
supporting our deployment and distribution functions.
    We also need to improve the capability to distinguish adversarial 
actions from authorized users actions within systems and networks. If 
the adversaries are successful in gaining entry to our networks, we 
will need more effective mechanisms not only to detect them, but also 
to contain and limit their potential damage to our information, and 
rapidly rebuild any damage done to our networks or information so we 
can continue to execute our mission.
    A holistic and unified response to threats across the Department of 
Defense and the U.S. Government remains one of our greatest challenges, 
and is planned to be a major area of discussion at our upcoming cyber 
summit. Cyber security will remain a top priority for TRANSCOM in all 
of our engagements with partners, whether they are commercial 
companies, the U.S. Government, or DOD entities.

    Chairman Levin. This is really a major subject for all 
Members of Congress.
    Admiral, you were asked, I believe, by Senator Inhofe to 
give us for the record in writing, how some of the objections 
which were raised to UNCLOS some time ago have been met, and 
that is important for all of us. If you can do that, if 
possible before you leave, it would be something, another item 
on your agenda to complete, I hope that's not too burdensome, 
but it would be very helpful.
    Admiral Willard. I'll get right on it.
    Chairman Levin. Also, you made a comment, Admiral, that I 
just want to see if you might wish to clarify. In response to a 
question of Senator Inhofe, and this had to do with North 
Korea, you indicated that their strategy has been successful 
for two generations. I assume that what you meant by that was 
that their strategy is to stay in power, essentially, and 
that's basically what they care about, and that strategy has 
succeeded, but not in terms of any success for their country?
    Admiral Willard. That's exactly what I intended. This is a 
coercive strategy that has about five dimensions to it, all of 
which are bad news for the region and a challenge for our 
Nation.
    Chairman Levin. Bad news for their own people.
    Admiral Willard. Very bad news for their own people.
    Chairman Levin. We thank you both, and it's been a very, 
very useful hearing. Best of luck to you and your family, 
Admiral, again as you take on new responsibilities, new 
challenges, new wonders.
    Admiral Willard. Thank you, Senator Levin.
    Chairman Levin. General, thanks so much.
    General Fraser. Thank you, sir.
    Chairman Levin. This hearing will stand adjourned.
    [Questions for the record with answers supplied follow:]

               Questions Submitted by Senator Carl Levin

                OPERATIONAL RESPONSIVE SPACE-1 SATELLITE

    1. Senator Levin. Admiral Willard, U.S. Central Command (CENTCOM) 
recently brought on line a small tactically responsive satellite, 
Operational Responsive Space-1 (ORS-1), based on an urgent needs 
statement it issued. The satellite was assembled, launched, and brought 
on line in less than 32 months for cost below $225 million. My 
understanding is that CENTCOM has been very pleased with the capability 
of the satellite, which it directly controls with Air Force Space 
Command, to satisfy tactical reconnaissance needs in denied access 
regions. My understanding is that other combatant commands have tasked 
CENTCOM to use this satellite for urgent needs in their area of 
responsibility (AOR), offering for the first time the use of a small 
satellite outside the normal tasking sequence for space assets with 
direct control by the combatant command. Given the success, cost, and 
innovation of ORS-1, does U.S. Pacific Command (PACOM) believe that a 
similar system dedicated to PACOM would have a positive impact on 
reducing PACOM's intelligence, surveillance, and reconnaissance (ISR) 
collection gaps?
    Admiral Willard. PACOM has been working closely with the 
Operationally Responsive Space (ORS) program on a satellite of our own. 
ORS-2 is in development and is scheduled to be launched in 2015. While 
it has a different payload than ORS-1, the capability will definitely 
have a positive impact on PACOM ISR collection gaps.
    CENTCOM has shared feedback with us on the utility and quality of 
ORS-1 collection. Based on CENTCOM's success with that system, we've 
had recent discussions with the ORS program on developing an ORS-1 
system for PACOM as well.
    These systems will be particularly useful in enhancing PACOM's 
ability to collect in denied areas that we cannot reach with airborne 
systems.

    2. Senator Levin. Admiral Willard, in addition, given the extremely 
large denied airspaces in PACOM's theater and widely dispersed land 
masses surrounded by large bodies of water, how would a tactical ISR 
satellite system dedicated to PACOM compare to a series of airborne ISR 
assets?
    Admiral Willard. A tactical satellite system dedicated to PACOM 
would be very useful, particularly with regards to collection in denied 
areas that airborne sensors cannot reach. However, there are 
limitations that make a straight comparison to airborne assets very 
difficult. Sensor quality, orbit, data throughput, and timeliness of 
collection can constrain our ability to answer many intelligence 
requirements. Airborne platforms often provide the persistence, 
flexibility, and fidelity that cannot be matched by tactical ISR 
satellite systems. Airborne ISR also provides a visible presence in the 
theater that creates a deterrent effect against potential adversaries 
and strengthens our commitment to our partners and allies.
    Used together, overhead and airborne systems complement each other 
extremely well and serve to mitigate our collection gaps.

    3. Senator Levin. Admiral Willard, given the recent statements by 
the Defense Intelligence Agency (DIA) Director, General Burgess, 
regarding the counterspace capabilities being developed in the PACOM 
theater, could a system of ORS-class satellites help in increasing the 
resiliency and responsiveness of PACOM's space capabilities?
    Admiral Willard. Yes. The future potential for rapid reconstitution 
of overhead systems in the face of adversary counterspace capabilities 
is very important to increasing the resiliency and responsiveness of 
PACOM's space capabilities. PACOM is a strong proponent of ORS-class 
satellites.

    4. Senator Levin. Admiral Willard, could ORS-class satellites be 
beneficial in reconstituting a thin line, good enough to win, space 
layer to support PACOM operations in a campaign in which space was a 
contested domain?
    Admiral Willard. [Deleted.]
                                 ______
                                 
            Questions Submitted by Senator Claire McCaskill

                          CONTAINER MANAGEMENT

    5. Senator McCaskill. General Fraser, the Department of Defense 
(DOD) is spending nearly $720 million in late fees for leased shipping 
containers used for delivery of parts, supplies, and other items for 
overseas contingency operations. At times the late fees have even been 
more costly than if the containers were bought outright. I realize that 
using leased containers makes sense in a number of situations. However, 
wasting millions of dollars on late fees is inexcusable. What has U.S. 
Transportation Command (TRANSCOM) done to address this issue?
    General Fraser. As mentioned in your question, there are instances 
when keeping carrier-owned containers longer than the anticipated time 
period to meet operational requirements makes fiscal sense. Whether 
containers are required to enhance the force protection of our 
warfigthers or required for critical temporary storage capability in an 
austere environment, we keep a mindful eye on the fiscal impact of 
these decisions. TRANSCOM, in coordination with the Surface Deployment 
and Distribution Command (SDDC), is actively working several measures 
to mitigate container detention in the CENTCOM AOR. We are taking the 
following actions to reduce detention costs: making improvements in 
contract provisions in the forthcoming Universal Services Contract-7 
(USC-7); transloading from individual carriers to U.S. Government-owned 
containers where practical; accomplishing container buyouts earlier 
when carrier-owned containers are required to meet mission objectives; 
expanding container management training and support for Mobile 
Container Assessment Teams; aggressively enhancing key leader 
engagement on adherence to established policies and procedures; and 
developing a single container management system capability.

    6. Senator McCaskill. General Fraser, how can the cost of late fees 
be reduced in the future?
    General Fraser. TRANSCOM, in coordination with SDDC and other Joint 
Deployment and Distribution Enterprise stakeholders, are taking several 
proactive steps to mitigate container detention. First, we have 
included improvements to container-related provisions in the USC-7 
tentatively set for an effective date of 15 August 12. Based on 
analysis of detention for containers delivered to Afghanistan over the 
last 2 years, the additional 5 days of free time in USC-7 would have 
represented a 22 percent reduction in detention costs for an annual 
$12.6 million in cost avoidance. Second, we continue to implement 
successful lessons learned from our experiences supporting operations 
in Iraq, most notably increased usage of government-owned containers 
where practical. Third, we continue to work with theater leadership to 
enhance their cargo reception capability and infrastructure support to 
return carrier-owned containers within the prescribed timelines. Last, 
we continue to leverage technology to improve our intransit visibility 
of cargo and management of our critical distribution assets.

    7. Senator McCaskill. General Fraser, have steps been taken to 
renegotiate container contracts and the leases currently in place?
    General Fraser. Yes, TRANSCOM negotiated more favorable container 
detention and purchase terms for the USC-7. The contract is due to 
start this summer. The terms include lower purchase prices for the 
containers, more ``free-time'' before detention charges start to 
accrue, and allowing purchase of containers 30 days sooner. The 
enclosed fact sheet (in response to previous Senate questions on 
container costs) provides the estimated cost impact of the new terms.
    More importantly, in addition to the contract terms, TRANSCOM, 
through its component, the Military SDDC, is actively engaging the 
Military Departments and Government agencies to improve container 
management procedures and contractual terms and conditions that will 
reduce container detention costs. As DOD's Global Container Manager, 
SDDC has decreased container detention charges by instituting improved 
processes, such as standing up sites to transload from commercial to 
Government containers in theater. SDDC is also working to prioritize 
cargo in the carrier holding yards, improve procedures for receipt and 
release of containers, and enforce accuracy standards and completion of 
monthly inventories. Another significant effort is the development of a 
single container management system that will enable better container 
tracking and reporting to further decrease detention charges.

 Proposed Universal Services Contract (USC)-7 Container Detention and 
                          Purchase Fact Sheet

    The following information is provided in response to questions the 
Military Surface Deployment and Distribution Command (SDDC) received 
from Senator Tom Carper's and Senator Scott Brown's staffs during a 
December 14, 2011, teleconference.

    1.  Free time \1\ cost comparison between the current requirements 
in USC-6 and the proposed changes for USC-7, which are tentatively 
scheduled to take effect June 1, 2012:
---------------------------------------------------------------------------
    \1\ Container detention charges are imposed by shipping lines for 
containers kept beyond the assigned ``free time'' and not made 
available for pickup within that period.

         Under USC-6, the U.S. Government is currently 
        authorized 15 days of free time before detention fees begin for 
        containers delivered in Afghanistan.
         Under USC-7's proposed language, an additional 5 days 
        would be added, for a total of 20 days free time before 
        detention charges begin on containers in Afghanistan.
         Based on analysis of detention for containers 
        delivered to Afghanistan over the last 2 years, the additional 
        5 days of free time would have represented a 22 percent 
        reduction in detention costs for an annual $12.6 million in 
        cost avoidance.

    2.  Containers are often used for storage, force protection, and 
other purposes, given the lack of infrastructure in theater. The 
Department can purchase containers to mitigate detention costs in one 
of two ways.

         Deliberate container purchase cost comparison using 
        the current requirements in USC-6 and the proposed changes for 
        USC-7:

                 Currently with USC-6, in order to purchase a 
                container, 90 days worth of detention costs must be 
                paid. To purchase a container under the proposed USC-7, 
                the number of days' worth of mandatory detention costs 
                drops to 60 days.
                 On a per container basis, purchase of a 40-
                foot dry container under USC-6 at the earliest possible 
                time (Day 91) would cost $5,100 to purchase the 
                container plus 90 days of mandatory detention ($35/day) 
                $3,150, for a total of $8,250.
                 Purchase of a 40-foot dry container under the 
                proposed USC-7 at the earliest possible time (Day 61) 
                would cost $4,590 to purchase the container plus 60 
                days of mandatory detention ($35/day) $2,100, for a 
                total of $6,690.
                 USC-7 proposed changes would have resulted in 
                a cost avoidance of $1,560 per purchased container 
                (18.9 percent reduction).
                 These purchase cost reductions are due to 
                lowering mandatory detention payment from 90 to 60 
                days, earlier commencement of credit on day 61 versus 
                day 91, and the reduced container purchase prices 
                negotiated by U.S. Transportation Command (TRANSCOM) 
                under the proposed USC-7.

         Container purchase in the event containers are 
        indefinitely retained by the U.S. Government (cumulative Credit 
        Against Purchase (CAP)), using the current requirements in USC-
        6 and the proposed changes for USC-7:

                 Currently with USC-6, daily detention costs 
                are capped at day 358 for a 40-foot dry container and 
                day 1,090 for a 40-foot refrigerated container, at 
                which time credit paid through detention costs equals 
                the purchase price of the container and the container 
                becomes the property of the DOD. For example, under 
                USC-6 the CAP cost of a 40-foot dry container is 
                $12,530 ($35/day  358).
                 Under USC-7, daily detention costs are capped 
                at day 350 for 40-foot dry containers and day 700 for 
                40-foot refrigerated containers, at which time credit 
                paid through detention costs equals the purchase price 
                of the container and the container becomes the property 
                of the DOD.For example, under USC-7 the CAP cost of a 
                40-foot dry container is $12,250 ($35/day  
                350).
                 This reduction in detention days would have 
                resulted in a 9 percent reduction in detention costs 
                for an annual $3.2 million in cost avoidance.

    3.  SDDC is also actively engaged in reducing commercial container 
detention costs through the increased use of U.S. Government-owned 
containers, where cost effective. As this business practice proved 
extremely successful in Iraq, we continue to look for opportunities to 
implement it in Afghanistan, when appropriate.

                 PAKISTAN GROUND LINES OF COMMUNICATION

    8. Senator McCaskill. General Fraser, TRANSCOM and our interagency 
partners have received permission from governments of some European, 
Central Asian, and Baltic countries to start retrograding materials 
from Afghanistan through the Northern Distribution Network (NDN). As we 
begin the drawdown of troops in Afghanistan in the next few years, the 
retrograde of materials and equipment from Afghanistan will 
increasingly become more important. The Pakistan Ground Lines of 
Communication (PAK GLOC) provides logistical support through the 
movement of cargo to Afghanistan. When open, the PAK GLOC remains the 
quickest and most cost-effective route. If the PAK GLOC is not open for 
retrograde operations, what additional cost will the United States 
incur in order to move equipment out of Afghanistan?
    General Fraser. The financial impact of the PAK GLOC closure 
continues to be analyzed as TRANSCOM gains more fidelity on the factors 
related to costing. At this time it is difficult to determine with any 
degree of confidence what that additional cost will be. TRANSCOM 
continues to explore and develop multiple retrograde options in order 
to meet warfighter operational requirements in the most cost effective 
manner.

    9. Senator McCaskill. General Fraser, has TRANSCOM conducted an 
analysis of what will be necessary to ensure the PAK GLOC is open?
    General Fraser. No. TRANSCOM does not control the conditions on the 
ground that would be necessary to conduct such an analysis on the PAK 
GLOC. However, CENTCOM states Pakistan leadership has made it clear to 
us that reopening the PAK GLOC, as well as all other issues related to 
Pakistan's relationship with the United States, must go through a 
process which begins with recommendations produced by their parliament. 
The administration plans to send a negotiating team to Pakistan to 
discuss the steps required to reopen the PAK GLOC, consistent with 
parliament's recommendations and U.S. laws and interests.

                     NORTHERN DISTRIBUTION NETWORK

    10. Senator McCaskill. General Fraser, the NDN provides an 
additional route for cargo to Afghanistan. Over the past year, around 
40 percent of all cargo in support of Operation Enduring Freedom (OEF) 
was moved through the NDN's multiple truck, water, rail, and air routes 
in an expanding distribution network. TRANSCOM continues to work with 
the interagency and governments of the NDN countries to expand NDN 
routes. However, many of the NDN countries do not want materials from 
Afghanistan to retrograde back through their countries. If the NDN is 
not open or partially open for retrograde operations, how will this 
affect the retrograding of materials and equipment from Afghanistan?
    General Fraser. TRANSCOM currently has two-way permissions on all 
our NDN routes for commercial-type items. Additionally, one of the NDN 
routes (the Russian route) is authorized to move wheeled armored 
vehicles. At this time, TRANSCOM is executing multiple proofs of 
principle to exercise these permissions. The lessons learned will be 
used to determine the best way to employ each route in the overall 
retrograde operation. Any additional permissions from countries 
supporting the NDN would further enhance retrograde flexibility, 
capacity, and redundancy with potential cost savings.

    11. Senator McCaskill. General Fraser, what additional costs will 
the United States incur in order to move equipment out of Afghanistan 
if the NDN route is closed?
    General Fraser. Assuming the PAK GLOC remains closed and the NDN 
closes, the cost to move all equipment out of Afghanistan would be 
significantly higher. The only option remaining would be airlift 
equipment and supplies direct air back to the States or to multi-modal 
locations. While this option is feasible it will not meet the current 
departure timelines. TRANSCOM has been working Proof of Principles to 
test using the NDNfor limited cargo coming out of Afghanistan, but this 
is still in the very early stages and the costs associated with cargo 
leaving Afghanistan has not been determined.

                           STRATEGIC AIRLIFT

    12. Senator McCaskill. General Fraser, our defense strategy relies 
on rapid global reach and rapid global response to deter aggression and 
deliver worldwide capability. An important component of maintaining 
U.S. military dominance is maintaining the airlift and air-refueling 
capability required for rapid delivery of our forces and equipment over 
long distances. C-17s will continue to be the workhorse for strategic 
airlift. Even though TRANSCOM is currently funding purchases, upgrade 
programs, and fleet rotation, I still have concerns that the stress of 
supporting two wars over the past decades will cause our current C-17 
fleet to age faster than expected. What is being done to ensure that we 
do not have any gaps in our strategic airlift capabilities as the 
current C-17 fleet begins to age?
    General Fraser. The C-17 fleet averages more than the planned 1,000 
actual flight hours per year, but the life-limiting effects felt by the 
fleet are within limits. The C-17 fleet will meet its service life of 
30 years, and based on historic usage severity, should be available 
much longer. Targeted fleet service life extension programs (SLEP) are 
being utilized to refresh specific aging aircraft drivers (wing upper 
cover, landing gear) as appropriate to enable continued safe/reliable/
economic C-17 operations. A requirement for an overall aircraft SLEP 
has not been established.
                                 ______
                                 
               Questions Submitted by Senator Mark Begich

                ORGANIZATIONAL REVIEW OF ALASKAN COMMAND

    13. Senator Begich. Admiral Willard, I understand at your direction 
PACOM has been conducting an organizational review of Alaskan Command. 
Although I am cognizant the renewed focus on the Asia-Pacific region is 
driving a need to shift PACOM resources, I firmly believe Alaskan 
Command is and will remain an integral component of enabling PACOM to 
carry out its mission. As you may know, Alaskan Command was founded due 
to a lack of unity of forces in Alaska during World War II. With more 
than 22,000 Active Duty personnel in Alaska, Alaskan Command provides 
PACOM mission assurance in the State, ensures a ready force, and 
expedites the deployment of forces in support of contingencies. I am 
aware that after the creation of U.S. Northern Command (NORTHCOM), some 
of the missions in Alaska are now under that combatant command, and 
organizational challenges have surfaced. Resolution of these 
organizational challenges will require coordination between PACOM and 
NORTHCOM. Could you please describe the scope of the PACOM 
organizational review of Alaskan Command?
    Admiral Willard. In accordance with the 2010 Secretary of Defense 
efficiencies tasking, PACOM performed a review of all PACOM missions 
and associated manpower requirements to identify potential savings and 
internal efficiencies. The scope of the Alaskan Command study included 
a determination of requirements for manpower support to gain a better 
understanding of the roles, missions, and responsibilities that impact 
Alaskan Command. The scope of the study also included mission analysis 
and functional capabilities analysis as related to wartime requirements 
and a review of level of support provided to PACOM missions assigned to 
Alaskan Command.
    To date, no final decision has been made. PACOM will ensure that 
any course of action is fully coordinated with all stakeholders prior 
to a final decision being reached.

    14. Senator Begich. Admiral Willard, what is the desired outcome?
    Admiral Willard. PACOM began looking at Alaskan Command as part of 
the Secretary of Defense Efficiency Review in late 2010. During a 
detailed examination of Alaskan Command, it was determined that the 
operations performed for PACOM in Alaska do not require a permanent 
Joint Headquarters and the potential operations performed for NORTHCOM 
can be handled by Joint Task Force-Alaska. Based on joint doctrine, 
there is no reason to maintain a permanent subordinate unified command 
in Alaska. Subsequently, Operation Tomodachi validated an identified 
need to operationalize U.S. Forces-Japan (USFJ) to increase the 
capacity/capability of USFJ as an operational headquarters to support 
the defense of Japan from increasing threats.
    This need coupled with the direction in the recently released 
``Sustaining U.S. Global Leadership: Priorities for 21st Century 
Defense,'' PACOM intends to shift some of its joint staff positions to 
strengthen relationships with Asian allies and key partners 
specifically Japan through a more robust USFJ capability. This 
relationship is critical to the future stability and growth in the 
Asia-Pacific region. Shifting these joint staff positions from Alaskan 
Command to other, more critical priorities is one step in strengthening 
these relationships in a period of constrained resources.
    PACOM does not intend to move any units, exercises, or activities 
out of Alaska, as these are critical to maintaining forces that are 
able to respond in a crisis in Alaska or throughout the Asia Pacific.

    15. Senator Begich. Admiral Willard, would you please describe 
coordination with NORTHCOM to reach an organizational solution mutually 
beneficial to both combatant commands?
    Admiral Willard. In November 2011, I directed the PACOM staff to 
develop a way ahead for achieving the desired end-state of shifting 
joint staff billets and civilian positions from Alaskan Command to 
higher priorities in the theater. The PACOM staff formed a planning 
team which consisted of representatives from the staff directorates, 
the Service components (Army, Air Force, Navy, and Marine Corps), 
Alaskan Command, and NORTHCOM. The purpose of the planning team was to 
examine the situation and offer recommendations based on competing 
priorities.
    In February 2012, the planning team offered their recommendation to 
retain Alaskan Command as a Subordinate Unified Command to PACOM and 
shift 45-50 joint staff billets and civilian positions to higher 
priorities with critical allies. Both the Commander of Alaskan Command 
and the Chief of Staff for NORTHCOM offered dissenting recommendations 
to transfer Alaskan Command and the majority of its 65 joint staff 
billets and civilian positions from PACOM to NORTHCOM. I directed my 
staff to examine the question of whether Alaskan Command still fits the 
criteria of a Subordinate Unified Command and deferred making a final 
decision.

                   ALASKAN COMMAND MANPOWER SUMMARIES

    16. Senator Begich. Admiral Willard, would you please provide 
manpower summaries (military, contractor, and civilian billets) for 
Alaskan Command for fiscal year 2012, and projected for fiscal years 
2013 through 2017?
    Admiral Willard. The manpower authorizations for fiscal year 2012 
are as follows:

        Military - 42 (Joint Table Distribution (JTD) shows 43, one 
        position identified as billpayer for DOS)
        Civilian - 23
        Total - 65

    Fiscal year 2013 through 2017 may or may not be the same as fiscal 
year 2012, depending on the outcome of PACOM's Alaskan Command review.

                      NORTHERN EDGE FUNDING LEVELS

    17. Senator Begich. Admiral Willard, Northern Edge is a critical 
exercise to prepare forces for contingencies in the PACOM AOR. Would 
you please provide funding levels for the exercise for fiscal year 2012 
and projected for fiscal years 2013 through 2017?
    Admiral Willard. [Deleted.]
                                 ______
                                 
               Questions Submitted by Senator John McCain

                   MILITARY QUALITY-OF-LIFE CONCERNS

    18. Senator McCain. Admiral Willard, please identify the top 
quality-of-life concerns for military families assigned within PACOM.
    Admiral Willard. America's All-Volunteer Force is our greatest 
strategic asset and we commit our full support for the 300,000 PACOM 
servicemembers and their families. We know quality-of-life for Active 
Duty soldiers, sailors, airmen, marines, and their dependents continues 
to be a key enabler and retention factor for these Americans serving in 
the PACOM AOR.
    We must ensure that the needs of our servicemembers and their 
families continue to be met, even during this time of fiscal 
constraint. We must sustain critical quality of life programs and make 
improvements where needed in the quality-of-life of assigned personnel. 
Current key focus areas include:

         Military Pay and Compensation

                 With the numerous challenges that come with 
                military life, pay and financial difficulties should 
                not be added stressors. We need to ensure that our 
                servicemembers and their families are provided with a 
                comfortable life which includes fair pay and 
                compensation. The National Defense Authorization Act 
                (NDAA) for Fiscal Year 2012 provides an increase of 1.6 
                percent for military basic pay. This raise is equal to 
                the Employment Cost Index as of 30 September 2010, as 
                prescribed by law, and will keep military pay increases 
                in line with those in the private sector. In addition, 
                the NDAA funds bonuses and other incentives to meet 
                recruiting and retention quality and quantity goals--
                especially for our most critical skills and experience 
                levels.

         Care for Wounded, Ill, and Injured Military Members

                 We continue our intense focus on the care of 
                our wounded, ill, and injured military members--those 
                who sacrificed so much in defense of our Nation. We are 
                working to achieve the highest level of care and 
                management to ensure quality care and as smooth a 
                transition back to normalcy as medically possible.
                 Recent key initiatives include:

                         Achieving a seamless transition to 
                        veteran status for members leaving the military 
                        and superlative cooperation between DOD and the 
                        Department of Veterans Affairs (DVA).
                         Ensuring a high standard for 
                        facilities caring for wounded warriors, i.e., 
                        first rate hospitals and trained staff.
                         Enhancing case management of 
                        individuals needing care and transition to 
                        civilian life.
                         Establishing an Integrated Disability 
                        Evaluation System--to create a simpler, faster, 
                        more consistent process for determining which 
                        members may continue their military service and 
                        helping them become as independent and self-
                        supporting as possible.
                         Working with the DVA to create Virtual 
                        Lifetime Electronic Records--critical to 
                        improve veteran care and services.
                         Continuing investments to modernize 
                        the Electronic Health Record--to improve 
                        provider satisfaction, system speed, 
                        reliability, and to record all healthcare 
                        encounters from the battlefield through each 
                        phase of treatment.

                 The NDAA for Fiscal Year 2012 provides $2.3 
                billion for enduring wounded, ill, and injured military 
                member programs. Of this amount, $415 million provides 
                for the continued support of cutting edge wounded, ill, 
                and injured medical research. This research is highly 
                focused on psychological health/post-traumatic stress 
                disorder (PTSD) and traumatic brain injuries (TBI), but 
                also includes prosthetics, vision loss, hearing loss, 
                and other conditions directly relevant to the injuries 
                our soldiers are currently receiving on the 
                battlefield.

         Prevention of Sexual Assault

                 Sexual assault is criminal conduct punishable 
                under the Uniform Code of Military Justice and will not 
                be tolerated. Our commitment is zero tolerance of 
                sexual assault or related behaviors within the PACOM 
                AOR. We will not allow sexual assault to injure our 
                personnel, our friends, our families, destroy our 
                professional values, or compromise readiness.
                 Requirements included in the recently released 
                DOD instruction 6495.02, Sexual Assault Prevention and 
                Response Program Procedures, are:

                         Policies and procedures for all 
                        commanders, at all levels, to take action to 
                        prevent sexual assault, protect and support 
                        victims, hold offenders accountable, and to 
                        ensure a safe and healthy environment.
                         All uniformed members, spouses, 
                        civilians, and contractors are afforded victim 
                        services.
                         Victim advocates will be well-trained 
                        and credentialed.
                         Funding will be provided for training 
                        investigators and lawyers.
                         All commanding officers and senior 
                        enlisted leaders will be fully trained, and 
                        committed to eradicating sexual assault.
                         Ensure the length of time sexual 
                        assault records are kept is standardized for 
                        all Services.
                         Victims filing unrestricted cases will 
                        now have the option to request an expedited 
                        transfer from their unit or installation.

         Suicide Prevention

                 The suicide rate among our servicemembers and 
                their families is at a record high. We have an 
                obligation and responsibility to take care of the men 
                and women who volunteer to sacrifice for our country. 
                Our military servicemembers and their families are 
                resilient and strong, but we want them to know that 
                they should not needlessly suffer through depression 
                and anxiety. Suicide prevention is a leadership 
                responsibility from the most senior leaders down to 
                front-line supervisors.
                 Marine Corps (Marine Forces Pacific 
                (MARFORPAC)): Improving the Family Readiness in the 
                Marine Corps has been accomplished by implementing 
                Behavioral Health programs to protect and strengthen 
                the health and well-being of Marines and their 
                families. Behavior Health programs consist of Combat 
                and Operational Stress Control, Suicide Prevention, 
                Family Advocacy, Sexual Assault Response and 
                Prevention, and Substance Abuse Prevention.

         Spouse Employment

                 Maintaining a career in the face of frequent 
                moves is an issue that has plagued military spouses for 
                years. Job availability and employer willingness to 
                hire transient spouses is always a concern. With one in 
                three working spouses holding jobs that require 
                licenses or certifications, transferability of 
                professional credentials from one State to another 
                complicates the employment issue. In many overseas 
                locations, availability of these professional jobs can 
                be limited, resulting in unemployment or under-
                employment. Many young spouses don't have the requisite 
                background for the civil service jobs offered and the 
                status of forces agreements or other foreign assignment 
                areas prevent military exchanges and commissaries from 
                opening all positions to U.S. candidates.

         Education

                 K-12 Education (Hawaii): Data is being 
                collected at PACOM to interpret if there is a 
                recruiting or retention issue for military families 
                with school-aged children stationed in Hawaii.
                 K-12 Education (DODEA): The Department of 
                Defense Education Activity (DODEA) Pacific oversees 49 
                schools in 3 countries and 1 Territory, with a 
                population of 23,500 students. DODEA is currently 
                unable to support varied educational options desired by 
                families, e.g., providing universal preschool within 
                all DOD overseas schools and home school families' 
                access to the DODEA Virtual School.

         Child Care and Youth Programs

                 Sufficient, reliable, yet affordable child 
                care is a key readiness issue for servicemembers and 
                their families. Our highest priority is ensuring 100 
                percent availability of child care, especially in 
                overseas locations. Additional unmet child care needs 
                include access to care during nontraditional hours to 
                accommodate servicemembers' work schedules, limited 
                availability of child care slots for lower priority 
                families requiring care (i.e., not Single Parent and 
                Dual Military), and drop-in and respite care for 
                families with a deployed servicemember.
                 Army (U.S. Army Pacific): Army Child 
                Development Centers (CDCs) are available on post with a 
                full day, part day, and hourly care for children. The 
                Youth Services are designed specifically for middle 
                school youth and teens and ensures services such as 
                sports, fitness and health, life skills, leadership 
                opportunities, academic, and intervention support and 
                services are available. Transportation to and from 
                school to the center is available in various locations. 
                The Army Family Child Care (FCC) home is another child 
                care choice for military family members, DOD civilians, 
                and DOD contractors in which family members work as 
                independent contractors in individual housing units 
                located on a military installation. Special services 
                may include 24-hour and long-term care during 
                mobilization and training exercises, evening and 
                weekend care, and care for special needs children and 
                mildly ill children. Parents can expect to receive the 
                same quality of care in an Army FCC home as in an Army 
                CDC or School-Age Program. FCC providers receive the 
                same training and support as facility-based staff.
                 An additional program available is the Armed Services 
                YMCA (ASYMCA), which provides military families, Active 
                Duty personnel, the National Guard, and military 
                reservists with access to youth development, family 
                strengthening, and health and well-being programs. The 
                Boys and Girls Clubs of America inspires young people 
                to become responsible citizens. The Clubs create a safe 
                place for kids to grow, provide mentoring by a 
                professionally-trained staff and caring volunteers, 
                nurture character development and life-enhancing 
                skills, and provide hope and opportunity.

         Housing

                 Housing availability and affordability is a 
                recurring readiness issue for servicemembers and their 
                families. Waiting lists for base housing can vary from 
                immediate occupancy to waits exceeding 24 months, 
                depending on rank, installation, and required housing 
                unit size. Overseas Housing Allowance (OHA) or Basic 
                Allowance for Housing (BAH) is paid to servicemembers 
                stationed in overseas locations (OHA) or in Hawaii and 
                Alaska (BAH) and is designed to provide equitable 
                housing compensation when government quarters are not 
                provided. However, servicemembers still report 
                significant out-of-pocket expenses while living off-
                base when on-base housing is not available.
                 Joint Base Pearl Harbor-Hickam (JBPH-H): 
                Public-Private Venture (PPV) housing has improved the 
                quality of our homes for our servicemembers over the 
                last few years. There is high demand for PPV homes as 
                their quality exceeds most of what is available in the 
                community. PPV only satisfies a portion of our housing 
                requirement, as we are expected to rely on the local 
                community. In some instances, we are not keeping up 
                with the demand for housing for several pay grades, 
                specifically Senior Enlisted and Field Grade Officers 
                who are experiencing wait list times of 6 to 12 months.
                 Navy (Navy Region Hawaii (NRH)): PPV housing 
                has improved the quality of our homes for our 
                servicemembers over the last few years. There is high 
                demand for PPV homes as their quality exceeds most of 
                what is available in the community. PPV only satisfies 
                a portion of our housing requirement (4,451 homes), as 
                we are expected to rely on the local community. NRH 
                continues to meet the requirements for housing. 
                However, we are not keeping up with the demand for 
                housing for several pay grades, specifically Senior 
                Enlisted and Field Grade Officers who are experiencing 
                wait list times of 6 to 12 months.
                 Army (U.S. Army Pacific): Availability of 
                housing for servicemembers is another top quality of 
                life concern. Servicemembers pay several hundred 
                dollars more a month in rent living in the same quality 
                home off-post when on-post housing is not available 
                upon their arrival. Additionally, when on-post housing 
                is subsequently available, some to all costs associated 
                to the move is the responsibility of the servicemember, 
                resulting in additional out-of-pocket costs affecting 
                many of our new military families and creating 
                financial hardship.

    19. Senator McCain. Admiral Willard, what progress has been made in 
those areas, especially spouse employment opportunities, child care, 
and education programs and facilities for DOD dependent school-aged 
children?
    Admiral Willard.

         Spouse Employment

                 Navy (NRH): The Navy manages the Joint 
                Employment Management System (JEMS), an online job bank 
                dedicated to military spouses, dependents, and retirees 
                of all services. JEMS was first established in 
                September 1985 to serve as a single point of contact 
                for the business community to offer employment 
                opportunities to job seekers from the military 
                community. JEMS averages 2,000 job openings at any 
                given time. In fiscal year 2011, over 4,800 spouses, 
                dependents, and retirees registered in JEMS and were 
                seeking employment. JEMS holds one job fair per year at 
                JBPH-H, averaging over 800 attendees and 100 companies. 
                JEMS also holds one job fair at Marine Corps Base 
                Hawaii averaging just over 300 attendees with 40 
                companies.
                 Navy (Navy Region Singapore): For those 
                spouses who want to work outside the home, there are 
                jobs available locally and on base primarily with 
                Morale, Welfare, and Recreation (MWR), the Navy 
                Exchange (NEX), and Navy Federal Credit Union. Spouses 
                have also found employment at the American Embassy and 
                Singapore American School. All civil service jobs are 
                open for overseas spouses and dependents as local. The 
                Family Services Office has provided assistance to many 
                spouses seeking employment.
                 Navy (Navy Region Marianas): Spouses who meet 
                the minimum qualifications are always given first 
                priority when it comes to NAF employment.
                 Navy (Navy Region Japan): To support 
                successful job searching, installation Fleet and Family 
                Service Centers (FFSC) provide Job Search Strategies 
                and Federal Employment and Resume Writing classes on a 
                regular basis. On average, more than 3,000 spouses 
                participate in these one-on-one and group seminar 
                programs annually. To further enhance spouse employment 
                opportunity, Navy Region Japan worked with the Navy 
                Civilian Human Resource chain of command to permit 
                foreign spouses of uniformed military personnel to 
                receive special appointment hiring authority to non-
                sensitive civil service positions.
                 Air Force (Pacific Air Forces (PACAF)): 
                Priority Placement is approved by DOD for employment of 
                spouses already employed by the U.S. Government prior 
                to arrival at overseas bases. The DOD Military Spouse 
                Employment Partnership (MSEP) website and job fair 
                support programs are now accessible to all PACAF bases.
                 Army (U.S. Army Pacific): MSEP has helped 
                military spouses access career resources and connects 
                with corporations who are ready to help spouses explore 
                career options for their mobile lifestyles. MSEP has 
                partnered with numerous companies such as H&R Block, 
                Army Career and Alumni Program, Army Air Force Exchange 
                Service, Wal-Mart, Verizon, Dell, et cetera, to smaller 
                community-based, local companies together working to 
                aid military spouses in finding and identifying 
                portable jobs, as well as reducing the wage gap between 
                military and civilian spouses. In addition, MSEP has 
                increased the U.S. partnerships by collaborating with 
                the Civilian Personnel Advisory Center (CPAC) to assist 
                spouses of military members stationed in South Korea 
                find local positions, gain awareness/education on home 
                based business options, and awareness of local job 
                fairs.

         Child Care and Youth Programs

                 Marine Corps (Marine Forces Pacific): To 
                alleviate the childcare challenge, the Marine Corps 
                established numerous CDCs over the past several years 
                and have more planned. Adequate funding will ensure CDC 
                Military Construction (MILCON) will take place as 
                planned.
                 JBPH-H: JBPH-H has made significant progress 
                in the area of child and youth programs.

                         CDCs: Peltier CDC reopened on 08 Mar 
                        2012. The Peltier CDC renovation and expansion 
                        enabled the consolidation of children from two 
                        older CDCs and netted 16 additional spaces 
                        bringing the net total to 130. Three additional 
                        CDCs are scheduled to open across JBPH-H. The 
                        Wahiawa CDC (replaces older CDC at Wahiawa) is 
                        scheduled to open on 26 April 2012, increasing 
                        capacity from 46 to 70 spaces. The new Center 
                        Drive CDC opens the end of May this year with a 
                        capacity of 304 spaces.
                         The new Ford Island CDC is scheduled 
                        to open mid-July this year with a capacity of 
                        304 spaces. When all 4 are opened, JBPH-H will 
                        have a total of 9 CDCs operating on Oahu with a 
                        total capacity of 1,306, including one 24/7 CDC 
                        accommodating 10 children day and night. This 
                        unit is designated for use by swing shift 
                        personnel and has the capacity to expand if 
                        need is identified. Anticipate reducing the 
                        overall wait list by at least 50 percent. There 
                        are no additional projects to increase CDC 
                        capacity on Oahu. Pacific Missile Range 
                        Facility (PMRF) continues to be able to 
                        accommodate all CDC requirements in its 34 
                        space CDC. The new CDCs will result in 230 new 
                        jobs.
                         School Age Care: JBPH-H has two School 
                        Age Care centers that accommodate 290 children. 
                        The PMRF on Kauai has seven children enrolled 
                        in their School Age Care program. Neither 
                        location has a waiting list.

                 Navy (Navy Region Singapore): There is no 
                Child and Youth Program in the region to assist 
                families with young children. Residents in Family 
                housing are allowed to hire foreign domestic workers or 
                live-in-aides. This currently alleviates the need for a 
                CDC. For parents who would rather have their children 
                supervised at a facility, they can choose to pay for 
                care on the economy. Many of these facilities are 
                within walking distance from the base. For children 5 
                years and under, the region offer a ``Little Tykes'' 
                program that is provided 3 days a week. The program 
                offers interactive socialization, crafts, and story 
                hours. Navy Region Singapore currently does not have 
                the population to justify a CDC. Funding is another 
                obstacle if the population increases.
                 Navy (Navy Region Marianas): Child care is 
                available for youth of all ages as well as before and 
                after school care, Child Development Homes, youth 
                sports, and youth leisure/recreation classes on both 
                bases.
                 Army (U.S. Army Pacific): Army CDCs are 
                available on post with a full day, part day, and hourly 
                care for children. The Youth Services are designed 
                specifically for middle school youth and teens and 
                ensure services such as sports, fitness and health, 
                life skills, leadership opportunities, academic and 
                intervention support and services are available. 
                Transportation to and from school to the center is 
                available in various locations. The Army Family Child 
                Care (FCC) home is another child care choice for 
                military family members, DOD civilians, and DOD 
                contractors in which family members work as independent 
                contractors in individual housing units located on a 
                military installation. Special services may include 24-
                hour and long-term care during mobilization and 
                training exercises, evening and weekend care, and care 
                for special needs children and mildly ill children. 
                Parents can expect to receive the same quality of care 
                in an Army FCC home as in an Army CDC or School-Age 
                Program. FCC providers receive the same training and 
                support as facility-based staff.
                 An additional program available is the ASYMCA, which 
                provides military families, Active Duty personnel, the 
                National Guard, and military reservists with access to 
                youth development, family strengthening, and health and 
                well-being programs. The Boys and Girls Clubs of 
                America inspires young people to become responsible 
                citizens. The Clubs create a safe place for kids to 
                grow, provide mentoring by a professionally-trained 
                staff and caring volunteers, nurture character 
                development and life-enhancing skills, and provide hope 
                and opportunity.

         Education

                 PACOM's Education Branch is dedicated to 
                promoting quality education for all military students 
                in the Pacific. PACOM's goal is to work in conjunction 
                with the civilian education community to offer a 
                comprehensive array of high quality educational 
                opportunities that allow parents to select the option 
                that matches the needs of each child to include public, 
                public charter, private, religious, DOD, and home 
                schools or on-line/virtual schools. PACOM's goal is to 
                ensure families receive support with their school 
                choice. For parents with certain school issues that 
                cannot be resolved by other means, the Interstate 
                Compact for Educational Opportunities for Military 
                Children may enlist their military representative.
                 PACOM has designated representatives for many 
                educational related boards and committees within the 
                PACOM theater and specifically, Hawaii. PACOM and all 
                combatant commands are represented on the DODEA 
                Dependents Education Council--a forum for the Services 
                to elevate the matters relating to facilities, 
                logistics, and administrative support provided to 
                DODschools. PACOM is also represented on the Pacific 
                Theater Education Council which identifies educational 
                concerns of parents, students, military leaders, and 
                educators within the PACOM AOR.
                 PACOM has a seat on the Advisory Council on Dependents 
                Education which recommends programs and practices, 
                ensuring a quality education system to the Secretary of 
                Defense and the DODEA Director.
                 In 2012, the DODEA started virtual courses for 
                students in Hawaii with a vision to prepare students to 
                live, learn, work, and serve the public good in a 
                digital, global society through engaging, synchronous 
                and asynchronous instruction. DODEA enacted the 
                Bullying Awareness and Prevention Program, a new 
                mathematics curriculum for all grades to include more 
                math unit coursework for graduation, a new attendance 
                policy providing specific guidance on attendance and 
                absences, identifies support services for students at 
                risk for not fulfilling the grade or course 
                requirements, and established the use of Gradespeed 
                which is a full-featured web-based grade book for both 
                parents and teachers. DODEA also utilizes Facebook as a 
                means to connect with administrators, teachers, 
                parents, and students.
                 In Hawaii, the Joint Venture Education Forum 
                is a partnership that has existed since 1999 between 
                the military community, business community, and Hawaii 
                Department of Education. It addresses education 
                concerns and provides support for children of military 
                families stationed in Hawaii. It also promotes good 
                will between the military and public schools.
                 To continue supporting military families with 
                school age children in Hawaii, PACOM partnered with 
                Johns Hopkins University to conduct a 3-year 
                longitudinal study to understand family members' 
                preconceptions prior to arrival in Hawaii and how 
                attitudes and beliefs are impacted and change during 
                their tour of duty. At the conclusion of the study, 
                information will be provided to PACOM, the Services, 
                and civic agencies to improve policy, programming, and 
                services for children and youth.
                 Continuous progress was made to Hawaii schools 
                in 2011 when the National Math and Science Initiative 
                began which brought advanced placement (AP) courses in 
                math, science, and English in schools serving a high 
                concentration of students from military families. 
                Courses are designed to increase students' potential 
                for success in college. Schools profit from training 
                for their APteachers and assistance with building their 
                AP programs.
                 Navy (Navy Region Hawaii): Navy in Hawaii will 
                continue to move toward strengthening relationships 
                with our military impacted schools, improving our 
                partnership with our educators and our students. Navy 
                children attend 59 public schools in Hawaii. We 
                currently have 35 active school partnerships with 
                military impacted schools where Navy children are 
                predominate and are working on establishing 
                partnerships at 5 schools with Navy children that do 
                not currently have a partnership. A partnership has 
                been established for all schools expressing interest. 
                Our School Liaisons foster relationships between 
                parents, educators, and the military families. They 
                also facilitate permanent change of station 
                transitions. The Commander Navy Region Hawaii (CNRH) 
                meets frequently with local education leaders to 
                discuss ways the Navy can assist with educational 
                improvements. CNRH will continue our robust school 
                partnership program. K-12 Education will remain a key 
                focus of the Navy in Hawaii.
                 Navy (Navy Region Marianas): Three issues were 
                prepared by Commander Navy Region Japan (CNRJ) at the 
                2011 PACOM area Dependents Education Council (DEC) 
                meeting. Specifically:

                         Need for additional gifted student 
                        services. An evaluation of school offerings in 
                        Japan is being conducted by DODEA and will 
                        provide the DEC with an update at its next 
                        meeting.
                         Universal Pre-K. The DOD Education 
                        Review has examined the current state of 
                        education for military children and, based on 
                        this analysis, has provided strategies for 
                        improving the quality of DOD's early childhood 
                        programs. When the results of the study are 
                        released, they will be reviewed and discussed 
                        in order to plan the next steps for improving 
                        access to early childhood education for 
                        military associated children.
                         The effect of DODEA staffing template 
                        use at small DODEA schools. DODEA is currently 
                        examining program offerings and instructional 
                        modalities, based upon student needs and 
                        interests and fiscal guidance. The review is 
                        ongoing and DEC will be given periodic updates.

                 Marine Corps (Marine Forces Pacific 
                (MARFORPAC)): DODEA has an extensive MILCON program 
                planned through fiscal year 2017 that will fund 
                renovating or replacing DODEA schools in the MARFORPAC 
                AOR; however, they are not scheduled to begin before 
                fiscal year 2013. In addition to DODEA schools, the 
                Office of Economic Adjustment has reviewed and ranked 
                over 150 public schools located on military 
                installations by facility quality and capacity issues. 
                To date (Mar 2012), the funding to improve schools 
                ranked in the MARFORPAC AOR has not been distributed.
                 Air Force (Pacific Air Forces): Approximately 
                $493 million funded for new school construction on Air 
                Force installations in the PACOM AOR between fiscal 
                years 2012-2016.
                 Army (U.S. Army Pacific): Army families in 
                Hawaii benefit from a strong School Support Program 
                which is tasked with coordinating and assisting Army 
                school-age youth with educational opportunities and 
                assistance, and providing them the information 
                necessary to achieve success. Tutorial programs offered 
                to Army students include:

                         Online tutoring/homework help through 
                        the ``Study Strong'' program (via the Tutor.com 
                        website) available in school-age and middle 
                        school/teen programs, and at home 24-hours-a-
                        day, 7-days-a-week.
                         March2Success, an Army-sponsored site 
                        providing free educational content to help 
                        students improve knowledge and test scores.
                         Army Family Covenant-authorized buses 
                        and vans provide transportation to after-school 
                        care and programs.
                         School Liaison Officers serve as 
                        installation subject matter experts for youth 
                        education and school transition issues, 
                        championing and working toward achievement of a 
                        ``level playing field'' for Army youth 
                        transitioning among installations and school 
                        systems.

    20. Senator McCain. Admiral Willard, how many command-sponsored 
dependents reside within PACOM, by Service, including official 
civilians?
    Admiral Willard.

----------------------------------------------------------------------------------------------------------------
                                                                                   South      Other
                                                  Hawaii      Guam      Japan      Korea    Locations    Total
----------------------------------------------------------------------------------------------------------------
Army..........................................     30,823        120      2,029      6,542        435     39,949
Navy..........................................     15,456      2,445     11,979        224        546     30,650
Air Force.....................................      7,460      3,289     13,168      1,175        314     25,406
Marine Corps..................................      6,722         10     12,076        125         24     18,957
Civilian......................................          *        290      5,179      4,568          6     10,043
                                                                                                      ----------
                                                                                                         125,005
----------------------------------------------------------------------------------------------------------------
* No data collected for DOD Civilian Dependents inside the United States.
Note: Japan numbers provided by U.S. Forces Japan. Korea numbers provided by U.S. Forces Korea. Guam numbers
  provided by Joint Region Marianas. All other data provided by Defense Manpower Data Center (DMDC).


    21. Senator McCain. Admiral Willard, what do you see as the 
greatest challenges to the military command structure regarding 
assignment of families within PACOM?
    Admiral Willard.
Facilities (Housing)
         Hawaii. Housing has improved significantly. Military 
        Housing has transformed through a privatization initiative. The 
        housing is now leased to a private managing entity. The company 
        is responsible for maintenance and renovation. They have since 
        built hundreds of new houses within Mainland housing standards. 
        Family and Unaccompanied Housing are expected to meet the OSD 
        goal for housing by the end of fiscal year 2012 and fiscal year 
        2017 respectively (90 percent rated Q1/Q2).
         AOR. Construction and renovation of inadequate 
        buildings is ongoing in order to meet OSD housing goals. Family 
        and Unaccompanied Housing are expected to meet the OSD goal for 
        housing by the end of fiscal year 2012 and fiscal year 2017 
        respectively (90 percent rated Q1/Q2). The current ratings are 
        as follows:

                 Navy

                         Japan, Guam, and Korea: 75 percent of 
                        Family Housing is rated Q1/Q2.
                         Guam: 40 percent of Unaccompanied 
                        Housing is rated Q1/Q2.
                         Japan and Korea: 47 percent of 
                        Unaccompanied Housing is rated Q1/Q2.

                 Marines

                         Iwakuni: 98 percent of Family Housing 
                        is rated Q1/Q2.
                         Camp Butler, Iwakuni, and Korea: 60 
                        percent of Unaccompanied Housing is rated Q1/
                        Q2.

                 Army. Korea is the point of interest within 
                the AOR. The number of inadequate government owned 
                houses remains higher than what is expected due to the 
                ongoing relocation plans. Delays to the relocation have 
                only worsened the condition of the houses. The greatest 
                concern is the impact continued delay of the Yongsan 
                relocation plan will have on the existing inventory of 
                houses on Yongsan Garrison. At USAG Humphreys, the Army 
                is pursuing a privatization strategy that delivers 
                apartment style homes using servicemembers OHA as rent. 
                The private partner will own, operate, maintain, and 
                recapitalize the units. This transformation effort will 
                provide quality of life for the families. This strategy 
                is in lieu of MILCON and leasing, both of which have 
                been unsuccessful in funding Family Housing in Korea.

Medical Support
         We see no medical issues with family assignments to 
        the AOR. EFMP is in place and works through the Services with 
        no identifiable issues or negative trends.
         There are limitations to the specialized care that is 
        available in certain areas of the AOR but there are systems in 
        place to either get the patient to the care or the care to the 
        patient. This can be done through host nation support, movement 
        to a U.S. location where the care is available, et cetera. We 
        will never be able to afford having specialized care at every 
        location but we are committed to providing the care to our 
        beneficiaries.

Family Separation
    Being assigned to a location far from family creates challenges as 
well as financial stress. Service and family members are frequently 
reluctant to accept orders in the PACOM AOR due to the distance from 
family support systems. Personnel assigned to Guam are a good example 
of such challenges.

         Personnel living in Guam find airline costs 
        prohibitive to travel to/from U.S. Mainland, especially for 
        larger families. Airline tickets range from $1,900 to $2,500 
        per person, depending on peak seasons. A typical family of four 
        pays approximately $10,000 for one roundtrip. As a result, many 
        families cannot afford to travel home during a 3-year tour.
         Space-A. Travel is limited and difficult as the member 
        would need to obtain space availability to a larger hub, such 
        as Japan or Korea, and obtain further flight availability from 
        there to get home.
         Patriot Express. Patriot Express is a U.S. Government 
        contract flight which provides support to U.S. military members 
        and their families. This potential opportunity has been 
        researched for service to and from Guam. Due to the low 
        population of military members in the area, the use of Patriot 
        Express was determined to be cost prohibitive.

Spouse Careers
    Maintaining a career in the face of frequent moves, in particular 
to overseas areas, is an issue that continues to plague military 
spouses. Job availability and employer willingness to hire transient 
spouses is always a concern. With one in three working spouses holding 
jobs that require licenses or certifications, transferability of 
professional credentials from one State to another complicates the 
employment issue. In many overseas locations, availability of these 
professional jobs can be limited, resulting in unemployment or under-
employment. Many young spouses don't have the requisite background for 
civil service jobs offered and the status of forces agreements or other 
foreign assignment areas prevent military exchanges and commissaries 
from opening all positions to U.S. candidates.
Education
         PACOM's goal is to work in conjunction with the 
        civilian education community to offer a comprehensive array of 
        high quality educational opportunities that allow parents to 
        select the option that matches the needs of each child to 
        include public, public charter, private, religious, DOD, and 
        home schools or on-line/virtual schools. PACOM's goal is to 
        ensure families receive support with their school choice. For 
        parents with certain school issues that cannot be resolved by 
        other means, the Interstate Compact for Educational 
        Opportunities for Military Children may enlist their military 
        representative.
         To continue supporting military families with school 
        age children in Hawaii, PACOM partnered with Johns Hopkins 
        University to conduct a 3-year longitudinal study to understand 
        family members' preconceptions prior to arrival in Hawaii and 
        how attitudes and beliefs are impacted and change during their 
        tour of duty. At the conclusion of the study, information will 
        be provided to PACOM, the Services, and civic agencies to 
        improve policy, programming, and services for children and 
        youth.

    22. Senator McCain. Admiral Willard, are resources to support 
quality-of-life activities affected by the reduction in the defense 
budget in fiscal year 2013 and beyond? If so, what programs are 
impacted and will they degrade or enhance support for quality of life?
    Admiral Willard. It is too soon to identify the full impact of 
budget constraints on our quality-of-life activities as the Office of 
the Secretary of Defense and the Services continue to develop guidance 
and plan for military family programs.
    We know quality of life for Active Duty soldiers, sailors, airmen, 
marines, and their dependents continues to be a key enabler and 
retention factor for these Americans serving in the PACOM AOR, far from 
family and loved ones. Our continued focus has to be to ensure adequate 
support for these men, women, and their families, even during this time 
of fiscal austerity: our force must have our full support.
    Undoubtedly, however, budget cuts will have some impact on our 
programs, and some impact has already been felt. Services have 
indicated that any significant resource cuts to quality-of-life 
programs this fiscal year and beyond will significantly impair the 
quality-of-life enterprise. The following are some examples provided by 
the commands within the PACOM AOR:

         PACAF personnel report that manpower reductions, 
        including a drawdown of Service Staffs at major commands, will 
        impact the ability to effectively manage and support quality-
        of-life programs at their bases. In addition, a major services 
        transformation is underway to completely reevaluate which base 
        quality-of-life programs and activities will be provided at Air 
        Force installations. A part of the transformation is to 
        establish which quality-of-life programs will remain; 
        currently, only seven ``core'' functions have been approved: 
        appropriated fund (APF) Dining, Fitness, Outdoor Recreation, 
        Child Care/School Age Care, Library, Youth Programs, and Airmen 
        and Family Readiness Centers. All other programs are being 
        evaluated by installation leadership for submission to their 
        major commands for approval to continue to operate, based on 
        financial solvency and customer and base support.
         The drawdown in the Middle East and longer soldier 
        dwell time, coupled with Army budget cuts to family programs, 
        play a role in the quality of life in the Pacific. For example, 
        as of January 2012, Army Community Service (ACS) centers in the 
        Pacific Region were staffed at 67 percent of requirements 
        because of budget reductions and the resulting hiring freeze. 
        Statistically, when soldiers return from combat the need for 
        all support services increases significantly. The fiscal 
        constraints have a critical impact on the capability of 
        garrisons to provide essential services to soldiers and their 
        families. The ACS centers at highly impacted garrisons, e.g. 
        Fort Wainwright and U.S. Army Garrison-Hawaii are carrying an 
        increasingly heavy workload due to high risk behaviors 
        including domestic violence, child abuse/neglect, and sexual 
        assault. The impending redeployment of the 1/25 Brigade Combat 
        Team at Fort Wainwright and the 3/25 Brigade Combat Team at 
        Schofield Barracks will add additional stress on an already 
        taxed support system.
         Due to the budget reduction and resulting Installation 
        Management Command (IMCOM) hiring freeze, hiring new Department 
        of the Army Civilian Victim Advocates, and New Parent Support 
        Program Home Visitors has been delayed. These positions were 
        scheduled to be hired in fiscal year 2012 because of the 
        planned end to temporary contracts. There is the likelihood of 
        a gap in Victim Advocate support when the Army central contract 
        ends and the positions have not been hired. Emergency Hire 
        actions have allowed for short-term relief along with support 
        provided by the Medical Treatment Facility Social Workers and 
        ACS Family Advocacy staff in the interim. However, the 
        Emergency Hire personnel will only be available for two 30-day 
        periods, which may not be adequate time to complete permanent 
        hiring actions once approval to hire these positions is 
        granted. Region and Headquarters IMCOM leadership are actively 
        pursuing resolution to this problem.
         Programs hit hardest may likely be highly regulated 
        and labor intensive programs. For example, Marine Corps CDC 
        monthly fees and labor requirements are regulated and beyond 
        local control. As costs rise, CDCs will incur greater losses, 
        staffs will be stretched, maintenance deferred, and services 
        likely compromised.
         In our overseas schools, DODEA MILCON funds and 
        programs reductions will delay health and safety improvements.
         Further direct impact to children and families can be 
        seen in the elimination of an Exceptional Family Member Program 
        (EFMP) position at JBPH-H and School Liaison Officer (SLO) 
        positions in three of four Air Force overseas installations. 
        The responsibilities from the full time SLO positions will be 
        divided between the Deputy Mission Support Group and Airman and 
        Family Readiness Center personnel.
         The ACS EFMP support and the Respite Care program have 
        been severely affected by the reduction in the defense budget. 
        The EFMP program manager reports diminished availability of 
        programs that cater to children with Special Needs. Recent 
        modifications to the Respite Care program, which offers 
        temporary relief to family members caring for other family 
        members with severe chronic medical conditions, resulted in a 
        loss of services for several families due to revised criteria 
        regarding severity of chronic medical conditions.
         Spouse employment is the single biggest quality of 
        life issue in Korea according to the ACS Directors and senior 
        leadership. It is a recurring Army Family Action Plan (AFAP) 
        issue and is raised at every town hall meeting. The cost of 
        living is high and financially challenging if a spouse is not 
        employed to supplement the family's income. An added limitation 
        is the requirement for professional degrees/licenses and the 
        ability to speak Korean.
         In many overseas locations, family members rely on 
        employment in base exchanges and morale, welfare, and 
        recreation facilities. Navy Region Center Singapore indicates 
        that with budget cuts, manpower reductions may occur and 
        employment opportunities jeopardized.
         Cutbacks are already apparent in some non-appropriated 
        fund programs, a critical component of the ``non-financial 
        compensation'' provided to our servicemembers. At Joint Region 
        Marianas, for example, Category ``C'' facilities (such as the 
        auto hobby shop) have closed. Reduction of gym and pool hours 
        is under consideration; golf course renovations have been 
        placed on hold. Higher costs for goods, fuel, and 
        transportation have made it increasingly difficult to offer 
        lower prices on goods and activities for servicemembers and 
        families; personnel are looking off base for more affordable 
        options.
         U.S. Army Pacific (ARPAC) families worry that morale, 
        welfare, and recreation facilities, such as the bowling alley 
        and auto center, may close due to funding cutbacks. The 
        reduction of resources to support these quality of life 
        activities may lead to fee increases, with Army Families forced 
        to share more of the cost of providing child and youth 
        programs.
         Servicemembers and their families are generous 
        volunteers, but even volunteering has been affected by 
        cutbacks. Volunteers with organizations such as Army Community 
        Service, Survivor Outreach Service, and the Army Family Action 
        Plan have noted that provision of/funding for child care while 
        volunteering is no longer available.

    Our quality-of-life programs are critical to ensuring the well-
being of our troops. We realize that we have much to do to minimize 
negative impacts to our families resulting from budget cuts. We will 
work to streamline programs and further encourage sharing among the 
Services, eliminate redundancies and avoid duplication of effort; we 
must keep our quality-of-life focus relevant while making programs more 
efficient. Leaders in the PACOM area play a critical role now and in 
the future to ensure that our increasingly scarce defense dollars are 
wisely allocated and our Services continue to work together to maximize 
family support programming.

    23. Senator McCain. Admiral Willard, what lessons were learned 
following the triple disasters in March 2011--earthquake, tsunami, and 
nuclear crisis--regarding communication with and accountability for 
military families, evacuation warning, access to DOD quality of life 
support programs, including health and mental health care, access to 
schools for dependent school aged children, and the potential health 
effects of exposure to radiation?
    Admiral Willard.
Communication
    Previously established base and operational commanders' 
communication and family support plans as well as townhall meetings, 
Family Support Centers, and the MilitaryOne Source website proved very 
effective in disseminating timely and critical information to military 
families and helped ease concerns. Within the first couple of days, the 
full spectrum of media products (Facebook, email, base broadcasts, 
Armed Forces Network) were focused on providing the most up-to-date and 
pertinent information. One lesson learned, especially in the opening 
days, was the importance of quickly ensuring a common message across 
the Services.
Accountability
    100 percent accountability of servicemembers and dependents was 
reported quickly from the Services after the event. Fortunately, our 
force concentrations were outside of the areas of major damage and we 
experienced no casualties. What we learned as the harder part of 
accountability was maintaining the 100 percent accountability and 
support as family members left Japan on their own or as part of the 
voluntary departure. We called this the challenge of ``the last 
tactical mile'' and found improvements are needed in the repatriation 
process as well as ensuring support for the displaced military families 
once they have arrived at their safe haven.
Evacuation Warning
    In areas where there is a large DOD dependent presence (Japan, 
Korea), we must sustain close coordination between the Department of 
State and PACOM to ensure departure guidance is clearly disseminated 
and executed.
DOD Quality of Life Programs
    There was no degradation to quality-of-life programs on the bases 
during the event. Family Service Centers remained open and manned 
throughout the crisis and continued to provide support to affected 
family members.
Education
    All DODEAs remained open in Japan throughout the crisis. Some 
degradation was noticed due to departing teachers who were also 
military dependents. This was offset by the number of students who also 
departed. Official DODEA teachers remained on station throughout the 
event and maintained a quality education curriculum for the students.
    For the students who departed Japan during the crisis, the 
Interstate Compact for Military School Age Children, which addresses 
issues such as eligibility, enrollment, placement, and graduation 
requirements, eased enrollment challenges in safe haven locations. We 
also found the most effective lever for the displaced students was 
asking the schools to apply the McKinney-Vento Homeless Assistance Act 
provision to their enrollment. This allowed for further flexibility and 
support for these displaced families. Ease of student enrollment in 
these situations is critical.
Medical
    The medical community experienced challenges initially in regard to 
effective communication of the potential health effects of radiation 
exposure to military members and their families--particularly when 
trying to reassure the population given the minimal levels present in 
most areas. An initial barrier was keeping the message and 
responsibility strictly within medical circles. This was quickly 
addressed by coordinating with leadership to deliver a consistent 
health risk message derived in a centralized manner and promulgated 
through various media outlets across all identified audiences.
    During Tomodachi, there were no identified degradations to military 
health services in Japan. In fact, there was an increase in capability 
in some areas due to the large number of specialty skill sets arriving 
to support operations.
    With respect to medical accountability, where applicable, all 
service and family members' medical records have been annotated to 
document their activities during Tomodachi to support any future 
unforeseen health concerns.

                    MARINE CORPS AIR STATION FUTENMA

    24. Senator McCain. Admiral Willard, the administration's recent 
announcement to adjust our current posture plans set forth in the 
Realignment Roadmap, in particular delinking both the movement of 
marines to Guam and resulting land returns south of Kadena Air Base 
from progress on the Futenma Replacement Facility, puts the future of 
the Marine Corps Air Station (MCAS) Futenma in limbo. In your opinion, 
what do you see as the future of maintaining a base for Marine Corps 
aviation on Okinawa over the long term?
    Admiral Willard. Both the United States and Japan agree that a 
Futenma Replacement Facility (FRF) is necessary and, after 
comprehensive study, conclude that constructing that facility in the 
waters off Camp Schwab in Okinawa is the best way forward. Both 
countries remain committed to the FRF plan agreed to in the Realignment 
Roadmap in 2006. We consider it to be an operationally feasible plan. 
If for some reason the FRF is not constructed, MCAS Futenma will remain 
the U.S. Marine Corps' aviation base in Okinawa.

    25. Senator McCain. Admiral Willard, what risks are incurred 
continuing to operate from the existing MCAS Futenma?
    Admiral Willard. The United States and Japan agree that Futenma 
replacement is necessary and that the urbanization that has developed 
around the airfield is problematic and will remain so if we continue to 
operate from Futenma. Additionally, over the past several years we have 
made little or no investment in Futenma's infrastructure, so if the FRF 
were to be delayed further, I think Futenma will require some 
infrastructure investment to keep it a viable facility for our marines. 
The longer we delay the FRF, this shortfall in necessary infrastructure 
investments will have a greater impact.

                     RELOCATION OF MARINES TO GUAM

    26. Senator McCain. Admiral Willard, the administration's recent 
announcement to adjust our current posture plans set forth in the 
Realignment Roadmap with the Government of Japan indicated that the two 
governments will be reviewing the unit composition and the number of 
marines who will relocate to Guam. What composition and status of 
forces (permanent or rotational) do you recommend on Guam and other 
locations in your AOR?
    Admiral Willard. [Deleted.]

    27. Senator McCain. Admiral Willard, can you describe your ideal 
force composition?
    Admiral Willard. An ideal force composition is one-sized, 
sustained, and positioned to react in a timely manner to address likely 
contingencies. While we currently have the appropriate Marine Corps 
force size to execute contingency operations in our AOR, we are lacking 
in the Amphibious Lift and Combat Logistics Force (CLF) vessels to 
support and sustain these forces. Additionally, relocation of existing 
forces further from likely conflict areas exasperates the situation. As 
we rebalance to the Asia Pacific, we need to be cognizant of the 
tyranny of time and distance on the ability of our forces to adequately 
react to crisis contingencies and engagement opportunities.
    Although we are discussing politically and fiscally-influenced 
force adjustments with our allies, we need to maintain the most optimal 
aspects of current operational agreements which directly support the 
warfighter.

    28. Senator McCain. Admiral Willard, why does Guam make sense from 
an operational perspective as opposed to locating U.S. military forces 
in other of your AORs?
    Admiral Willard. [Deleted.]

                 STATUS OF FUNDS FOR HOUSING ON OKINAWA

    29. Senator McCain. Admiral Willard, I note that the budget request 
for fiscal year 2013 includes $32 million to improve military housing 
infrastructure on Okinawa, which is the latest installment of hundreds 
of millions over the past 5 years. Despite our continued investment of 
U.S. taxpayers' funds, over $1 billion for upgrades to housing at Camp 
Foster on Okinawa has been tied up by the Japanese Government for 3 
years pending the outcome of land issues. Would you please provide a 
plan to release these funds and to complete the renovations?
    Admiral Willard. The Special Action Committee on Okinawa (SACO) 
bilateral agreement of 1995, which reduces the U.S. military footprint 
on Okinawa, has an 8-phase program that will improve 1,770 units using 
more than $1 billion in Japanese funding. Phases 1-4 are nearly 
finished with 670 units completed and cultural asset surveys to be 
conducted on the site of another 56 within the next 2-3 years. 
Investments to the remaining homes remain on hold pending the outcome 
of U.S.-Japanese negotiations regarding the Defense Policy Review 
Initiative. Similarly, a request for replacement through the Japanese 
Facility Improvement Program (JFIP) of another 1,275 homes on Kadena 
Air Base, an effort valued at $764 million, remains on hold for the 
same reasons.

                           QUALITY OF HOUSING

    30. Senator McCain. Admiral Willard, please provide your general 
assessment of the quality of unaccompanied and family housing in your 
AOR. Are there particular areas of concern?
    Admiral Willard. Overall, the condition of unaccompanied and family 
is good and continues to improve. A few locations in the AOR have 
further than others to go to meet the mandated goals. For example, the 
number of inadequate government owned houses in Korea remains higher 
than what is expected due to the ongoing relocation plans. Delays to 
the relocation have only worsened the condition of the houses. The 
greatest concern is the impact that the continued delay of the Yongsan 
Relocation Plan will have on the existing inventory of houses on the 
Yongsan Garrison.

    31. Senator McCain. Admiral Willard, what are the Military 
Services' plans to address those concerns?
    Admiral Willard. The Services continue to invest in unaccompanied 
and family housing based on a deliberate planning process to meet these 
goals through new construction, renovation, and demolition of outdated 
facilities. For Korea, the Army is pursuing a privatization strategy 
that delivers apartment style homes using servicemembers OHA as rent at 
Camp Humphreys. The private partner will own, operate, maintain, and 
recapitalize the units. The Army provides no occupancy guarantees. 
Humphreys Housing Opportunity Program is a critical element to the 
transformation efforts in Korea that will provide quality of life for 
these families. This strategy is in lieu of MILCON and leasing both of 
which have been unsuccessful in funding family housing in Korea.

             INVESTMENTS TO IMPLEMENT THE STRATEGIC REVIEW

    32. Senator McCain. Admiral Willard, the President announced that a 
strategic review was used to guide development of the budget request 
for fiscal year 2013 which resulted in a delicate balance of 
capabilities and risks. But yet, the costs for most of the initiatives 
presented to rebalance forces in the Asia Pacific are not known, nor 
are they represented in the budget. How does this budget support your 
plans for rebalancing forces in the Asia-Pacific region?
    Admiral Willard. The force structure envisioned can continue to 
serve PACOM well. It is important, however, that we bias the force 
structure into the regions of the world that are most important to our 
national security, regardless of the adjustments in force structure 
that take place as a result of the fiscal environment.

    33. Senator McCain. Admiral Willard, do you have a rough idea what 
costs will be incurred from establishing a rotational presence in 
Australia or Guam as well as enhancing capabilities in Singapore, South 
Asia, and the Philippines?
    Admiral Willard. The costs of the Marine Corps lay-down in Guam 
will be the result of ongoing discussions with Japan on Marine Corps 
force lay-down and adjustments to our agreements with Japan.
    With an emphasis on rotational force presence in Singapore and 
Australia, costs are not expected to be large. The majority of the 
forces rotationally deployed to Singapore and Australia will be 
deployed without families, much as the Services already deploy units 
worldwide.
    Depending on the facilities available for our use in each country, 
there may be some facility construction requirement, but that 
requirement will be negotiated with the host country. We do not 
anticipate that the United States will cover all costs of the 
initiatives in Singapore and Australia.

            STRATEGIC AIRLIFT SUPPORT FOR FORCE REALIGNMENTS

    34. Senator McCain. General Fraser, the proposed realignment of 
U.S. military forces in Europe and dispersal of forces in the Pacific 
theater with an emphasis on rotational force will inevitably change 
strategic lift requirements for TRANSCOM. As an example--moving up to 
5,000 marines to Guam will drive a significant new requirement to get 
them from Guam during contingencies. Have you been able to determine 
what these new requirements will be?
    General Fraser. TRANSCOM is actively working with the geographic 
combatant commanders on their proposed realignments and drawdown plans. 
Throughout this process TRANSCOM has identified its requirements within 
geographic combatant commanders theater campaign plans, theater posture 
plans and theater distribution plans, and will incorporate them into 
our global campaign plan for distribution. With reference to the 
projected move of marines to Guam; once PACOM and the Marine Corps 
determine their concept of operations, TRANSCOM will conduct analysis 
to determine the capability required to project the force. TRANSCOM is 
supporting projects on Guam that will increase the velocity and 
capability to project these forces (e.g. fiscal year 2012 Air Freight 
Terminal Complex, $37 million; fiscal year 2014 X-Ray Wharf $55.6 
million; and fiscal year 2014 Joint Military Deployment Center, $28 
million). Continued funding support for these projects and others 
within the en route system will further enable TRANSCOM's force 
projection.

    35. Senator McCain. General Fraser, can these requirements be 
supported with the current en route infrastructure?
    General Fraser. Yes, the current requirements identified by the 
combatant commanders can be supported by the current en route 
infrastructure. TRANSCOM validated this requirement within the Mobility 
Capabilities and Requirements Study 2016 (MCRS-16) and more recently 
within the Global Access and Infrastructure Assessment. TRANSCOM's 
annual En Route Mobility Infrastructure Master Plan (ERIMP), recently 
released in February 2012, provides the locations, capabilities, and 
shortfalls to the en route network, and proposes solution sets for 
eliminating identified capability gaps. Through the ERIMP, the 
combatant commanders are able to determine TRANSCOM's requirements and 
account for them within their Theater Posture Plans.

    36. Senator McCain. General Fraser, are you confident that plans 
are in place to mitigate limiting factors so that TRANSCOM will be able 
to meet combatant command requirements?
    General Fraser. Yes. Following release of the President's and 
Secretary of Defense's new strategic guidance, we conducted a 
comparison of its principles to those requirements outlined in MCRS-16. 
The comparison validated 275 aircraft (223 C-17s and 52 C-5Ms) and our 
Civil Reserve Air Fleet (CRAF) partners can support a large scale 
operation in one region, with a capability to deny the objectives of an 
opportunistic aggressor in a second region, while defending the 
Homeland and providing support to civil authorities.

                            PATRIOT EXPRESS

    37. Senator McCain. General Fraser, TRANSCOM has operated the 
Patriot Express charter flight program to offer cost effective travel 
options for servicemembers and their families assigned overseas. This 
program has been an important quality of life benefit for military 
families assigned far away from home. What is the current status of the 
Patriot Express charter flight system?
    General Fraser. The Patriot Express program continues to provide a 
valuable quality of life travel benefit to military families. With duty 
travelers paying prices equal to the GSA City Pair rate, results 
exceeded expectations. While achieving 80 percent seat utilization, 95 
percent on-time performance and 102 percent recovery of costs, the 
fiscal year 2010 to fiscal year 2011 ridership increased 5 percent. 
Approximately 200,000 official duty and 100,000 military family 
passengers enjoyed the benefits of economic, reliable travel on modern, 
newer aircraft during fiscal year 2011.

    38. Senator McCain. General Fraser, how many flights are operated 
and where are they operated?
    General Fraser. 10 weekly routes depart from three CONUS gateways 
at Baltimore, Norfolk, and Seattle to 16 international destinations: 
Germany, Portugal, Spain, Italy, Turkey, Bahrain, Crete, Diego Garcia, 
Cuba, Djibouti, Kuwait, Qatar, Kyrgyzstan, Japan, Okinawa, and Korea.

    39. Senator McCain. General Fraser, is this program operated on a 
cost neutral basis? If not, why not?
    General Fraser. In accordance with Title 10 of the U.S.C., Section 
2208--Working Capital Funds, the Patriot Express program is operating 
on a cost neutral basis.

    40. Senator McCain. General Fraser, what is your projection for 
continuation and further improvements to this system in fiscal year 
2013 and beyond?
    General Fraser. To execute continued operations flying modern fuel 
efficient aircraft with significant savings to ensure long-term 
readiness, identify options to expand worldwide Patriot Express 
passenger capacity and retain enterprise ability to respond to 
contingency operations while maintaining CRAF passenger carrier 
viability.

                   SPACE AVAILABLE TRAVEL ELIGIBILITY

    41. Senator McCain. General Fraser, recent legislative proposals 
seek to expand eligibility for Space-Available Travel (Space-A) on 
military aircraft. Specifically, these proposals would open Space-A to 
members of the Reserve components, a member or former member of a 
Reserve component who is eligible for retired pay but has not reached 
age 60, and widows and widowers of retired members and their 
dependents. Please assume that this legislation is enacted and made 
effective no later than January 2013. Could you explain with 
specificity what the impact will be on current eligible personnel and 
on the Air Mobility Command's (AMC) air passenger operations?
    General Fraser. The Under Secretary of Defense for Acquisition, 
Technology, and Logistics (AT&L) promulgates policy for the DOD Space 
Available Program and publishes Department-wide Space-Available policy. 
The Space-A travel system's primary purpose of Space-A travel is to 
provide Active Duty members and their dependents respite from the 
rigors of military service and the primary objective is to enhance the 
morale and welfare of our Active-Duty Force.
    Our sense is the potential for expanding the eligibility pool 
cannot be accommodated without having a detrimental impact to our 
Active Duty members. Under the current wartime situation, DOD does not 
have the global ability to support this expansion. The expansion would 
increase support costs for security identification, administration, 
processing, baggage handling, safety equipment, training, personnel, 
and facilities and would undermine the current policy that execution of 
the Space-A travel is at no cost to the DOD.
    Members of our Reserve component, as well as former members of a 
Reserve component who are eligible for retired pay but have not reached 
age 60 (known as ``Gray Area'' retirees) are authorized Space-A 
transportation although on a limited basis. In the current resource-
constrained environment, an expansion of the program to widows and 
widowers of retired members and their dependents would diminish the 
value of the limited benefit currently available to Active Duty 
personnel and their dependents.
    In terms of quantifiable impact, the NDAA for Fiscal Year 2012 has 
levied a congressional report requirement concerning space-available 
travel. Specifically, the Comptroller General of the United States is 
tasked to conduct a review of the DOD system for space-available 
travel. The review shall determine the capacity of the system presently 
and as projected in the future and shall examine the efficiency and 
usage of space-available travel.

                        JOINT HIGH SPEED VESSEL

    42. Senator McCain. General Fraser, the Joint High Speed Vessels 
(JHSV) represents a transformational sealift capability by offering an 
enhanced logistics response to military and civil contingencies around 
the globe. In your statement, you mention that JHSVs are critical, ``in 
closing the gap between high-speed, low-capacity airlift and low-speed, 
high-capacity sealift.'' In the proposed 2013 defense budget, the Obama 
administration proposes to cut the buy of JHSVs in half from the 
requirement stated just a year ago. What is the risk in your ability to 
provide logistics response to military and civil contingencies around 
the globe in response to combatant command requirements?
    General Fraser. The reduction of the Program of Record for JHSVs to 
10 incurs no additional risk to TRANSCOM's ability to meet combatant 
command requirements.

                              AFGHANISTAN

    43. Senator McCain. General Fraser, PAK GLOC remains the quickest 
and most cost-effective route to move cargo, Afghanistan Security Force 
Fund material, Foreign Military Sales (FMS), and unit cargo and 
equipment to Afghanistan. Multi-modal hubs in Dubai, United Arab 
Emirates, and Aqaba, Jordan, proved invaluable when PAK GLOC routes 
were no longer available for use in November of last year. Based on 
recent and potential future closures of the PAK GLOC, how is TRANSCOM 
postured to support the future sustainment, deployments, and 
redeployment of forces in Afghanistan?
    General Fraser. TRANSCOM has benefited from previous efforts to 
develop additional routes and capacities in order to mitigate potential 
supply disruptions such as the PAK GLOC closure. Routes such as the NDN 
and the multi-modal operations have proven invaluable to weather the 
current situation.
    TRANSCOM continues to seek, explore, and develop additional 
opportunities to strengthen the redundancy, capacity, and support we 
provide to the warfighter. For example, TRANSCOM currently is 
evaluating two-way flow on the NDN and through multi-modal ports. Once 
validated and implemented, this will be an important addition to 
retrograde capacity and redundancy.

    44. Senator McCain. General Fraser, with the proposed cuts in 
President Obama's 2013 defense budget to large cargo aircraft (i.e., C-
5As) and smaller cargo airplanes (i.e., C-130s and C-27s), does 
TRANSCOM and its component, AMC, have the capacity to support combat 
operations in Afghanistan and respond to all geographic combatant 
command requests worldwide? Please explain your answer fully.
    General Fraser. With respect to strategic lift, President Obama's 
2013 defense budget provides for 223 C-17s, 52 C-5Ms, and 318 C-130s. 
TRANSCOM through its component, AMC, has sufficient capacity to support 
combat operations in Afghanistan and respond to all geographic 
combatant command requests worldwide. The 2013 defense budget retires 
the remainder of the older and less reliable C-5A fleet. The remaining 
fleet of C-17s and modernized C-5s will provide 30.4 MTM/D of capacity. 
Recent Department assessments indicate that this capacity is sufficient 
to meet the airlift demand for the revised defense guidance with 
respect to theater operational lift. The budget also eliminates the C-
27J from the airlift fleet. The C-27J aircraft was designed to perform 
the direct support mission for the Army. The C-130 is capable of 
performing that mission and the Air Force is committed to performing 
the Army direct support mission using its fleet of 318 C-130s with no 
adverse affect to its intratheater airlift mission.

                                 PIRACY

    45. Senator McCain. General Fraser, piracy continues to threaten 
commercial shipping of U.S.- and foreign-flagged ships predominantly in 
the Horn of Africa region. What are TRANSCOM and its component, 
Military Sealift Command (MSC), doing to reduce the vulnerability of 
the U.S. commercial fleet from piracy?
    General Fraser. Since 2009, TRANSCOM has reimbursed our commercial 
maritime partners for the cost of deploying Privately-Contracted Armed 
Security (PCAS) teams aboard ships carrying DOD cargo through seas 
designated by the U.S. Coast Guard as ``High Risk'' for piracy. PCAS 
teams have proven to be a 100 percent-effective deterrent to piracy, 
ensuring the safety of U.S. mariners, DOD cargo, and enabling the 
success of our mission. The United Nation's International Maritime 
Organization (IMO) has recently published recommended guidance for all 
nations to employ these teams, in a manner very similar to our 
standards.
    TRANSCOM has reimbursed our commercial maritime partners 
approximately $9 million to cover the cost of PCAS teams and we 
continue to work in concert with MSC, our interagency partners, and the 
Maritime Industry to incorporate industry Best Management Practices 
(BMP) and enhance the security posture of U.S.-flagged vessels moving 
DOD cargo.
    In view of the unquestionable success of PCAS teams in deterring 
piracy, TRANSCOM will continue to encourage the employment of PCAS 
teams. In addition, continued U.S. support for multi-national counter-
piracy efforts pays significant dividends. Thus, we will continue our 
engagement with other DOD agencies and combatant commands, our 
interagency partners, our foreign partners, and commercial industry 
partners to stay abreast of the latest threats and BMP.

           MOBILITY CAPABILITIES AND REQUIREMENTS STUDY 2016

    46. Senator McCain. General Fraser, is the MCRS-16 requirement 
still operative with the current budget reductions proposed by the 
Obama administration and DOD's new strategic guidance? Please explain 
your answer fully.
    General Fraser. MCRS-16 is the current study of record, however, it 
does not reflect current strategic guidance and the new defense 
strategy. DOD's new strategy is not reflected in the basic scenarios 
used in MCRS-16 and some specific cases no longer capture the necessary 
mobility capabilities for the future. That said, MCRS-16 is still 
useful as a baseline analysis of mobility capabilities to understand 
what has changed and why.
    DOD analyzed the airlift and tanker adjustments in the President's 
budget, and I agree with those decisions. However, the new strategy 
warrants another comprehensive study of future mobility capabilities to 
provide the Department and Congress with additional insight on future 
mobility needs.
    The analysis done by the Office of Secretary of Defense and Joint 
Staff shows that under certain circumstances I may have to manage 
operational air mobility risk when confronted with competing demands 
and ask our warfighters to prioritize or phase their force movements. 
However, the strategic airlift fleet is more capable today than 2001 
and our ability to swing capabilities rapidly to meet global demands is 
a significant capability that gives me confidence we can meet future 
airlift requirements. Our strategic sealift capabilities are also 
consequential and can move massive amounts of equipment and cargo when 
time permits.
    For air refueling, we can meet the daily demands experienced in the 
high OPTEMPO environment over the last 10 years with a smaller fleet of 
453 tanker aircraft. But, there is no excess in the tanker fleet. The 
new strategy does not significantly change the continued need for a 
fleet of tankers which is why we must have the KC-46 delivered on 
schedule.
                                 ______
                                 
             Questions Submitted by Senator James M. Inhofe

                            QUALITY OF LIFE

    47. Senator Inhofe. Admiral Willard, I understand there may be 
significant issues in the enlisted quarters at Osan Air Base. Issues 
may include plumbing, lead concerns, and mold issues at Building 746, 
Building 708, and Building 475. Does the PACOM and Air Force-requested 
dormitory for Osan Air Base in the fiscal year 2012 budget submission 
address enlisted quarters that are below standards?
    Admiral Willard. Yes, the recently awarded fiscal year 2012 MILCON 
project (156-person dormitory) at Osan Air Base replaces four 
inadequate enlisted dormitories at Osan and provides for their 
demolition. In reference to the dormitories you specifically ask about 
(buildings 746, 708, and 475), I offer the following.

         - Building 746: Over the years, this dormitory has experienced 
        problems with lead. The Air Force fixed the problem by 
        installing filters and routinely flushing the lines. The water 
        is routinely tested by biological and environmental health 
        professionals and continues to remain well within health 
        standards. The facility is in compliance with the EPA lead and 
        copper rule. The Air Force also replaced the heating, 
        ventilating, and air conditioning system in fiscal year 2008.
         - Building 708: This dormitory was renovated in fiscal year 
        2010; bringing the dormitory into compliance and up to 
        standards. The renovation included the installation of new hot 
        and cold water lines and replacing the heating, ventilating, 
        and air conditioning boiler and controls. The repairs fixed the 
        health concerns, and provide quality housing for our joint 
        forces.
         - Building 475: The Air Force continues to make significant 
        investments in its dormitories in accordance with the 2010 
        Dormitory Master Plan. Building 475 is planned to receive a 
        $3.1 million renovation, to include replacing the hot and cold 
        water lines and the heating, ventilating, and air conditioning 
        boiler and controls, similar to Building 708.

    48. Senator Inhofe. Admiral Willard, are there other dormitories 
outside of this proposed dormitory that are not addressed?
    Admiral Willard. Yes, Osan Air Base, in accordance with its 
dormitory master plan, will demolish three additional dormitories. 
These three dormitories are being replaced by a single dormitory using 
Host Nation Funding. The dormitory is currently under design and 
scheduled to be completed by January 2015. The Air Force continues to 
invest to sustain and modernize its dormitories in accordance with the 
2010 Dormitory Master Plan to maintain the quality of life for our 
joint forces.

    49. Senator Inhofe. Admiral Willard, what is the wing commander's 
assessment of the enlisted dormitory situation at Osan Air Base (active 
mission assigned personnel as well as support/tenant units)?
    Admiral Willard. Osan Air Base has a large inventory of dormitories 
with a range of age, condition, and adequacy. For instance, the level 
or existence of modern amenities in all of the dormitories is not 
consistent due to the relative newness of the different dormitories. 
According to DOD standards, all of the occupied dormitories at Osan are 
considered adequate. According to the personal assessment of the Wing 
Commander, however, there are three dormitories at Osan that are not 
adequate.
    One of the dormitories, 475, was mentioned in a previous question. 
The other two dormitories, like 475, have had no recent improvements in 
accordance with the dormitory master plan and base master plan that 
supported tour normalization. To mitigate the conditions in these 
dorms, the Wing Commander is looking at a couple of options. The first 
is to actively seek programming for an additional major renovation for 
one dormitory using operations and maintenance funds, including 
demolition of another and a fiscal year 2015 MILCON request for a 127-
person noncommissioned officer dormitory. The second is to conduct a 
review of options to potentially move the next projected occupants of 
those facilities into off-base housing. The Wing Commander will 
continue to advocate for renovation of existing facilities along with 
the continued replacement of dormitories approaching or already past 
their useful life in accordance with the Air Force's current programmed 
dormitory master plan.

    50. Senator Inhofe. Admiral Willard, are there any plans to correct 
the substandard rooms remaining?
    Admiral Willard. The 2010 Dormitory Master Plan provides a detailed 
investment strategy, to include sustainment of substandard rooms, to 
provide adequate and quality housing for our joint forces. Based on 
this master plan, the Air Force continues to make significant 
investments to sustain its facilities in order to provide safe, 
adequate housing and work environments for our joint forces.
                                 ______
                                 
             Questions Submitted by Senator Saxby Chambliss

                        STRATEGIC AIRLIFT FLEET

    51. Senator Chambliss. General Fraser, many studies have examined 
the proper size of the strategic airlift fleet. Two years ago, 316 
strategic airlifters were described as the sweet spot. Last year the 
Air Force requested a reduction of the strategic fleet to 301, based on 
analysis of the most stressing scenarios, and Congress approved. Now 
suddenly, the Air Force proposes 275. As the combatant commander 
responsible for air, land, and sea transportation for DOD, would you 
please share and describe the objective studies TRANSCOM has done to 
ensure we have the fleet size correct this time, as opposed to the 
extensive analysis that supported a minimum floor of 301?
    General Fraser. The current mobility study of record is MCRS-16, 
however, it does not reflect current strategic guidance and the new 
defense strategy. The DOD analysis supporting the reductions of the 
President's budget for 2013 indicates that the President's budget for 
2013 level will meet daily demands for strategic airlift. However, if 
certain circumstances occur in which we have concurrent demands and/or 
elevated defense levels in the Homeland, I am confident that we can 
manage the operational risk.

                          RETIRING C-5A FLEET

    52. Senator Chambliss. General Fraser, the Air Force proposes to 
retire the entire C-5A fleet, yet DOD has a long history of contracting 
former Soviet-bloc AN-124s to meet its needs. Retiring C-5s should be 
offered to the CRAF to establish the first ever U.S.-flagged outsized 
cargo carrier and stop outsourcing these missions to the Russians, at 
the cost of billions of dollars to U.S. taxpayers. C-5s are national 
assets, have decades of service life remaining, and have operationally 
demonstrated exceptional reliability and performance when upgraded to 
the C-5M Super Galaxy configuration. Would TRANSCOM be willing to take 
a serious look at offering some of these aircraft to its CRAF partners 
or even international allies who cannot afford new aircraft? This seems 
to be a win-win opportunity and something I believe members of this 
committee could help enable.
    General Fraser. The C-5As that are being retired under the NDAA for 
Fiscal Year 2012 and prior years are being put into storage for 
reclamation and can be used for spare parts. The Air Force delivered 
the ``Report on Retirements of C-5A Aircraft'' to four congressional 
defense committees in October 2010 which pointed out that the transfer 
of these aircraft to the commercial fleet creates a capacity increase 
that's not required and there is a high cost to demilitarize the C-5As.
    The C-5As proposed for retirement under the fiscal year 2013 
presidential budget will be put into Type 1000 storage for use at a 
future time, if needed. This provides the enterprise options for the 
future.
                                 ______
                                 
             Questions Submitted by Senator Roger F. Wicker

                            TRANSCOM SEALIFT

    53. Senator Wicker. General Fraser, I understand that in any 
typical operation, over 90 percent of all cargo is delivered by 
sealift, is that correct?
    General Fraser. It truly depends upon the operation, but in 
general, and especially for sustainment cargo once an operation is 
underway, yes, approximately 90 percent is carried by sealift. Through 
a combination of our government-owned strategic sealift fleet and the 
maritime security program vessels owned and operated by our commercial 
maritime partners, well over 90 percent of the deployment, sustainment, 
and redeployment cargo can be delivered. When restricted timelines or 
the sensitive nature of certain cargo requires it, we have the option 
to have it delivered via airlift.

    54. Senator Wicker. General Fraser, I understand from your prepared 
testimony that DOD spent approximately $2 billion on sealift through 
United Services Contract. How do you exploit your current commercial 
relationships as we pivot to Asia and the Pacific?
    General Fraser. We maintain longstanding partnerships with numerous 
U.S. flag carriers. Most of these companies are integrated into their 
parent companies' global intermodal networks, providing TRANSCOM 
instant access to their existing infrastructure around the world. Some 
of these U.S. flag carriers concentrate their ocean services in the 
Asia and Pacific region; therefore, transitioning to that geographic 
area should not be challenging. Our current global ocean services 
contract already covers locations in Asia and the Pacific. 
Additionally, our large global carriers have historically collaborated 
with us and created or altered routings and repositioned vessels when 
our cargo flows shifted due to mission requirements. Finally, we 
maintain the ability to charter commercial vessels when necessary to 
support requirements in Asia and the Pacific.

    55. Senator Wicker. General Fraser, is a 60-ship program adequate 
for what this nation needs to accomplish?
    General Fraser. In short, yes, with acceptable risk.
    The 60-ship Maritime Security Program provides 1 of 3 primary 
components of our total Strategic Sealift force; the other 2 being our 
organic fleet under the MSC and the Maritime Administration and the 
forward deployed Maritime Prepositioning Forces (MPF). Our analysis 
completed in MCRS-16 showed adequate sealift capacity available to 
close our forces in the most demanding scenarios with acceptable risk.
    A 60-ship fleet also employs a significant number of U.S. citizen 
mariners and maintains a U.S. flag fleet operating in international 
trade, providing DOD assured access to established international 
intermodal infrastructure.

                         AIR FORCE BUDGET CUTS

    56. Senator Wicker. General Fraser, on January 26, the Secretary 
and Chief of Staff of the Air Force held a press conference to discuss 
the aircraft force structure overview. The budget proposes retiring 286 
aircraft in the Future Years Defense Plan, including 227 in fiscal year 
2013 alone. Some of these cuts include the divestiture of some C-130J 
aircraft (eliminating 10 aircraft from Keesler Air Force Base in fiscal 
year 2014) and divestiture of all C-27 aircraft (eliminating all 6 
aircraft from the Meridian fiscal year 2013) and 20 KC-135s. How is 
TRANSCOM adversely affected by the Air Force's proposal?
    General Fraser. The overall number of aircraft is based on 
established studies of record providing a balanced fleet of modern and 
sustainable aircraft and does not adversely affect TRANSCOM's 
capability to meet wartime requirements. MCRS-16 Case III provides a 
requirement for 270 intratheater (C-130H/J) aircraft. The RAND Direct 
Support Study identified a minimum requirement of 50 intra-theater 
aircraft to maintain moderate risk or lower. The study also stated C-
130s and C-27Js are equally effective in the direct support mission. 
Therefore, the recent President's budget for 2013 airlift assessment 
recommends a reduction of intra-theater aircraft.

    57. Senator Wicker. General Fraser, Air Force leadership has stated 
that one method in which will help them deal with budget cuts is to 
remission bases and assets. What impacts will this have on your 
operational readiness and responsiveness?
    General Fraser. We are confident the proposed fiscal year 2013 Air 
Force force structure adjustments will have no impact on our ability to 
support combatant commanders' requirements based on the new 2012 
Defense Strategic Guidance.

     foreign language training and retention of qualified personnel
    58. Senator Wicker. Admiral Willard, I am a strong proponent of 
foreign language and cultural training at the military academies, 
Reserve Officers' Training Corps cadets and midshipmen, as well as 
similar training and incentives for college students interested in the 
intelligence community. These initiatives include the Center for 
Intelligence and Security Studies at the University of Mississippi. I 
am quite proud to be associated with this program which trains 
undergraduate students for careers in intelligence analysis. To what 
extent do you believe education and training in foreign languages and 
cultures are important in preparing the next generations of military 
officers and civilian analysts?
    Admiral Willard. I believe it is easier to promote U.S. interests 
when you can engage leadership in their native language and demonstrate 
an understanding of cultural sensitivities. When a U.S. senior officer 
speaks to his or her peer in a native language, it tells the foreign 
officer their country is valued as an ally and creates an immediate 
connection on multiple levels. In those many instances where our 
leaders may not speak a specific language, is it critical that they are 
prepared for their interactions by experts with language and cultural 
depth.
    Investment in foreign languages and understanding cultural 
differences permits military and civilian professionals to connect to 
the global environment. Acquisition of these skills takes years, 
however, and requires periodic refreshment and dedicated concentration. 
Training must begin at the beginning of military careers with programs 
like the one in Mississippi and others. U.S. national security relies 
upon our intelligence analysts' capabilities to stay proficient not 
only in the traditional languages such as Arabic, Mandarin, Japanese, 
and Russian, but in the hundreds of languages and dialects in the PACOM 
AOR that are less commonly learned.

    59. Senator Wicker. Admiral Willard, can you elaborate on PACOM's 
ongoing efforts to recruit and retain qualified and capable Active Duty 
and civilian analysts and operators?
    Admiral Willard. Recruiting and retaining a high-quality analytic 
workforce is a top priority. Realizing that state universities train 
students in languages; we reach out to provide internship and entry 
analyst opportunities to students with an interest in a career in 
national security. The National Security Education Program's Language 
Flagship Program graduates a variety of language-capable professionals 
including Chinese and Korean scholars. The only Korean flagship program 
is at the University of Hawaii at Manoa.
    The retention of both military and civilian personnel is an ongoing 
effort with a focus on professional development opportunities. Analysts 
with language expertise can take advantage of immersion opportunities 
to enhance their skills. Another development tool aiding retention is 
taking advantages of opportunities to travel within the theater, which 
improves cultural and language skills to add context analysis.

    60. Senator Wicker. Admiral Willard, what challenges do you face?
    Admiral Willard. One of the biggest challenges we face is the sheer 
number of languages spoken in our AOR. There are over 1,000 languages/
dialects in PACOM and most of them are less commonly taught languages. 
It is nearly impossible to have the readily available capability in 
these languages that is needed to handle military-to-military 
engagement and deal with emerging contingencies, such as humanitarian 
assistance and counterterrorism. In a large crisis, we also face the 
problem with having insufficient analysts in more commonly taught 
languages like Mandarin, Korean, and Bahasa Indonesia to handle the 
array of military tasks that require these abilities.
    Another challenge we have is the process of hiring proficient 
linguists for classified work. It can take over a year for some 
linguists to obtain a security clearance; by then short-term 
contingencies or mission requirements are often complete. We need to 
find a way to streamline this process without sacrificing quality 
background checks in order to translate classified documents.
    Finally, we face the continual challenge of maintaining high 
proficiency levels for our military and civilian force. Language 
fluency requires dedicated self study and recurring attendance in 
immersion programs to maintain the requisite language proficiency. 
Continued funding for these programs, as well as additional incentives 
for critical skill sets, should be explored.

                         U.S. IMAGE IN OKINAWA

    61. Senator Wicker. Admiral Willard, members of this committee 
continue to be concerned about the tremendous MILCON costs of 
relocating U.S. troops from Okinawa to Guam. I am concurrently 
concerned about the public diplomacy ramifications of any changes to 
our proposed relocation of troops from Okinawa. What is your current 
assessment of the image of U.S. forces in the eyes of the Okinawans and 
the Japanese Government?
    Admiral Willard. I believe that our servicemembers who live and 
work in Okinawa enjoy a very positive relationship with the Okinawan 
people on the personal and local level. Significantly, this impression 
has endured through the long-term, despite crises and controversies 
regarding U.S. facilities in Okinawa. I think we can attribute this to 
both the Okinawans' character as courteous and welcoming people and to 
the excellent training of our servicemembers, who are very much aware 
that they are guests and diplomats in Japan. More broadly, the Japanese 
people have consistently viewed America favorably. Recently, this good 
will has sharply increased; the December 2011 Japanese Cabinet Office 
report showed a record 82 percent of Japanese polled have a friendly 
view toward the United States. Similarly, the 2011 Pew Global Attitudes 
survey showed 85 percent of Japanese respondents see the United States 
favorably.
    Our interactions with the Japanese Government also reflect a 
favorable view of U.S. forces. From senior staff level relations with 
ministry officials to local commanders' close work with municipal 
governments our servicemembers meet a positive attitude from our 
Japanese colleagues. Even in Okinawa, despite the politically charged 
challenges regarding U.S. facilities there, we find that local 
officials seem to hold U.S. servicemembers in high regard.

                        JOINT HIGH SPEED VESSEL

    62. Senator Wicker. General Fraser, JHSVs represent a 
transformational sealift capability by offering an enhanced logistics 
response to military and civil contingencies around the globe. In your 
statement, you mention that JHSVs are critical, ``in closing the gap 
between high-speed, low-capacity airlift and low-speed, high-capacity 
sealift.'' In the proposed 2013 defense budget, the Obama 
administration proposes to cut the buy of JHSVs in half from the 
requirement stated just a year ago. What is the risk in your ability to 
provide logistics response to military and civil contingencies around 
the globe in response to combatant command requirements?
    General Fraser. The reduction of the Program of Record for JHSVs to 
10 incurs no additional risk to TRANSCOM's ability to meet combatant 
command requirements.

                                 PIRACY

    63. Senator Wicker. General Fraser, piracy continues to threaten 
commercial shipping of U.S.- and foreign-flagged ships predominantly in 
the Horn of Africa region. What are TRANSCOM and its component, MSC, 
doing to reduce the vulnerability of the U.S. commercial fleet from 
piracy?
    General Fraser. Since 2009, TRANSCOM has reimbursed our commercial 
maritime partners for the cost of deploying PCAS teams aboard ships 
carrying DOD cargo through seas designated by the U.S. Coast Guard as 
``High Risk'' for piracy. PCAS teams have proven to be a 100 percent-
effective deterrent to piracy, ensuring the safety of U.S. mariners, 
DOD cargo, and enabling the success of our mission. The United Nation's 
IMO has recently published recommended guidance for all nations to 
employ these teams, in a manner very similar to our standards.
    TRANSCOM has reimbursed our commercial maritime partners 
approximately $9 million to cover the cost of PCAS teams and we 
continue to work in concert with MSC, our interagency partners, and the 
Maritime Industry to incorporate industry BMP and enhance the security 
posture of U.S.-flagged vessels moving DOD cargo.
    In view of the unquestionable success of PCAS teams in deterring 
piracy, TRANSCOM will continue to encourage the employment of PCAS 
teams. In addition, continued U.S. support for multi-national counter-
piracy efforts pays significant dividends. Thus, we will continue our 
engagement with other DOD agencies and combatant commands, our 
interagency partners, our foreign partners, and commercial industry 
partners to stay abreast of the latest threats and BMP.

    64. Senator Wicker. General Fraser, are you a strong advocate for 
the use of private security teams aboard commercial vessels?
    General Fraser. Absolutely. The effectiveness of PCAS teams is 
unquestionable. No ship that has employed a PCAS team has been 
hijacked. Since 2009, we have reimbursed our commercial maritime 
partners for the cost of employing PCAS teams aboard their ships when 
they carry DOD cargo through ``High Risk Waters'' as designated by the 
U.S. Coast Guard.
    To date, TRANSCOM has paid approximately $9 million for these 
teams. We consider their 100percent success rate in ensuring the safety 
of U.S.-citizen mariners, DOD cargo, and the preservation of our 
mission capabilities to justify our investment. We will continue to 
work in concert with our naval component MSC, our interagency partners, 
and the maritime industry to incorporate industry's BMPs and enhance 
the security posture of U.S.-flagged vessels moving DOD cargo. We must 
continue to encourage the employment of private security teams as our 
most viable deterrent.
                                 ______
                                 
             Questions Submitted by Senator Kelly A. Ayotte

                       COMMERCIAL VARIANT OF C-17

    65. Senator Ayotte. General Fraser, setting aside current strategic 
airlift requirements, would it be advantageous for military readiness 
to have the additional capability in the CRAF--at no cost to 
taxpayers--that a commercial variant of the C-17 would provide?
    General Fraser. The C-17 is a strategic airlift aircraft 
categorized to carry DOD outsized and oversized cargo requirements. 
Based upon our wartime requirements, DOD does not require civil 
aircraft to support outsized and oversized cargo requirements. However, 
when not operating at full wartime capacity and utilization rates, the 
use of commercial contracts with our CRAF carriers and their partners 
to move outsize cargo reduces wear-and-tear on our organic assets when 
not mobilized for warfighting efforts, increasing their service life.

                        MARITIME PREPOSITIONING

    66. Senator Ayotte. General Fraser, in the fiscal year 2013 
proposed budget, the Navy announced a plan to reduce the number of 
Maritime Prepositioning Squadrons (MPSRON) from 3 to 2 and the number 
of prepositioning ships to 12. How will this decision slow response 
times to potential contingencies?
    General Fraser. This decision was made by the Department of Navy 
and they are currently developing a risk assessment which the CNO and 
Commandant will be providing as required by theNDAA for Fiscal Year 
2012.
    We have completed limited analysis on the impacts of this force 
reduction, using the DOD's current planning scenarios. Two MPSRONs meet 
the requirements of all combatant command approved operation plans. In 
the limited instances where global contingency requirements call for a 
third MPSRON, reconstituting and deploying an equivalent cargo set from 
CONUS to the Mediterranean could be delayed by 30 days.

    67. Senator Ayotte. General Fraser, what are the readiness risks 
associated with these slower response times?
    General Fraser. The Department of Navy is currently developing a 
risk assessment which the CNO and Commandant will be providing as 
required by the NDAA for Fiscal Year 2012.
    That said, we have identified a potential response time risk of up 
to 30 days in the event of having to respond with a third MPSRON. The 
readiness and response time risks, as a result of reducing from three 
to two MPSRONs, will be examined in greater detail using the most up-
to-date scenarios during the next mobility study.

    68. Senator Ayotte. General Fraser, was this proposed change 
developed in full collaboration with the Marine Corps?
    General Fraser. This proposed change was developed by the Marine 
Corps, in partnership with Navy, as part of their budget proposal for 
fiscal year 2013 and fiscal year 2014. The change was fully 
collaborated with the Marines Corps, Navy, Office of the Secretary of 
Defense, the Joint Staff, and the combatant commands.
    We concur with the proposal because the ships still remain a part 
of our total force meeting necessary sealift capacity requirements.

    69. Senator Ayotte. General Fraser, were these readiness risks 
associated with this proposed MPF reduction included in the DOD risk 
assessment that is being finalized?
    General Fraser. I believe they are. Although MPSRON reset 
conditions are just now being finalized, the approximate end-state was 
known during DOD's Program Review process last summer. The Department 
of Navy and the Marine Corps are currently developing an updated risk 
assessment which the CNO and Commandant will be providing as required 
by the NDAA for Fiscal Year 2012.

    70. Senator Ayotte. General Fraser, what is the strategic rationale 
for no longer having a MPSRON in the Mediterranean?
    General Fraser. This was a decision made by Navy and Marine Corps 
and would be better addressed by the Service Chiefs, however I can 
offer TRANSCOM's perspective. Neither U.S. European Command (EUCOM) nor 
U.S. Africa Command (AFRICOM) have an approved operation plan which 
requires a MPSRON and the new strategic guidance has shifted our focus 
to PACOM and CENTCOM, while assuming risk to the EUCOM and AFRICOM AOR.
    Combatant commanders' contingency requirements can be satisfied by 
two MPSRONs. Requirements for a third MPSRON to support a notional 
EUCOM or AFRICOM contingency scenario can be met with an approximate 
30-day delay.

                          JOINT STRIKE FIGHTER

    71. Senator Ayotte. Admiral Willard, Secretary Panetta and the 
Service Chiefs have reaffirmed DOD's commitment to the Joint Strike 
Fighter (JSF) program. In light of the Chinese development of their own 
advanced fighter, DOD has certified that there are no suitable 
alternatives to the F-35 JSF. How critical is the JSF to protecting 
U.S. interests and maintaining U.S. air dominance around the world but 
more specifically in the Asia-Pacific region?
    Admiral Willard. [Deleted.]

                      NORTH KOREAN MISSILE THREAT

    72. Senator Ayotte. Admiral Willard, do you agree with the 
assessment that North Korea is becoming a direct threat to the United 
States and that North Korea will likely possess an intercontinental 
ballistic missile (ICBM) capable of targeting the continental United 
States within the next 5 years?
    Admiral Willard. [Deleted.]

                   DEFENSE AGAINST NORTH KOREA THREAT

    73. Senator Ayotte. Admiral Willard, does the United States 
currently possess enough ground based interceptors (GBIs) to counter 
this emerging North Korean ICBM threat to the continental United 
States?
    Admiral Willard. [Deleted.]

    74. Senator Ayotte. Admiral Willard, can North Korea currently 
target Hawaii will ballistic missiles? If yes, how confident are you of 
our ability to protect the citizens of Hawaii and our military 
facilities in Hawaii from North Korean missile attack?
    Admiral Willard. [Deleted.]

    75. Senator Ayotte. Admiral Willard, what more should be done to 
ensure the people of the United States are protected now and in the 
future from a North Korean missile attack?
    Admiral Willard. [Deleted.]
                                 ______
                                 

               Questions Submitted by Senator John Cornyn

                    TAIWAN'S DETERIORATING AIR FORCE

    76. Senator Cornyn. Admiral Willard, sadly, Taiwan's air defense 
capabilities are nearly obsolete, while China's military capabilities 
are growing at an alarming rate. According to DOD, the People's 
Republic of China (PRC) has 2,300 operational combat aircraft, while 
the Government of Taiwan has only 490 operational combat aircraft. 
Taiwan's air force is clearly deteriorating. Its problems can be 
separated into two categories--qualitative and quantitative. In terms 
of quality, there are certainly serious deficiencies. According to the 
DIA in an unclassified 2010 report: ``Many of Taiwan's fighter aircraft 
are close to or beyond service life, and many require extensive 
maintenance support.'' In September, the Obama administration notified 
Congress of a $5.9 billion upgrade package for Taiwan's existing fleet 
of 145 F-16 A/Bs. I support this so-called retrofit package as a step 
to qualitatively improve Taiwan's air force. But, the upgrades do 
absolutely nothing to address what I see as a much bigger problem for 
Taiwan's air force--the quantitative one. Essentially, Taiwan is about 
to experience a massive shortfall in fighter aircraft. By 2020, 
virtually all of Taiwan's fighter jets will have to be retired, except 
for those 145 F-16A/Bs that we sold Taiwan during the George H.W. Bush 
administration. How many viable fighter aircraft do you believe Taiwan 
would need to patrol its own airspace and deter a potential Chinese 
attack and is 145 aircraft enough or do they need more?
    Admiral Willard. [Deleted.]

    77. Senator Cornyn. Admiral Willard, in my opinion, there now 
exists a serious airpower imbalance between China and Taiwan. Do you 
disagree?
    Admiral Willard. I do not disagree, however airpower parity across 
the Strait is not achievable given that PRC military modernization far 
outpaces Taiwan's ability to modernize its own military, and Taiwan 
cannot afford to go one-for-one with the PRC. The Taiwan military must 
look more broadly across its armed forces in all domains to determine 
what capabilities are best to ensure a sufficient self-defense.

    78. Senator Cornyn. Admiral Willard, what is your assessment of the 
risk to both Taiwanese and U.S. interests as a result of this growing 
cross-Strait imbalance in airpower?
    Admiral Willard. [Deleted.]

    79. Senator Cornyn. Admiral Willard, for years, DOD has documented 
a steady increase in advanced Chinese weaponry and aircraft positioned 
opposite Taiwan. It is consensus belief among security and military 
experts that Taiwan has lost its technological edge in defense 
weaponry. What is the tipping point, in terms of Chinese force buildup, 
that would necessitate the sale of additional U.S. fighter aircraft to 
Taiwan?
    Admiral Willard. [Deleted.]

    80. Senator Cornyn. Admiral Willard, the United States is currently 
facing a serious fiscal crisis and, as a result, DOD is staring down 
the barrel at sweeping budget cuts. Do you agree that a capable 
Taiwanese air force would lessen the burden on U.S. forces in the 
region?
    Admiral Willard. Taiwan's self defense capability across the board, 
not just the air force, enhances stability across the Strait and 
enables its dialogue with the PRC. This contributes to stability in the 
region.

                         SALE OF F-16 TO TAIWAN

    81. Senator Cornyn. Admiral Willard, although Taiwan has attempted 
to submit a Letter of Request for the purchase of these 66 new F-16 C/D 
aircraft, to date, the United States has not accepted it. Shortly after 
the administration announced the F-16 A/B upgrade package, I wrote to 
President Ma to ask him for clarification on Taiwan's military 
requirement for new F-16C/Ds. On October 14, I received an unequivocal 
response, stating that Taiwan needs both the upgraded F-16A/Bs and the 
new F-16C/D purchase to fulfill its ``self-defense needs in qualitative 
and quantitative terms.'' If we fail to sell additional F-16s to 
Taiwan, the Taiwanese air force will continue to shrink in size. By 
2020, it is likely that Taiwan's fleet of combat aircraft will be half 
the size it is today. How would that impact Taiwan's capacity to defend 
itself?
    Admiral Willard. [Deleted.]

    82. Senator Cornyn. Admiral Willard, in your opinion, would 66 new 
F-16 C/Ds for Taiwan serve as a deterrent to China?
    Admiral Willard. [Deleted.]

    83. Senator Cornyn. Admiral Willard, DOD, in a letter to me dated 
February 15, 2012, characterized its 2010 report to Congress on 
Taiwan's Air Defense Force as concluding that ``Taiwan needs to focus 
its planning and procurement efforts on non-traditional, innovative, 
and asymmetric approaches.'' Yet at the same time, ``the report's 
findings also indicate that a capable air force is important--indeed 
critical--in a variety of scenarios and to maintain peacetime 
deterrence.'' Do you agree that F-16 C/Ds would have a deterrent effect 
that no nontraditional, innovative, or asymmetric approach could match?
    Admiral Willard. [Deleted.]

    84. Senator Cornyn. Admiral Willard, the F-16 production line may 
shut down before the administration authorizes additional F-16 sales to 
Taiwan. If that is allowed to happen, would you be in favor of selling 
the highly innovative F-35B Short Take Off and Vertical Landing (STOVL) 
aircraft to Taiwan to ensure that Taiwan can deter threats from China?
    Admiral Willard. Though I have not seen studies analyzing 
specifically the utility of the F-35B STOVL variant to Taiwan, 
airframes that are STOVL-capable could be beneficial because of their 
ability to take off from damaged runways. Any such capability would 
still need to be part of a truly integrated air and missile defense 
system that is mobile and redundant, and an air force protection plan 
that promotes airbase hardening.

    85. Senator Cornyn. Admiral Willard, DOD's new strategic guidance, 
released in January, highlights the importance of building partner 
nation capacity, committing to expanding ``our networks of cooperation 
with emerging partners throughout the Asia Pacific to ensure collective 
capability and capacity for securing common interests.'' The document 
goes on to state that ``building partnership capacity elsewhere in the 
world also remains important for sharing the costs and responsibilities 
of global leadership''--an important point at a time when our Nation 
faces a fiscal crisis and DOD is attempting to absorb drastic cuts to 
the defense budget. Does this goal of building partner capacity not 
also apply to Taiwan?
    Admiral Willard. I believe that Taiwan's self-defense capability 
contributes to stability across the Strait and enables its dialogue 
with the Mainland, which in turn enhances stability in the region.

    86. Senator Cornyn. Admiral Willard, what message do you think the 
administration's de facto denial of Taiwan's request for new F-16 C/Ds 
has sent to other U.S. allies, both in the region and around the world?
    Admiral Willard. [Deleted.]

                         AIR-SEA BATTLE CONCEPT

    87. Senator Cornyn. Admiral Willard, the Air-Sea Battle concept has 
been described by some as a new way for the Navy and Air Force to work 
together to fight future wars against major powers. As I understand it, 
the Air-Sea Battle concept is aimed at maintaining U.S. dominance of 
the air and sea domains and to overpower any nation-state that might 
try to defeat our military forces through the use of advanced missiles, 
stealth aircraft, and/or a blue-water naval fleet of its own. China is 
currently pursuing advanced missiles, stealth aircraft, and a blue-
water naval fleet. Does the implementation of the Air-Sea Battle 
concept represent the U.S. policy response to a rising military threat 
from China?
    Admiral Willard. Air-Sea Battle is an evolutionary concept, a 
natural development in joint military doctrine and capability. It 
represents a suite of capabilities which, when coupled with a military 
strategy, will enhance our military options in the Asia Pacific 
theater. China is developing a range of capabilities which threaten to 
hold at risk our continued access and freedom of navigation to the 
Asia-Pacific region in support of normal operations or contingencies. 
However, China is not the only country that is developing these 
capabilities. Air-Sea Battle is not directed at China, but it does 
offer one solution to the type of challenge that China could represent.

    88. Senator Cornyn. Admiral Willard, why is it important that the 
U.S. military have a strategy to deal with China?
    Admiral Willard. [Deleted.]

    89. Senator Cornyn. Admiral Willard, in your opinion, does China 
pose a threat to the United States?
    Admiral Willard. We welcome a strong, prosperous, and successful 
China that reinforces international rules and norms and enhances 
security and peace both regionally and globally. However, China is 
developing capabilities that seem intended to counter our own forces 
and they are not always clear in communicating their intentions. We see 
China's development as a positive trend and do not view them as a 
threat today, but we are concerned about the lack of transparency and 
clarity of their long-term aspirations.

                        ANTI-ACCESS/AREA-DENIAL

    90. Senator Cornyn. Admiral Willard, in your opinion, what kinds of 
investments should we be making to counter anti-access/area-denial 
activities?
    Admiral Willard. [Deleted.]

                              F-35 PROGRAM

    91. Senator Cornyn. Admiral Willard, how important is the F-35 to 
preserving our interests and freedom of action in the Asia-Pacific 
region?
    Admiral Willard. Adversaries are fielding anti-access/area-denial 
capabilities designed to deny U.S. forces freedom of action in the 
global commons and threaten U.S. sanctuaries/rear areas. Failure to 
field and demonstrate concepts, capabilities, and capacity to defeat 
anti-access/area-denial threats can undermine confidence in the commons 
and American security, unravel U.S. alliances around the world, along 
with associated agreements on trade, economic integration, and 
diplomatic alignment, cause the United States to lose the ability to 
threaten or conduct proportional military responses to aggression, and 
add to international instability by making U.S. deterrence less 
credible and U.S. responses more escalatory. Developing 5th generation 
fighters like the F-35 will enable the United States and its allies the 
ability to stay abreast of developing threats allowing for U.S. ground, 
air and naval forces to maintain freedom of action to follow-on 
operations. The JSF's sensor fusion capacity, electronic attack 
capabilities, and stealth will enhance the U.S. supremacy across the 
Range of Military Operations in the Asia-Pacific region.

                       BUILDING PARTNER CAPACITY

    92. Senator Cornyn. Admiral Willard, U.S. forces will begin flying 
the F-35 in the PACOM AOR by the end of this decade. Australia is one 
of the original international partners in the F-35 program, having 
committed to buying 100 aircraft. Singapore has signaled its intent to 
purchase the F-35 in the not so distant future, while in December, 
Japan announced its decision that the F-35, which will give Japan the 
ability to integrate seamlessly with U.S. air forces in the region, 
best met its requirements. As you survey the region, what value do you 
see in ensuring the viability of the F-35 for our partner nations who 
have made commitments and other friends who have expressed interest in 
the program?
    Admiral Willard. It is critical to ensure the viability of the F-35 
for our partner nations. The F-35 fills a critical part of Australia's 
current military overhaul. With their plans to purchase up to 100, 
Australia Defense Forces will replace all existing F-18 Classic Hornets 
as they move towards an almost completely JSF force.
    Singapore has programmed in the F-35 as their next generation 
multi-role fighter to replace their aging F-5 fleet (19 a/c). The JSF 
will serve as a key platform to execute Singapore's strategy of 
deterrence and maintain regional stability. Singapore has historically 
been a strong supporter of U.S.-led coalition operations, and promoting 
interoperability is an important objective of the strategic 
partnership.
    F-35 will provide Japan with an improved air defense platform, well 
into the future and will maximize interoperability with U.S. forces.
    With schedule delays and cost issues continuing to creep up, it is 
vitally important we provide reassurance that the JSF is important to 
the U.S. military, PACOM, and our allies.

    93. Senator Cornyn. Admiral Willard, what is your assessment of the 
benefits of key allies modernizing their fighter fleets with fifth-
generation aircraft such as the F-35?
    Admiral Willard. From a regional perspective, failure to make the 
F-35 available for purchase to key allies and partners undermines the 
U.S. position as partner of choice and fuels the perception our role in 
the region is in decline. In addition, it will force our allies and 
partners to look to competitors and potential adversaries to fulfill 
their next generation fighter aircraft requirements. The United States 
will not only lose out economically, but will also lose out in the 
ability to influence and build partner nation capabilities for 
integration into future coalitions. This significant loss in 
credibility will also negatively impact FMS across the board, as 
nations will be hesitant to buy American if the United States is seen 
as unreliable.

                        CHINA AND CYBER WARFARE

    94. Senator Cornyn. Admiral Willard, according to an October 2011 
report by the Office of the National Counterintelligence Executive, 
``Chinese actors are the world's most active and persistent 
perpetrators of economic espionage,'' the report goes on to highlight 
that ``computer networks of a broad array of U.S. Government agencies . 
. . were targeted by cyber espionage; much of this activity appears to 
have originated in China.'' In your opinion, is China engaging in 
state-sponsored cyber attacks and cyber theft against the United 
States?
    Admiral Willard. [Deleted.]

    95. Senator Cornyn. Admiral Willard, what is your assessment of the 
threat of cyber attacks that originate in China?
    Admiral Willard. [Deleted.]

    96. Senator Cornyn. Admiral Willard, the 2011 DOD report also 
stated that China continues to leverage ``state-sponsored industrial/
technical espionage to increase the levels of technologies and 
expertise available to support military research, development, and 
acquisition.'' I view this as a serious risk to our long-term national 
security. Are you concerned about this?
    Admiral Willard. [Deleted.]

    97. Senator Cornyn. Admiral Willard, do you think more needs to be 
done in this area?
    Admiral Willard. [Deleted.]

    98. Senator Cornyn. Admiral Willard, Given DOD's report stating 
that China continues to leverage state-sponsored industrial/technical 
espionage, and the fact that China is a suspect whenever a major cyber 
attack against U.S. defense networks occurs, how should the United 
States respond to the growing threat of Chinese cyber warfare?
    Admiral Willard. [Deleted.]

                    UNITED STATES AS A PACIFIC POWER

    99. Senator Cornyn. Admiral Willard, Secretary Panetta said during 
his trip to Asia last fall that the purpose of his visit was ``to make 
very clear to this region and to our allies in the Pacific that . . . 
the Pacific will remain a key priority for the United States, that we 
will maintain our force projection in this area, that we will maintain 
a presence in this area, that we will remain a Pacific power.'' In 
light of China's aggressive military buildup, how do you believe the 
United States can best project itself as a Pacific power in the coming 
years?
    Admiral Willard. [Deleted.]

    [Whereupon, at 12:05 p.m., the committee adjourned.]


DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR 
               2013 AND THE FUTURE YEARS DEFENSE PROGRAM

                              ----------                              


                        THURSDAY, MARCH 1, 2012

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

             U.S. EUROPEAN COMMAND AND U.S. AFRICA COMMAND

    The committee met, pursuant to notice, at 9:34 a.m. in room 
SH-216, Hart Senate Office Building, Senator Carl Levin 
(chairman) presiding.
    Committee members present: Senators Levin, Lieberman, Reed, 
Nelson, Udall, Hagan, Manchin, Shaheen, Blumenthal, McCain, 
Inhofe, Sessions, Chambliss, Brown, Ayotte, and Graham.
    Committee staff member present: Leah C. Brewer, nominations 
and hearings clerk.
    Majority staff members present: Richard W. Fieldhouse, 
professional staff member; Jessica L. Kingston, research 
assistant; Michael J. Kuiken, professional staff member; Jason 
W. Maroney, counsel; William G.P. Monahan, counsel; Russell L. 
Shaffer, counsel; and William K. Sutey, professional staff 
member
    Minority staff members present: Ann E. Sauer, minority 
staff director; Adam J. Barker, professional staff member; 
Christian D. Brose, professional staff member; Paul C. Hutton 
IV, professional staff member; Daniel A. Lerner, professional 
staff member; Lucian L. Niemeyer, professional staff member; 
and Diana G. Tabler, professional staff member.
    Staff assistants present: Hannah I. Lloyd, Mariah K. 
McNamara, and Bradley S. Watson.
    Committee members' assistants present: Bryon Manna, 
assistant to Senator Lieberman; Carolyn Chuhta, assistant to 
Senator Reed; Ryan Ehly, assistant to Senator Nelson; Gordon 
Peterson, assistant to Senator Webb; Casey Howard, assistant to 
Senator Udall; Mara Boggs, assistant to Senator Manchin; 
Patrick Day, assistant to Senator Shaheen; Chad Kreikemeier, 
assistant to Senator Shaheen; Anthony Lazarski, assistant to 
Senator Inhofe; Lenwood Landrum, assistant to Senator Sessions; 
Clyde Taylor IV, assistant to Senator Chambliss; Charles 
Prosch, assistant to Senator Brown; Brad Bowman, assistant to 
Senator Ayotte; and Sergio Sarkany, assistant to Senator 
Graham.

       OPENING STATEMENT OF SENATOR CARL LEVIN, CHAIRMAN

    Chairman Levin. Good morning, everybody. This morning's 
hearing continues the committee's review of the fiscal year 
2013 defense budget request of the administration and the 
Future Years Defense Program. Today, we receive testimony from 
Admiral James G. Stavridis, USN, Commander, U.S. European 
Command (EUCOM) and Supreme Allied Commander, Europe; and 
General Carter F. Ham, USA, Commander, U.S. Africa Command 
(AFRICOM). They are here to discuss the defense and security 
challenges in their areas of responsibility (AOR) and how their 
combatant commands are postured to meet those challenges.
    We thank you both for your fine service. Please extend on 
behalf of this committee our gratitude to the military men and 
women who serve in the EUCOM and AFRICOM AORs. They and their 
families deserve and have this Nation's support and our thanks.
    This will likely be Admiral Stavridis' final posture 
statement before the committee. Admiral, this committee has 
benefitted in so many ways and on so many occasions from your 
testimony and your advice, first as the Commander of the U.S. 
Southern Command (SOUTHCOM) and most recently as EUCOM 
Commander and Supreme Allied Commander Europe. We thank you for 
your many decades of great service. We all wish you and your 
family our very best in your retirement.
    The Strategic Guidance that the Department of Defense (DOD) 
issued in January reaffirmed that Europe is our principal 
partner in seeking global and economic security for now and for 
the foreseeable future. DOD's guidance also stressed the 
central role that the North Atlantic Treaty Organization (NATO) 
alliance serves for the security of Europe and beyond.
    This transatlantic security partnership is clearly 
demonstrated in the NATO-led International Security Assistance 
Force (ISAF) in Afghanistan where NATO and other European 
countries contribute more than 30 percent of the total 
coalition forces and nearly 80 percent of the non-U.S. foreign 
forces in Afghanistan. The role of ISAF forces is transitioning 
from being in the combat lead to assuming a support, advise, 
and assist role as Afghan National Security Forces (ANSF) step 
forward and assume the lead for security. This transition is 
underway, and consistent with President Obama's decision last 
June, the United States has begun the drawdown of the 33,000 
U.S. surge force from Afghanistan, to be completed by the end 
of this summer.
    The success of transition will depend in large part on the 
success of the international coalition in training and 
supporting the ANSF through 2014 when the transition to an 
Afghan security lead is planned to be completed. That is a 
major agenda item for the NATO Summit in Chicago in May. 
Another top agenda item for that Summit will be defining NATO's 
strategic partnership with the Government of Afghanistan beyond 
2014, including arrangements for sustaining the ANSF.
    Successful transition will also heavily depend on the 
commitment of the Government of Afghanistan and the Afghan 
people to increasing security throughout the country. The 
recent violence in response to the unintentional burning of 
Korans at the Parwan detention facility, including the killing 
of U.S. and coalition troops--and that includes two more 
American soldiers yesterday--is deeply disturbing. Admiral 
Stavridis, the committee would be interested in your views on 
the implications of these events for the success of transition 
and the success of our mission in Afghanistan.
    DOD's Strategic Guidance issued in January also notes that 
changes in the strategic landscape, including the end of the 
Iraq conflict and the drawdown in Afghanistan, create an 
opportunity to ``rebalance the U.S. military investment in 
Europe.'' I welcome DOD's announcement last month that two of 
the four Army brigades stationed in Europe will be inactivated. 
This change, along with the removal of an Air Force A-10 
squadron from Germany, will decrease the number of U.S. 
military personnel stationed in Europe, currently around 80,000 
personnel, by about 10,000 and will result in the closure of a 
number of facilities. I encourage DOD to continue to review its 
force posture in Europe across the Services to see if 
additional force reductions and base closures might be in 
order, consistent with EUCOM's missions and our NATO 
commitments. We need to consider those before we consider 
another domestic base realignment and closure (BRAC) round.
    The threat of the proliferation of weapons of mass 
destruction and the means of delivering those weapons is a 
central security challenge. At the 2010 Lisbon Summit, NATO 
recognized the growing threat to Europe from ballistic missiles 
from the Middle East, and NATO decided to establish a missile 
defense of NATO's population and territory. The United States 
will provide the core of that defense with its Phased Adaptive 
Approach (PAA) on ballistic missile defense (BMD), the first 
phase of which is now deployed. This system is designed to 
protect our deployed forces, our allies, and our partners from 
Iran's increasing missile inventory. NATO is seeking Russia's 
cooperation with this regional system. Such cooperation would 
send a powerful signal to Iran of world unity against their 
developing long-range missiles or their having nuclear weapons. 
We look forward to Admiral Stavridis' views on the progress and 
the impact of missile defense.
    Nearly a year ago, AFRICOM initiated Operation Odyssey Dawn 
in Libya. NATO, with the support of forces from EUCOM, 
conducted and completed Operation Unified Protector. These 
successful civilian protection and mass atrocity prevention 
operations saved untold Libyans from being slaughtered at the 
hands of Qadhafi's forces and helped end decades of tyranny and 
oppression at the hands of the Qadhafi regime. Our witnesses 
are to be commended on the successful outcome of these 
operations. In my view, it was the right call for our NATO 
allies to lead with U.S. forces playing a unique and enabling 
role, particularly given the endorsement of the Arab League, 
the Gulf Cooperation Council, and the United Nations (U.N.).
    Today, Libya's new political leadership has begun the 
difficult process of building consensus. AFRICOM is presented 
with an opportunity that has not existed for more than 4 
decades: the establishment of a military-to-military 
relationship with the Libyan armed forces. The committee looks 
forward to learning of General Ham's efforts in Libya and his 
assessment of the Libya security forces as a potential security 
partner.
    Libya is but one of many of General Ham's security 
challenges. The fall of the Qadhafi regime has created a 
security vacuum and a market for surplus small arms and other 
man-portable weapons in the region that al Qaeda affiliates and 
other transnational actors are seeking to use to their 
advantage. This development is a cause of great concern. 
General Ham's efforts to train, assist, and support regional 
militaries in North Africa will be a key factor as to whether 
these violent extremist and criminal organizations are able to 
create safe havens through which they can further destabilize 
the region and its governments and potentially plan external 
attacks against our interests.
    In East Africa, Somalia continues to threaten regional 
security and serve as a burgeoning safe haven for al Qaeda 
affiliates to train for and plot external operations. The 
efforts of AFRICOM since its inception to train and equip the 
regional militaries, as well as international efforts to 
maintain and bolster the presence of the African Union mission 
in Somalia, has shown progress in recent months. Last week in 
London, Secretary Clinton, in word and in deed, demonstrated 
that the United States remains committed to helping create a 
more stable and unified era for the Somali people. AFRICOM's 
efforts to build the capacity of regional governments, most 
notably Kenya, Ethiopia, and Uganda, will be a key determinant 
of whether recent progress can be consolidated. Last year's 
National Defense Authorization Act (NDAA) provided General Ham 
with new authorities in this area, and we would be interested 
to learn from General Ham whether they have assisted him in his 
efforts.
    General Ham and Admiral Stavridis, I have just touched the 
wave tops of the issues facing you and your commands. We look 
forward to hearing your testimony and continuing to help 
AFRICOM and EUCOM accomplish their security objectives.
    I want both of you to know that we very much appreciate the 
very positive way in which you have worked with this committee 
and the relationships that you have fostered with our members.
    I will put the balance of my statement in the record.
    [The prepared statement of Chairman Levin follows:]

                Prepared Statement by Senator Carl Levin

    This morning's hearing continues the committee's review of the 
fiscal year 2013 defense budget request and the Future Years Defense 
Program. Today we receive testimony from Admiral James Stavridis, 
Commander, U.S. European Command (EUCOM), and Supreme Allied Commander, 
Europe; and General Carter Ham, Commander, U.S. Africa Command 
(AFRICOM). They are here to discuss the defense and security challenges 
in their areas of responsibility, and how their combatant commands are 
postured to meet those challenges. Thank you both for your fine 
service. Please extend on behalf of this committee our gratitude to the 
military men and women who serve in the European and African areas of 
responsibility. They and their families deserve and have this Nation's 
support and our thanks.
    This will likely be Admiral Stavridis' final posture statement 
before the committee. Admiral, this committee has benefited on so many 
occasions from your testimony, first as the Commander of U.S. Southern 
Command and most recently as EUCOM Commander and Supreme Allied 
Commander, Europe. Thank you for your many decades of great service to 
our Nation. We all wish you and your family the very best in your 
retirement.
    The Strategic Guidance that the Department of Defense (DOD) issued 
in January reaffirmed that Europe is ``our principal partner in seeking 
global and economic security'' for now and the foreseeable future. 
DOD's guidance also stressed the central role that the North Atlantic 
Treaty Organization (NATO) alliance serves for the security of Europe 
and beyond.
    This transatlantic security partnership is clearly demonstrated in 
the NATO-led International Security Assistance Force (ISAF) in 
Afghanistan, where NATO and other European countries contribute more 
than 30 percent of total coalition forces and nearly 80 percent of the 
non-U.S. foreign forces in Afghanistan. The role of ISAF is 
transitioning from being in the combat lead to assuming a support, 
advise, and assist role as Afghan security forces step forward and 
assume the lead for security. This transition is underway, and 
consistent with President Obama's decision last June, the United States 
has begun the drawdown of the 33,000 U.S. surge force from Afghanistan, 
to be completed by the end of this summer.
    The success of transition will depend in large part on the success 
of the international coalition in training and supporting the Afghan 
security forces through 2014, when the transition to an Afghan security 
lead is planned to be completed. That is a major agenda item for the 
NATO Summit in Chicago in May. Another top agenda item for the NATO 
Summit will be defining NATO's strategic partnership with the 
Government of Afghanistan beyond 2014, including arrangements for 
sustaining the Afghan security forces.
    Successful transition will also heavily depend on the commitment of 
the Government of Afghanistan and the Afghan people to increasing 
security throughout the country. The recent violence in response to the 
unintentional burning of Korans at the Parwan detention facility, 
including the killing of U.S. and coalition troops, including two more 
American soldiers yesterday, is deeply disturbing. Admiral Stavridis, 
the committee would be interested in your views on the implications of 
these events for the success of transition and the success of our 
mission in Afghanistan.
    DOD's Strategic Guidance issued in January also notes that changes 
in the strategic landscape, including the end of the Iraq conflict and 
the drawdown in Afghanistan, create an opportunity to ``rebalance the 
U.S. military investment in Europe.'' I welcome DOD's announcement last 
month that two of the four Army brigades stationed in Europe will be 
inactivated. This change, along with the removal of an Air Force A-10 
Squadron from Germany, will decrease the number of U.S. military 
personnel stationed in Europe, currently around 80,000 personnel, by 
about 10,000, and will result in the closure of a number of facilities. 
I encourage the Department to continue to review its force posture in 
Europe across the Services to see if additional force reductions and 
base closures might be in order, consistent with EUCOM's missions and 
our NATO commitments. We need to consider those before we consider 
another domestic Base Realignment and Closure round.
    Even as these reductions go forward, our allies should rest assured 
that the United States remains committed to its defense obligations 
under the North Atlantic Treaty. A key challenge for EUCOM is to 
continue engagements with our European allies to promote the 
interoperability of U.S. and allied forces and to build the capacity of 
our European partners to contribute to and participate in coalition 
operations. At the same time, I and other members of this committee are 
concerned that, as Secretary Gates stated last year, NATO is at risk of 
becoming a ``two-tiered alliance,'' where some members have the 
commitment and capacity to support the range of NATO missions, while 
others enjoy the benefits of the alliance while not sharing equally in 
the risks or the costs of making the necessary defense investments to 
contribute to coalition operations. We would be interested in hearing 
today about what is being done to address capability shortfalls of our 
European allies and partners.
    The threat of the proliferation of weapons of mass destruction and 
the means of delivering those weapons is a central security challenge. 
At the 2010 Lisbon Summit, NATO recognized the growing threat to Europe 
from ballistic missiles from the Middle East, and NATO decided to 
establish a missile defense of NATO's population and territory. The 
United States will provide the core of that defense with its Phased 
Adaptive Approach on ballistic missile defense, the first phase of 
which is now deployed. This system is designed to protect our deployed 
forces, our allies, and our partners from Iran's increasing missile 
inventory. NATO is seeking Russia's cooperation with this regional 
system. Such cooperation would send a powerful signal to Iran of world 
unity against their developing long-range missiles or having nuclear 
weapons. We look forward to Admiral Stavridis' views on the progress 
and impact of missile defense.
    Nearly a year ago, AFRICOM initiated Operation Odyssey Dawn in 
Libya. NATO--with the support of forces from EUCOM--conducted and 
completed Operation Unified Protector. These successful civilian 
protection and mass atrocity prevention operations saved untold Libyans 
from being slaughtered at the hands of Qadhafi's forces and helped end 
decades of tyranny and oppression at the hands of the Qadhafi regime. 
Our witnesses are to be commended on the successful outcome of those 
operations. In my view, it was the right call for our NATO allies to 
lead, with U.S. forces playing a unique and enabling role, particularly 
given the endorsement of the Arab League, Gulf Cooperation Council, and 
United Nations.
    Today, Libya's new political leadership has begun the difficult 
process of building consensus. AFRICOM is presented with an opportunity 
that has not existed for more than four decades--the establishment of a 
military-to-military relationship with the Libyan armed forces. The 
committee looks forward to learning of General Ham's efforts in Libya 
and his assessment of the Libya security services as a potential 
security partner.
    Libya is but one of many of General Ham's security challenges. The 
fallout of the Qadhafi regime has created a security vacuum and a 
market for surplus small arms and other man portable weapons in a 
region that al Qaeda affiliates and other transnational actors are 
seeking to use to their advantage. This development is a cause of great 
concern. General Ham's efforts to train, assist, and support regional 
militaries in North Africa will be a key factor as to whether these 
violent extremist and criminal organizations are able to create safe 
havens through which they can further destabilize the region and its 
governments and--potentially--plan external attacks against our 
interests.
    In East Africa, Somalia continues to threaten regional security and 
serve as a burgeoning safe haven for al Qaeda affiliates to train for 
and plot external operations. The efforts of AFRICOM since its 
inception to train and equip the regional militaries, as well as 
international efforts to maintain and bolster the presence of the 
African Union Mission in Somalia, has shown progress in recent months. 
Last week in London, Secretary Clinton--in word and deed--demonstrated 
that the United States remains committed to helping create a more 
stable and unified era for the Somali people. AFRICOM's efforts to 
build the capacity of regional governments, most notably Kenya, 
Ethiopia, and Uganda, will be a key determinant of whether recent 
progress can be consolidated. Last year's National Defense 
Authorization Act provided General Ham with new authorities in this 
area and we are interested to learn from General Ham whether they have 
assisted in his efforts.
    General Ham is also supporting, with the deployment of U.S. Special 
Operations Forces, the ongoing regional effort to counter the Lord's 
Resistance Army. This effort stretches across a vast portion of central 
Africa that includes at least four countries. The committee looks 
forward to General Ham's testimony on these advise and assist 
operations.
    AFRICOM is also home to the newest nation in the world--South 
Sudan. Many had hoped South Sudan's creation would bring an end to the 
decades-long conflict in the former Sudan, but this region continues to 
suffer from territorial conflicts over natural resources which create 
further instability and displacement in a region already struggling 
with significant numbers of refugees and internally displaced peoples.
    General Ham and Admiral Stavridis, I have just touched the wave 
tops of the issues facing you and your commands. We look forward to 
hearing your testimony and continuing to help AFRICOM and EUCOM 
accomplish their security objectives.
    I want both of you to know that we very much appreciate the 
positive way you have worked with this committee and the relationships 
you have fostered with our members.

    Chairman Levin. Senator McCain.

                STATEMENT OF SENATOR JOHN McCAIN

    Senator McCain. Thank you, Mr. Chairman. Let me join you in 
welcoming Admiral Stavridis and General Ham, thanking them for 
their distinguished service. I especially want to acknowledge 
Admiral Stavridis, as this will be his final appearance before 
this committee in uniform, and I know he is grateful for that. 
Thank you, Admiral, for your service and dedication to our 
Nation. I wish you fair winds and following seas.
    What is clear from our commanders' prepared testimonies, 
and what will become clearer today, is that the work of our 
Armed Forces, both in Europe and Africa, is not decreasing. It 
is increasing. It is becoming more complex, and it is becoming 
more important to our national security. I think we should bear 
all this in mind as we in this committee and we in Congress 
more broadly debate whether and how to reduce our defense 
spending, including the catastrophic effects of sequestration.
    Our European allies remain our preeminent security 
partners. Today, EUCOM and NATO are being called upon to bear 
an ever greater responsibility for diverse international 
security challenges, from Afghanistan and Libya, to cyber 
threats and transnational terrorism, to BMD and the strategic 
balance of forces on the continent. We must be mindful of the 
enduring value and impact of our European alliances as we 
evaluate change to our force posture.
    In its recently released defense strategy, DOD has proposed 
the withdrawal of an additional brigade combat team from 
Europe. At the same time, this drawdown of forces is 
complemented by new U.S. military commitments to Europe, 
including a brigade-sized contribution to the NATO response 
force, new rotations of troops for joint exercises and 
operations, the installation of a ground-based radar in Turkey, 
and the stationing of four BMD-capable Aegis ships in Spain. 
Overall, this seems like a prudent realignment of our forces 
and commitment in Europe.
    Amid the growing global focus of EUCOM, we must remember 
that the vision of a Europe whole, free, and at peace will 
remain unfulfilled so long as the country of Georgia remains 
forcibly divided and occupied by Russian forces. Georgia is an 
aspiring member of NATO and one of the largest contributors of 
forces to the Afghan mission. Yet, our bilateral defense 
relationship remains mired in the past. As a bipartisan report 
led by two members of this committee, Senators Jeanne Shaheen 
and Lindsey Graham, concluded last year, the United States 
needs to build a more normal defense relationship with Georgia, 
including defensive arms sales in coordination with our NATO 
allies.
    At a time of uncertainty in Russia, when lashing out at 
manufactured foreign enemies remains a tempting way to garner 
domestic legitimacy, it is not in America's interest to leave 
Georgia without adequate means to defend itself. It is for this 
reason that Congress included a provision in the NDAA last year 
that requires DOD to provide Congress with a strategy for the 
normalization of the U.S.-Georgia defense relationship, 
including the sales of defensive arms. We look forward to 
Admiral Stavridis updating us on the development of that 
strategy.
    One area where we and our European allies are increasingly 
working together is Africa. But while EUCOM has 68,000 forces 
assigned to it, AFRICOM has none. The increasing threats in 
Africa make it hard to justify this disparity.
    As General Ham notes in his prepared statement, the danger 
of transnational terrorism across Africa is growing and 
troubling. As al Qaeda's senior leadership continues to be 
degraded through sustained military pressure, al Qaeda's 
franchise groups, especially those in Africa, are expanding 
their ambitions and capabilities. Al Shabaab in Somalia, Boko 
Haram in Nigeria, and al Qaeda in the Islamic Maghreb (AQIM) 
are all increasingly making common cause with each other and 
exploiting weak governments in Africa to facilitate their 
operations. That is why AFRICOM's efforts to build the capacity 
of our African partners to disrupt these terrorist groups and 
deny them safe haven and freedom of movement is so critical. 
Two of the best emerging partners we have in this regard are 
Libya and Tunisia, which was reaffirmed once again for me last 
week when I traveled to both these countries with a few of my 
colleagues from this committee.
    In Tunisia, the operational tempo of their armed forces has 
increased substantially due to the conflict next door in Libya. 
More than 10,000 Libyan refugees are now living in Tunisia. The 
Tunisian Government is seeking additional military assistance 
to enable them to sustain their security operations along their 
border with Libya, as well as to combat al Qaeda franchise 
groups that seek to destabilize the country. The Tunisians are 
seeking spare parts for the sustainment of their force, wheeled 
vehicles, aircraft, and better capacity to monitor their 
maritime domain and borders. We look forward to General Ham's 
assessment of how AFRICOM can better assist Tunisia in these 
ways. It is critical that we do so.
    Finally, it is essential that AFRICOM remain actively 
engaged with the National Transitional Council in Libya and 
with the elected government that will eventually succeed it. 
The most urgent and important area where we can assist the 
Libyans is the demobilization, disarmament, and reintegration 
of the many militias that remain in the country. It is critical 
that we support Libya in training and equipping a security 
force that can be a source of national unity and internal 
stability, as well as a capable partner for our Armed Forces. 
This effort goes hand-in-hand with our continued assistance to 
the Libyans to help secure loose weapons inside the country, 
especially the Man-Portable Air Defense System (MANPADS), to 
keep them out of the hands of terrorists.
    At the same time, we must do far more to assist the many 
Libyans who have been wounded in this conflict. Our military is 
the best organization in the world when it comes to medical 
treatment for wounded warriors, especially in prosthetics and 
rehabilitation. This remains one of the most emotionally 
resonant issues among the people of Libya, and it would only 
increase the enormous good will and influence that we enjoy in 
the country if we could expand our assistance for these wounded 
Libyans, especially in our military medical facilities in 
Europe. Such assistance would not require much of us but it 
would honor the sacrifice that so many in Libya have made to 
free their country and thereby stand as a firm pillar of mutual 
respect and solidarity on which to build our partnership with 
the new Libya.
    Again, I thank the witnesses. I thank you, Mr. Chairman.
    Chairman Levin. Thank you very much, Senator McCain.
    Admiral Stavridis.

   STATEMENT OF ADM JAMES G. STAVRIDIS, USN, COMMANDER, U.S. 
       EUROPEAN COMMAND/SUPREME ALLIED COMMANDER, EUROPE

    Admiral Stavridis. Chairman Levin, Ranking Member McCain, 
distinguished members of the committee, as always, thank you 
for a very gracious welcome.
    I will comment about my final appearance here. Just to 
recall, the first time I testified--and I am not sure anyone 
would remember. It was in 1994 when I was a young commander in 
command of a destroyer and we had a panel on readiness with a 
representative from each of the Services here at the 05 level 
in command. All I remember about that hearing is that the other 
three Services sent individuals who were all about 6,3,, and 
had great hair. I was clearly the outlier in that particular 
group and I think I remain that way today. [Laughter.]
    Chairman Levin. You have not changed in all those years. 
[Laughter.]
    Admiral Stavridis. Exactly, unfortunately. [Laughter.]
    It has been a terrific 3 years here at EUCOM and in the 
NATO world. I would highlight over the last year, since I 
appeared in front of the committee, the work in Libya. We do 
feel good about that. I think we are making progress in 
Afghanistan despite all the challenges that Chairman Levin and 
Ranking Member McCain correctly alluded to. We have kept 
stability in the Balkans. We have done very well, I think, in 
engaging with our partners in Europe. We are pushing on missile 
defense, cyber, interagency, private-public, a lot of different 
initiatives, and we will continue to work on all those things.
    Our fundamental job at EUCOM is to defend this country 
forward. We try and do that by being ready for the unexpected. 
If we look back on last year at this time, as Libya was 
bursting onto the scene, it is a good example of how we do not 
know what will happen next. We try to be ready. We try to work 
with partners and allies, as we have talked about, and we try 
to continue to strengthen this NATO alliance which I do believe 
is a cornerstone for all of us.
    I am working now on the adjustment to the force posture in 
Europe, and I will be glad to talk a bit about that. The 
removal of the two heavy combat brigades, but the addition of a 
rotational one, and the adjustments we are making over there--I 
think they are sensible and balanced.
    We are making progress on the missile defense piece, and I 
will be glad to talk in more depth about that.
    One thing I would like to mention--often I get a question 
from people, constituents of yours, as well as from the 
members, about why? Why is it important to remain engaged in 
Europe? I would just like to very quickly say I think it does 
matter that we continue to have Europe as our partner of first 
resort and a cornerstone of our engagement in the world, and I 
think that is for several different reasons, including the 
economy. Although somewhat diminished of late, it still remains 
about 25 percent of the world's gross domestic product (GDP). 
The geography is extremely important. Europe is a strategic 
platform that allows us to go to Africa to support General Ham, 
to go to the Middle East, to operate really in the global South 
Asian and Central Asian world.
    Then the NATO alliance itself, I think, is as we have 
mentioned several times, very key to all of this. In practice, 
that translates into addition to our ability to operate in the 
world. That is why we have 40,000 non-U.S. troops in 
Afghanistan. That is why our allies did such, I think, strong 
work in Libya. That is why they do the bulk of the work in the 
Balkans. They are taking the lead in counterpiracy. So I think 
we get very real benefit from all of that.
    I will simply close by thanking the committee, as always, 
for the great support to EUCOM. I will, with great enthusiasm, 
relay your wonderful words about the men and women who are in 
the command. It means a lot. I encourage you all to come and 
visit, as some of you have had the opportunity to do. Your 
presence to our troops matters and your engagement with senior 
leaders in other nations matters as well.
    Thank you for hearing our testimony today.
    [The prepared statement of Admiral Stavridis follows:]

           Prepared Statement by ADM James G. Stavridis, USN

                              INTRODUCTION

    Mr. Chairman, Ranking Member, distinguished members of the 
committee: Thank you for the opportunity to appear before you today. 
For nearly 3 years now, I've had the privilege to command the 
exceptional men and women of the U.S. European Command and the North 
Atlantic Treaty Organization (NATO), Allied Command Operations. It has 
been a busy year for these commands, for the NATO Alliance, and for our 
international and interagency partners who are such a vital part of our 
mission, our many initiatives, and our team.
    Working together, we have accomplished some important objectives 
since I saw you last: saving tens of thousands of lives from a despotic 
and unstable regime in Libya; supporting continued progress and 
transition in Afghanistan; maintaining a safe environment in the 
Balkans; sustaining vital relationships with our key allies and 
emerging partners in the region; and developing the necessary 
capabilities to meet the rising--and, in many cases, different--
security challenges of the 21st century.
    I am happy to report that we continue to make sound and efficient 
progress, in concert with our allies and partners, toward ensuring 
continued security and stability across our theater and, in so doing, 
are providing for the forward defense of the United States.
    But before reporting our progress and achievements over the past 
year, I want to take a moment to examine a fundamental question on many 
minds here in Washington and abroad: How does the U.S. military 
presence in the European theater contribute to the national security of 
the United States? This is a question especially relevant during times 
of significant economic challenge; a challenge that represents a 
formidable threat to our national security as well as our national 
well-being.
    First, economics matter. U.S. engagement and European stability 
have been intertwined since the first American soldier stepped foot 
onto the continent in 1917. Since then, American periods of engagement 
and support have helped underwrite security to prevent the far wider 
costs of war. Sadly, the converse has also proven true, when episodes 
of postwar U.S. disengagement, notably in the 1930s and 1990s, led to 
renewed European instability, conflict, and bloodshed, ultimately 
requiring significant U.S. military action.
    Yet, for the past 63 years, the security and stability delivered by 
this transatlantic alliance have provided conditions for economic 
vibrancy, sustained investment, and growth; conditions that have 
substantially benefitted the United States. Indeed, it is not a 
coincidence that the 28 countries which comprise NATO constitute over 
50 percent of the globe's Gross Domestic Product. This association, 
rooted in security, continues to enable the largest and most complex 
economic relationship in the world, with activity supporting 15 million 
transatlantic jobs and generating trade in goods and services of more 
than $2.4 billion daily.\1\ This advantage provides the United States 
and Europe, acting together, tremendous economic influence moving into 
the future.
---------------------------------------------------------------------------
    \1\ European Commission Directorate-General for Trade, report on 
European trade with the United States, http://ec.europa.eu/trade/
creating-opportunities/bilateral-relations/countries/united-states/
index--en.htm.
---------------------------------------------------------------------------
    Second, the European Theater, located in or adjacent to three 
continents--Europe, Asia, and Africa--represents critical geostrategic 
terrain. Existing U.S. posture in Europe provides ready, proven, mature 
basing infrastructure for rapid response to crises in the world's most 
likely hot spots including North Africa, as we witnessed first-hand 
last year, the Levant, and elsewhere in the Middle East. U.S. basing in 
Europe, though 75 percent reduced from the height of the Cold War, 
continues to provide that irreplaceable combination of location and 
services at the nexus of these three continents essential in responding 
to contingencies, both foreseeable and unforeseeable, in today's highly 
dynamic security environment. These bases also support the global reach 
missions of four U.S. combatant commanders and numerous U.S. Government 
agencies. Currently, that reach includes support to the Northern 
Distribution Network, which provides a vital logistical lifeline to our 
forces in Afghanistan and is increasingly important today given the 
precarious nature of our other lines of supply. Preserving this 
theater's vital strategic access to meet our enduring national security 
needs requires relationships with our European partners, relationships 
based on presence and commitment.
    Additionally, European Command's outreach and engagement with 
nations inside our theater across the Caucasus, Black Sea, and Balkan 
regions also strive to mitigate the potential for conflict in areas 
important to U.S. foreign policy, inviting these nations into the 
community of international cooperation and partnership, and benefitting 
from their willingness to conduct expeditionary operations, including 
support to the International Security Assistance Force (ISAF) in 
Afghanistan.
    Third, the NATO Alliance, which the President has called ``the most 
successful alliance in human history,'' and NATO's continued 
transformation matter tremendously to the future viability of coalition 
warfare, and our ability to meet the security challenges of the 21st 
century. These challenges include missile defense, assurance, 
deterrence, cyberspace, terrorism, and transnational illicit 
trafficking, to name just a few. In squarely meeting these challenges, 
sustained American leadership, commitment, and support will remain an 
important cornerstone to ensure, in concert with our allies, that 
history's most successful alliance remains strong and, as the President 
has also said, ``as relevant in this century as it was in the last.''
    Fourth, the fundamental values we share with our European allies 
and partners cement our Nations' common commitment to the bedrock 
principles of democratic government, the rule of law, free markets, and 
enduring human rights. Communicating and reinforcing these shared 
values throughout our theater-wide engagements and personal 
interactions--through what we say and, more importantly, what we do--
helps to clarify our common goals and identify common threats as we 
work together to achieve the former and combat the latter, firmly and 
confidently, in step with the new century's unremitting pace, change, 
and challenge.
    Fifth, through our longstanding presence, leadership, cooperation, 
and engagement with the Europeans, we have developed our best and most 
willing pool of partners to stand with the United States in our ongoing 
commitment to security, stability, and peace. In Afghanistan, roughly 
90 percent of the 40,000 non-U.S. troops serving there come from 
Europe. In Libya, NATO aggressively stepped up to lead that mission 
just 3 weeks after military operations commenced, conducting 75 percent 
of all sorties and 100 percent of the maritime operations. In the 
Balkans, Europe provides 90 percent of all forces for peacekeeping 
operations in Bosnia and Kosovo. Operating together, whether on modern 
battlefields in Afghanistan, Libya, and the Balkans, or in emerging and 
ironically ``new'' missions like counter-piracy, Europeans continue to 
stand shoulder-to-shoulder with us to face the many complex challenges 
of the 21st century. In the years ahead, even as our Nation shifts its 
strategic focus to the `Asia-Pacific,' the reality remains that our 
most willing, effective, credible, and enduring strategic military 
partners reside in Europe.
    To summarize, in all of my appearances before you, I have sought to 
emphasize and illustrate, through tangible progress and concrete 
examples, the strategy that we have pursued for several years now: a 
strategy of active security and forward defense focused on preserving 
our strategic partnerships in Europe; building interoperability with 
the NATO Alliance; deterring would-be adversaries; sustaining progress 
and transition in Afghanistan; when directed, conducting decisive 
military and counterterrorism operations to fight and win; and thinking 
creatively, acting efficiently, and working collaboratively to confront 
the rising security challenges of the modern era--an era that continues 
to be characterized by the power of unprecedented information 
connectivity, the tensions and opportunities of global economic 
interdependence, and accelerating change.
    Like any strategy, this strategy has served as a framework to 
organize the relationship of ends, ways, and means necessary to 
accomplish our mission. But at the core of this strategy is the 
fundamental realization and revalidation of the strategic linkage 
between Europe and the United States. America's European allies remain 
our Nation's most reliable and enduring strategic partners.
    As we consider the complexity of the modern security environment, 
as well as the need to align fiscal realities with enduring security 
requirements, I believe that our European partnerships and engagements 
continue to be wise and sound national security investments. As 
Secretary Panetta said last October in Brussels: ``We live in a world 
of growing danger and uncertainty, where we face threats from violent 
extremism, nuclear proliferation, rising powers, and cyber attack. We 
cannot predict where the next crisis will occur. But we know we are 
stronger when we confront these threats together. The benefits that our 
countries derive from working together to defend common interests and 
protect our security and prosperity are obvious and enduring. It is 
precisely because of the growing security challenges and growing fiscal 
constraints that we need to work more closely than ever as partners.'' 
As I have said many times throughout the years, and believe now more 
firmly than ever, we are stronger together with our European partners.

                MISSION, VISION, OBJECTIVES, PRIORITIES
      
    
    
      
    Over the past year, U.S. European Command has made significant 
contributions to coalition combat operations in Afghanistan and Libya, 
while pursuing an aggressive schedule of major theater exercises and 
sustained engagement with our allies and partners. We have achieved 
progress along multiple lines of operation to assure our friends and 
deter potential adversaries.
Support to the International Security Assistance Force in Afghanistan.
    European Command continues to conduct a wide range of activities 
supporting the ISAF in Afghanistan, as well as the President's strategy 
to transfer the security lead to Afghan National Security Forces (ANSF) 
by 2014. As mentioned, 90 percent of forces from non-U.S. troop 
contributing nations come from the European theater. This translates to 
a third of the force on the ground, relieving the strain this gap would 
pose as a U.S. force generation requirement. European nations are, by 
far, our strongest supporters in Afghanistan.
    European Command actively supports our allies and partners in their 
preparations for deployment to Afghanistan. We help these countries 
identify pre-deployment training and equipment requirements, and then 
leverage a number of available programs and authorities to assist in 
meeting those requirements. Through these programs, our allies and 
partners have received training in critical combat skills, including: 
Counter-Improvised Explosive Device (IED) procedures; the operation of 
mine-resistant ambush protected (MRAP) vehicles and up-armored high 
mobility multipurpose wheeled vehicles (HMMWVs); counterinsurgency 
intelligence analysis, tailored to the complex Afghan environment; and 
battalion-level full-spectrum counterinsurgency operations. European 
Command has also provided partner nations with essential equipment for 
operations in Afghanistan, including night vision devices, 
communications systems, robots, and other counter-IED systems.
      
    
    
      
    Some quantitative examples illustrate the scope of European 
Command's efforts to support the fight in Afghanistan. In fiscal year 
2011, European Command conducted 3 Operational Mentor and Liaison Teams 
(OMLT) and 3 Police Operational Mentor and Liaison Team (POMLT) 
training rotations at the Joint Multinational Readiness Center in 
Grafenwoehr and Hohenfels, Germany, ultimately preparing 50 OMLTs, 25 
POMLTs, and almost 2,000 personnel from 15 countries for deployment. 
Additionally, European Command conducted 21 Expeditionary Intelligence 
Training Program courses, providing fundamental counterinsurgency 
intelligence and operational skill sets for 628 personnel from 25 
countries, and trained 2,135 soldiers from 18 countries in lifesaving 
counter-IED skills. Finally, in 2011, European Command trained two 
Polish Brigades, two Romanian battalions, and two Georgian battalions 
for deployment to Afghanistan. All of these activities provide crucial 
linkages, personally and professionally, between the U.S. military and 
these deploying coalition forces. Without these relationships, 
contributions, and training conducted to a common standard, the 
challenges we face deployed side-by-side with these partners would be 
far more difficult, and the requirements placed on U.S. forces heavier.
      
    
    
      
    European Command also provides critical logistical support to 
operations in Afghanistan. Our mature basing footprint and theater 
relationships are a vital part of U.S. Transportation Command's enroute 
strategy, and have enabled us to develop and expand the Northern 
Distribution Network (NDN) to provide important additional supply 
routes to Afghanistan. In fiscal year 2011, European Command's 
Deployment and Distribution Operations Center moved 21,574 containers 
and 232,206 tons of equipment through Europe to Afghanistan over the 
NDN. Additionally, for the first time since 2003, U.S. forces conducted 
transloading operations at the multimodal facilities located at Mihail 
Kogalniceanu Airbase in Romania. This effort fulfilled U.S. Central 
Command's requirement to establish alternative lines of communication 
to mitigate any potential loss of supply routes through Pakistan.
    European Command also provides logistical capacity to assist our 
allies and partners move their forces and equipment to and from 
Afghanistan. In fiscal year 2011, European Command coordinated the use 
of the Department of Defense (DOD) Lift and Sustain Program to 
transport 16,344 servicemembers and 2,734 tons of cargo from 19 
contributing nations, who otherwise would have been unable to make 
these contributions. In addition, European Command increases efficiency 
by leveraging our active involvement in two European military 
transportation consortiums, as well as the U.S. allocation of 1,000 
flight hours in the Heavy Airlift Wing (comprised of three 
cooperatively shared Hungarian-registered C-17 aircraft), to support 
U.S. and partner logistical movements into and across the theater.
Support to Operations in Libya
    Last year's operations in Libya validated the critical importance 
of maintaining strong relationships across Europe for basing, access, 
and force contributions. These relationships, as well as infrastructure 
investments already made, particularly along the Mediterranean Sea in 
France, Italy, Spain, and Greece, allowed us to obtain rapid basing and 
access for U.S. and coalition military assets participating in 
Operations Odyssey Dawn and Unified Protector.
    This support made it possible to develop a holistic basing plan 
that maximized the air assets of all participating nations, and 
provided the aircraft support, logistics, ordnance, communications, and 
resupply to ensure rapid and sustained actions throughout the 
operation.
      
    
    
      
    In one example, only days after U.N. Security Council Resolution 
(UNSCR) 1973 was passed, Naval Air Station Sigonella, Italy, opened its 
doors, with Italian support and approval, to become a critical 
multinational coalition launching pad, hosting air assets from nine 
countries flying sorties in direct support of NATO mission 
requirements.
    In addition to basing, sustainment, and logistical support, 
European Command provided significant intelligence, command and 
control, and communications support to coalition and NATO operations 
over and around Libya. Without strategic access and forces postured in 
Europe, it is safe to say that the coalition response to UNSCR 1973 
would have been significantly longer in developing, less effective in 
execution, and less likely to have achieved its objective. This 
reinforces the criticality of our strategic partners and position in 
Europe, highlighting that we truly are stronger together when we act 
collectively in areas where our national interests overlap.

Multinational, Joint, and Interagency Exercises
    European Command's rigorous theater exercise schedule formed a 
vital foundation for the effective execution of the combat operations 
described above, and remains an essential venue for intensive, steady-
state interaction and engagement with our allies and partners. European 
Command maintained an intensive bilateral and multilateral exercise 
program last year, executing 22 major exercises involving nearly 50,000 
U.S., allied, and partner nation personnel from 42 contributing 
nations. Exercises in 2011 focused on preparing partner nations for 
ongoing coalition operations, primarily in support of the ISAF in 
Afghanistan, as described in the previous section, as well enhancing 
NATO interoperability for present and future coalition operations, and 
improving our military coordination and interoperability with Israel. 
Highlights of the latter include:

Austere Challenge/Juniper Cobra
    In its seventh year as European Command's premier joint force 
headquarters exercise, Austere Challenge 11 ventured back into the 
arena of full spectrum major combat operations, incorporating a 
significant focus on cyberspace. Austere Challenge 11 made significant 
progress addressing the ongoing challenge of coalition communications 
interoperability, implementing a first-of-its-kind information sharing 
network over the existing U.S. Battlefield Information Collection and 
Exploitation System (BICES). This arrangement provided rapid network 
development and expansion, as well as important lessons for integration 
into future coalition communication plans.
    This year, Austere Challenge 12 will continue to provide world-
class, large-scale training opportunities for U.S. European Command 
Headquarters, our Service Component Commands, and the Israel Defense 
Force General Staff. A five-phased, eight part exercise, Austere 
Challenge 12 will examine two existing U.S. European Command concept 
plans exercising theater operations organized under two different Joint 
Task Force Commanders. Exercising real-world air and maritime missions, 
the first Joint Task Force (JTF) will be commanded by U.S. Air Forces 
in Europe/Third Air Force, while the second JTF will be led by the 
Commander of Naval Forces Europe/Africa/SIXTH Fleet. As part of the 
broader Austere Challenge event, European Command will also conduct the 
largest of our combined exercises and engagements with Israel, Exercise 
Juniper Cobra. Juniper Cobra supports the U.S.-Israeli political-
military relationship and exercises important theater capabilities, 
providing a further demonstration of U.S. commitment to the security of 
Israel.

Balkan Exercises
    In the Balkans, Exercise Immediate Response brought together forces 
from Albania, Bosnia-Herzegovina, Croatia, Macedonia, Montenegro and 
Serbia in an effort to build relationships, strengthen capabilities, 
and foster multinational cooperation through counter-IED training. 
Additionally, Macedonia hosted the popular Medical Central Europe 
(MEDCEUR) Exercise last year, sharing valuable medical skills among 340 
medical professionals from the United States, Bosnia-Herzegovina, 
Bulgaria, Macedonia, Montenegro, Serbia, and Slovenia.

Baltic Exercises
    U.S. Naval Forces Europe led the 26th annual Baltic Operations 
(BALTOPS) exercise, assembling 13 nations in the region's largest 
multinational maritime training event focused on maritime interdiction, 
amphibious skills, and interoperability. Shifting landward to Exercise 
Saber Strike, European Command, the Baltic nations, and Poland 
sharpened the counterinsurgency skills--at the platoon, company and 
brigade levels--of over 1,600 Latvian, Lithuanian, and Polish forces 
preparing for deployment to Afghanistan.

Black Sea Exercises
    Focusing on partnerships and interoperability in the Black Sea 
region, Rapid Trident assembled 1,600 forces from 13 countries to 
conduct the first-ever multinational airborne drop into Ukraine, 
developing important land warfare skills and camaraderie among key NATO 
and non-NATO partners in a critical area of the world. Jackal Stone 11, 
Special Operations Command Europe's annual capstone exercise, involved 
8 nations and over 1,500 partner nation Special Operations Forces (SOF) 
sharpening theater SOF capabilities in all mission sets from 
counterterrorism to high-intensity conflict. Exercise Sea Breeze joined 
naval and marine forces from 14 countries in the Black Sea to exercise 
maritime interdiction, counter-piracy, non-combatant evacuation 
operations, and actions to counter the flow of illicit transnational 
trafficking, all rising challenges in the 21st century.
      
    
    
      
Israeli Engagement
    European Command's sustained engagement with Israel, in numerous 
annual theater security cooperation and military-to-military engagement 
activities, continues to strengthen our relationship with this key 
regional ally. European Command chairs four bilateral, semiannual 
conferences with Israel addressing planning, logistics, exercises, and 
interoperability. The United States/Israeli exercise portfolio also 
includes eight major recurring exercises to strengthen our Nations' 
ties and military cooperation. Through these engagements, European 
Command leaders and staff maintain uniquely strong, recurring, 
personal, and direct relationships with their counterparts in the 
Israeli Defense Forces.
    Additionally, our comprehensive engagement strategy with Israel 
complements other U.S. Government security cooperation initiatives, to 
include the efforts of the U.S. Security Coordinator for Israel and the 
Palestinian Authority (USSC). The USSC's mission is to help the 
Palestinian Authority transform and professionalize its security 
sector, and support U.S. and international whole-of-government 
engagement with the Israelis and Palestinians through security 
initiatives designed to build mutual trust and confidence. European 
Command is working actively and collectively with our Israeli partners 
to address common security challenges and counter threats to regional 
stability.

Flexible Leader
    Exercise Flexible Leader opens the aperture, expanding awareness 
and exploring the efficiencies of interagency capacity to meet ``whole-
of-society'' challenges raised by Foreign Consequence Management and 
Foreign Humanitarian Assistance. This year's exercise, set in the 
Balkans, focuses on the response to a major earthquake and a rail yard 
collision leading to the accidental spill of nuclear power plant fuel. 
These exercises provide valuable opportunities to vet European 
Command's contingency plans, examine internal and interagency command 
and control protocols, and improve coordination with regional and 
international response organizations.

Combined Endeavor
    The largest communications and electronics interoperability 
exercise in the world, European Command's Combined Endeavor 11 brought 
together delegates from 40 nations (25 NATO and 15 Partnership for 
Peace countries) seeking to strengthen partner communications 
capabilities,pursue joint training and professional development 
objectives, develop critical interoperability standards, and prepare 
command and control, communications, and computer forces for 
deployment. Combined Endeavor continues to bridge important partners 
from across the theater to identify future coalition communication 
needs in support of regional and global military operations.

Cyber Endeavor
    European Command's flagship cyber security engagement, Cyber 
Endeavor continues to reach out to NATO allies, partner nations, 
industry, and academia to strengthen cyber defense capabilities through 
multiple exercise events. Cyber Endeavor 11 included representatives 
from NATO Headquarters, 19 NATO nations, and 13 Partnership for Peace 
nations. The exercise explored and developed secure information system 
core competencies, technical defense capabilities, and best-practice 
network security measures. Cyber Endeavor participation continues to 
grow each year, another indication of the rising relevance and theater-
wide interest in the effects and impact of cyberspace.

Arctic Zephyr
    The Arctic Zephyr series, which started in 2010, seeks to expand 
understanding and awareness of the legal, security, commercial, and 
political ramifications of the changing Arctic environment, while 
strengthening relationships with other Arctic nations. The Arctic 
Zephyr exercise series will culminate in 2013, and remains one of the 
areas where we seek to find common ground and zones of cooperation with 
Russia.
      
    
    
      
National Guard State Partnership Program
    We are very proud of this low-cost, high payoff program. One of 
European Command's most unique, cost effective, and essential 
international engagement tools, the State Partnership Program partners 
U.S. National Guardsmen from 21 participating states with 22 countries 
across the theater to engage in mutually beneficial training, 
interactions, and exercise engagements that support key Theater 
Security Cooperation objectives and preserve and develop these 
important strategic partnerships. The program capitalizes on the 
National Guard's unique state and Federal military characteristics. The 
program has achieved mutually beneficial security goals and developed 
long-term productive relationships that continue to benefit ongoing 
military activities.
      
    
    
      
    
    
      
                    EUCOM SERVICE COMPONENT COMMANDS



      
    Except when assigned to a joint task force for military operations 
or participating in joint exercises, European Command forces are 
managed, trained, and equipped by our Service component headquarters: 
U.S. Army Europe (USAREUR); U.S. Marine Forces Europe (MARFOREUR); U.S. 
Naval Forces Europe/Africa/COMSIXTHFLT (NAVEUR); U.S. Air Forces in 
Europe (USAFE); and U.S. Special Operations Command Europe (SOCEUR). 
These organizations provide forces for our military-to-military 
engagements, serve an assurance and deterrence function in the region, 
deploy units for contingency operations, and, when necessary, provide a 
full-spectrum Joint Task Force headquarters. Understanding our Service 
component commands is the key to understanding European Command, as 
they conduct the majority of our steady-state activities.

                 U.S. ARMY EUROPE--HEIDELBERG, GERMANY

Introduction & Overview
    U.S. Army Europe provides forward-based forces to execute national 
security objectives, prevail in today's wars, and prepare to defeat 
future threats. U.S. Army Europe leverages its forward presence to 
conduct and facilitate essential theater multinational interoperability 
training. These activities assure our allies and partners, and deter 
potential aggressors. Today in Afghanistan, the ISAF executes complex 
multinational coalition operations to defeat terrorism and protect the 
U.S. Homeland forward. U.S. Army Europe provides a vital linkage 
between the U.S. Army and our European allies and partners 
participating in ISAF through our longstanding relationships, frequent 
military-to-military engagements, and the interoperability training so 
instrumental to current and future coalition operations. U.S. Army 
Europe provided essential logistical support to NATO operations in 
Libya in 2011, and continues to provide training and intelligence 
support to Israel as well as critical logistical support in Kosovo. 
Additionally, United States Army Europe's Forces form the cornerstone 
of the U.S. Article V commitment to NATO.

Major Accomplishments
    U.S. Army Europe focused on providing trained and culturally aware 
units and enabling forces, capable of conducting full-spectrum 
operations, in support of ISAF and other current and future contingency 
operations. Until recently, Army Europe's V Corps provided the primary 
command and control headquarters for ISAF in Afghanistan. Today, V 
Corps is reorganizing and preparing for future deployments. U.S. Army 
Europe's leadership and support were also crucial in establishing the 
first ground-based radar site in Turkey, as European Command implements 
the President's European Phased Adaptive Approach to Missile Defense. 
Additionally, while U.S. Army Europe forces maintained a 30-40 percent 
deployment rate to Iraq and Afghanistan last year, increased dwell time 
has significantly improved the quantity and quality of our 
multinational training events and engagements. These events are focused 
on improving our European partners' capabilities, capacity, and 
interoperability for deployment to ISAF or other future contingency 
operations.
    In 2011, U.S. Army Europe staff officers, intelligence specialists, 
and logisticians provided direct mission support to U.S. Africa Command 
and Operation Odyssey Dawn, including critical ground targeting 
capability from the 66th Military Intelligence Brigade. Throughout the 
continent of Europe, the 21st Theater Support Command provided U.S 
Africa Command, and their Special Operations component, with key 
logistics and sustainment support, enabling the execution of vital 
missions across this theater of operations. Additionally, U.S. Army 
Europe played a crucial role in U.S. Transportation Command's proof-of-
principle test in Romania to develop alternatives for transiting 
critical cargo to Afghanistan, Pakistan, and other locations.

Theater Security Cooperation
    In one of European Command's most important Theater Security 
Cooperation initiatives, U.S. Army Europe forces prepared two Polish 
brigades, two Romanian battalions, and, in concert with the Marine 
Corps, two Georgian battalions for deployment to ISAF.
      
    
    
      
Leveraging the personal relationships and consistent presence of our 
forward-deployed brigades, we use these brigades to conduct vital 
training and mentorship with similar multinational forces. These `unit 
partnership' programs have dramatically enhanced the capabilities of 
our coalition partners, preparing them to conduct operations across the 
globe and receiving considerable praise from ISAF commanders. 
Additionally, U.S. Army Europe has provided deploying units with 
critical lifesaving courses in the use of MRAP vehicles, Uparmored 
HMMWVs, and counter-IED procedures. Finally, in fiscal year 2011, U.S. 
Army Europe trainers prepared 50 OMLTs and 25 POMLTs for deployment to 
Afghanistan, supporting ISAF's high priority mission to train ANSFs.
    The Joint Multinational Training Command (JMTC) is the linchpin to 
achieving these vital theater objectives, and meeting our comprehensive 
security cooperation mission. JMTC is a national strategic asset, 
providing world-class training and support that enables a broad range 
of multinational soldier training events ensuring U.S. and partner 
nation forces are well-prepared for ISAF operations and future global 
contingencies.

Exercises
    Exercises remain critical to the pre-deployment training of U.S. 
and coalition forces supporting ISAF operations, and they serve to 
prepare these same forces for future coalition operations across U.S. 
European Command, U.S. Africa Command, and U.S. Central Command. In 
2011, U.S. Army Europe participated in 21 major joint and Army 
exercises, including 3 major mission rehearsals, conducted in 13 
countries with 44 participating nations. Highlights include:

         Saber Strike 11, a Joint Chiefs of Staff (JCS)-
        directed brigade level command post exercise conducted in 
        Latvia involving over 1,700 soldiers from Latvia, Lithuania, 
        Estonia, Ukraine, and Poland. Saber Strike enhanced combat 
        readiness and interoperability in the Baltic region, while 
        assuring NATO partners of the United States' Article V 
        commitment.
      
    
    
      
         Dragon 11, a live-fire exercise conducted in Poland 
        with Polish, Canadian, and British ground forces to enhance 
        partner capacity and increase interoperability. The exercise 
        incorporated ISAF lessons learned, through the participation of 
        NATO Multinational Corps Northeast personnel and the 173rd 
        Airborne Brigade Combat Team.
         Immediate Response 11, a JCS-directed multilateral 
        joint and combined exercise in the Balkans, with participation 
        from Albania, Bosnia-Herzegovina, Croatia, Macedonia, 
        Montenegro, and Serbia, which provided an important venue for 
        continued Balkan interaction and prepared ISAF-contributing 
        nations to serve in Afghanistan's complex counterinsurgency 
        environment alongside coalition forces.

Way Ahead
    U.S. Army Europe will provide forces for global combat operations, 
continue to conduct and facilitate world-class training with our allies 
and partners, and meet all theater missions to defend the homeland 
forward. Looking beyond ISAF, we have begun to establish new standards 
for multinational training to strengthen U.S. and partner nation 
participation in future coalition warfare. Recently, the 173rd ABCT 
Full Spectrum Training Event exercised critical Command capabilities to 
prepare full-spectrum forces ready for global employment, and to 
improve our allies' and partners' survivability and combat 
effectiveness during deployment. These engagements provide vital 
assurances to our allies and partners, reinforce U.S. leadership in 
NATO, enhance interoperability, and strengthen our key theater 
relationships.

             U.S. MARINE FORCES EUROPE--STUTTGART, GERMANY

Introduction & Overview
    In 2011, Marine Forces Europe focused on strengthening and 
sustaining our allied and partner capabilities, as well as utilizing 
U.S. Marine expeditionary forces to reassure allies, deter potential 
adversaries, and remain ready to respond rapidly to crises across the 
region. The U.S. Marine Corps' expeditionary nature focuses Marine 
Forces Europe's primary orientation on security cooperation activities 
with our newest NATO allies and partners, particularly in the Caucasus, 
Black Sea, Balkan, and Baltic regions.

Major Accomplishments
    In response to the Libya operation last year, Marine Forces Europe 
coordinated the provision of a battalion-sized augmentation to afloat 
expeditionary forces supporting U.S. Africa Command during Operation 
Odyssey Dawn, and facilitated the rapid deployment of electronic 
warfare assets to Italy in support of NATO Operation Unified Protector. 
In response to Turkey's devastating October 2011 earthquake, Marine 
Forces Europe provided essential humanitarian assistance, rapidly 
deploying transportable shelters and heating equipment to ease human 
suffering and support this important NATO ally in its time of need. 
While maintaining only a small Service component headquarters, Marine 
Forces Europe also effectively leveraged our capabilities to support 
key European Command objectives--focused on engagement in the Caucasus, 
Black Sea, and Balkans--in order to enable our partners to contribute 
to collective security in European and out-of-area operations. Marine 
Forces Europe continued to provide reassurance in the Baltics last 
year, while continuing to sharpen crisis response skills through 
training and operations.

Georgia Deployment Program--International Security Assistance Force
    In support of nationally directed theater strategic end states, 
Marine Forces Europe leads European Command's joint mission to train 
the Georgian Armed Forces. Executing this mission since 2010, Marine 
Forces Europe has developed and implemented a program that has trained 
and deployed a total of four Georgian battalions to conduct full-
spectrum counterinsurgency operations in support of ISAF. This program, 
the first of its kind in scale and scope, increased the Georgian Armed 
Forces' capacity to train and prepare their own forces for coalition 
operations, gradually decreasing U.S. Marine Corps instructor 
requirements by 60 percent. After working closely and building trust 
with the Marines through pre-deployment training and exercises--many 
conducted at the Joint Multinational Training Center in Germany--
Georgia has extended its commitment to support U.S. Marine Corps 
operations in Regional Command-Southwest for another 2 years and, 
notably, expanded its ISAF contribution from one to two battalion 
rotations every 6 months, deploying a total of nine battalions during 
these 2 years for continued full-spectrum support to ISAF operations.
    In light of this program's success and efficiency in moving toward 
partner self-sufficiency, the United States has accepted Georgia's 
offer. The Joint Staff has directed European Command to expand and 
extend the program to 2014. This spring, Marine Forces Europe is 
leading the simultaneous training of two Georgian battalions for 
deployment to ISAF.

U.S. Marine Corps' Black Sea Rotational Force
    The U.S. Marine Corps' Black Sea Rotational Force is a multi-year 
program rotating Marine air and ground units, based in the United 
States, on deployment to bases in the Black Sea region in order to 
strengthen military capabilities, provide regional stability, and 
develop lasting partnerships with nations in this important region. In 
2011, the Black Sea Rotational Force trained Romanian, Bulgarian, and 
Macedonian units, as well as forces from eight other contributing 
nations, for deployment to ISAF.
      
    
    
      
Exercises
    Marine Forces Europe participated in 15 joint, bilateral, and 
multilateral exercises in 2011, reassuring theater allies and deterring 
potential adversaries by demonstrating rapid assembly, deployment, and 
maritime expeditionary capabilities. Of note, European Command's 
Exercise Austere Challenge 11 provided an outstanding opportunity to 
train the Marine Forces Europe staff in its Service component role 
during crisis response, revitalizing important amphibious and maritime 
pre-positioning objectives. Through participation in these exercises, 
Marine Forces Europe sustained critical warfighting skills, 
strengthened important theater relationships, and conducted vital 
interaction with European Command and NATO.

Way Ahead
    Marine Forces Europe will continue to pursue renewed Amphibious 
Ready Group/Marine Expeditionary Unit presence in theater to meet the 
need for bilateral combined arms and amphibious training with key 
partners, including Israel, Turkey, France, and the United Kingdom, 
training that has been largely absent since 2003. Resuming this 
amphibious presence supports important theater reassurance and 
deterrence objectives. Marine Forces Europe will also stay engaged with 
Service-led efforts to transform our current pre-positioning posture in 
Norway, able to provide augmentation for employment of up to a Marine 
Expeditionary Brigade-sized force while maintaining our commitment to 
the reinforcement of Norway. Additionally, coordination continues to 
develop a limited crisis response capability for Black Sea Rotational 
Force 12, addressing areas that include Non-combatant Evacuation 
Operations and Humanitarian Assistance and Disaster Relief missions.

U.S. NAVAL FORCES EUROPE/U.S. NAVAL FORCES AFRICA/SIXTH FLEET--NAPLES, 
                                 ITALY

Introduction & Overview
    U.S. Naval Forces Europe/Africa/Commander Sixth Fleet (C6F), 
conducts the full range of maritime operations and Theater Security 
Cooperation in concert with NATO, coalition, joint, interagency, and 
other partners in Europe and Africa. Naval Forces Europe/Africa/C6F 
continues to perform Navy Component Commander functions supporting 
daily Fleet operations and Joint Maritime Commander/Joint Task Force 
Commander missions, thereby strengthening relationships with enduring 
allies and developing maritime capabilities with emerging partners, 
particularly in the theater's southern and eastern regions.

Major Accomplishments Supporting European Command
    Naval Forces Europe/Africa/ C6F met all mission requirements in 
2011 and maintained its certification as Joint Force Maritime Component 
Commander. The command engaged in numerous Theater Security Cooperation 
activities, enhancing vital skills in Maritime Domain Awareness, 
security, and sea control. Always poised for crisis response, Naval 
Forces Europe/Africa/C6F contributed to numerous global security 
efforts in 2011, including: Operation Enduring Freedom; anti-piracy 
operations off the African coast; and coalition and NATO operations 
against pro-Gaddafi forces in Libya, consisting of Operation Odyssey 
Dawn, Operation Odyssey Guard, and NATO's Operation Unified Protector.
      
    
    
      
Libya Operations
    Naval Forces Europe/Africa/C6F's posture and readiness were ideally 
suited to support Libya operations, wherein its forward naval bases--
including Naval Air Station Sigonella, Italy and Naval Support Activity 
Souda Bay, Greece--played a vital role in coalition asset placement and 
logistical support. Rapid crisis response and containment activities 
could not have occurred without Naval Forces Europe/Africa/C6F's bases 
and forward-stationed assets supporting and executing these operations. 
Additionally, USS Mount Whitney, operating from international waters 
with the Joint Task Force Commander and Joint Force Maritime Component 
Commander embarked, provided vital command and control, planning, and 
strike coordination capabilities during the initial days of Operation 
Odyssey Dawn.
      
    
    
      
Ballistic Missile Defense
    Last year, USS Monterey and USS The Sullivans deployed to the 
European Command Theater to serve as the first Ballistic Missile 
Defense (BMD) ships supporting the European Phased Adaptive Approach to 
Missile Defense. Naval Forces Europe/Africa/C6F also increased support 
to the theater BMD mission by conducting 24-hour operations at its 
Maritime Operations Center in Naples, Italy.

Forward Deployed Naval Forces, Spain
    The decision to station four Aegis destroyers at Naval Station Rota 
will place these ships in a position to maximize their operational 
flexibility for theater missions and crisis response in the Atlantic 
Ocean and across the Mediterranean Sea. These versatile, multi-mission 
platforms will perform a myriad of tasks, including BMD, maritime 
security operations, humanitarian missions, and bilateral and 
multilateral exercises. Spain's commitment reaffirms our Nations' 
longstanding friendship and mutual security cooperation.

Theater Submarine Operations
    U.S. submarine forces provide assurance, deterrence, and valuable 
contributions to the forward defense of the United States. U.S. 
submariners expand European Command's intelligence, surveillance, and 
reconnaissance (ISR) capacity, and stand ready to conduct anti-
submarine and anti-surface warfare operations, ensure undersea 
dominance, deliver close proximity strike, and provide high-value unit 
protection, thereby ensuring our Nation retains unfettered access to 
the sea lines of communication. Naval Forces Europe executed a vigorous 
series of theater-wide exercises in 2011, bringing U.S. submarines and 
partner navies together to strengthen maritime warfighting proficiency 
and interoperability. These capabilities are increasingly important as 
the Russian Federation Navy increases the pace, scope, and 
sophistication of its submarine fleet. Four new classes of Russian 
submarines are in development or near delivery. This focus on submarine 
recapitalization, incorporating improved platform capabilities, 
indicates that Russia continues to place a high priority on undersea 
warfare.

Intelligence, Surveillance, and Reconnaissance
    In addition to the surface and submarine fleet, Naval Forces 
Europe/Africa/C6F contributed to theater ISR capabilities and capacity 
by way of P-3 Maritime Patrol Aircraft and EP-3 Reconnaissance Aircraft 
operating from bases in Italy, Spain, Turkey, and Greece, as well as 
ship-based Unmanned Aerial Vehicle missions. Employing these 
capabilities, Naval Forces Europe/Africa/C6F provided vital ISR support 
to both Operations Odyssey Dawn and Unified Protector, as well as ISR 
operations in the Eastern Mediterranean and in support of the NATO-led 
Kosovo Force.

Theater Security Cooperation
    Naval Forces Europe/Africa/C6F led Eurasia Partnership Capstone, a 
flagship initiative designed to integrate various maritime efforts 
across the region into a comprehensive partnership. Training with naval 
forces from Azerbaijan, Bulgaria, Georgia, Greece, Lithuania, Malta, 
Poland, Romania, Turkey, and Ukraine, Naval Forces Europe/Africa/C6F 
enhanced capabilities in Maritime Interdiction Operations; Visit, 
Board, Search, and Seizure; search and rescue; maritime law 
enforcement; and environmental protection. In the Partnership of 
Adriatic Mariners program, U.S. naval forces joined with countries 
along the Adriatic Sea to increase proficiency in Maritime Domain 
Awareness and counter-illicit trafficking operations. As part of this 
effort, sailors from Croatia, Montenegro, and Albania embarked in USS 
Mitscher and USS Monterey, spending 2 weeks gaining experience in these 
important skills.
      
    
    
      
Exercises
    Naval Forces Europe/Africa/C6F participated in six JCS-directed 
exercises and 14 NATO and European Command exercises in 2011. Baltops 
11, discussed earlier, involved 13 European nations--including Russia--
23 ships, 1 submarine, and 31 aircraft conducting maritime operations 
and interoperability training. Sea Breeze 11 involved 20 ships and over 
2,000 personnel from 14 nations training in and around the Black Sea. 
Neptune Response, conducted last November, exercised vital consequence 
management skills, preparing our forces and installations for terrorist 
attacks, natural disasters, and major oil spills.
      
    
    
      
Way Ahead
    Naval Forces Europe/Africa/C6F will remain focused on ensuring 
maritime safety, security cooperation, and crisis response in the 
defense of our Nation and interests across the region. The command will 
support, develop, and expand ballistic missile defense capabilities, 
afloat and ashore, in synchronization with other European Command 
Service components. Naval Forces Europe/Africa/C6F will also focus on 
sustaining allied and partner maritime capabilities in a cost-effective 
manner.

         U.S. AIR FORCES IN EUROPE--RAMSTEIN AIR BASE, GERMANY

Introduction & Overview
    U.S. Air Forces in Europe provides forward-based, full-spectrum 
airpower and support to global U.S., NATO, and coalition operations. 
Air Forces in Europe provides mobility, access, communications, 
logistical support, contingency bed-down, command and control, and 
capable, responsive forces prepared to defend the homeland forward and 
respond at any time to crises across the theater or the world. This 
posture supports partnerships that enhance the NATO alliance and 
existing coalitions, ultimately increasing the security of the United 
States and reducing the burden on U.S. forces.

Major Accomplishments
    Air Forces in Europe flew over 26,000 combat hours to support 
ongoing contingency operations in 2011, working daily with our NATO 
allies and partners to provide security across the European Theater and 
the globe. Of special note, forward-based air forces were essential to 
the United States' ability to rapidly respond to emerging operational 
requirements in Libya. Air Forces in Europe played a major role, 
providing seasoned leadership, expert command and control across the 
full spectrum of air operations, and the initial strategic and tactical 
level personnel and forces that led to the overwhelming success of 
Operations Odyssey Dawn and Unified Protector.
      
    
    
      
    Air Forces in Europe also made major contributions to operations in 
Afghanistan and Iraq. The command deployed a variety of aircraft to 
support combat operations, including fighter aircraft that provided 
multi-role and ground attack support as well as refueling aircraft, 
combat search and rescue, and operational support aircraft. In 
addition, personnel from across the command deployed in support of 
Operations Enduring Freedom and New Dawn. Additionally, as a major 
mobility hub, Air Forces in Europe supported the deployment and 
redeployment of forces and equipment into and out of the U.S. Central 
Command Theater.
      
    
    
      
    An instrumental global communications hub, Air Forces in Europe 
provides vital data links for worldwide communications, unmanned aerial 
system command and control, intelligence collection, and space 
operations. Poised to provide rapid humanitarian assistance, Air Forces 
in Europe delivered 9 tons of aid last year to Tunisia less than 48 
hours after notification, in direct support of U.S. Africa Command and 
the U.S. Agency for International Development. The command also 
provided essential aid to Turkey in the wake of last October's 
earthquake, supporting this vital ally. Finally, Air Forces in Europe 
continues to ensure the availability of the basing and infrastructure 
that underpins the mobility en route system, directly supporting 
numerous combatant commands and critical air mobility missions.
      
    
    
      
Operational Support
    As mentioned, Air Forces in Europe supports the operations of U.S. 
European Command, U.S. Africa Command, U.S. Central Command, U.S. 
Southern Command, and NATO, while conducting combat deployments at the 
same or higher rate than U.S. based air forces and supporting the 
throughput of over 60 percent of global air mobility missions. Air 
Forces in Europe maintains Combat Air Patrols supporting the NATO 
Icelandic and Baltic Air Policing missions, and conducts intelligence, 
surveillance, and reconnaissance missions across the greater Levant. 
Additionally, Air Forces in Europe coordinated the theater stationing 
and operation of permanent and expeditionary Air Force RQ-4B Global 
Hawk and MQ-1 Predator deployed in support of Operations Odyssey Dawn 
and Unified Protector.

Ballistic Missile Defense
    Supporting the European Phased Adaptive Approach to Missile Defense 
(BMD), Air Forces in Europe performs command and control for U.S. BMD 
forces, and is coordinating with the NATO Air Component Headquarters to 
develop capabilities and procedures to transition the European 
territorial missile defense command and control mission to NATO. In 
support of this effort, Air Forces in Europe is establishing a joint 
and combined European Integrated Air and Missile Defense Center in 
Einsiedlerhof, Germany, designed to educate, develop, and refine U.S., 
partner, and allied missile defense capabilities and expertise. 
Finally, we continue leading the effort to enable NATO to meet its goal 
of declaring an interim NATO Ballistic Missile Defense capability by 
May 2012.

Theater Security Cooperation
    When not supporting combat operations, Air Forces in Europe 
accomplished over 1,800 partnership events, including senior leader 
outreach, military-to-military engagement, and other training 
activities supporting three combatant commands. Robust senior leader 
engagement with 22 allied and partner nations sustained relationships 
across U.S. European Command, U.S. Africa Command, and U.S. Central 
Command. Pursuing interoperability with newer NATO allies, Air Forces 
in Europe conducted thorough engagement strategy studies with Romania 
and Croatia to assess air capabilities and identify mutually beneficial 
engagement opportunities. Recently, the C-17 Heavy Airlift Wing passed 
the noteworthy 4,000 flight-hour mark while redeploying Hungarian 
allies from operations in Afghanistan. Air Forces in Europe also 
continues to conduct the Tactical Leadership Program with eight of our 
allies, developing the next generation of combat air leaders capable of 
worldwide operations to augment, or in some cases reduce, the need for 
U.S. airmen. Finally, Air Forces in Europe continues to develop a 
strong cadre of future noncommissioned officers through engagement with 
partner nation Senior Enlisted Leaders from across Europe and Africa.

Exercises
    Air Forces in Europe participated in 12 JCS-directed exercises in 
fiscal year 2011. Anatolian Eagle provided realistic, scenario-based 
training to test combined aerial combat skills with Jordan, Saudi 
Arabia, Spain, and Turkey. In Screaming Eagle, Ramstein Air Base 
personnel interacted with Polish forces to increase interoperability 
with this increasingly important theater partner. In Medceur 2011, Air 
Forces in Europe developed expeditionary medical support capabilities 
and participated in a Macedonian interagency humanitarian assistance 
exercise to train personnel and agencies from the U.S. and five Balkan 
nations.

Way Ahead
    Recognizing the need for sustained effectiveness and increased 
efficiency, Air Forces in Europe continues to implement Secretary of 
Defense-directed budget efficiencies. Accordingly, Air Forces in Europe 
will consolidate its subordinate numbered air forces and their 
associated Air and Space Operations Centers, creating an extremely 
lean, agile, and flexible headquarters with leadership and staff 
supporting U.S. European Command and U.S. Africa Command while 
maintaining essential service support to forces in theater. As we look 
to the near term, Air Forces in Europe will continue to aggressively 
implement the European Phased Adaptive Approach to Missile Defense, and 
continue supporting global U.S. national and military objectives 
through our forward-based forces and infrastructure. Europe's strategic 
location and our strong relationships remain critical enablers for 
unilateral and joint mobility, and rapid response to contingencies 
across Europe, Africa, Asia, and the Middle East.

       U.S. SPECIAL OPERATIONS COMMAND EUROPE--STUTTGART, GERMANY

Introduction and Overview
    Special Operations Command Europe operates from two main forward-
deployed locations in Stuttgart, Germany, and the Royal Air Force (RAF) 
station at Mildenhall, England. The Command is comprised of three 
assigned components: 1st Battalion, 10th Special Forces Group 
(Airborne); Naval Special Warfare Unit-2; and the 352d Special 
Operations Group (Air Force Special Operations Command). Special 
Operations Command Europe continues to expand theater-wide special 
operations forces (SOF) capabilities, mainly by developing and enabling 
our allied and partner nation SOF to deploy to Afghanistan in support 
of ISAF. In developing our allied and partner SOF skills, we seek to 
enable niche capabilities which, taken together, can translate into 
unified SOF actions that support NATO, U.S. national security 
objectives, and our shared security interests.

Operations
    While predominately focused on allied and partner development for 
ISAF employment, Special Operations Command Europe also supported 
combat operations in Iraq and Afghanistan through the deployments of 
U.S. Army Special Forces, U.S. Navy SEALs, and U.S. Air Force Special 
Operations MC-130 Combat Talon and Combat Shadow aircraft and air 
commandos. Additionally, Special Operations Command Europe conducted 
planning and provided forces to support U.S. Africa Command's Operation 
Odyssey Dawn and NATO's Operation Unified Protector. Supporting this 
Alliance operation, Special Operations Command Europe's 352d Special 
Operations Group provided command and control for the first-ever AC-130 
and EC-130J Compass Call combat operations over Libya, neutralizing 14 
regime targets and conducting Military Information Support Operations, 
respectively, to help protect the Libyan people. Through these and 
other combat operations, Special Operations Command Europe continues to 
validate its strategic posture and value by projecting U.S., allied, 
and partner SOF into two adjacent geographic combatant commands, while 
supporting steady-state transatlantic security and maintaining our 
ability to rapidly respond to unforeseen contingencies against emerging 
threats from state and non-state actors.

Major Accomplishments
    Special Operations Command Europe focused its efforts and delivered 
results across four areas in 2011:
    First, we maintained emphasis on engagement activities with allied 
and partner SOF, in order to prepare them for deployment to 
Afghanistan. Special Operations Command Europe conducted 21 Joint 
Combined Exchange Training events, 14 bilateral training activities, 51 
Partnership Development Program events, 2 bilateral counter-
narcoterrorism training events, an intelligence conference on Iranian 
activities in Europe, and numerous key leader engagements and staff 
visits to sustain partner SOF development. Additionally, Special 
Operations Command Europe conducted the Joint Chiefs of Staff-directed 
Exercise Jackal Stone 11, bringing together over 1,400 international 
SOF participants from 9 countries for the invaluable opportunities to 
train together, build mutual respect, share SOF doctrine, tactics, 
techniques, and procedures, and ultimately increase our 
interoperability using NATO procedures.
    Second, Special Operations Command Europe led European Command's 
efforts to support U.S. Central Command's efforts in Iraq and 
Afghanistan. In Stuttgart, Special Operations Command Europe chaired 
the Stuttgart Effects Group, a multi-headquarters interagency forum to 
increase understanding of transnational threats and de-conflict 
associated efforts across the combatant commands and among our U.S. 
interagency partners. In Iraq, our deployed forces participated in 
numerous counterterrorism operations in direct support of U.S. Central 
Command, conducting more than 115 successful high-risk offensive 
missions that targeted 113 high-value individuals. One such mission 
captured the leader of an al Qaeda-affiliated organization, dealing a 
huge blow to this Sunni extremist group. Additionally, 17 Special 
Tactics Airmen from the 352d Special Operations Group provided direct 
support to 120 combat operations in support of Operations New Dawn and 
Enduring Freedom. Naval Special Warfare provided personnel to serve on 
Joint Planning and Advisory Teams (JPAT) for one Lithuanian and two 
Polish Special Operations Task Groups in support of ISAF. For the fifth 
year in a row, Special Operations Command Europe continued to provide 
direct support to ISAF through the deployment of Special Operations 
Task Force 10, providing essential military assistance to five Afghan 
Provincial Reaction Companies. These efforts made key contributions to 
the Government of Afghanistan and mentored ANSFs, reinforcing their 
progress into a self-run, confident force capable of making significant 
contributions to security operations across sizable Afghan population 
centers.
    Third, Special Operations Command Europe continued to prepare for 
contingency missions through an intense exercise schedule, while 
responding to actual contingency tasking. During our annual Jackal 
Stone Part 1 certification exercise, the command validated critical 
command and control and crisis response functions, while also 
exercising important capabilities during European Command's annual 
Austere Challenge exercise and executing mission support to Operation 
Unified Protector.
      
    
    
      
    Fourth, Special Operations Command Europe continued to refine and 
adapt strategic special operations forces requirements across European 
Command's area of focus, while also taking care of our people. We broke 
new ground, through the development of operational concepts like the 
Distributed Special Operations Forces Network, and by coordinating the 
work of U.S. Country Team SOF liaison elements with allied and partner 
SOF. After a decade of sustained combat operations, Special Operations 
Command Europe renewed efforts to focus on additional ways to take care 
of our warriors and their families. We have instituted greater command-
sponsored family events, increased servicemember awareness regarding 
health and comprehensive well-being, and provided command-sponsored 
apartments near the Landstuhl Regional Medical Center to support 
wounded SOF Warriors and their families.

Way Ahead
    Special Operations Command Europe will continue to focus our 
efforts on contributing to ISAF Special Operations Forces, moving from 
development of allied and partner tactical skills to the development of 
operational-level capabilities. Within the theater, Special Operations 
Command Europe will increasingly focus on supporting our interagency 
partners' counter-terrorist efforts and continue our engagement with 
allied and partner counterterrorism forces. Special Operations Command 
Europe will continue to support European Command, U.S., and NATO 
objectives, maintain our combat edge, further develop our allied and 
partner Special Operations Forces, and always be ready to respond 
quickly to crisis--a vanguard force for the forward defense of the 
United States.
                       CHALLENGES & OPPORTUNITIES



      
    Many challenges converge across a theater as large and complex as 
U.S. European Command. From the Arctic circle to the Caspian basin; 
from the strategic corridor of the North Atlantic to the strategic 
chokepoints of Gibraltar and the Bosporus; in an area of focus 
encompassing 51 very different countries spanning Europe, Asia, and the 
Levant; and in environments that alternate from the ocean depths to the 
Eurasian steppes to the ever-expanding horizons of cyberspace, European 
Command is presented with important opportunities to initiate positive 
change across a wide array of 21st century security fronts. While 
maintaining vigilance for signs of regression or instability that may 
pose a threat to U.S. national interests, European Command approaches 
all of these challenges as opportunities for sustaining engagement, 
fostering cooperation, and establishing mutual security.

Afghanistan
    At the Lisbon Summit in November 2010, the United States and its 
NATO allies announced the beginning of a process to transition 
leadership of security operations from ISAF to the Government of 
Afghanistan. Since then, the Afghan government has designated for 
transition part or all of 25 provinces and districts, comprising some 
50 percent of the Afghan population. The Afghan population is 
responding. In a poll conducted by the Asian Foundation \2\ last fall, 
87 percent of respondents--from a diverse cross-section consisting of 
6,500 Afghan men and women from rural and urban areas across 
Afghanistan's 34 provinces--stated that the Afghan National Army was 
improving the security situation across the country. The survey 
confirmed that many Afghans see affirmative progress in the quality of 
their lives, appreciate the services provided by the government, and 
support equal rights regardless of gender, ethnicity, or religion. 
Significantly, 85 percent of Afghans polled supported educational 
opportunities for women.
---------------------------------------------------------------------------
    \2\ The Asia Foundation, ``Afghanistan in 2011: A Survey of the 
Afghan People,'' http://asiafoundation.org/country/afghanistan/2011-
poll.php.
---------------------------------------------------------------------------
    Maintaining this momentum depends on the continued development and 
expansion of the ANSFs. The key to sustaining this progress and 
achieving the 2014 transition is training the Afghan National Army and 
Afghan National Police to a level that permits them to fully assume 
these responsibilities. In addition, we and our NATO allies are 
committed to an enduring partnership with Afghanistan, requiring 
sustained support to Afghan security institutions in order to solidify 
their capabilities against threats to the security, stability, and 
integrity of Afghanistan.
      
    
    
      
    By providing army and police trainers, as well as other forces, our 
European allies and partners have played an essential role in 
supporting this transition and maintaining the enduring partnership 
that follows. Europeans currently contribute approximately 25 percent 
of the mentoring teams required to train ANSFs in the field, as well as 
gendarmerie and other instructor personnel serving at regional police 
training centers. Our European allies and partners understand the vital 
importance of this mission. They remain willing to send their sons and 
daughters into harm's way alongside the United States to bring peace, 
security, and prosperity to the people of Afghanistan. Their commitment 
also comes at a precious price, with nearly 1,000 forces killed in 
action and non battle-related deaths since 2001. In fact, many of these 
nations, making particularly large force contributions relative to 
their populations, are suffering proportionally higher casualties than 
the United States.
    We need the continued efforts of our European allies and partners 
to complete the transition of responsibility to the Afghan government, 
and to consolidate security and stability in Afghanistan following the 
transition. For this reason, supporting European deployments to 
Afghanistan remains a European Command priority. This support includes 
assistance with predeployment training, equipment, personnel 
augmentation, and movement to and from Afghanistan. We also seek to 
sustain the expeditionary, counterinsurgency, and other important 
military capabilities that our allies and partners have built through 
years of deployment to Afghanistan, in many cases with equipment and 
training that the United States has provided. Our efforts to sustain 
these capabilities and maintain interoperability with U.S. forces will 
assist NATO in its commitment to an enduring partnership with 
Afghanistan, and will also help our allies and partners retain and 
refine the military capabilities called for in the NATO Strategic 
Concept, defining the path forward for the Alliance in the fast-moving 
and turbulent 21st century.

Israel
    As Israel is inside European Command's area of focus, we continue 
to support the United States' commitment to this longstanding and 
important partner through numerous bilateral military engagement 
events, increased interagency activities, robust exercises, and 
continuous senior military leader consultation. Israel's strategic 
location in the Levant, and our close working relationship with U.S. 
Central Command, enables European Command leaders and planners to 
remain regionally orientated and constantly updated on threats 
emanating from Hezbollah, Hamas, Iran, Syria, and other regional actors 
of concern. Additionally, the impact and pace of political change 
generated by the `Arab Spring' dynamic continues to increase the need 
for a careful watch of rapidly unfolding events. This political-
military environment remains volatile, and could erupt with little 
warning through instigation or miscalculation, posing serious security 
challenges to the region, the United States, and our allies and 
partners.
    European Command's security cooperation activities remain focused 
on strengthening our relationship with Israel and enhancing regional 
stability and security. Our recently revised and released 2012 Theater 
Strategy emphasizes that stability in the Levant remains one of our 
most pressing Command concerns and highest Command priorities. As 
mentioned earlier, we chair four bilateral, semi-annual conferences to 
address planning, logistics, exercises, and interoperability with 
Israel. We also conduct multiple headquarters and component-level 
security cooperation events annually, including eight major recurring 
exercises focused on cooperation, interoperability, and mutual 
understanding. This year, Austere Challenge 12 will provide a multi-
phased large-scale exercise opportunity to train key leaders and joint 
forces from U.S. European Command Headquarters, our U.S. Service 
components, the Israel Defense Forces General Staff, and Israel's 
Service components as we continue to build, maintain, and strengthen 
our unique partnership.

Turkey
    A NATO ally since 1952,Turkey continues to be a critical 
geopolitical contributor to U.S. national security objectives, 
particularly in its support of U.S. and coalition antiterrorism 
operations. Turkey is also an indispensable partner in addressing the 
increasingly complex challenges in the Levant and across the greater 
Middle East.
    Last year, as an important step in implementation of the European 
Phased Adaptive Approach to Missile Defense, the United States gained 
Turkey's approval to establish a Ballistic Missile Defense Early 
Warning Radar System (AN-TPY 2) in Kurecik, Turkey, as part of a NATO 
missile defense system. In another key theater initiative, the United 
States continues to provide Turkey with critical support in their 
ongoing fight against terrorism.
    Pursuing important interoperability goals with Turkey, European 
Command has acquired approval to provide secure communications for 
three Turkish AH-1W Super Cobra helicopters, enhancing Turkey's ability 
to contribute to mutual security interests, including counterterrorism, 
border security, Operation Enduring Freedom, and NATO and U.N. 
operations. Lastly, European Command's Joint Interagency Counter 
Trafficking Center (JICTC), an organization chartered to synchronize 
theater military support to activities that combat illicit 
transnational trafficking and terrorism, supports the U.S. Interagency 
and U.S. Embassy's strong collaborative efforts with Turkey to disrupt 
illicit trafficking through Turkey's historic crossroads linking Europe 
and Asia.

Bosnia and Herzegovina
    For over 16 years, the United States has made a substantial 
investment in Bosnia and Herzegovina. Recently, political difficulties 
and the country's delay in forming a central government until 15 months 
after the general elections illustrate that the long-term effect of our 
collective efforts and historic progress remain tenuous, requiring 
sustained vigilance and attention in order to keep regional stability 
on track. Unfortunately, 2011 did not see notable changes in either the 
political or defense reform processes, though these reforms are 
necessary for eventual membership into the European Union (EU) and 
NATO. The road to EU and NATO accession may also meet with resistance 
when some elements of the political elite realize that further Euro-
Atlantic integration will require enhancements in the rule of law and 
democratization. Continued U.S. and EU engagement is required to 
reinvigorate the reform process. Ultimately, this renewed focus, 
facilitating the Euro-Atlantic integration of Bosnia and Herzegovina, 
will cost far less than responding to renewed conflict years from now 
should reforms be allowed to stagnate or fail.
    In spite of these difficulties, Bosnia and Herzegovina has made 
contributions to the fight in Afghanistan, sending a troop rotation to 
support ISAF operations in Helmand Province and donating excess 
military equipment to support ANSFs. Bosnia and Herzegovina will also 
host and participate in European Command's first iteration of Exercise 
Shared Resilience this June, an international civil-military event 
including NATO members and Southeastern European countries focused on 
humanitarian assistance and disaster response.

Kosovo
    In Kosovo, ethnic tensions flared last summer and fall along the 
northern border with Serbia, demonstrating that the hard-earned peace 
and security achieved in this region over the past decade still remains 
fragile. These events serve to remind us that our commitment to 
sustaining the dialogue between parties and our national contributions 
to the NATO Kosovo Force (KFOR) remain important safeguards to Kosovo's 
security and stability. Currently, there are approximately 800 U.S. 
forces assigned to KFOR, only about 10 percent of the total NATO 
mission, a percentage that reveals the extensive commitment of our 
allies to this critical stability operation. European Command also 
maintains the U.S. National Intelligence Cell located in Pristina, 
Kosovo, providing mission-essential support to KFOR leadership.
    U.S. engagement in Kosovo remains focused on the objectives 
outlined in the NATO-endorsed Ahtisaari Plan, calling for development 
of Kosovo Security Force (KSF) capacity in specialized skill sets 
including Explosive Ordnance Disposal, hazardous material response, 
firefighting, search and rescue, and other supporting functions. The 
recent pairing of Iowa and Kosovo through the National Guard State 
Partnership Program will strengthen U.S. bilateral engagement with 
Kosovo Security Forces. U.S. military-to-military engagements also 
continue to focus on strengthening and professionalizing the Kosovo 
Security Force with a special emphasis on the noncommissioned officer 
corps. These initiatives are important transition and legacy objectives 
designed to develop a viable force able to provide security once the 
KFOR mission ultimately draws to a close.
      
    
    
      
Russia
    European Command continues to evolve in our military-to-military 
partnership role with Russia, and we actively continue to seek out 
zones of cooperation. This remains a complex and challenging 
assignment. The United States maintains an open and honest dialogue 
about all aspects of our relationship, including our disagreements. 
Over the past year, we have increased our military-to-military dialogue 
and activities, both bilaterally and within the NATO-Russia 
architecture, while at the same time reassuring our allies and other 
partners that this intensification does not come at their expense.
    With respect to military engagement, in September 2010, the 
Secretary of Defense signed a Memorandum of Understanding on Defense 
Cooperation to establish the Defense Relations Working Group (DRWG) 
under the Bilateral Presidential Commission. Dialogue has started 
within specific issues of mutual concern, including missile defense, 
human resources, education and training, defense technical cooperation, 
and regional and global security. Within the Military Cooperation 
Working Group, discussion has intensified between the Chairman of the 
Joint Chiefs of Staff and the Chief of the Russian General Staff on 
combating terrorism; Afghanistan/Pakistan; and other key regional and 
operational issues. In May 2011, the Chairman and Chief of the General 
Staff signed a Memorandum on Counter-terrorism Cooperation to outline 
mutual goals and activities for greater interaction in this area.
    European Command plays a key role in operationalizing this 
strategic guidance to shape our military-to-military cooperation with 
Russia. We lead the development of the annual bilateral Military 
Cooperation Work Plan with U.S. stakeholders, including the Joint 
Staff, U.S. Pacific Command, U.S. Strategic Command, U.S. Northern 
Command, the Services, select U.S. Defense Agencies, and their 
respective Russian counterparts. Despite continued disagreements at 
political levels over missile defense, the amount and scope of other 
cooperative activities continues to increase, in areas that include 
combating terrorism, counter-piracy, crisis response, and maritime 
operations. The number and quality of these bilateral events increased 
consistently in 2010 and 2011. We are coordinating for new and more 
substantive counterterrorism and peacekeeping exercises in 2012, and 
working with the Office of the Secretary of Defense and the Joint Staff 
to develop mechanisms for reciprocal logistics support and information 
exchanges to ensure the bilateral relationship develops in an equal, 
pragmatic, transparent, and mutually beneficial manner.
    Conducting counter-piracy operations off the Horn of Africa, 
Russian ships continue to patrol alongside NATO vessels and ships from 
the European Union, Gulf States, China, and India. While piracy 
challenges persist--by some estimates costing the shipping industry 
more than $9 billion a year \3\--Russian cooperation and coordination 
have been very helpful. We continue to work with Russia to improve 
these efforts. Cooperation between our navies is one of the most active 
areas in the bilateral Work Plan and continues to enable the overall 
effort.
---------------------------------------------------------------------------
    \3\ Nirmala George, ``Piracy Costs World Shipping Industry $9 
Billion a Year,'' Insurance Journal, October 4, 2011, http://
www.insurancejournal.com/news/international/2011/10/04/218532.htm.
---------------------------------------------------------------------------
      
    
    
      
    Outside the military-to-military framework, European Command seeks 
to support wider interagency initiatives to engage Russia in areas of 
mutual concern and potential benefit. We seek to build on previous 
experience, such as European Command's effort to assist Russia respond 
to its 2010 wildfires, ongoing U.S. Coast Guard cooperation with the 
Russian Border Service, and earlier engagement between the Iowa 
National Guard and Russia's Emergency Situation Ministry (within a 
bilateral Federal Emergency Management Agency-led framework), in order 
to pursue opportunities in areas such as disaster response and 
counternarcotics.
    In 2009, European Command authored a framework document to resume 
military-to-military cooperation with Russia, as mentioned, in an 
equal, pragmatic, transparent, and mutually beneficial manner. The 
framework not only addresses crisis response and consequence management 
operations, but also seeks to promote interaction and ensure mutual 
support in areas that include counterterrorism and counter-piracy 
operations; peacekeeping; missile, space, and ballistic missile 
defense; and search and rescue operations.
    This framework document, signed by the Chairman of the Joint Chiefs 
of Staff and the Russian Chief of Defense at the 2009 Presidential 
Summit in Moscow, has begun to rebuild a structure for our bilateral 
defense relationship that allows wide-ranging and candid engagement on 
all issues of concern. European Command continues to support this 
effort by leading the development of the annual military-to-military 
work plan, defining the events and activities that we aim to accomplish 
together over the next year. Again, while enhancing our bilateral 
military-to-military relationship with Russia, European Command will 
work with NATO and other partners to implement an integrated and 
inclusive security cooperation architecture beneficial to all 
participants that does not come at the expense of our allies and 
partners.

Poland
    Poland is a staunch supporter of U.S. strategic interests, theater 
operational initiatives, and NATO coalition operations, and serves as a 
critical leader of the newly acceded NATO nations. We welcome their 
engagement and deeply appreciate their expanded contributions to ISAF's 
mission in Afghanistan. In another area of critical importance, 
Poland's commitment to host regional ballistic missile defense assets 
is not only valuable to the United States; it contributes to our 
security relationships with other NATO allies and regional partners, 
and identifies Poland as a leader within the alliance. We remain 
committed to furthering this highly beneficial relationship and 
assisting Poland develop the capabilities and interoperability needed 
to continue supporting NATO and coalition operations.
    Building on this cooperation, European Command is proceeding with 
plans to establish a small aviation detachment in Poland to support 
rotational deployments of F-16 and C-130 units designed to strengthen 
interoperability between our air forces. In addition, U.S. support for 
the development of Poland's fourth generation (F-16) fighter capability 
and European Command's pre-deployment training for Polish brigades 
slated to deploy to Afghanistan continue to underpin and strengthen our 
military relationship. Finally, in fulfillment of the Declaration of 
Strategic Cooperation between our two nations, European Command 
continues to support PAC-3 Patriot battery rotations to Poland on a 
quarterly basis to familiarize Polish Armed Forces with the Patriot 
Missile System and enhance U.S.-Poland Air and Missile Defense 
cooperation. There have been eight rotations in 2010 and 2011 for 
training and exercise purposes. The final four rotations are scheduled 
this year. I am greatly encouraged by the promising partnership we have 
with this pivotal European nation, and expect that Poland will continue 
to make strong contributions to our shared security interests in the 
years ahead.

The Caucasus
    Georgia, Armenia, Azerbaijan, and the Caspian Sea present important 
strategic issues in our theater, including logistical access to 
Afghanistan, participation in coalition stability operations, 
hydrocarbon infrastructure security, and rising humanitarian concerns. 
The region also possesses a high degree of potential instability due to 
the unresolved Nagorno-Karabakh conflict between Armenia and 
Azerbaijan, and the Russia-Georgia clash over Abkhazia and South 
Ossetia. European Command's engagement with these nations seeks to 
promote security and stability in a sensitive region, promote maritime 
security cooperation in the Caspian, and improve partner nation 
interoperability with U.S. forces.

Georgia
    Georgia remains a dedicated and capable partner, maintaining a 
thriving military engagement program with the United States and 
providing robust ISAF support. The Georgian Government is committed to 
defense reform, seeks to inculcate a Western approach to civil-military 
relations, and is diligently working to achieve NATO standardization. 
Through this partnership, European Command buttresses U.S. policy 
supporting Georgian territorial integrity, and works to find peaceful 
resolutions to the frozen conflicts in Abkhazia and South Ossetia.

Armenia
    The United States continues to pursue a wide-ranging program of 
security engagement with the Republic of Armenia. Current emphasis is 
focused on defense reform, professional military education, 
international and NATO peacekeeping operations, expeditionary medical 
capabilities, and humanitarian de-mining as Armenia strives to become a 
security provider, rather than a security consumer, in the 
international community.

Azerbaijan
    The U.S. relationship with the Republic of Azerbaijan remains 
strong. Azerbaijan continues to support ISAF through the Northern 
Distribution Network's logistical air and ground corridors, and with 
fuel supplies and a troop contribution. Additionally, U.S.-Azerbaijani 
efforts continue to improve critical energy infrastructure protection, 
enhance maritime security, increase NATO interoperability, develop 
strategic defense reform, and work toward the goal of regional 
stability and security.

The Caspian
    The Caspian Sea is both an extension of the South Caucasus and a 
bridge to Central Asia. European Command continues its close 
cooperation with U.S. Central Command in order to coordinate security 
cooperation across the Caspian to develop regional capabilities and 
respond to maritime transnational threats. Maritime security 
cooperation helps our partners bolster their independence and 
contributes to regional stability.

Terrorism in Europe
    The threat of terrorist attack and the presence of both Sunni and 
Shia terrorist support networks within our area of focus remain 
serious, with several hundred kinetic terror attacks in the European 
Command's region last year, including the death of two U.S. airman at 
the Frankfurt airport in Germany. Although these attacks from multiple 
Europe-based extremists were not conducted by al Qaeda, Europe 
continues to represent an area of high interest for al Qaeda and its 
affiliated terrorist groups, seeking potential targets and especially 
for their use as a support base. Violent-minded extremists exploit the 
relatively permissive European legal environment to radicalize local 
populations and to seek material and financial support for jihadist 
efforts in Afghanistan, Iraq, and elsewhere.
    Radicalized fighters returning home to Europe from conflict zones 
pose a real threat given their experience, contacts, and ability to 
move across the continent. The threat these extremists pose, using 
Europe as a base or corridor for operations elsewhere in the world 
including the United States, cannot be discounted.
    Though al Qaeda and affiliated extremists possess significant 
ability to conduct mass casualty attacks against U.S. allied personnel 
and facilities in Europe, self-motivated terrorists with little or no 
guidance from any parent organization pose an additional unpredictable 
threat, as they remain largely unknown to European security services. 
The aforementioned attack last year, killing two U.S. airmen at the 
Frankfurt airport, highlights the unpredictable dangers that exist from 
extremist-inspired solitary terrorist assailants. As shown by the 
attacks in Norway last year--both in the devastating downtown bombing 
that killed eight and the horrific youth camp massacre that took the 
lives of 69 young people--uncoordinated acts of murderous terrorism 
across the continent may also proceed from other fanatical and 
inscrutable ideologies representative of the long history of terrorism 
in Europe, including nationalism, separatism, anarchism, and various 
kinds of political extremism.
    We are also seeing increased Iranian activity in Europe from the 
Qods Force, the external operational arm of Iran's Revolutionary Guard 
Corps. Similarly, we are seeing an increase in the capabilities of 
Lebanese Hizballah. Both of these elements operate against U.S. and 
allied interests.
    European countries continue to improve their counterterrorism 
capacity by strengthening counterterrorism legislation, expanding 
international counterterrorism cooperation, and successfully 
prosecuting and jailing terrorist actors. European Command's 
contribution to this evolving fight focuses on intelligence, 
information sharing, and support to our partners' capabilities. Current 
European Command information-sharing and coordination with the 
International Criminal Police Organization has assisted investigations 
in more than 80 countries to date. European Command also works with our 
European partners, the Intelligence Community, and our counterparts at 
U.S. Central Command and U.S. Northern Command to identify and counter 
threats to the United States and U.S. forces originating from Europe, 
Afghanistan, and Pakistan. These efforts help close the seams exploited 
by terrorist networks, strengthening the broad global counterterrorism 
dragnet that reduces the Homeland's vulnerability to terrorism 
emanating from Europe.

Illicit Trafficking
    Located at the historic crossroads of Europe, the Middle East and 
Asia, the European Command area of focus remains both a key global 
transit zone and destination for illicit trafficking in drugs, weapons, 
humans beings held against their will, and a host of other illicit 
commodities. The effects of globalization--expanded international 
trade, increased border porosity, and a widened potential for 
corruption among nascent governments--has created vulnerabilities which 
sophisticated criminal networks continue to exploit across the Black 
Sea, Caucasus, Balkans, and Eastern and Southern Europe. The proceeds 
from transnational illicit trafficking enable organized criminals, 
terrorists, and insurgents to evade law enforcement, conduct training 
and operations, penetrate legitimate economic structures, and challenge 
the authority of national governments. Drug trafficking through Europe 
has also had a significant impact on security in Afghanistan. A 2011 
U.N. estimate indicated that the Taliban made more than $150 million in 
2009 through the sale of opium.\4\ That same year, the U.N. estimated 
that 75-80 metric tons of Afghan heroin reached Central and Western 
Europe, while another 90 metric tons of Afghan heroin are estimated to 
have transited through Central Asia to Russia, compounding a growing 
heroin epidemic among the Russian people, particularly Russian youth.
---------------------------------------------------------------------------
    \4\ United Nations Office on Drugs and Crime (UNODC), World Drug 
Report 2011, http://www.unodc.org/documents/data-and-analysis/WDR2011/
World--Drug--Report--2011--ebook.pdf.
---------------------------------------------------------------------------
    While human and drug trafficking may not seem like purely military 
issues, their corrupting influence on governance and security 
structures, and their tragic human toll, elevate their relevance in the 
multi-faceted security arena of the 21st century. The U.S. Secretary of 
State has estimated that as many as 23 million people worldwide are 
victims of human trafficking, for despicable use in forced labor, 
prostitution, debt bondage as migrant laborers, involuntary domestic 
servitude, forced child labor, and as child soldiers. These tragic 
activities, along trafficking routes that run through Europe, make this 
dark side of globalization a signal security issue for European 
Command.
    Accordingly, European Command has realigned existing resources to 
stand up the Joint Interagency Counter-Trafficking Center (JICTC). 
JICTC is focused on counter-trafficking and counterterrorism, providing 
support to the U.S. Interagency and U.S. Country Teams in Europe, and 
establishing relationships with similar international organizations in 
Europe in order to disrupt and eliminate the intersecting networks that 
terrorists and organized criminals use to generate revenue, move 
illicit commodities, support operations, and destabilize partner 
nations and emerging governments across our theater.

Combating Weapons of Mass Destruction
    Weapons of Mass Destruction (WMD) in the hands of terrorists or a 
rogue state represent a grave threat to the United States and our 
allies. In the high-stakes fight to combat WMD, several factors 
intersect across the European Command area of focus: the bulk of the 
world's WMD reside here; European population centers and U.S. military 
installations present numerous targets for terrorist organizations; and 
European ports and terminals are the last line of defense for much of 
the commercial traffic that enters the U.S. port system. Fortunately, 
we have several close allies and partners who share these WMD concerns.
    Our goal is to leverage the capability of theater 
counterproliferation stakeholders and facilitate collaborative efforts 
to reduce the potential for successful WMD trafficking. In order to do 
this, we must continue to increase our preparedness through military-
to-military engagements, joint training events, and interagency 
interaction and partnering to strengthen our collective capabilities in 
this critical mission area.

Cyberspace
    Today, economies, information, communications, transportation, 
essential services, critical infrastructure,and governance all hinge on 
cyberspace. Governments, corporations, and organizations of all kinds 
are increasingly reliant on network security, information assurance, 
and cyber defenses to keep modern society functioning. Meanwhile, 
hackers, spies, and terrorists can reach through cyberspace to conduct 
damaging, even devastating, attacks. Modern militaries continue to view 
cyberspace as an increasingly inviting and effective battleground for 
21st century conflict. Indeed, a glimpse of this future was seen in our 
own theater, during cyber attacks occurring in Estonia in 2007 and 
Georgia in 2008.
    While the costs of cyber defense for governments, militaries, and 
other organizations are high, the risks and potential loss of critical 
national, military, and proprietary information are alarmingly higher. 
There is a clear and compelling need for greater cooperation among 
governments, militaries, and the private sector to protect critical 
networks and national infrastructures from cyber-related threats. 
Recognizing this challenge, European Command views cyberspace as a 
tremendous opportunity for theater outreach to engage, learn, and forge 
our cyber defenses stronger together. Recently, the United States 
became a full member in the NATO Cooperative Cyber Defense Center of 
Excellence, located in Tallinn, Estonia. Its focus on collaboratively 
building NATO members' cyber defenses stronger together is a 
tremendously positive step in the right direction. European Command has 
also included cyber defense as a priority area for our military-to-
military engagements. These engagements include focus areas that 
examine cyber defense capabilities, capacity required to build and 
sustain a cyber defense program, and the development of a capable cyber 
defense workforce. To date, 37 European Command country cooperation 
plans support these cyber-focused objectives.

Arctic
    Climate change in the Arctic makes it one of the world's most 
rapidly changing environments. As the volume of Arctic sea ice 
decreases, access continues to increase permitting maritime traffic 
into areas previously impassable without specialized vessels. This new 
access is creating opportunities for transit, development, and natural 
resource extraction. While some see these changes as a potential 
breeding ground for conflict, we see the risk of armed conflict as low, 
and continue to approach the Arctic as an area of cooperation among 
Arctic nations.
    Though significant cooperation exists among Arctic nations, 
continued cooperation should be based on a clear legal framework for 
determining the status of each nation's claims. To this end, I continue 
to support U.S. accession to the Law of the Sea Convention. The 
Convention provides access to a procedure that maximizes legal 
certainty and international recognition of the continental shelf beyond 
200 miles from shore. Establishing a clear, internationally recognized, 
continental shelf will enhance Arctic regional security and promote 
development.
    European Command continues to work multilaterally with Arctic 
partners to build a comprehensive and sustainable approach that 
benefits all stakeholders, and pursues mutual interests in safe 
navigation, scientific exploration, and environmental protection. In 
one example of our support to these efforts, European Command co-hosted 
with Norway the first Arctic Roundtable,a forum for Arctic nations' 
militaries to discuss cooperative solutions to shared challenges, 
enhancing the Arctic dialogue and increasing mutual trust and 
confidence. We are working with Norway to build upon this success with 
the 2012 Arctic Roundtable. We are also encouraged by the work done 
with the international search and rescue agreement and the 
international oil spill response initiative. As we look to the future, 
we must balance fiscal constraints with the need to provide safety and 
sustained access to this important region. As the Arctic continues to 
change, it is important that we plan and resource the necessary 
capabilities to meet our strategic interests there, ensuring our 
readiness to operate in the Arctic in the years ahead.

Energy Security
    Reliable access to affordable energy remains a core issue for 
countries across the European Command Theater, whether they are energy 
exporters, importers, or transit states. Dependence on natural gas from 
Russia will continue for many of our European partners, especially in 
light of its continued substitution for coal in electricity generation 
and questions regarding the future of nuclear power in Europe raised by 
the Fukushima nuclear incident. We continue to monitor changes to the 
energy status quo in Europe, including the large-scale development of 
shale gas and the increased utilization of liquefied natural gas.
      
    
    
      
    In this area, European Command recognizes its role is a supporting 
one. We are working with our interagency partners, regional allies, and 
the private sector to explore whole-of-government solutions. Through 
our J9 Interagency Partnering Directorate, which includes experts from 
the Departments of Energy and State, we are assisting efforts to 
identify and protect critical energy infrastructure. Additionally, we 
have lent support to the nascent Energy Security Center in Lithuania, 
focused on operational energy security issues with potential NATO 
applicability. We are also working with our adjacent geographic 
combatant commands to address energy issues that transect theater 
seams, including North Africa and the Caspian Sea. Finally, in energy 
security areas with clear military utility, such as installations and 
deployed forces, we are exploring energy security as a topic for joint 
concept development focused on energy access and protection.
    When it comes to energy, European Command supports conservation, 
fiscal stewardship, energy source diversification, as well as the 
potentially game-changing transition to renewable and sustainable 
energy options. By examining our own energy dependencies and working 
with partners to address the strategic energy environment, European 
Command can maximize our freedom of action and mitigate our dependence 
on access to energy resources in the years ahead.

                              INITIATIVES

    Effective and efficient pursuit of U.S., allied, and partner 
interests, particularly in a fiscally constrained environment, 
ultimately depends on our ability to innovate, steward resources, and 
find new and better ways of achieving our objectives.
      
    
    
      
Efficiencies
    For well over 2 years now, European Command has been streamlining 
operations to build a leaner, more efficient, and more effective 
organization in support of the Secretary of Defense Efficiencies 
Initiative and the current fiscal environment. As we continue to adjust 
our organization, we are learning to function with more than 200 fewer 
billets in the management headquarters and nearly 150 fewer billets in 
our intelligence directorate. Seeking even greater efficiencies, 
European Command Headquarters has bundled together similar contracts to 
save on overhead costs, and has implemented Contract Management Boards 
to review all manpower contracts for possible in-sourcing or reduction. 
Additionally, we hold Manpower Governance Boards to validate authorized 
billets, and have willingly accepted greater risk in our Program 
Objective Memorandum in order to fund our most important missions and 
functions.
    At European Command Headquarters, we have executed an internal 
staff rebalance that has incurred no new growth and achieved a 15 
percent decrease in manning and budget, while increasing emphasis and 
focusing expertise on emerging 21st century mission sets, including 
ballistic missile defense, military partnering, counter-trafficking, 
and cyberspace. Finally, in an effort to measure and evaluate our 
performance, a refocused J7 directorate provides independent 
assessments and analyses of European Command activities and operations. 
We recognize the difficulties of the current fiscal environment, and 
are taking a number of steps to inculcate a culture of cost 
consciousness in everything we do. At the same time, it is important 
that we proceed with caution and a balanced approach in order to 
identify risks, assess alternatives, and meet our fundamental 
responsibilities to our mission and our people.

NATO Operations & Engagement
    In addition to the outstanding support provided by our Service 
Component Commands, European Command has also participated in several 
key NATO initiatives. The Libyan operation demonstrated, once again, 
the vital importance of maintaining secure communications among NATO 
members. European Command's aggressive expansion of the U.S. 
Battlefield Information Collection and Exploitation System (BICES) 
network proved absolutely essential to the execution of effective 
targeting, intelligence sharing, and air tasking operations during 
Operation Unified Protector. European Command also deployed Global 
Broadcast System (GBS) suites to provide full-motion video 
intelligence, surveillance, and reconnaissance collection and 
dissemination capabilities to NATO command elements.
    Supporting NATO's continued transformation and evolving 
capabilities, European Command also contributed to U.S. accession as a 
fully participating member in three NATO Centers of Excellence: the 
Counter Improvised Explosive Devices Center of Excellence; the Joint 
Chemical, Biological, Radiological and Nuclear Defense Center of 
Excellence; and the Cooperative Cyber Defense Center of Excellence. 
Through the collaborative efforts of these vital centers and their 
initiatives, the U.S. shares important skills, lessons, and subject 
matter expertise with our NATO allies to meet the emerging and evolving 
threats of the 21st century, help prepare them for deployment and 
participation in NATO exercises, and develop common defense doctrine 
and standards enhancing overall Alliance capabilities and 
interoperability. In turn, our Nation gains access to these centers, 
increasing our insight, synergy, and effectiveness through education, 
interaction, research, and concept development with our allies.

European Ballistic Missile Defense
    Adversarial regimes continue to procure illicit ballistic missile 
technology, develop increasingly sophisticated missiles, and refine 
their abilities to employ these weapons against our forces, families, 
allies, and partners in Europe. Accordingly, European Command continues 
to plan and implement, in concert with our allies and partners, the 
European Phased Adaptive Approach (EPAA) to Missile Defense. Together 
with the Department of State, Department of Defense, Missile Defense 
Agency, and others, European Command is actively implementing the 
President's direction to defend Europe and America against the threat 
of ballistic missile attack.
      
    
    
      
    Last spring, USS Monterey became the first ballistic missile 
defense ship to deploy to theater as part of EPAA. Additionally, in 
September 2011, Turkey announced it will host an AN/ TPY-2 missile 
defense land-based radar installation in Kurecik, Turkey, which is now 
operational. Taken together, these actions have achieved EPAA Phase 
One. Additionally, last October, to solidify EPAA Phase One 
capabilities, Spain agreed to base four U.S. Navy Aegis ballistic 
missile defense ships at Naval Station Rota. Also last fall, in support 
of EPAA Phase Two, the U.S. successfully concluded an agreement with 
Romania to host an Aegis Ashore facility, which will be operational by 
2015. Currently, European Command is working closely with the Polish 
Ministry of Defense to implement the U.S.-Poland Ballistic Missile 
Defense Agreement in support of important EPAA Phase Three 
capabilities.
    At the November 2010 Lisbon Summit, NATO declared its commitment to 
develop a missile defense capability for the protection of NATO's 
European populations, territory, and forces. Supporting that effort, 
European Command has already fielded workstations employing the NATO-
compatible U.S. BICES network throughout our headquarters and our 
Service Components' headquarters in order to provide a communication 
system able to support NATO's ballistic missile defense mission. This 
spring, European Command will add U.S. ships to the U.S. BICES 
architecture, further integrating our theater sensors, shooters, and 
platforms. There has also been a remarkable increase in the willingness 
of NATO nations to support the NATO ballistic missile defense mission 
through national contributions, such as protection (i.e. ``riding 
shotgun'') for Aegis Missile Defense platforms. European governments, 
including Spain, the United Kingdom, Germany, The Netherlands, Denmark, 
Italy, and France are examining ways to procure capabilities in order 
to complement EPAA and support this NATO mission.
      
    
    
      
    
    
      
Joint Interagency Counter Trafficking Center
    As mentioned, European Command's response to the rising threat 
posed by global illicit trafficking is the JICTC. JICTC's mission is to 
support U.S. Interagency and Country Team efforts and collaborate with 
similar international organizations to effectively and efficiently 
counter transnational illicit trafficking and terrorism across our 
theater. JICTC's focus areas include narcotics trafficking, terrorism, 
weapons trafficking (to include weapons of mass destruction), 
trafficking in persons, and illicit finance. JICTC's aim is to assist 
our partner nations develop and refine their counter-trafficking and 
counterterrorism skills, competencies, and capacity in order to keep 
these threats as far as possible from American shores. This year, JICTC 
outreach includes primary engagement with Turkey, as well as outreach 
to other nations in Southeastern Europe and the Black Sea region.
      
    
    
      
    Embracing a whole-of-government design, JICTC is maturing steadily 
as a robust interagency team that includes representatives from the 
Departments of State, Treasury, and Energy; Customs and Border 
Protection; the Federal Bureau of Investigation; Immigrations and 
Customs Enforcement; and the Drug Enforcement Administration. JICTC's 
work--in conjunction with our interagency partners and the other 
combatant commands, including U.S. Africa Command, U.S. Central 
Command, and U.S. Special Operations Command--helps to close the seams 
that traffickers exploit, and to synchronize Department of Defense 
support to U.S. interagency and regional actions supporting the 
National Strategy for Counterterrorism and the Strategy to Combat 
Transnational Organized Crime. With the support of our interagency and 
international partners, JICTC is poised to bring all elements of 
national power--diplomatic, informational, military, and economic--to 
bear in the fight against transnational organized crime and terrorism.

Organizing in Cyberspace
    Recognizing the rising threats and vulnerabilities present in 
cyberspace, European Command has established a Joint Cyber Center (JCC) 
as the headquarters organization chartered to organize, coordinate, 
integrate, and direct cyberspace activities in, through, and across the 
European Command. Initially formed in January 2011 for experimentation 
during Exercise Austere Challenge 11, this compelling concept, sourced 
internally from existing headquarters personnel, continues to mature, 
providing important insights on how to conduct command and control in 
the cyber domain.
      
    
    
      
    Organizationally, the JCC Director serves as the subject matter 
expert and principal advisor to the combatant commander to address the 
full spectrum of cyberspace operations, and integrate cyber effects 
with actions in the conventional warfighting domains. The JCC and staff 
are also actively engaged with our partner nations to strengthen our 
collective Information Assurance and Cyber Defense postures. To that 
end, European Command is the Executive Agent for five Departmental 
Information Assurance and Cyber Defense Information Sharing Agreements 
critical to supporting the Department of Defense Strategy for Operating 
in Cyberspace. These agreements allow us to work closely with our 
allies and partners to share information and build the relationships 
necessary to provide for our collective cyber defense.
    Additionally, European Command is involved in numerous NATO and 
U.S. cyber-based exercises with the Interagency, Services, and other 
combatant commands--to include the new and urgently needed U.S. Cyber 
Command--in order to coordinate, synchronize and integrate cyber 
activities with ongoing military activities. Working together, we are 
developing coordinated contingency plans, supporting execution orders, 
and building strong cooperative relationships across the defense 
enterprise to provide a solid foundation for operations and progress in 
cyberspace. We also continue to work with the Department of State to 
issue demarches that restrict adversarial use of cyberspace in Europe. 
In short, we are moving in the right direction. We need to keep moving 
in this direction and pick up speed in order to prevail in what is 
rapidly becoming a primary battlefield of the 21st century.

          ``Our Nation sits at a crucial moment, where cyber attacks 
        are common but have not yet significantly impacted or 
        endangered the American way of life. We have the opportunity to 
        improve prevention and response to cybersecurity threats, but 
        we must take action now.''--Congressman James R. Langevin (D-
        RI), House Armed Services Committee

Interagency Coordination
    At European Command, we believe that `no one of us is as smart as 
all of us, thinking and working together.' Nowhere is that maxim more 
applicable than in the realm of interagency coordination, particularly 
in an environment of constrained resources. The diversity and 
complexity of the modern security environment exceeds the capacity of 
any single government organization. It demands `whole-of-government' 
solutions that draw strength and effectiveness from the collective 
judgment, training, and experience of the many dedicated public 
servants in government who, working together, can effectively 
synchronize the elements of national power. To that end, our 
Interagency Partnering Directorate continues to tap the strength of the 
U.S. interagency through in-house experts and outreach efforts that 
synchronize our efforts across the U.S. Government, partner nation 
governments, international and nongovernmental organizations, the 
private sector, think tanks, and academia.
    We believe strongly in the value--and the efficiencies--that exist 
in these `whole-of-government' and `whole-of-society' solutions, if 
only we have the ability and patience to seek them out and put them 
into practice. To that end, European Command benefits tremendously from 
our Civilian Deputy to the Commander position, occupied by career 
Foreign Service Officer, Ambassador Larry Butler. His diplomatic 
credentials and savvy are indispensable to theater operations. 
Additionally, our Interagency Partnering Directorate adds the knowledge 
and capabilities of several interagency experts from the Departments of 
State, Justice, Energy, and Treasury; the Federal Bureau of 
Investigation; Immigration and Customs Enforcement; Customs and Border 
Protection; the Drug Enforcement Administration; U.S. Agency for 
International Development; Office of Foreign Disaster Assistance; and 
the Justice Department's International Criminal Investigative Training 
Assistance Program. These outstanding professionals each bring a vital 
depth and breadth to our Command, its operations, and our outreach 
across the continent that is adding tremendous value to our mission, 
effectiveness, and ability to speak and act across a multitude of 
organizational cultures.
    In addition, over the last 2 years, we have partnered with the U.S. 
Interagency and with international and nongovernmental organizations--
from the Department of State to the U.N. Office for the Coordination of 
Humanitarian Affairs to volunteer technical communities--to explore 
continuing innovations in cloud computing and real-time information 
sharing. Through these efforts and partnerships, European Command seeks 
to leverage crowd-sourcing, crisis mapping, social media, and other 
unclassified information sharing venues to establish situational 
awareness and share critical information quickly during natural 
disasters, humanitarian assistance efforts, and other response 
activities. So far, this unparalleled outreach has achieved measurable 
success in crisis collaboration and communication. It is paving the way 
in an exciting and groundbreaking area that will significantly enhance 
our effectiveness and capacity in future operations.

Public-Private Cooperation
    European Command continues to leverage expertise found in the 
private sector to find greater efficiencies, achieve important theater 
objectives, and support priority NATO efforts. One initiative is 
European Command's partnership with the Business Executives for 
National Security (BENS), a group of volunteer business executives with 
an interest in national security, who travel to theater at their own 
expense to understand and offer ideas about the complex challenges of 
the 21st century security environment. Last year, BENS provided 
concrete recommendations on strengthening cyber security in the 
Baltics, one of the best public-private exchanges I've seen in a 
decade. On another important front, BENS is examining how to work with 
European Command and the U.S. Embassies in Ukraine and Moldova to 
address the growing problem of illicit trafficking in and through those 
countries.
    Supporting the partners who fight side-by-side with us in 
Afghanistan, European Command has teamed up with `Project Hope,' 
sending some of the foremost experts in traumatic brain injury to the 
Baltics to work with our allies there and improve assistance programs 
for returning veterans injured in combat. European Command also 
continues to support the State Department's ``New Silk Road'' 
initiative, seeking to promote and broaden economic development 
opportunities across Afghanistan in support of vital NATO objectives 
and the U.S. transition strategy.
    We are working with the U.S. Agency for International Development 
to develop and strengthen humanitarian programs designed to enhance and 
sustain U.S. engagement in the Balkans which are, as mentioned, 
increasingly important today. Finally, in an initiative European 
Command spearheaded with the Chairman of the Joint Chiefs and Under 
Secretary of Defense for Policy, the Defense Business Board plans to 
examine current departmental public-private collaboration with the goal 
of focusing these activities into a genuine `whole-of-society' effort, 
continuing progress toward a more efficient, effective, and fiscally 
responsible Department of Defense.

Innovation
    Increasingly, the key to unlocking greater productivity and 
efficiency lies in innovation. European Command continues to advance 
innovative ideas, concepts, and technologies to further our mission, 
support our partners, and improve our own capabilities and capacity. 
Innovation collaboration is a two-way street, requiring outreach and 
reciprocation with our international, interagency, and public-private 
partners. Since standing up an Innovation Cell 2 years ago, a culture 
of innovation and creativity has become engrained across the Command.
    Our Science and Technology Office has initiated numerous Joint 
Capability Technology Demonstrations to speed the learning cycle in 
support of cyberspace, environment sensing, force protection, 
consequence management and counter trafficking initiatives. Our 
Intelligence directorate has launched efforts using complex modeling to 
better understand today's dynamic and adaptive strategic and 
operational environments. Evaluating theater throughput, we are looking 
at innovative ways to build smarter logistics and improve the 
logistical capacity of our allies and partners. Our Public Affairs 
directorate has taken the lead in incorporating rapidly expanding 
social media technologies to help us understand, incorporate, and 
operate in the world of Facebook and Twitter. Numerous other 
innovations are being explored across the enterprise.
    None of these ideas would be possible without our ability to 
engage, exchange, and cross-pollinate innovative ideas with our 
international, governmental and private partners. Ideas emerge and grow 
from connection and collaboration, and are improved and strengthened 
when they are combined in creative and surprising ways. We will 
continue to foster a robust and inclusive culture of innovation at 
European Command that relies on our ability to share and test ideas 
across the public and private spectrum. We know that future 
efficiencies and success will increasingly rely on new ideas and 
innovations. European Command stands ready to contribute to that 
national endeavor.

             POSTURE: FORCES, FOOTPRINT, AND RELATIONSHIPS

    European Command's posture is comprised of three interdependent 
elements--forces, footprint, and relationships--supporting the military 
operations, international military engagement, and interagency 
partnering that enhance transatlantic security and provide for the 
forward defense of the United States. Our posture facilitates U.S. 
global operations, assures allies and partners, deters aggression, 
maintains strategic access, enhances partnerships, and sustains our 
allies' and partners' capabilities and capacity to achieve shared 
security objectives.

Forces
    Forward-stationed active duty servicemembers, forward-deployed 
rotational units, and Reserve Forces in European Command remain our 
primary tool for maintaining U.S. influence across the theater and--
when called upon--projecting power within and beyond it. These forces 
are a visible and incontestable manifestation of U.S. commitment to the 
region. They provide for frequent engagement at all levels, build 
habitual relationships and trust, ensure interoperability with our 
allies and partners, and help facilitate transformation within European 
militaries. They assure access when and where it is needed, fulfill our 
NATO alliance commitments, including our Article V commitment, and 
preserve U.S. leadership in NATO.
    There are approximately 78,000 active duty military forces within 
the European Theater. Of these, approximately 68,000 personnel are 
assigned to European Command and its Service components. It is 
important to note that over 10,000 forces in Europe are assigned 
outside European Command, to other DOD organizations and U.S. 
Government activities in theater, a testament to the important role 
European Command plays in supporting NATO, other U.S. combatant 
commands, and agencies across our theater.

Footprint
    The nation relies on a network of Main Operating Bases, Forward 
Operating Sites, and Cooperative Security Locations located inside the 
European Command area of focus that provide superb training and power 
projection facilities supporting coalition operations and contingency 
missions in Europe, Africa, Asia, and the Middle East. In addition to 
meeting our mission, this mature, well-established, and highly capable 
network supports and enables the activities of U.S. Transportation 
Command, U.S. Central Command, U.S. Africa Command, U.S. Strategic 
Command, U.S. Southern Command, and NATO. This basing network, 
providing unparalleled proximity and access to three continents, stands 
ready to support U.S. and NATO contingency operations on very short 
notice. Indeed, we witnessed last year how rapidly the installations 
along the Mediterranean--Moron Air Base, Spain; Aviano Air Base, Italy; 
Naval Air Station Sigonella, Italy; and Naval Support Activity Souda 
Bay, Greece--were able to provide critical basing and logistical 
support to support NATO operations over Libya.
    Thanks to strong and continued Congressional support, previous 
annual military construction authorizations and appropriations have 
enabled European Command to address a balanced mix of our most pressing 
mission, mission support, quality of life, and housing requirements. 
The goal of our fiscal year 2013 military construction program is to 
support our posture initiatives, consolidation efforts, and 
infrastructure recapitalization projects, including the Medical 
Facility Consolidation and Recapitalization Project at the Rhine 
Ordnance Barracks, Germany.
    The Rhine Ordnance Barracks Medical Center Replacement project is 
one of European Command's highest priority military constructions 
projects, providing for the consolidation of duplicative medical 
facilities in the Kaiserslautern Military Community (adjacent to 
Ramstein Air Base), and providing a vitally important replacement for 
the aged and failing infrastructure at the Landstuhl Regional Medical 
Center (LRMC). LRMC, a strategic national asset for nearly 60 years--
which has saved the lives of thousands of U.S. warfighters, driven the 
U.S. combat fatality rate to historic lows over the past 10 years of 
conflict, and provided outstanding medical care to our overseas 
servicemembers and their families--is reaching the end of its service 
life. LRMC's accelerating structural failure and our enduring need to 
preserve a critical surge-capable overseas medical platform, able to 
support current and future U.S. combat operations at this medically 
significant half-way point between the United States and conflict areas 
spanning half the globe, reinforce the need for this project. 
Importantly, the National Defense Authorization Act for Fiscal Year 
2012 and fiscal year 2012 appropriation provided essential 
authorization and funding to continue this vital project's forward 
progress. Sustained congressional support in fiscal year 2013 and 
beyond is necessary to meet this pressing requirement.
      
    
    
      
    At enduring theater locations, we will preserve past investments 
through the responsible use of both the Sustainment, Restoration, and 
Modernization program and the military construction program, even as we 
continue our long-term and highly successful efforts to reduce overall 
facility inventory. It is important to note that, over the past 22 
years, European Command has reduced inventory by approximately 75 
percent. Over the past 8 years, we have closed or consolidated over 200 
sites of various sizes across the theater. Our remaining footprint is 
primarily comprised of approximately 25 major bases with supporting 
smaller sites.
    At other locations, we are optimizing the use of all available 
resources to ensure that these installations remain mission effective 
until they are removed from the inventory. Additional efforts to reduce 
inventory will be driven by future strategic force structure decisions. 
Though, in some cases, continued reductions and consolidations in the 
pursuit of increased efficiencies may require additional military 
construction in order to succeed.
    As always, when it comes to military construction, we will continue 
to leverage NATO common funded investments and, where required, 
prefinance our projects to reserve a future opportunity to recapture 
part of this investment through the NATO Security Investment Program.
    When it comes to our overseas footprint, European Command will 
continue to review requirements across our mission, quality of life, 
and agency portfolios in order to work towards joint solutions and 
achieve infrastructure efficiencies, particularly as Departmental 
leadership, in accordance with the new strategic guidance, considers 
the appropriate size and composition of U.S. forces in Europe. As we 
continue these consolidation and recapitalization efforts, we will 
convey our requirements in our Theater Posture Plan and military 
construction requests.
      
    
    
      
Relationships
    Our experience in operating as part of multinational coalitions has 
demonstrated the importance of developing and sustaining long-term 
relationships with our allies and partners. These relationships are 
critical to maintaining the theater access and freedom of movement we 
both need and rely upon in crises. These relationships also build the 
trust essential for us to work and train together, develop needed 
capabilities and interoperability, and build the willingness among our 
partners to contribute to regional security and out-of-area operations.
    We recognize that today's fiscal environment requires difficult 
decisions regarding overseas force structure. In order to achieve 
efficiencies and cost savings, European Command continuously evaluates 
opportunities for recapitalization, consolidation, or closure of 
facilities, balanced with the need to preserve the appropriate level of 
current and planned mission support for our command as well as the 
other U.S. combatant commanders, Services, agencies, and activities 
that we support. Uncoordinated or expedited posture reductions risk 
permanent loss of access with important host nations. Once 
relinquished, access is often fiscally and politically prohibitive to 
reestablish, or the terms are less advantageous to the United States. 
Our ongoing planning efforts seek to find the right balance between 
strategic access, operational effectiveness, fiscal efficiency, and 
diplomatic consistency.

Initiatives
    Currently, European Command is implementing a number of critical 
posture initiatives to accomplish our mission, strengthen 
interoperability with our strategic partners, support our Service 
components and other U.S. combatant commands, and achieve basing 
efficiencies. Those initiatives include:

    Stationing four U.S. Navy Aegis Ballistic Missile Defense 
        destroyers in Rota, Spain
    This effort directly supports the President's European Phased 
Adaptive Approach (EPAA) to Missile Defense. EPAA outlines the phased 
implementation of U.S. contributions to an allied missile defense 
capability for Europe that protects U.S. forces stationed in Europe, 
our allies and partners, and the U.S. Homeland. In terms of this 
mission, forward-based forces provide considerable efficiency when 
compared to the force generation required to meet the same requirement 
with rotational U.S. forces. The Navy estimates that it would take 20 
ships based in the United States to supply the presence provided by 
these 4 forward-deployed ships.
    Establishing a small aviation detachment in Poland
    As mentioned earlier, this detachment is designed to support a 
periodic rotational aircraft presence to strengthen interoperability 
between the U.S. and Polish air forces. The first detachment is 
scheduled to arrive in early 2013 for a 2-week rotation.
    Continuing Army consolidation actions in theater
    First, the U.S. Army's V Corps relocated to Wiesbaden following the 
departure of 1st Armored Division Headquarters, which moved to Fort 
Bliss, TX. Second, U.S. Army Europe Headquarters will begin its move to 
Wiesbaden later this year. Third, scheduled in the near future, the 
Army will move the majority of the 173rd Airborne Brigade Combat Team 
to Vincenza, Italy.
    Multi-modal logistical support to U.S.Transportation Command
    Also as mentioned, European Command is supporting U.S. 
Transportation Command's requirement to develop and enhance its multi-
modal distribution capabilities available at MK Airbase in Romania, an 
important capacity initiative for ongoing theater and global logistical 
missions.

Strategic Presence
    U.S. posture in Europe provides a deterrent effect against would-be 
adversaries or aggressors reluctant to face forward-based U.S. forces 
or withstand a U.S.-supported coalition response. That deterrent 
effect, in proximity to some of the world's most dangerous places 
including the Levant, Africa, and the Middle East, is contingent on 
U.S. forces retaining our decisive edge in combat capabilities, agility 
and flexibility in providing rapid crisis response, and physical 
presence as a constant reminder of the costs of aggression and 
miscalculation. A credible combination of forward-based and rotational 
forces, in proximity to these hot spots, is essential to maintaining 
deterrence against future aggressors, preserving stability, and 
reassuring our allies and partners. U.S. posture in Europe is also 
important because it provides irreplaceable basing and other support to 
global U.S. operations, helps to sustain critical partnerships and 
partner capabilities, demonstrates U.S. leadership in NATO, and 
reaffirms our Nation's strong and enduring commitment to the NATO 
Alliance.

                      OUR MOST IMPORTANT RESOURCE

    None of these activities would be possible without the 
extraordinary people that make up U.S. European Command and NATO Allied 
Command Operations. We are committed to providing the best possible 
support to these brave and dedicated men and women, and their families. 
We are devoted to sustaining their readiness, health, and quality of 
life support.

Deployment, Behavioral Health, and Compassionate Fatigue and Family 
        Support
    While maintaining our focus on mission readiness, we must also seek 
avenues to respond to the significant stress placed on our forces and 
families due to protracted combat operations and cyclical deployments. 
Several organizations and studies within the Department of Defense have 
identified an urgent need for sustained behavioral health services to 
support our warriors and families, especially in an overseas 
environment with few private sector options. Within adaptive and 
flexible care systems, the members of our All-Volunteer Force and their 
families must continue receiving quality care and responsive support in 
a stigma-free environment. A system-wide, recurring 360-degree review 
of these programs, focused on the connection between at-risk indicators 
and catalysts, is needed to eliminate gaps in support. The goal is 
alignment of focused caregiver teams with corresponding data to provide 
needed care in a timely and responsive manner.We will continue our work 
with the Office of the Secretary of Defense on a working definition for 
resilience, and determine initial measures for baseline assessments to 
address at-risk indicators and servicemember needs. Additionally, we 
have partnered with the First Family's Initiative to `Join Forces,' and 
are implementing elements of that campaign within the European Command 
enterprise. We continue to support ongoing efforts to improve complex 
care management and the medical portion of the disability evaluation 
process, which will result in improvement of wounded, ill, and injured 
warrior benefits.

Investment in Our Schools
    We are pleased that the Department of Defense Education Activity 
(DODEA) continues to make needed investments in DODEA's overseas school 
infrastructure. Many of our schools are converted 1950s-era barracks. 
These investments directly support the children of our service men and 
women, who will benefit tremendously from this investment. At the end 
of this 7-year program, all failed or failing infrastructure will be 
recapitalized, providing concrete proof of our promised commitment to 
take care of the military families who also serve, and have made many 
sacrifices in recent years. Additionally, we will continue to address 
and pursue improvements to our military family housing and barracks in 
the 2013 military construction program to improve living conditions for 
our servicemembers and their families.
      
    
    
      
Sustaining Quality of Life
    Potential changes to overseas force structure require a renewed 
effort to ensure the appropriate balance between force levels and 
quality of life support. European Command is closely examining how to 
increase effectiveness and efficiency in applying regionally 
distributed service support, through a hub and spoke model, from our 
main operating bases to those locations experiencing change. 
Increasingly, our smaller force locations require a fresh look at 
scalable facilities and contracts, increased reliance on host nation 
support, and greater public-private cooperation. These geographically 
separated units require tailored support standards that are palatable 
to service providers, within appropriate guidelines. We must ensure the 
availability of mainstay support functions--health care, education, 
child care, morale, post office, and internet access--prior to making 
assignments to these remote locations. We are also cognizant of the 
need to ensure safe, accompanied tour parity with our partner nations 
in locations that support and enhance our theater objectives.

                    NATO & ALLIED COMMAND OPERATIONS
      
    
    
      
NATO: An Active Alliance
    As an anchor of transatlantic security for more than 60 years, the 
NATO alliance remains essential to the security of the United States 
and its allies, ensuring peace and stability throughout Europe, and 
countering threats across the globe. Although much has changed since 
its founding in 1949, the Alliance remains an essential and unique 
source of stability in an unpredictable geopolitical environment. NATO 
members now confront a far broader spectrum of security challenges than 
in the past. Threats such as the proliferation of weapons of mass 
destruction (WMD) and ballistic missile technologies, cyber attacks, 
and terrorism know no borders. NATO has also found itself called upon 
to help protect civilian populations from government repression. NATO 
today leads seven major operations and missions--up from almost none in 
the early 1990s--including NATO's largest mission ever in Afghanistan 
and last year's highly successful Operation Unified Protector. During 
that same period, NATO has cut personnel assigned to its operational 
headquarters by 67 percent, while expanding its partnerships. NATO's 
2010 New Strategic Concept entitled, ``Active Engagement, Modern 
Defense,'' provides a 10-year roadmap that reconfirms the allies' 
commitment to defend one another against attack, as the bedrock 
foundation of Euro-Atlantic security, and lays out a vision for an 
evolving and increasingly agile, capable, and effective Alliance ready 
to defend its members against the threats of the 21st century.

Strategic Concept and Command Structure Reform
    The Strategic Concept announced at the 2010 Lisbon Summit reaffirms 
the fundamental purpose of NATO and defines three core Alliance tasks: 
collective defense; security through crisis management; and cooperative 
security through partnership. In June 2011, NATO Defense Ministers 
received a detailed review of capabilities, and approved a set of 
concrete reforms in support of the new Strategic Concept and the 2010 
Lisbon Summit Declaration. These reforms will make NATO leaner,more 
flexible,and more cost effective, sustain the current level of 
operational ambition, and enable command and control for two major 
joint operations and six smaller joint operations. The new military 
command structure will have fewer headquarters organized under two 
Strategic Commands, (Operations and Transformation), and will include 
two deployable Joint Force Headquarters. Additionally, the U.S.-led 
NATO organization, STRIKEFORNATO (led by a dual-hatted commander also 
responsible for the U.S. 6th Fleet and Naval Forces Europe/Africa), is 
in the process of relocating from Naples, Italy, to Lisbon, Portugal; 
one of the first major moves in the implementation of NATO's new 
command structure. Once fully implemented, this restructuring will lead 
to a 30 percent reduction in personnel (13,000 to 8,800), and will 
consolidate 11 major headquarters to only 6.

Major Operations
    Over the past year, NATO and Allied Command Operations have 
executed multiple major operations, demonstrating an impressive array 
of Alliance capabilities. Today, roughly 150,000 military personnel are 
engaged in NATO missions around the world, successfully managing 
complex ground, air, and naval operations in all types of environments. 
These forces are currently operating in Afghanistan, Kosovo, Iraq, the 
Mediterranean, in the seas off the Horn of Africa, and, until recently, 
in support of operations over Libya. During the Libyan operation, NATO 
had a total of nearly 170,000 troops engaged in worldwide operations.

Afghanistan
    NATO's operation in Afghanistan remains the Alliance's most 
significant operational commitment to date. Our allies and partners 
continue to share the risks, costs, and burdens of ISAF. They have 
contributed troops, funding, and equipment, and have made significant 
non-military contributions to ISAF. ISAF forces include over 130,000 
troops from 49 contributing nations. Three of the 6 regional commands 
in Afghanistan are led by allied or partner nations, and 13 of the 29 
Provincial Reconstruction Teams in Afghanistan are led by nations other 
than the United States.
      
    
    
      
    As mentioned earlier, the successful transition of security to 
Afghan authority will continue to rely upon increased ANSF 
capabilities. Over the past year, ANSF has achieved their growth target 
of 305,000. In June 2011, the Security Standing Committee of the Joint 
Coordination and Monitoring Board agreed to an increase of the ANSF to 
over 350,000 by November 2012. The nascent Afghan Air Force currently 
numbers nearly 4,700 personnel and 59 aircraft, and is on its way to 
becoming a professional, operationally capable, and sustainable force. 
There are now over 200,000 ANSF members either completed with or in 
literacy training, which may well have the most far-reaching and long-
term impact, not only on the ANSF as a capable and professional force, 
but, importantly, on Afghan society as well.
    These improvements in Afghan capabilities, along with improved 
security conditions, have allowed us to begin transitioning security 
responsibilities from coalition forces to Afghan authorities. Since the 
summer of 2011, NATO has started handing over primary security 
responsibility to the Afghan Government and the ANSF. Thousands of 
police and military personnel have been trained as part of this 
enduring partnership and transition process. Following the November 
announcement by President Hamid Karzai that 18 more areas will soon 
transition to Afghan security control, over half the Afghan population 
will be protected by their national security forces.
    The increased professionalism and capabilities of the ANSF support 
these transition objectives by enabling the Afghan capability to secure 
their own territory, facilitate civilian efforts to establish 
governance, and prevent future threats to stability. While there is 
tremendous progress occurring, key challenges and areas that still must 
be addressed by the international community include corruption, cross 
border sanctuaries, and strategic communications outreach.
    The recent Bonn Conference set out how far we have come in 10 years 
since the first Bonn Conference in 2001, while reaffirming the mutual 
commitment between Afghanistan and the international community to 
deepen and broaden their historic partnership from Transition to the 
Transformation Decade of 2015-2024. This effort supports further 
transformation in the areas of governance, security, the peace process, 
economic and social development, and regional cooperation. The lasting 
commitment of the international community--including funding to sustain 
the ANSF; training and operational support for niche capabilities; 
Quick Reaction Forces; and assistance to Special Operations Forces--
will be essential to ensure that gains made in stability become 
irreversible.

Libya
    From March 24 to October 31, 2011, NATO Allies led an unprecedented 
coalition of contributors in Operation Unified Protector supporting UN 
Security Council Resolutions 1970 and 1973. The coalition enforced an 
arms embargo by air and sea across Libya's maritime flank, maintained a 
no-fly-zone, and undertook specific operations to protect civilians and 
civilian populated areas. NATO air assets conducted over 26,500 
sorties, including over 9,700 strike sorties to protect the people of 
Libya from attack or the threat of attack. A total of 49 ships from 12 
nations, along with surveillance assets provided by submarines and 
maritime aircraft, supported the operation in the Mediterranean Sea. 
Ships conducted more than 3,000 intercepts for hailings, 311 boardings, 
and 11 denials. The NATO Alliance worked as it was designed to do, with 
our allies and partners sharing the burdens and responsibilities of 
these operational missions.
      
    
    
      
    Shortly following initial coalition efforts by the United States, 
United Kingdom, and France to reduce the threat of Libyan air defenses, 
NATO assumed the lead for Operation Unified Protector. The United 
States continued to contribute as a combat enabler, focusing largely on 
aerial refueling and intelligence, surveillance, and reconnaissance 
support. These crucial and irreplaceable U.S. contributions to the 
overall effort enabled our allies and partners to fully contribute to 
the operation. In all, 14 NATO members and 4 partner countries provided 
naval and air forces for NATO's 3 missions. Together, these 18 
countries bore the brunt of the Alliance effort. Additionally, the 
longstanding political-military relationships developed through 
Alliance operations, exercises, and partnerships permitted and 
facilitated the coordinated and rapid commencement of operations within 
an unprecedented timeline. Furthermore, Operation Unified Protector 
proved the value of a comprehensive approach involving civilian 
advisors and coordination with nongovernmental organizations. In sum, 
the Libya operation demonstrated the synergistic effects of Alliance 
capabilities, and manifested the continued success and evolution of the 
NATO Alliance in the 21st century.
      
    
    
      
Kosovo
    While Afghanistan remains NATO's primary operational theater, the 
Alliance has not faltered in its other commitments, particularly in the 
Balkans. Today, approximately 6,000 allied and partner nation troops 
operate in the Balkans as part of the NATO Kosovo Force (KFOR) to help 
maintain a safe and secure environment, and enable freedom of movement 
for all citizens irrespective of their ethnic origin. The United States 
provides only around 10 percent of forces currently deployed. Despite 
great progress made towards peace and stability in Kosovo, continued 
tensions at the border crossings with Serbia have reinforced the need 
for vigilance and careful analysis before further adjusting the KFOR 
posture toward a minimal presence.

Other Major NATO Operations
    The Alliance has been active in a number of operations and missions 
to counter terrorism and maritime piracy, and to enhance stability in 
troubled regions. Operation Ocean Shield is focusing on at-sea counter-
piracy operations off the Horn of Africa, contributing to international 
efforts to combat piracy in this area. It is also offering, to regional 
states that request it, assistance in developing their own capacity to 
combat piracy activities. NATO naval forces continue to lead Operation 
Active Endeavour, focused on detecting and deterring terrorist activity 
in the Mediterranean and safeguarding this strategic maritime region. 
The experience and partnerships developed through Operation Active 
Endeavour considerably enhanced NATO's capabilities and contributed 
directly to the rapid integration of assets for Operation Unified 
Protector.
    Additionally, the NATO Training Mission in Iraq recently was 
successfully concluded. It delivered training, advice, and mentoring 
(with all NATO member countries contributing to the training effort 
either in or outside of Iraq) through financial contributions or 
donations of equipment. Over the 7 years of the mission, nearly 20,000 
Iraqi security forces received training.
    NATO members and partners also conduct an important joint and 
collective air-policing mission to preserve the integrity of NATO 
airspace through the NATO Integrated Air Defence System, a system 
comprised of sensors, command and control facilities, and weapons 
systems such as ground-based air defense and fighter jets.

Major Exercises
    NATO exercises are key enablers for core missions and focus areas, 
and contribute to the value of U.S.-led training and exercises. As an 
example, in 2011, exercises and resources were synchronized with a 
large U.S. based Mission Rehearsal Exercise (MRX) program, Unified 
Endeavor, enabling two NATO pre-deployment exercises in order for the 
ISAF Joint Command Headquarters and Regional Command South to prepare 
forces and headquarters for the mission in Afghanistan. The exercises 
provided training for the U.S. First Corps, 82nd Airborne Division, 
NATO's HQ Allied Rapid Reaction Corps, and individual augmentees from 
troop-contributing nations, increasing the level of coalition training 
not only for U.S. forces, but also for coalition members.
    Additional exercises provide an opportunity for allies to work with 
other partner nations, building collective capabilities for mutual 
security interests. In 2011, NATO carried out a number of exercises 
with Russia supporting the Lisbon Summit pledge, seeking to enhance the 
strategic partnership with Russia and other new partners. Russia 
participated in allied Exercise Bold Monarch, demonstrating submarine 
rescue operations, as well as Exercise Vigilant Skies, the first live 
NATO-Russia counterterrorism exercise in the skies, where Polish, 
Russian, and Turkish fighter jets intervened in response to the 
simulated terrorist hijacking of a passenger aircraft.We are doing some 
mission defense exercises with Russia this spring as we seek 
cooperative relations in this complex area.

NATO Special Operations Forces
    The NATO Special Operations Forces Headquarters (NSHQ) is a U.S.-
led framework organization within the NATO structure that has achieved 
significant multinational Special Operations synergy over the past 4 
years. This is perhaps best illustrated by the active presence of over 
2,000 ISAF Special Operations Forces (SOF) personnel on the ground, 
actively partnering with Afghan Security Forces. As NATO looks to 
broaden such engagements and partnering in an effort to apply 
comprehensive solutions to security challenges, NSHQ has already begun 
integrating Partnership-for-Peace SOF members from Sweden and Austria 
into the NSHQ, where they interact habitually with Irish, New Zealand, 
Finnish, Swiss, and Australian SOF.
    Fostering SOF capability and interoperability among 28 allies, and 
a wide range of other actors who leverage the Alliance, is an economy 
of force effort and force multiplier that epitomizes the concept of 
`Smart Defence,' with an associated impact that extends beyond the 
Alliance and the transatlantic security relationship. Whether in areas 
of intelligence sharing, training and education, communications, or 
biometrics and exploitation, the NATO SOF community is driving 
significant change and innovation within NATO. As an effective agent of 
21st century change, NSHQ continues to capitalize on knowledge, 
experience, and capabilities returning from Afghanistan, and apply them 
to future challenges in order to take NATO's SOF transformation to the 
next level.

Chicago Summit
    Clearly, NATO is an active and leading contributor to peace and 
security on the international stage. This May, the 25th NATO Summit 
will take place in Chicago. Ministerial meetings since December 2011 
continue to develop the summit agenda. In Chicago, NATO Heads of State 
and Government will further develop and approve strategic guidance for 
Alliance activities supporting the enduring partnership with 
Afghanistan beyond 2014, other partnership strategies, NATO's Missile 
Defense Capability, Multinational Capabilities, and a review of the 
Alliance's Deterrence and Defense Posture.
      
    
    
      
                               CONCLUSION

    The soldiers, sailors, airmen, marines, and civilians of U.S. 
European Command and NATO Allied Command Operations are making vital 
contributions to our national security and forward defense every day 
through their engagement, support, and brilliant execution of combined 
operations with our allies and partners across the theater. As we look 
to future success, I ask for your continued support of these 
extraordinary men and women, and their families, to ensure they receive 
the care and benefits they have earned and so rightly deserve.
    Our work continues to make a difference. As the Secretary of 
Defense has stated, the United States depends on NATO ``every day to 
provide capacity that we cannot find anyplace else.'' Given the 
continuous change we face in the current security and fiscal 
environments, sustaining this vital, historic, and effective Alliance, 
and preserving our critical theater strategic partnerships, is even 
more essential to protecting the security interests we share as we 
continue moving forward in the 21st century.
    European Command remains focused on sustaining these partnerships 
to meet the demands of ongoing operations. We continue to leverage the 
authorities and funding that Congress has provided to support the 
allies and partners who have made their own vital contributions to 
these operations. Congressional support for these programs has enabled 
us to assist these allies and partners as they have conducted 
operations in Afghanistan and taken a leadership role in last year's 
Libya operation. These allied and partner contributions remain critical 
to meeting our goal to transition security responsibility in 
Afghanistan by 2014. Accordingly, we ask for your continued support of 
the funding and authorities so essential in preparing our allies and 
partners to make these contributions to our common defense.
    Even as we focus on present needs, we must also consider the future 
of the transatlantic partnership. Through years of deployment to 
Afghanistan, and in recent operations over Libya, we have made great 
strides toward developing the military capabilities called for in the 
November 2010 NATO Strategic Concept. Looking ahead, we seek to 
consolidate and sustain these gains, keeping our skills sharp for 
future expeditionary and stabilization operations while retaining our 
ability to train foreign military forces to support future contingency 
operations. I agree with Secretary Panetta: it would be a tremendous 
loss if, for any reason, the Alliance did not retain, develop, and 
institutionalize the hard-earned capabilities that have allowed it to 
conduct these operations with such skill and success. Given the 
economic constraints facing Europe and the United States, this risk is 
real. However, we believe this outcome can be avoided as long as our 
allies and partners properly resource and transform their armed forces, 
and the United States continues to support these vital strategic 
partnerships, focusing in areas that allow us to train, deploy, and 
operate together safely and effectively. We respectfully request your 
continued assistance in this endeavor, one essential to the security of 
the United States.
    As we look to the future of the historic transatlantic security 
partnership, one that proved so valuable and served us so well in the 
last century, we must continue to focus its evolution and capabilities 
on the common strategic interests and challenges that we face in the 
21st century. Those challenges include the threat of ballistic missile 
attack, the proliferation of weapons of mass destruction, threats in 
cyberspace, and transnational illicit trafficking. The danger of 
underestimating the value of this partnership is also real, 
particularly as the generation that contributed and received so much 
from it passes from the scene. As former Defense Secretary Robert Gates 
recently said, ``The policymakers who will follow us . . . will not 
have the same historical, personal and, indeed, emotional ties to 
Europe, and may not consider the return on America's investment in 
Europe's defense worth the cost . . . and that will be a tragedy.'' 
Working together with our historic partners on these critical security 
challenges of the 21st century to wisely leverage the significant 
investments that America has made for over half a century will be more 
important than ever in light of the fiscal constraints that we all 
face. Your continued support will ensure that we are prepared, working 
in concert with these enduring allies and partners, to meet those 
challenges head-on and prevail.
    So supported, European Command and Allied Command Operations will 
continue to serve as a vital part of the transatlantic bridge that 
provides our countries continued security in a new--and still 
unfolding--era. For, as Secretary Panetta said in Brussels last year, 
``Security in the 21st century will not be achieved by each nation 
marching to its own drummer. It can only be achieved by a willingness 
to fight together to defend our common security interests. That is the 
world we must shape today, to build a stronger world for tomorrow.''
    Every day, the men and women of European Command and Allied Command 
Operations are working through history's most successful alliance, 
alongside our allies and partners across a dynamic theater, to build 
and sustain that indispensable ``willingness'' in the pursuit of our 
common security interests and the forward defense of the United States. 
With every action, they are shaping the rapidly changing world we live 
in today in order to provide the enduring capabilities, security 
structures, and trust we need for a stronger world tomorrow. It is a 
world in which we are--and will continue to be--Stronger Together.

    Chairman Levin. Thank you so much, Admiral.
    General Ham.

  STATEMENT OF GEN CARTER F. HAM, USA, COMMANDER, U.S. AFRICA 
                            COMMAND

    General Ham. Mr. Chairman, Senator McCain, and members of 
the committee, thanks very much for the opportunity to appear 
before you today. I am truly honored to be here with Admiral 
Stavridis, a very respected colleague and a longtime friend.
    Operations in Libya truly brought EUCOM and AFRICOM to a 
higher level of collaboration, and this year we will continue 
to work closely together to more effectively address security 
challenges in our respective AORs.
    The last year, as Chairman Levin and Ranking Member McCain 
have indicated, has been a year of significant change that has 
swept across the African continent. The broad wave of 
democratic movements that began in Tunisia have spread faster 
and more broadly than many had forecasted. The Republic of 
South Sudan became the world's newest nation. In Nigeria, Boko 
Haram emerged as an increasingly violent extremist group and a 
threat to western interests. In the Horn of Africa, al Shabaab 
and al Qaeda's publicly formalized merger made evident what we 
have long suspected. Throughout the past year, we have seen 
that security in Africa continues to be influenced by external 
actors, by rapid economic developments, population growth, and 
the overall size and diversity of the continent itself.
    In line with the new DOD Strategic Guidance, we have 
prioritized our efforts, focusing on the greatest threats to 
America, Americans, and American interests. Countering the 
threats posed by al Qaeda affiliates in East and Northwest 
Africa remains my number one priority. Strengthening the 
defense capabilities of our African partners to responsibly 
address security challenges remains an integral part of what we 
do. Strengthening regional capabilities in peacekeeping and 
maritime security also remain important areas of focus. Our 
engagements are designed to be innovative, low-cost, and have a 
small footprint. Indeed, in Africa a small investment can go a 
long way.
    As I traveled across the continent, I have been encouraged 
by the optimism of African leaders in confronting the 
challenges and embracing the opportunities ahead. I sincerely 
believe that in the long run it is Africans who are best able 
to address African security challenges. Because of this and 
because a safe, secure, and stable Africa is in the United 
States' national interest, we at AFRICOM will continue to 
strive to be the security partner of choice on the continent.
    Everything AFRICOM has accomplished is the result of the 
professionalism and dedication of the uniformed and civilian 
women and men of the command, our strong partnerships in 
Africa, and our teammates from across the U.S. Government.
    I appreciate the tools that you have given us to execute 
our missions, including new authorities under sections 1206 and 
1207 of the NDAA. Meeting our intelligence, surveillance, and 
reconnaissance (ISR) requirements continues to be a challenge, 
and I am working with DOD to gain additional capabilities to 
monitor the activities of al Qaeda affiliates in East, North, 
and West Africa.
    ISR is also essential to AFRICOM's ongoing efforts to 
assist the Democratic Republic of Congo, Uganda, Central 
African Republic, and the Republic of South Sudan to defeat the 
Lord's Resistance Army (LRA) in Central Africa.
    I thank the committee for its enduring support, without 
which AFRICOM would simply be unable to accomplish its 
missions. We welcome you to visit us at our headquarters or 
preferably in Africa where you can see firsthand what we are 
doing.
    Thank you, Mr. Chairman, Senator McCain. I welcome your 
questions.
    [The prepared statement of General Ham follows:]

               Prepared Statement by GEN Carter Ham, USA
      
    
    
      
                              INTRODUCTION

    Thank you for the opportunity to discuss the accomplishments and 
future efforts of the men and women of U.S. Africa Command (AFRICOM). 
During the past year, we worked closely with U.S. Government agencies 
and many international partners to address emerging and ongoing threats 
to security and stability in Africa. Our operations, exercises, and 
security cooperation programs continue to support U.S. policy 
objectives in Africa, strengthen partnerships and reduce threats to 
America, Americans, and American interests emanating from Africa.
    This year, with the continued support of Congress, we will strive 
to build upon existing relationships and develop new partnerships in 
Africa in order to strengthen the defense capabilities of partner 
nations to better enable them to provide for their own security while 
increasingly contributing to regional security and stability. Guided by 
the Defense Strategic Guidance, we will continue to sharpen our focus, 
particularly in the realm of countering violent extremist 
organizations. We will seek new ways to work with and through the 
African Union (AU) and its regional organizations and to support their 
leadership in preventing and responding to African security challenges. 
We will continue to develop innovative, low-cost, and small-footprint 
approaches consistent with the blueprint for the Joint Force of 2020.
    Throughout Africa, small teams of soldiers, sailors, airmen, 
marines, coastguardsmen, and Department of Defense (DOD) civilians and 
contractors, along with teammates from many other U.S. Government 
agencies, conduct a wide range of engagements in support of U.S. 
security interests. I believe that with a comparatively small resource 
investment, we can continue to achieve tangible results in Africa.
    In order to realize success in our mission we must: PREPARE, in 
cooperation with our partners and allies, to respond to future crises 
and contingencies; PREVENT future conflicts by continuing to strengthen 
our partners' defense capabilities; and PREVAIL in current and future 
operations.

                         STRATEGIC ENVIRONMENT

    Despite numerous challenges, Africa is a continent where 
significant progress can be found and great potential exists. The 
United States is increasingly connected to African states and regional 
organizations through shared economic, political, and security 
interests, including commitments to consolidating democratic and 
economic progress achieved in recent years. AFRICOM supports these 
efforts through our operations, exercises, and security cooperation 
activities. In the past year we have seen considerable progress in the 
capabilities and cooperation of regional partners in addressing threats 
to regional security, including the operational gains made by African 
Union Mission in Somalia (AMISOM) forces working alongside Somali, 
Kenyan, and Ethiopian troops against al Shabaab, and the cooperative 
efforts of Algeria, Niger, Mali and Mauritania in combating al Qaeda in 
the Land of the Islamic Maghreb (AQIM).
    With six of the world's fastest growing economies in the past 
decade, combined with democratic gains made in a number of African 
nations in 2011, Africa's strategic importance to the United States 
will continue to grow. This year will almost certainly be yet another 
dynamic year for Africa, with 20 national elections scheduled to occur 
across the continent, including five elections prompted by peace 
facilitation, post-conflict, and presidential successions. Some 
elections may result in new political and security dynamics in Africa. 
Through all of these changes, AFRICOM will remain flexible as we move 
forward with our engagements in order to accomplish our strategic 
objectives.
    The Defense Strategic Guidance notes the need for adaptable and 
strategically targeted approaches to meet the increasing complexity of 
the 21st century global security environment. Africa's sheer size, 
diverse population, and many fragile states are emblematic of this 
complexity. Africa accounts for 14 of the world's 20 weakest states in 
Foreign Policy's 2011 ``Failed States Index.'' Many of its fragile 
states lack the capacity or political will to effectively address 
demographic, political, social, and economic challenges, including 
population growth, rapid urbanization, persistent internal conflicts, 
widening income inequality, burgeoning political demands, widespread 
disease, and increasing demands for essential resources.
      
    
    
      
    Key security challenges of concern to AFRICOM and our partners 
include the activities of al Qaeda and its affiliates in East Africa, 
the Maghreb, and the Sahel. Across the continent, illicit trafficking 
and its nexus with violent extremist organizations (VEOs) pose 
significant threats to regional stability and U.S. national interests. 
Illicit trafficking across the spectrum, from weapons proliferation to 
trafficking in narcotics and humans, contributes to instability by 
eroding governance and development. Many Manportable Air Defense 
Systems disappeared from unsecured storage sites in Libya during the 
conflict last year and could potentially be trafficked to extremist 
groups. Also of concern are the Qadhafi regime's stock of chemical 
weapons and precursor chemicals, the destruction of which was 
interrupted by the conflict. The Organization for the Prohibition of 
Chemical Weapons verified the presence of previously undisclosed 
chemical weapons in a visit to Libya in January 2012, and will continue 
to coordinate with the Government of Libya on the destruction of all 
chemical weapons.

                      U.S. AFRICA COMMAND STRATEGY

    AFRICOM's strategy is fully in line with key elements of U.S. 
foreign policy and the recent Defense Strategic Guidance. Applying 
resources in a thoughtful and effective manner to strengthen the 
defense capabilities of our partners in Africa also remains a critical 
element of DOD's new Strategic Guidance. For the foreseeable future, 
the United States will continue to take an active approach to 
countering the threat posed by al Qaeda. Monitoring threats, working 
with African nations to establish control over undergoverned spaces, 
and taking an active approach to disrupting al Qaeda, are key elements 
of our efforts in Africa.
      
    
    
      
          Chart: Africa Regions as according to the African Union

    Due to the vast challenges and opportunities on the continent, as 
well as current fiscal realities, we have prioritized regions in Africa 
to better focus our exercises, operations and security cooperation 
activities. The Command's regional alignment corresponds with the AU's 
regional approach. Our highest priority is the East Africa region which 
is the nexus for transnational threats to our Nation's security. These 
threats include violent extremist organizations, illicit trafficking 
and piracy. In prioritizing engagement with individual partners, 
AFRICOM considers our common interests, compelling U.S. national 
security interests, and each nation's role on the continent.
    All of our efforts are guided by two principles; first that a safe, 
secure, and stable Africa is in our national interest, and second that 
Africans are best suited to address African security challenges. The 
United States can best address the security challenges and 
opportunities of the African continent by employing all of the elements 
of national power in cooperation with our African partners. Our 
strategy synchronizes our activities with those of our U.S. Government, 
allied, and African partners. It also details our focus areas, 
prioritizes regions, and ensures our activities produce sustainable 
effects.

                     U.S. AFRICA COMMAND PRIORITIES

Countering Terrorism and Violent Extremist Organizations
    Our national defense strategy stresses countering terrorism by 
transnational VEOs as a critical mission. We conduct operations, 
exercises, and theater security cooperation programs to prevent attacks 
against the U.S. Homeland or its personnel and facilities abroad and to 
reduce the threat to our partners and allies.
    In Somalia, al Shabaab represents both a terrorist threat to U.S. 
and regional interests and an insurgent problem to the Somali 
Transitional Federal Government (TFG) as well as Somali regional 
administrations. In a video released on 9 February 2012, al Qaeda and 
al Shabaab jointly announced their formal merger.
      
    
    
      
    Al Shabaab continues its attempts to overthrow the TFG and gain 
control of Somali territory. The TFG remains dependent on international 
support and the presence of AMISOM peacekeepers for its survival. 
AMISOM successes in Mogadishu, as well as TFG, Kenyan, and Ethiopian 
operations in south-central Somalia, have the potential to consolidate 
gains against al Shabaab and foreign fighters. Somalia faces a 
significant transition point in August 2012 when the TFG's mandate will 
expire. Current military operations provide the security necessary for 
progress in the political process.
      
    
    
      
    Of concern in North and West Africa is the terrorist organization 
AQIM, which uses the undergoverned spaces of the Maghreb and Sahel as a 
safe haven. Originally focused on overthrowing the Government of 
Algeria, AQIM evolved and now has a stated intent to attack western 
targets. AQIM continues to increase its activities in North and West 
Africa, including collecting large sums of money through kidnapping for 
ransom. In August 2011, AQIM claimed responsibility for the bombing of 
an Algerian military school that killed 18 people. There are clear 
indications that AQIM is now involved in trafficking arms from Libya. 
In addition, the upheavals in Libya and Tunisia have created 
opportunities for AQIM to establish new safe havens.
    Nigeria, Africa's most populous nation and the source of 8-11 
percent of U.S. oil imports, has very recently experienced a 
significant decline in security, including a steep increase in the 
number of terrorist attacks by Boko Haram. Historically, Boko Haram 
focused on Nigerian government targets but in August 2011, it bombed 
the United Nations mission in Abuja, killing 25 and injuring more than 
80 individuals. Violence has escalated in the last several months with 
40 killed in Christmas 2011 attacks and over 180 killed in January 2012 
in Kano in a series of coordinated attacks against government and 
police facilities.
      
    
    
      
    In response to these attacks, Nigerian President Goodluck Jonathan 
declared a state of emergency in some areas and sent additional 
military forces to northern Nigeria. We seek to work with our Nigerian 
partners to strengthen their capability in civil-military affairs to 
facilitate interaction between military forces and civilians in 
northern Nigeria and to improve their ability to counter improvised 
explosive devices. These tailored efforts will enhance Nigerian 
capabilities to effectively provide security to the Nigerian people and 
to address conditions conducive to the growth of Boko Haram. The 
insecurity in northern Nigeria will not be solved solely by military 
action. An enduring solution will require addressing the underlying 
conditions which lead individuals to support Boko Haram.
    We actively counter these threats through a mix of security force 
assistance, assisting African states to establish control over 
undergoverned territories and, in some instances, direct military 
activity. Our programs and activities support and complement the 
Department of State's Partnership for Regional East African 
Countererrorism (PREACT) and the Trans-Sahara Counterterrorism 
Partnership (TSCTP). Our engagements focus on border security, 
intelligence, and tactical training. We also assist in properly 
equipping partner nation forces as well as encourage regional 
cooperation and intelligence sharing as methods to increase 
effectiveness.
    I believe our strategy for countering-VEOs and emphasis on regional 
cooperation are having positive effects. In June 2011, the Nations of 
Mauritania and Mali, whose forces have both trained in a variety of 
ways including in our annual Flintlock exercise designed to help build 
counterterrorism capacity, collaborated to destroy an AQIM camp in 
northern Mali. The nations of Niger and Algeria are both aware of the 
threat of weapons trafficking from Libya, and are now cooperating to 
secure their borders. In January 2012, Algeria stopped a 4 vehicle 
convoy which was carrying over 100 assault rifles, 2 rocket propelled 
grenades (RPG), and ammunition suspected of being of Libyan origin. 
Furthermore, our sustained support for the troop contributing countries 
to the AMISOM has resulted in that organization being increasingly 
capable of countering al Shabaab's influence.
    The potential for support and strengthening of ties between these 
three groups (al Shabaab, AQIM and Boko Haram) with al Qaeda in the 
Arabian Peninsula and al Qaeda senior leaders in Pakistan, is of 
particular concern and requires continued monitoring.
Countering Piracy and Illicit Trafficking
    Instability on land contributes to the growth of both VEOs and 
other criminal activity. The free flow of commerce through the global 
commons is essential to U.S. economic and security interests. Piracy 
and other maritime crimes negatively impact the security and freedom of 
access for all nations to critical waterways and continue to threaten 
U.S. security in the waters off the east and west coast of Africa. The 
international community, including the North Atlantic Treaty 
Organization (NATO) and the European Union, is actively combating 
piracy in the waters off of the African continent. However, many 
African partners presently lack the maritime capability and capacity to 
effectively address piracy. Our goal is to help partner nations build 
their capacity to increase maritime domain awareness and security in 
Africa as part of the broader U.S. Government and international effort.
    In the waters off the Horn of Africa and into the Indian Ocean, 
Somali-based piracy is a persistent threat. Pirates have demonstrated 
the ability to operate small watercraft at distances greater than 100 
nautical miles from the coast. As the pirates move further east into 
the Indian Ocean and south into the Mozambique Channel, the challenges 
and cost associated with interdicting pirate vessels will grow due to a 
larger area to patrol, making vessels more vulnerable. According the 
Office of Naval Intelligence, the number of attempted pirate attacks 
decreased from 186 in 2010 to 166 in 2011; similarly, the number of 
successful attacks in 2010 dropped from 51 to 27 in 2011. This decline 
is attributed primarily to the presence of armed security teams on 
commercial vessels and increasing pressure from the international 
community in the form of naval patrols.
      
    
    
      
    Somali pirates enjoy sanctuary and freedom of movement on land 
relatively unimpeded by regional forces. The emergence of armed 
security teams on commercial vessels, which is reducing the number of 
successful attacks, may be forcing Somali pirates to adopt new tactics 
to earn ransoms. A growing concern regarding Somali clan based criminal 
networks is land-based kidnapping for ransom.
    Piracy and armed robbery at sea are also a persistent and growing 
threat in West Africa's Gulf of Guinea. The International Maritime 
Bureau statistics document an increase in reported attacks from 28 in 
2010 to 39 in 2011. Unlike piracy in the waters off East Africa, 
attacks in the Gulf of Guinea tend to focus on theft of cargo and 
kidnapping of individuals crewmembers for ransom, and more frequently 
result in the injury or death of crewmembers.
    Our objectives for maritime security include developing maritime 
domain awareness, increasing response capabilities, and fostering 
regional integration and cooperation. Our activities are carried out 
pursuant to a variety of DOD (title 10) and State (title 22) 
authorities. Some of these are military-to-military authorities like 10 
U.S.C. 1051 and 2010. While others are carried out in cooperation and 
coordination with Department of State pursuant to authorities such as 
International Military Education and Training, Foreign Military Sales 
and Financing, and Peace Keeping Operations. Our flagship maritime 
security engagement program is Africa Partnership Station (APS). APS 
provides sustained engagement using mobile training teams, interagency, 
and international trainers, working from U.S. Navy, U.S. Coast Guard 
and international partner nations' vessels. Beginning this year, APS 
will have a construct of ``training African trainers'' to enable 
African maritime forces to provide the same level of instruction 
without U.S. personnel. To date, APS engagements have involved 21 
nations and trained more than 7,700 maritime security professionals.
    AFRICOM also works closely with African regional organizations to 
promote and facilitate enhanced regional dialogue and cooperation on 
maritime security issues. In July 2011, AFRICOM along with the African 
Center for Strategic Studies sponsored the Maritime Safety and Security 
Seminar with subject matter experts from the Economic Community of 
Central African States (ECCAS) and the Economic Community of West 
African States (ECOWAS). The seminar provided a venue for the two 
groups to discuss the wide range of maritime security threats and to 
align their strategies to confront maritime threats. AFRICOM was able 
to provide a neutral venue and foster the development of a draft 
agreement between the two organizations that delineates legal roles and 
promotes interregional cooperation.
    Increasingly, African states are taking ownership of security 
challenges and are working together to combat shared threats. In 
response to the piracy threat in the Gulf of Guinea, Benin and Nigeria 
are conducting joint maritime patrols. The nations of Togo and Ghana 
are expected to join in these patrols as well. ECCAS is also conducting 
joint patrols in the Gulf of Guinea, with Cameroon, Sao Tome and 
Principe, Equatorial Guinea, and Gabon. In November 2011, ECOWAS 
conducted a conference to discuss further regional cooperation to 
combat piracy in the region. Activities conducted to increase maritime 
security, also contribute to reducing the potential exploitation of 
undergoverned maritime space by violent extremists or criminal 
organizations.
    Many of the same conditions conducive to VEOs and maritime crime 
are also exploited by criminal elements for illicit trafficking across 
the spectrum, from sales of weapons to potential trafficking in 
narcotics and humans. The emergence of complex networks of 
transnational criminals, narcotics traffickers, VEOs, and other actors 
necessitates a greater emphasis on countering illicit trafficking (CIT) 
on land and at sea. The primary objective of our CIT efforts is the 
development of legitimate, effective, and accountable security forces 
capable of combating narcotics, weapons trafficking, and other forms of 
illicit trafficking. We prioritize support to partner nations whose 
efforts prevent or disrupt the convergence of illicit trafficking and 
VEOs.
    Last year we conducted 71 CIT training events with 24 African 
partner nations using both section 1033 of the NDAA for Fiscal Year 
1998 (support to counter-drug activities of certain foreign 
governments) and section 1004 of the NDAA for Fiscal Year 1991 (support 
to counter-drug activities of other government agencies). We supported 
bases of operation in Ghana and Liberia used to enhance maritime 
security operations in the Gulf of Guinea. Additionally, we implemented 
five projects to facilitate information sharing with our partner 
nations. Through increased information sharing, Cape Verde successfully 
executed its largest drug seizure valued at $100 million. These modest 
efforts relative to demand are paying dividends in increased 
cooperation and effectiveness against illicit trafficking capabilities.
Partnering to Strengthen Defense Capabilities
    AFRICOM assists African partners to develop the capabilities 
required to combat VEOs, piracy, illicit trafficking, and prevent 
conflict. Increasing the ability of Africans to prevent, mitigate, and 
resolve conflicts leads to increases in stability and can create the 
conditions conducive to development. Building partner capacity is also 
important because it promotes the sharing of costs and responsibility 
for security on the African continent.
    Our capacity building activities complement Department of State 
programs and are planned with the embassy country team and the partner 
nation. We focus on the development of professional militaries which 
are disciplined, capable, and responsible to civilian authorities and 
committed to the well being of their citizens and protecting human 
rights. Our efforts focus on increasing the capability and capacity of 
African partner nations to serve as trained, equipped agents of 
stability and security on the African continent.
    The majority of our engagements are conducted by small teams led by 
our Army, Navy, Air Force, Marine and Special Operations Components at 
a low cost and with a small footprint. African militaries are very 
receptive to this approach which allows us to cultivate the personal 
relationships that are so important to our efforts to deepen 
institutional relationships and build capacity. Given the imperative to 
reduce costs, we have focused our exercise program on multilateral 
exercises to make judicious use of resources. An added benefit of 
multilateral exercises is they develop relationships between nations 
and contribute to regional cooperation.
    One of our primary foci is support to African nations who are 
willing and able to provide forces to the AMISOM and other peacekeeping 
operations. In support of the Department of State's Global Peace 
Operations Initiatives (GPOI) and the African Contingency Operations 
Training and Assistance (ACOTA) programs, we provide military mentors 
to support pre-deployment training. We work extensively with the 
Nations of Uganda and Burundi as they provide the majority of forces to 
AMISOM to date. Last year we assisted the forces of Djibouti in 
preparing for their deployment to support AMISOM. Despite some 
challenges, Djibouti deployed a 100-man advance element of its pledged 
infantry battalion of over 800 troops. This year we look forward to 
assisting Sierra Leone as it prepares peacekeeping forces for 
deployment to Somalia, and we would also look for ways to assist Kenyan 
forces, consistent with our prior trainings and as appropriate, given 
AMISOM plans to incorporate Kenyans into the mission.
    In the Great Lakes Region of Africa, the United States is engaged 
in a number of efforts to help address violent armed groups and to 
promote security. For several years, the people and Governments of 
Uganda, the Central African Republic, the Democratic Republic of the 
Congo, and South Sudan have worked to eliminate the threat posed by the 
Lord's Resistance Army (LRA), one of Africa's most violent and 
persistent armed groups, which has brutalized civilians in the region 
for a quarter-century.
      
    
    
      
    Consistent with the bipartisan legislation on the LRA passed by 
Congress in 2010 and signed into law by the President, the United 
States continues to pursue a comprehensive, multi-year strategy to help 
our regional partners mitigate and eliminate the threat posed by the 
LRA. As part of that strategy, President Obama reported to Congress in 
October that he had authorized a small number of U.S. forces to deploy 
to the LRA-affected region and to act as advisors to the militaries 
that are pursuing the LRA. About 100 U.S. personnel deployed to support 
the regional effort. These U.S. forces do not have an operational role 
and are focused on assisting and advising host nation forces. An 
important aspect of their mission is to enhance the capacity of our 
partners to coordinate and fuse intelligence with effective operational 
planning so they are better able to plan and conduct operations with 
the goal of removing from the battlefield Joseph Kony and other senior 
leadership of the LRA.
    Our military advisors are sensitive to the challenges of civilian 
protection and are incorporating protection considerations into 
training and operational planning support. AFRICOM is also implementing 
a rewards program intended to enhance information-gathering efforts 
throughout LRA-affected areas. Our support to addressing the LRA threat 
is embedded within a broader strategy and complemented by civilian 
efforts to include encouraging members of the LRA to defect and 
peacefully surrender, and we are working closely with the Department of 
State and USAID as a result. Ultimately, success in countering the LRA 
will depend upon the continued resolve and partnership of the affected 
countries as they work together to remove the LRA's top leaders from 
the battlefield and seek to encourage the defection and disarmament of 
others.
    In East Africa, the Republic of South Sudan continues efforts to 
improve its capabilities addressing immediate security and humanitarian 
concerns. Tensions between Sudan and South Sudan have been and remain a 
source of regional instability. Disagreements between the two nations 
remain over the contentious issues of border demarcation, wealth 
sharing primarily related to oil revenue, and debt forgiveness. Ongoing 
violence remains a challenge to both governments and the United Nations 
Mission in South Sudan. As of February 2012, the two Sudans are engaged 
in difficult negotiations related to transit fees for oil. The two 
sides remain deeply divided over these issues but the future of both 
nations will depend on their ability to peacefully address this and 
other post-referendum issues.
    Our activities in South Sudan will focus on assisting with the 
development of the Ministry of Defense and the transformation of their 
military. We will concentrate on developing the institutional processes 
of the Sudan People's Liberation Army (SPLA) general headquarters and 
mission critical forces focused on command and control, discipline of 
the force, and mobility. Our efforts in security force assistance are 
expected to begin in 3rd quarter fiscal year 2012.
    In our efforts to strengthen defense capabilities of African 
partners, the National Guard State Partnership Program is an incredibly 
important component. Currently, there are eight partnerships in Africa 
(Botswana and North Carolina, Ghana and North Dakota, Liberia and 
Michigan, Morocco and Utah, Nigeria and California, Senegal and 
Vermont, South Africa and New York, Tunisia and Wyoming). The Michigan 
National Guard is providing 24 personnel in support of Operation Onward 
Liberty to conduct training in defense sector reform. I have asked 
General McKinley, Chief of the National Guard Bureau, to consider 
adding two State Partnerships this year and to continue to explore 
future growth.
    Our component commands bring valuable assets and tailored 
experience necessary for successful capacity building efforts. One 
example of this is the United States Marine Corps Special Purpose 
Marine Air Ground Task Force (SPMAGTF) which established a rotational 
presence in Sigonella, Italy, in October 2011 to support the command. 
Managed and tasked by U.S. Marine Corps Forces, Africa, the SPMAGTF is 
tailored to conduct theater security cooperation engagements. The 
SPMAGTF consists of just under 200 marines, organized in 5-14 man 
teams, with 2 KC-130 aircraft. These teams will deploy in support of 
PREACT and ACOTA missions. The SPMAGTF is an invaluable asset for the 
command and increases our ability to engage on the continent. In 
addition, the SPMAGTF provides the command a limited crisis response 
capability for natural disasters, evacuations, and other crises.
    Beginning this year, we will begin Africa Partnership Flight (APF). 
Modeled after the Navy's successful APS, APF features low footprint, 
short duration, high-impact, sustainable and predictable engagement 
with our African partners. APF will become the primary Air Force 
program for conducting building partnership capacity and will enable 
committed African states to enhance their aviation capabilities, foster 
greater regional cooperation, and increase air domain safety and 
security in Africa. The first event under APF is scheduled for March 
2012, in Ghana.
    Finally, the Department of the Army has selected U.S. Army Africa 
to conduct the pilot Regionally-Aligned Brigade rotation in fiscal year 
2013. This brigade, a tailored Army General Purpose Force, is designed 
to help support AFRICOM's validated requirements for security 
cooperation activities throughout Africa.
Preparing and Responding to Crisis
    AFRICOM is always prepared to conduct humanitarian, disaster 
relief, and other operations as directed. The dynamic security 
environment on the continent requires the command headquarters and our 
components to be trained and ready to plan and conduct responses for a 
wide range of contingencies. Our operating locations on the continent 
support our operations and provide the ability to rapidly respond if 
required.
    We demonstrated our ability to respond to a crisis in the spring of 
2011 when the command directed coalition military operations in Libya, 
which prevented the Qadhafi regime from committing mass atrocities 
against the citizens of Benghazi. After the end of NATO Operation 
Unified Protector on 31 October 2011, we established a joint task force 
to command and control post conflict U.S. operations related to Libya. 
Joint Task Force Odyssey Guard, commanded by U.S. Army Africa, was 
instrumental in providing support to the Department of State as it 
reopened the U.S. embassy in Tripoli. Joint Task Force Odyssey Guard 
also provided explosive ordnance disposal assistance and monitored the 
security of the chemical weapons in the Waddan storage complex.
    Critical Intelligence, Surveillance, and Reconnaissance (ISR) 
assets based in Sigonella, Italy, and Souda Bay, Greece, were used in 
Operation Odyssey Dawn and NATO Operation Unified Protector and 
continue to be used today to monitor illegal trafficking and violent 
extremist organizations.
    ISR assets are a key enabler for many of our operations and 
engagements. The information provided by these assets is used to 
develop a full picture of the activities of VEOs and other activities 
of interest. Without operating locations on the continent, ISR 
capabilities would be curtailed, potentially endangering U.S. security. 
We currently operate ISR assets from various locations and continue to 
explore additional operating locations in order to improve access and 
on-station times for our ISR missions. Given the vast geographic space 
and diversity in threats, the command requires increased ISR assets to 
adequately address the security challenges on the continent.
    On the African continent, we have strategic locations that provide 
a hub and spoke operational reach that covers the continent with C-130 
aircraft operational capability. Our only enduring presence on the 
continent is Camp Lemonnier, Djibouti, which provides an essential 
command and control and logistics hub for Combined Joint Task Force 
Horn of Africa to plan and support operations, exercises and security 
cooperation activities throughout East Africa. Camp Lemonnier is also 
an essential regional power projection base that enables the operations 
of multiple combatant commands; U.S. Transportation Command, U.S. 
Central Command, U.S. Special Operations Command and AFRICOM. The 
requirements for Camp Lemonnier as a key location for national security 
and power projection are enduring.
    New mission requirements at Camp Lemonnier necessitate new 
facilities and upgrades. We will take measured steps to move from 
expeditionary and temporary facilities which have been cobbled together 
over time to an enduring austere footprint. Additionally, we will 
prudently evolve to improve force protection, safety, and energy 
standards. We continue to work with the Department of the Navy to 
update the existing master plan. I very much appreciate the continued 
support the Congress has provided for military construction projects at 
Camp Lemonnier, Djibouti.
    In addition to Camp Lemonnier, the command leverages support from 
U.S. European Command's and Defense Logistics Agency's military 
infrastructure to support operations in a time of crisis. U.S. bases in 
Europe provide geographic proximity, infrastructure, maintenance 
support and flexibility. European based forces were absolutely critical 
to Operation Odyssey Dawn; simply stated, we could not have responded 
on the timelines required for operations in Libya had air and maritime 
forces not been forward-stationed in Europe.
    The value of our operating locations on the continent and the 
readiness of the command's headquarters and its components were further 
demonstrated in January 2012 when the command, at the request of the 
Department of Justice, planned and conducted the successful hostage 
rescue of an American citizen and a Danish citizen who were held 
captive in Somalia.
    Our headquarters location in Stuttgart, Germany, has been a topic 
of discussion since the command was established. The final decision on 
location was deferred until 2012 by then Secretary of Defense Gates. 
The Office of the Secretary of Defense is leading a comprehensive study 
of the factors involved in the headquarters basing, and we are 
providing complete data and information to support their analysis of 
the comparative costs, benefits, and risks of various basing options. 
Until a final decision is made, we will continue to accomplish our 
missions from Stuttgart, where our proximity to Africa, both 
geographically and in terms of time zones, facilitates our ability to 
build relationships with our African partners, and provides a location 
where our servicemembers, civilians, and their families are well 
supported.

Fiscal Responsibility
    AFRICOM recognizes the national security imperative of deficit 
reduction and continues to seek innovative, low-cost concepts for 
activities and functions across the command. I have directed the staff 
to look beyond the assigned reductions with a goal of further 
efficiencies in the command's budget requirements. We conducted a study 
of the headquarters functions to seek further efficiencies and improve 
effectiveness. Through this study, we found areas where we believe we 
can combine functions and reduce manpower requirements with a minimum 
of risk.
    To reduce fuel costs at Camp Lemonnier, the containerized living 
units (CLU) will be renovated through a $1 million project funded by 
the DOD Operational Energy Plans and Programs Office. The CLUs will be 
redesigned incorporating energy efficient air conditioning units, 
increased insulation, and reflective exterior coatings. As part of the 
project, a highly energy efficient SuperCLU will be developed. The 
projected energy saving are 54 percent for CLUs and 82 percent for 
SuperCLUs thus reducing fuel costs for the camp.
    We recognize our security cooperation engagements must be 
innovative, low-cost, and if sustained, yield more than immediate 
budgetary savings. The outcomes of our security cooperation programs 
are twofold, first as African partners become increasingly capable of 
addressing their own security and countering violent extremist 
organizations, the burden of addressing those threats is shared, 
reducing budgetary and personnel costs to the United States. Second, 
while it is difficult to prove that we have prevented a crisis by 
working with partners in peacetime, we know that the cost of 
intervention far exceeds that of prevention.

How Congress Can Help
    The African continent has many challenges which require 
collaboration and support of all the agencies of government and the 
support of Congress. At this time, the command is properly resourced; 
however, ISR continues to be a challenge to satisfy mission 
requirements. We are working with DOD to gain additional ISR to monitor 
the activities of al Qaeda affiliates in East Africa, the Maghreb, and 
the Sahel and the Lord's Resistance Army in Central Africa.
    In order to conduct many of our programs we use a mix of Department 
of State and DOD authorities. One example of this is the APS program 
where DOD title 10 authorities pay for the movement of ships and 
personnel while State Department's PKO funding pays for the actual 
training activities of African personnel. An example of how 
Congressional support provided critical authority at an appropriate 
time is the Global Security Contingency Fund (GSCF), approved in the 
National Defense Authorization Act (NDAA) for Fiscal Year 2012. This 
was a first step in streamlining State and DOD authorities for security 
assistance and the two departments are working closely to utilize the 
GSCF in the coming year.
    The Department of State's ability, through security assistance 
funding, to work on the same problem set from a different angle is 
beneficial and would suffer if its funding were reduced, weakening 
overall U.S. Government abilities to advance U.S. objectives on the 
continent. We will work with our interagency partners to ensure the 
resources you provide are appropriately tied to our highest defense and 
foreign policy priorities. I thank this committee and Congress for its 
continued support of our team and our mission.
    Another example of how congressional support provided critical 
authority at an appropriate time is the new authority of section 
1207(n) in the NDAA for Fiscal Year 2012. Pursuant to that authority, 
we are working with the Department of State to plan our support to 
build the capacity of the counterterrorism forces of Ethiopia and those 
countries engaged in AMISOM. This is an opportune time to exercise this 
authority as al Shabaab in Somalia is facing a fight on three fronts 
with forces from AMISOM and the Somali TFG, Kenya, and Ethiopia 
actively engaged. We appreciate the additional authority and believe it 
will enable AMISOM forces to continue their progress against al 
Shabaab.
    We also appreciate the new authority under section 1206 of the NDAA 
for Fiscal Year 2012 to provide logistics support, supplies, and 
services for countries participating in counter-LRA operations. We feel 
this authority will enable continued steady progress by our regional 
partners toward our mutual goal of defeating the LRA and bringing 
Joseph Kony to justice.
    Finally, we welcome visits by you and by your staffs. The members 
and staff who have had the opportunity to travel in Africa gain a 
deeper appreciation for both the challenges and the many opportunities 
that are presented in this large and diverse continent.

                               CONCLUSION

    AFRICOM will continue its operations, exercises, and security 
cooperation in order to protect America, Americans, and American 
interests from threats emanating from the African continent and advance 
U.S. policy goals. We will prioritize and focus our engagements to 
counter the most significant threats to U.S. security. We look forward 
to being the security partner of choice for African nations by building 
lasting, beneficial partnerships. Our success is dependent upon close 
collaboration with our interagency partners, embassy country teams, 
African regional organizations, and African nations.
    We believe that over the long run, it is Africans who should 
address African security challenges and that we most effectively 
advance U.S. security interests through focused and sustained 
engagement. In strengthening African defense capabilities and 
capacities, we enable African states to take ownership of their 
challenges and strengthen their leadership roles. We believe that for a 
relatively low resource cost, our programs are making a positive 
difference.
    Our past successes would not have been possible without the 
dedication of the entire AFRICOM team--soldiers, sailors, airmen, 
marines, coastguardsmen, civilians, contractors, and our interagency 
teammates--and their families.
    During my travels throughout my first year with AFRICOM, I have 
heard many great African proverbs, however, I have learned one which I 
think is particularly applicable to AFRICOM:

          ``If you want to go quickly, go alone. If you want to go far, 
        go together.''

    We, at AFRICOM, choose to go far. We choose to go together, with 
our Africa partners as well as together with our many interagency 
partners, to better meet their security interests and to advance the 
security interests of the United States.

    Chairman Levin. Thank you so much, General Ham.
    Let us try 7 minutes for our first round. We have a vote at 
11 a.m. but apparently it is now 11:30 a.m., but assuming that 
we are still asking questions, which I presume will be the 
case, we will try to work right through that vote, and if 
necessary, we will also have a second round.
    Admiral and General, first, about the fiscal year 2013 
budget. We have had an administration strategy which has been 
laid out recently. My question is, does the 2013 budget request 
from the administration reflect the administration's strategy 
for your AOR, and do you support that budget? Admiral?
    Admiral Stavridis. Yes, sir, to both questions.
    Chairman Levin. General?
    General Ham. I do, sir.
    Chairman Levin. Now, relative to Afghanistan, Admiral, let 
me ask you a number of questions about the events that are 
going on in Afghanistan following the violence over the Koran 
burning. Question number one, should we, because of this 
violence, modify our strategy in Afghanistan in your judgment?
    Admiral Stavridis. No, sir. I think at the moment, although 
as you say it has been a very challenging week, as I look at 
the broad sweep of our progress there, I am convinced that we 
should continue with the current strategy of transitioning to 
the ANSF.
    Chairman Levin. Do our NATO allies and the other ISAF 
participating countries also remain committed to the strategy 
following this violence?
    Admiral Stavridis. Yes, sir. In my conversations--as you 
can imagine, I have had many over the last week or so with 
senior leaders within the alliance. You have also seen the 
Secretary General of the alliance, Secretary General Rasmussen, 
address this specifically. I think there is solid support on 
the European side of this to continue with the current 
strategy.
    Chairman Levin. What is your assessment of the response of 
the ANSF to the violence over the recent days?
    Admiral Stavridis. It has been reasonably good. We have had 
about 150 demonstrations around the country, about 30 people 
killed, about 150 people wounded. So this has been a 
significant level of activity, but it has been very diffuse 
around the country. I think General Allen would tell you and 
will probably have a chance to tell you directly in a few weeks 
that he has been generally pleased with the response, both of 
the Afghan National Police (ANP) and the Afghan National Army 
(ANA), in containing these demonstrations and holding violence 
to a minimum.
    Chairman Levin. Last June when the President announced the 
plans for the drawdown of U.S. surge forces by the end of this 
summer, he also said that after that occurred, that U.S. troop 
reductions would continue, in his words, ``at a steady pace as 
ANSF move into the lead.'' Can you give us your view regarding 
the pace of troop reductions in Afghanistan after the end of 
this summer when the surge forces are out of Afghanistan 
between then and 2014 when we would be turning over the 
principal security responsibility throughout Afghanistan to the 
Afghans?
    Admiral Stavridis. Sir, as you would expect, we are 
starting to think about that holistically from, as you say, the 
end of the fighting season at the end of this summer and 
looking forward. But I think it is too soon to lay out a 
definitive track. General Allen will be coming in, I would 
guess, by mid-summer with some ideas about that, and they will 
have to be vetted on the U.S. side through General Mattis up 
the NATO chain with me. I would not anticipate having 
granularity on that until later on this year. I think it has to 
be conditions-based as we go forward. So I think that is a 
sensible approach.
    Chairman Levin. Do you have any current views about that 
pace?
    Admiral Stavridis. I do not, sir. I want to see how things 
go for the rest of the year.
    Chairman Levin. Next, do you anticipate that one of the 
major outcomes from the NATO Summit in Chicago in May would be 
an agreement between NATO and the Government of Afghanistan on 
a long-term strategic partnership for promoting security and 
stability in Afghanistan?
    Admiral Stavridis. I believe it will be. That is a very 
high-level goal for Secretary General Rasmussen. Everything I 
can see around the circuit on the NATO side indicates a strong 
willingness to go forward, and I believe we will have an 
enduring partnership between NATO and the Republic of 
Afghanistan.
    Chairman Levin. You expect that could be accomplished by 
that Summit?
    Admiral Stavridis. Yes, sir, I do.
    Chairman Levin. Now, discussions between us and Afghanistan 
on a long-term strategic partnership agreement have allegedly 
slowed down reportedly over the issues of night raids and 
detention operations. Is it your expectation that those issues 
would need to be resolved within the U.S.-Afghanistan strategic 
partnership negotiations before an Afghanistan-NATO strategic 
partnership agreement could be finalized?
    Admiral Stavridis. First of all, those particular 
discussions are in the U.S. chain. So it would be General 
Mattis who would be focused on that, obviously. My sense is 
that on the NATO side, we are going to move forward 
independently of national bilateral agreements. Some European 
nations have already concluded strategic partnership 
agreements. Some are in discussions. There is a NATO path 
forward on this that I am confident will be done by the Summit.
    Chairman Levin. Now, on the question of our forces in 
Europe, after the inactivation of two Army brigades and the one 
A-10 squadron in Germany, I assume that this is going to affect 
bases or sites that we have in Europe. I am wondering if you 
would provide us for the record a list of the impact of those 
changes on our locations in Europe.
    Admiral Stavridis. Yes, sir, I will be glad to.
    [The information referred to follows:]

    The inactivation of the two Army brigades will allow us to close 
the communities of Bamberg and Schweinfurt, Germany (a total of 11 
distinct sites), in addition to the communities of Mannheim and 
Heidelberg, whose closure was announced in 2010. While the inactivation 
of the A-10 squadron will reduce our presence in Spangdahlem, Germany, 
it will remain an enduring location because of the presence of other 
U.S. forces. Similarly, the divestiture of the Air Control Squadron at 
Aviano Air Base, Italy, will reduce our presence but Aviano will remain 
an enduring location. The Army will also reduce combat enablers by 
2,500 personnel in Europe, coming from a variety of locations across 
Germany. Finally, there are other ongoing basing efficiency initiatives 
which may result in other site modifications that will be announced and 
executed as soon as we've completed consultations with the affected 
host nations.

    Chairman Levin. Do you believe it is in our security 
interest to pursue cooperation with Russia on missile defense?
    Admiral Stavridis. I do.
    Chairman Levin. Can you tell us why?
    Admiral Stavridis. I think that as a general proposition, 
the missile defense system that we are putting in place is not 
in any way directed against Russia. It is directed against 
ballistic missiles that could come from a variety of nations.
    Chairman Levin. Including Iran?
    Admiral Stavridis. Including Iran, of course. Clearly, 
Russia's geopolitical position where they exist in the world, 
their geography, would make it advantageous to have a means of 
sharing information. Now, that is distinct from a fully 
integrated system, and of course, we have to protect our 
classified information and so forth. But I think there is 
advantage in a tactical sense to this, and from a political 
perspective, I think seeking zones of cooperation with Russia 
where we can find them is a useful thing to do, recognizing 
there are going to be areas that we are going to disagree with 
the Russian Federation upon.
    Chairman Levin. Thank you.
    General, you recently visited Libya, I believe, and had 
discussions with military leaders in Libya. Can you give us 
your reaction to those meetings?
    General Ham. Sir, I have visited Tripoli, a first visit, 
first of what I hope will be many visits to that country. Early 
in February, we hosted the military chiefs of the Libyan armed 
forces at our headquarters in Germany. All of this focused on 
establishing what I will call a normalized military-to-military 
engagement process.
    I am encouraged by the willingness of the Libyans to want 
to have that kind of relationship. To that end, we have stood 
up an Office of Security Cooperation. That is the mechanism 
that we would have to facilitate things such as foreign 
military sales and international military education and 
training (IMET) programs.
    So I think we are off to a good start. The challenge for us 
will be to sustain that and make sure we are addressing the 
security concerns that are of mutual interest to Libya and the 
United States.
    Chairman Levin. Thank you both.
    Senator McCain.
    Senator McCain. Thank you, Mr. Chairman.
    Admiral, I am sure in your experience you remember that we 
intervened in Kosovo and Bosnia because ethnic cleansing and an 
unacceptable situation prevailed that caused us to intervene 
and stop the massacre that was going on, right?
    Admiral Stavridis. Yes, sir.
    Senator McCain. Yesterday the Secretary General of NATO, 
Mr. Rasmussen, told The Cable, ``we haven't had any discussions 
about a NATO role in Syria, and I don't envision such a role 
for the alliance.'' Is it true that NATO is doing no 
contingency planning of any kind with respect to Syria, 
including for the provision of humanitarian and medical 
assistance?
    Admiral Stavridis. We are not doing any detailed 
contingency planning at this point, Senator, and there is a 
reason for that. Within the NATO command structure, there has 
to be an authorization from the North Atlantic Council before 
we can conduct detailed planning.
    Senator McCain. Before you can do any planning?
    Admiral Stavridis. Before we do detailed contingency 
planning.
    Senator McCain. I asked if there is any planning going on.
    Admiral Stavridis. There is always a close monitoring of a 
situation like that, but there is nothing that I would 
categorize as detailed planning.
    Senator McCain. Would you characterize the crisis in Syria 
as an armed conflict between Assad's forces and opposition 
forces?
    Admiral Stavridis. Yes, sir, I would.
    Senator McCain. Would the provision of arms, communication 
equipment, and tactical intelligence help the Syrian opposition 
to better organize itself and push Assad from power?
    Admiral Stavridis. I would think it would, yes, sir.
    Senator McCain. So here we are with a NATO that was willing 
to engage and intervene in Bosnia and Kosovo, but we will not 
even make any contingency plans for the massacre that is going 
on in Syria. I guess I will not have to ask a comment on that. 
It speaks for itself as to the role of NATO.
    General Ham, have you seen evidence of al Qaeda attempting 
to exploit unrest in Libya and Tunisia? If so, have they had 
any success?
    General Ham. Sir, we have seen indications that al Qaeda 
seeks to take advantage of the situation in Libya. It is less 
clear to me that they have the same intent in Tunisia, but 
Libya to be sure.
    Senator McCain. In your prepared remarks, you say there are 
clear indications that AQIM is now involved in trafficking arms 
from Libya. Could you tell us a little bit about the 
indications, what kind of weapons they are trafficking, and has 
al Qaeda acquired MANPADS from Libya?
    General Ham. Senator, if you allow me, it would be best, I 
think, to give you the details in a classified response to your 
question. But more generally, we certainly have seen the 
transit of small arms, some heavy weapons, and munitions from 
stockpiles in Libya through the border area between Niger and 
Algeria, and we assume that that is intended to resupply AQIM 
principally operating in northern Mali.
    [The information referred to follows:]

     [Deleted.]

    Senator McCain. This whole issue the Tunisians have with 
their border problems lends itself to making the situation 
worse because they do not have control of their borders, right?
    General Ham. Sir, that is true for most of the nations in 
that neighborhood.
    Senator McCain. So it would be in our interest to help the 
Tunisians, as I mentioned in my prepared statement, with some 
ability to better control their own borders.
    General Ham. I agree with that, Senator.
    Senator McCain. Admiral, in the NDAA, we put in language 
about Georgia and the sale of defensive arms. Have we had any 
advice and counsel from you on that as to how we can carry out 
that mission of helping them with defensive weapons?
    Admiral Stavridis. Sir, we are moving very fast on that and 
I anticipate that coming back to the committee, to Congress, at 
the end of this month. I want to assure you it is getting a 
great deal of attention and we are leaning forward on it very 
much.
    I also want to just mention--and you picked up on this, but 
Georgia's contributions in Afghanistan are almost beyond 
noteworthy. They have a full battalion there. They have just 
agreed to add a second battalion. They will then become the 
largest troop-contributing nation on a per capita basis of the 
50 nations who are there. We are also looking at bringing them 
into the NATO Special Operations Headquarters to do some work 
in that regard too. So overall, as you indicated, it is a 
nation that we are working with very closely, and I look 
forward to delivering the section 1242 data you asked for at 
the end of the month.
    Senator McCain. Thank you.
    General Ham, on a recent visit that we paid to both Tunisia 
and Libya, I got the distinct impression that al Qaeda is a 
threat and radical Islamist elements are a threat, but overall, 
more so in Tunisia than Libya because they are further along. 
There does not seem to be a fear, at least amongst the people 
of these countries, about those extreme elements having an 
undue influence. But at the same time, this issue, particularly 
in Libya, of all these weapons lying around, including perhaps 
MANPADS--I have heard figures as much as 20,000. The militias 
that are still not under government control should give us 
pause.
    What is your assessment, because you hear a lot of 
different opinions in the United States, of the real threat 
that these countries might fall under the sway or influence or 
takeover by al Qaeda, Salafis, or other extreme Islamist 
organizations that might not be in the United States' national 
security interest?
    General Ham. Senator, from the reporting that I have seen 
and my interaction with leaders in both countries, I do not 
think there is great likelihood that an extremist organization 
will be able to extend control of the government of either 
country. It is rather the network and the cells of extremist 
organizations that are seeking to take advantage of the current 
unrest particularly in Libya that would undermine the efforts 
of the legitimate government of those countries. I think that 
is the real threat rather than taking over the country.
    Senator McCain. So a lot of it will be gauged by the 
progress that they make towards forming up a government, 
getting the militias under control. In other words, nation-
building from scratch.
    General Ham. Good governance and establishment of 
legitimate security institutions are absolutely key to the 
success in both countries.
    Senator McCain. I found, much to my dismay, that both the 
prime minister and the deputy prime minister were professors at 
the University of Alabama, and that brings an extreme element 
into the government----[Laughter.]
    --that should be of significant concern, I believe. Do you 
agree, General?
    General Ham. Sir, I do not. Having met the prime minister, 
I think he is--and he will be here in this city next week.
    Senator McCain. I hope all of our colleagues have the 
chance to meet him.
    Admiral Stavridis. I would just add ``Roll Tide.'' 
[Laughter.]
    Chairman Levin. I was going to thank Senator McCain for his 
questions until that last one. Thank you, Senator McCain.
    Senator Lieberman.
    Senator Lieberman. Thanks, Mr. Chairman.
    Thanks, Admiral and General, for your service.
    I must admit that I never thought that of all the things I 
have had the honor to experience in my time as a Senator, that 
I would ever be sitting in Tripoli with the leadership of the 
country, could say the two words that you said, ``Roll Tide,'' 
and receive thunderous applause in response. [Laughter.]
    Admiral, let me join those who are thanking you for your 
service, extraordinary service to our country. It has been a 
great honor and really a pleasure to get to know you. You 
obviously have been a great military leader but you also have a 
tremendous sense of history which I think has contributed to 
your service to our country. May I say I know you referred with 
your characteristic humility a while ago to your height. You 
join a rather proud list of great military leaders over history 
who have not been tall except in the quality and effect of 
their leadership. I thank you very much for that. Obviously, I 
have no bias against people who are not tall. [Laughter.]
    Admiral Stavridis. You look pretty tall to me, Senator. 
[Laughter.]
    Senator Lieberman. Now, let me begin with you. I do want to 
say for the record that I share the consternation that Senator 
McCain expressed about the excess of rhetoric and deficiency of 
any real action to assist the opposition in Syria. This does 
remind me of experiences we had in Bosnia and Kosovo in the 
1990s. It actually took quite a while for us to build the 
political will both here and in Europe to get involved there. 
While we were doing that, a lot of people got killed. The same 
is happening in Syria now. I hope it does not take us so long. 
In both of those cases, when we got involved, we were able to 
stop it--NATO, our coalition of the willing--and brought about 
a much better situation than existed before. I hope before long 
we will be able to do that there as well.
    I also want to touch on another matter that Senator McCain 
raised and that is our relations with Georgia. As you well 
know, Admiral, there will be a NATO Summit in Chicago this 
spring. It does not appear to me, from what I hear, that there 
will be anything on the agenda about further NATO enlargement. 
I hope we can find a way to make clear in Chicago that the door 
to NATO has not been closed to other nations, particularly I am 
thinking of Georgia, but there are others as well.
    Do you have any sense of that? I presume it will not be on 
the agenda, but can we find a way to let countries like Georgia 
know that the door is still open to them to NATO?
    Admiral Stavridis. Sir, I do not know if it will be on the 
agenda. But as you surmise, I doubt that it will be formally 
placed on the agenda. There are nations in various stages of 
moving toward membership including, among others, Macedonia and 
Montenegro. Georgia is in a national plan that continues to 
make progress.
    The treaty is very clear. The treaty is very simple in 
terms of an open door is defined, democratic ideals, position 
to contribute, unanimous consent of the members. I think that 
the United States continuing to use its voice within the 
councils of NATO can move this position very effectively, and 
that is how I would approach it.
    Senator Lieberman. Okay. I hope that is, in fact, the case.
    Let me ask you one follow-on question about the really 
tragic events in Afghanistan in the last week or so. Do we have 
a judgment about whether the unrest that followed the 
regrettable, to put it mildly, burning of the Koran is 
spontaneous or whether our enemies there, the Taliban, for 
instance, are basically jumping on an unfortunate event and 
trying to turn it to their advantage?
    Admiral Stavridis. Senator, I will provide some classified 
data on that. As you can imagine, we do have a sense of it. I 
would say it is somewhat both, and we will provide you some 
more detail on that.
    Senator Lieberman. That is good enough for now.
    [The information referred to follows:]

     [Deleted.]

    Senator Lieberman. General Ham, I wanted to come back to 
the LRA. I know the President a while back deployed about 100 
of our special forces into Uganda and the Democratic Republic 
of Congo, et cetera, in response to the LRA. Can you give us a 
status report on that operation this morning?
    General Ham. Senator, I would be glad to.
    The force is deployed. We have liaisons in each of the 
national capitals that work with the military forces of the 
four countries. More importantly, they are deployed in the 
operating areas particularly in the Central African Republic 
and the Republic of South Sudan, as well as members who operate 
in a joint intelligence operation center in the Democratic 
Republic of Congo. They are mostly special forces. Personnel 
are advisors and trainers. They are facilitating the flow of 
intelligence. They are helping with logistics planning so that 
the African forces can sustain themselves for longer periods in 
what is a very large and austere operating area and also 
assisting with long-range communications.
    So I think we are off to a pretty good start. The next 
steps for us are, in concert particularly with Uganda and South 
Sudan, to use a South Sudanese base from which we can fly an 
ISR aircraft to extend the range into what we think is the most 
likely operating area of the LRA in the Central African 
Republic and the northern portion of the Republic of South 
Sudan. So far, so good.
    A concern is the rainy season is coming. That will impede 
intelligence collection and certainly tactical movement. So we 
have a bit of a sense of urgency to try to get done everything 
we can before the rains hit.
    Senator Lieberman. How would you describe what the goal of 
our presence there is?
    General Ham. Sir, we are an enabling force to facilitate 
and advance the capabilities of the African forces, to increase 
their ability to sustain their operations for longer periods of 
time. They have much better human intelligence. Their field-
craft is quite good. They need mostly communications, a little 
bit of sustaining capability, a little bit of planning effort. 
But it will be the Africans who bring this mission to a 
successful conclusion.
    Senator Lieberman. Of course, the goal of their efforts is 
to defeat the LRA and to presumably capture or kill its leader. 
Is that correct?
    General Ham. Yes, sir, that is.
    Senator Lieberman. Thanks.
    Let me go back to Tunisia and just invite you to say a 
little more, General Ham. As others who have been there, I have 
been really impressed by the transition they made. They had a 
good interim government. They held open, free, and fair 
elections. They have elected a government which the majority of 
the elected representatives to the parliament were members of a 
party called Inyatta, which is Islamist, but has really, I 
think, helped a lot of us have a different vision or a fair 
vision of what is possible for a party that calls themselves 
Islamists in terms of respect for law, women's rights, 
democracy.
    But they have some really big challenges, and I think 
perhaps of all the Arab Spring uprisings, this is the one that 
has the greatest prospect to succeed, but they need our help to 
do so. I know immediately they need financial assistance, which 
a lot of countries are talking about doing, including our own.
    But what about military-to-military? I was surprised at how 
little we were giving them before this uprising certainly as 
compared to Egypt but really other countries in the region as 
well. I wanted to invite you to talk a little bit about what 
your plans are, if you have any--I hope you do--to work with 
the Tunisian military to build their capabilities in the year 
ahead.
    General Ham. Senator, during the transitional period, the 
interim government period, we had dialogue with the Tunisian 
Ministry of Defense and their armed forces, but there was some 
reluctance to commit to longer-term arrangements. Now that the 
government has been seated and the government is certainly more 
permanent, we had just 2 weeks ago a bi-national commission 
meeting with the Tunisians in Tunis, again to map out the 
military-to-military engagement and security assistance plan 
between the two countries.
    What the Tunisians have asked us for at the top of their 
list is assistance with border security, both land and in the 
maritime domain. So we are seeking opportunities to do that.
    Second, they have asked us to make sure that we can at 
least sustain and preferably increase the number of Tunisian 
officers who are afforded the opportunity to train in U.S. 
military educational institutions.
    So again, a good basis for an enduring relationship, I 
think, is formed, and we just have to sustain that now well 
into the future.
    Senator Lieberman. Good. Thank you.
    Admiral Stavridis. Can I add just one thing, sir, on this, 
on Tunisia? It is a NATO organization called the Mediterranean 
Dialogue which brings together non-NATO Mediterranean 
countries, including Egypt, Tunisia, Morocco, and Israel, and 
is a mechanism that we are going to employ to bring Libya 
closer as well. So there are alliance mechanisms as well as the 
good points that General Ham made.
    Thank you, sir.
    Senator Lieberman. Thank you. Again, Godspeed in the 
chapters ahead, Admiral.
    Thanks, Mr. Chairman.
    Chairman Levin. Thank you, Senator Lieberman.
    Senator Inhofe.
    Senator Inhofe. Thank you, Mr. Chairman.
    I think when we talked about the force structure in EUCOM 
being reduced and if you go back--it is my understanding--
through the 1990s, that reduction has gone up as high as 75 
percent even before the more current reductions. You have 
answered the question in terms of meeting the contingencies 
there, but I did not hear anything, General Ham, in terms of 
this reduction and the fact that we need a rapid response 
sometimes to things that are happening in Africa that you and I 
have talked about. How is this impeding your looking down the 
road?
    General Ham. Senator, I think we will be okay. The air and 
maritime forces that have been forward-stationed in Europe were 
absolutely essential to operations in Libya. Those forces will 
largely remain in Europe, and I think we will be in good shape. 
The special forces that are stationed in Europe are going to be 
enhanced in the future with some special operations aviation 
that will, I think, again give us increased capability. One of 
the Army brigades that is retained is the Airborne Brigade 
based in Italy. That is the most likely Army force that we 
would require in a contingency. So I am pretty satisfied, 
Senator.
    Senator Inhofe. Vicenza?
    General Ham. Yes, sir.
    Then lastly, sir, as Admiral Stavridis laid out in Europe 
where there will be a rotational presence, we are actually very 
fortunate that the very first of what are called regionally-
aligned brigades or regionally-aligned forces will come to U.S. 
Army Africa, our Army component, in fiscal year 2013. We think 
that is a very good initiative. It gives some predictability 
and will enhance our ability not only to respond to emergent 
contingencies but, more importantly, to continue exercises and 
partnership activities on a predictable basis on the continent.
    Senator Inhofe. Admiral, I was pretty much involved in the 
Vicenza, back when we had to use them to overfly Turkey, and 
helping them. Fortunately, we had weather that was cooperating 
at that time, but we now have--I think it is all complete now. 
The staging area in Aviano, is that operating to your 
satisfaction?
    Admiral Stavridis. Yes, sir. I visited it about 8 months 
ago. It is a terrific facility.
    Senator Inhofe. Yes, it is, it is. Yes, I was there also.
    Just for a minute, going back--and I appreciate the fact 
that Senator Lieberman was asking questions about the LRA. It 
was actually my legislation back in 2009 and we called it the 
LRA Disarmament in Northern Uganda. At that time, Northern 
Uganda was pretty much it, up there around Gulu. My first 
exposure to that was some 16 years ago. Now moving all around 
as far south as you mentioned, Eastern Congo--and I had 
occasion to be in South Sudan, one of the first visitors there 
under that new country. That was one of their major concerns up 
there. So I do know that it has expanded to the point where I 
always felt we should be considering that a major terrorist 
activity, even though they say Joseph Koni is one man, he has a 
few close lieutenants, but they are spreading around. They have 
mobility.
    The question I would ask you about this is, do you feel you 
have the assets necessary--we will start with just the LRA--to 
handle what you need to handle and then emphasize the fact that 
even though we have some combat troops there, it is not a 
combat mission that we have. There has been a lot of criticism 
that people thought that it was. Would you elaborate on that?
    General Ham. Senator, I would be glad to. First of all, 
with regard to the role of the forces, we are a train, advise, 
and assist role. We are not those who are out on operational 
missions. However, because of the area in which our forces 
operate, they are combat-equipped. There are dangerous areas in 
which they are operating, and they are certainly based 
alongside the forces of the nations involved.
    With regard to assets, I have the assets I need with one 
exception, that if you will allow me to do so, to answer in a 
classified forum.
    [The information referred to follows:]

     [Deleted.]

    General Ham. The challenge for us right now, particularly 
with reconnaissance, is the ability to reach all of the areas 
we need to reach to be able to observe or try to collect and 
identify where the leaders of the LRA are operating. That is 
why this base in South Sudan, which General James Hoth Mai, 
Chief of Staff of the Sudan People's Liberation Army (SPLA), 
who you have met, has offered to us, is so important because it 
will allow us to extend and have the reconnaissance aircraft 
operate for longer periods of time in the areas in which we 
think the LRA is operating, again particularly in the Central 
African Republic and the northern regions of the Republic of 
South Sudan.
    Senator Inhofe. I appreciate it. I know what you are doing 
and you are doing a great job. We do get classified briefings 
on a regular basis, and I would just like to make sure that 
anything that comes up that changes what you are doing now or 
progress you are making that you share that with me personally.
    [The information referred to follows:]

    We continue to make steady progress toward enabling our African 
partners to defeat the Lord's Resistance Army (LRA) and remove Joseph 
Kony and his senior commanders from Central Africa. Cooperation, 
coordination, and communication between the forces of Uganda, the 
Democratic Republic of the Congo (DRC), the Central African Republic 
(CAR), the Republic of South Sudan (RoSS), and the United Nations 
Stabilization Mission in the DRC are improving steadily. I believe this 
cooperation will result in increased effectiveness against the LRA in 
the months ahead.
    Our near-term efforts focus now on developing better intelligence, 
operations integration, logistics support, command and control, and 
communications with our regional partners. Special Operations Forces 
(SOF) advisors are now postured at forward operating locations in Obo 
and Djema, CAR; Nzara, RoSS; and at Dungu, DRC. We have also 
established C-LRA Operations Fusion Centers in the CAR at Djema and 
Obo; and in RoSS at Nzara. These centers enable our partners to better 
synchronize operations and integrate the efforts of local civic 
leaders. Additionally, we are in coordination with Kinshasa and our 
counterparts, Forces Armees de la Republic Democratic du Congo, to 
advance our partnering efforts in the DRC.
    The progress of our African partners is encouraging. The Ugandan 
military is conducting patrols while our forces continue to train 
Ugandan C-LRA units. The CAR Government has supported regional C-LRA 
efforts by providing U.S. and Ugandan forces continued access to its 
territory. RoSS has granted permission for Ugandan presence in South 
Sudan and has agreed in principle to host a regional African Union C-
LRA Task Force Headquarters. DRC military responsiveness to LRA 
sightings is a positive development and could indicate increased 
commitment to C-LRA operations.
    I anticipate continuing progress in C-LRA operations. U.S. forces 
have established operating bases and sustainment mechanisms to support 
regional C-LRA operations. They have developed solid relationships with 
regional forces, helped refine intelligence-sharing, and intelligence-
driven planning. We are working together with the U.S. Embassy country 
teams to implement a DOD rewards program that will provide incentives 
to communities as well as individuals to support elimination of the 
LRA.

    Senator Inhofe. Getting into the Boko Haram, I think that 
has been there. They say that it only came by that name since 
2001. However, I can remember being with Sani Abacha as long 
ago as 16 years ago, and while it was not called that at the 
time, it was the genesis of what has become Boko Haram.
    I just would ask if you think that the capability of the 
Nigerian forces--how are they--how would you assess them and 
their capability of handling that because I consider that to be 
a major problem in that part of Africa.
    General Ham. Sir, we have been engaged with the Nigerians 
to seek opportunities, if they would like us to, to seek to 
increase the capabilities specifically of their tailored 
counterterrorist forces. Their general purpose forces are 
pretty good, but they are not really designed for this kind of 
a mission. We think, just as we have found, having some 
specialized training, equipping, small forces that are very 
specifically focused on a counterterrorist role, would probably 
be beneficial to Nigeria. If they would like some help, we 
would like to do that.
    Senator Inhofe. Yes. You think maybe the 1206 and 1207 
programs have a very good application there?
    General Ham. Absolutely, sir.
    Senator Inhofe. I was going to say that I want to include 
IMET throughout the continent down there and how beneficial 
that has been. When I am down there, I can see the results of 
that. You see the people that we have trained and they have 
gone back to these areas. It has been a very successful 
program, and I would assume that you agree with that.
    Admiral Stavridis. If I could just say a word on 1206. In 
the EUCOM dimension, we use that to prepare our allies to go 
forward into Afghanistan with us, and it absolutely underpins 
the contribution of 40,000 European troops. So 1206 has been a 
terrific initiative from the EUCOM perspective as well, sir.
    Senator Inhofe. Yes. My time has expired, but I would like 
to have you make one comment about an area that really 
impresses me is in Kabul, the military training center there. 
We have watched this. I know the Oklahoma 45th was actually 
over there in the very early stages long before that center was 
developed. But is that progressing and are you getting the 
results that you were looking in ANA and the quality of 
training?
    Admiral Stavridis. Yes, sir, absolutely. Just to give you a 
number, we now have 80 percent of the instructors there are 
Afghans.
    Senator Inhofe. It is 80 percent now?
    Admiral Stavridis. Yes, sir.
    Senator Inhofe. That is quite an improvement. I was there 
over New Year's and it was about half of that, I thought, at 
that time. So it has really been improving quite a bit. Good. 
Good work.
    Let me also get on record and say the same thing that the 
other Senators have said about your service, about our personal 
relationship, and how much you will be missed. Thank you.
    Chairman Levin. Thank you, Senator Inhofe.
    Senator Nelson.
    Senator Nelson. Thank you, Mr. Chairman.
    Admiral Stavridis, let me thank you for your service. In 
our little discussion before, what you are doing is you are 
avoiding being disintermediated, and that is an important point 
that we discussed earlier.
    Your testimony notes that we have completed phase one of 
the European Phased Adaptive Approach (EPAA) to missile 
defense. It is designed and intended to defend against the 
existing growing threat from Iranian ballistic missiles to 
Europe and other possibilities as well. You also note that our 
NATO allies are making efforts to contribute to NATO's new 
missile defense mission.
    Can you in layman's terms, as much as possible, describe 
why you believe this EPAA and the planned capabilities of it 
are important to defending Europe against Iran's growing 
missile capabilities, particularly phase two in Romania and 
phase three in Poland?
    Admiral Stavridis. Yes, sir. You correctly categorized the 
threat as coming from that region of the world and it is only 
growing. Therefore, we have an obligation, an alliance 
obligation, here and, of course, ultimately that threat will 
probably be intercontinental in nature. So all the more reason 
at that point to be defending the Homeland. So as we build up 
from the current phase one, which is a couple of Aegis ships, a 
static radar system, a command and control system up in 
Germany, we put all that together. We are going to combine that 
with the NATO command and control system.
    By 2015, we will have a land-based interceptor set that 
will be ashore in Deveselu, Romania. We will upgrade the 
missiles at that point. We will upgrade the command and 
control. We will lash in more overhead sensors, and then the 
next step will be 2018 when we will add another set of ground 
interceptors in Poland.
    As we build this, I am confident the NATO allies will step 
up and contribute as well. For example, the Dutch are buying 
ships that are capable now of plugging into this architecture 
like our four DDGs, our destroyers that will be going to Rota.
    So it is a progression. It is phased and it is adaptive to 
the threat in that we can plug in at any step along the way to 
continue to improve it to pace the threat that we see.
    Senator Nelson. It is adequately named. Because it is 
phased adaptive, it can be adapted to what the changes would 
require, but it is also called the defense. It is not intended 
to be an offense approach. It is defense. So I think that is 
important for people to understand.
    You noted and Senator McCain noted about the Aegis 
ballistic defense ships that are going to be based. Can you 
explain the benefit of homeporting for the four ships at Rota 
as compared to having the ships transit the Atlantic as an 
alternative?
    Admiral Stavridis. Yes, sir. The advantage of having them 
forward, if you will, in Rota is partly the multi-capability of 
the ships. In other words, these are not just ballistic missile 
ships. They are air defense ships. They are anti-submarine 
ships. They are anti-surface ships. They can be used as 
intelligence gatherers. They have very sophisticated aircraft 
attached to them. So the capability that you bring forward into 
this theater is frankly profound, and it also helps my fellow 
combatant commander here because Rota is uniquely positioned 
essentially directly between EUCOM and AFRICOM. These ships 
could be 1 day working down off the Gulf of Guinea addressing 
threats from a Boko Haram scenario. In the next few weeks, they 
could transit through the Suez and be doing counterpiracy 
missions. The next week, they could be doing their traditional 
missions in the ballistic missile sense in the eastern 
Mediterranean.
    The advantage to having them forward and not transiting the 
Atlantic is simply one of time/distance. For every ship that is 
forward-deployed, it is really the equivalent of the effort of 
three or four ships back in the United States because of that 
transit time it has to eat up.
    Then lastly, the political benefit of having them there to 
engage with our allies, I think, speaks for itself within the 
alliance, sir.
    Senator Nelson. In addition to the Dutch, are other NATO 
allies working on comparable ships or comparable warfighting 
opportunities?
    Admiral Stavridis. Yes, sir. The Spanish are looking at 
this. The Germans and Italians have air defense systems that 
they are looking to lash into this. All the nations contribute 
in the command and control arena and certainly in the staffing 
and the command structure. So over time, my intention is to 
continue to encourage our European allies to shoulder their 
rightful part of this, and I think over time we should continue 
to press that hard.
    Senator Nelson. We have been frustrated in the past because 
it felt like NATO was the United States pulling a lot of our 
friends along but they were not pulling their weight in terms 
of the financial cost or the capability to be supportive as we 
have been. Do you see that as developing in parity?
    Admiral Stavridis. I think we have to continue to press on 
our allies to spend more on defense as a general proposition. 
The Europeans set a goal of 2 percent of the GDP, and they are 
not meeting that. In the aggregate, they spend about 1.5 
percent of GDP. They are not meeting their own standards for 
doing that, and I think the United States should continue to 
press this very hard. I do at every opportunity and I welcome 
the chance to address it in a public forum like this as well.
    Senator Nelson. I think it is important, and I appreciate 
the fact you are stating that so publicly because it seems at 
times as though our allies would sacrifice until our last 
penny. What we need to do is be sure that there is a parity 
here among all the nations that gain from this security 
apparatus that we have.
    Admiral Stavridis. Yes, sir. I agree we need to continue to 
press hard.
    Senator Nelson. General Ham, one of the broad questions 
that always comes to mind is what in your command keeps you 
awake at night from time to time, the threat that perhaps is 
the hardest to quantify, the hardest to identify, the hardest 
to deal with.
    General Ham. Senator, very clearly at the top of my list is 
the threat of a terrorist attack that would emanate from Africa 
but be conducted here in the Homeland. It is not too hard to 
imagine how that might happen. For example, a Somalia American 
citizen disaffected finds his way--probably a young man finds 
his way to Somalia to a training camp, because he is a U.S. 
passport holder, perhaps finds a way to negotiate the various 
security systems, and then conducts an attack here in the 
Homeland. That is mission failure for us, Senator, and that is 
what keeps me awake.
    Senator Nelson. Obviously, that is one of the hardest 
things, if not the hardest thing, to defend against.
    General Ham. It is, sir, but again, with our emphasis on 
working by, with, and through host nation forces, seeking ways 
to have stable institutions in Africa, the likelihood that an 
attack like that could occur lessens. That is really what we 
are focused on.
    Senator Nelson. Thank you, gentlemen.
    Thank you, Mr. Chairman.
    Chairman Levin. Thank you, Senator Nelson.
    Senator Brown.
    Senator Brown. Thank you, Mr. Chairman.
    To both of you, thank you for your service, obviously, and 
your leadership.
    I would like to follow up on my colleagues' comments on 
Syria. I certainly share their concerns and agree that we 
should empower our partners who are in the best position to 
exert pressure on the Assad regime. So I just want to note that 
for the record.
    Admiral, I would like to just switch gears a little bit. 
You have mentioned how proud you are of the National Guard 
partnership program. I have actually had the honor of 
participating with Massachusetts going over to Paraguay and 
serving and learning. I can tell you firsthand that program is 
unbelievable. The work I have done also over at DOD in 
understanding the larger role of that program has been eye-
opening as well.
    I am assuming that you agree that that program is unique, 
cost-effective, and a necessary international engagement tool. 
Is that a fair statement?
    Admiral Stavridis. Oh, I would go beyond that, Senator.
    First, thank you for your service as well.
    Let me say that I think the State Partnership Program (SPP) 
dollar-for-dollar may be one of the most efficient and 
effective programs that we have at our disposal as combatant 
commanders. I have 22 of these programs in the European 
theater. When I was the Commander of SOUTHCOM, I had the SPP 
you allude to. Down there I had about 20 of those programs. So 
I have seen about 40 to 45 of these over the last 6 years, and 
the bang for the buck is terrific because in the end we can do 
all kinds of messaging and strategic communication but personal 
contact trumps everything. When we put fine young American 
National Guardsmen and women in and around their partners, the 
return on investment, especially over time, is very powerful.
    I will conclude by saying the other thing about the Guard 
is they bring this unique basket of civilian skills along with 
their military skills, and that has real application, 
particularly in many of these less-developed countries.
    Senator Brown. You are right. The bang for the dollar--I 
was actually shocked as to how little it actually is and the 
value we get out of it. I am concerned that the Department of 
State (DOS) is trying to wrestle the program from us, and I 
would encourage you and others to advocate for it because of 
its effectiveness.
    I am wondering if we reduce our military presence in 
Europe, how do you think the partnership program will be 
affected, if at all?
    Admiral Stavridis. I think it becomes more valuable in that 
scenario because it is relatively low cost. If we are going to 
have less static forces assigned in Europe, the ability to have 
those State partnership folks rolling in and out becomes even 
more valuable.
    Senator Brown. Can you comment on the ongoing discussions 
between DOD and our German and Italian allies with respect to 
the termination of the Medium Extended Air Defense System 
(MEADS) program? Are these discussions progressing?
    Admiral Stavridis. They are progressing. Congress has 
helped us by sharpening the amount of funding that we can spend 
on this. We are in the process of discussing this. This is 
really done on a policy level in DOD, but I track it because I 
talk all the time to the senior German and Italian military 
folks. I would categorize it as a discussion that is ongoing 
that will, I think, conclude successfully in a mutually agreed 
way this spring.
    Senator Brown. General, if I could, the Guard currently are 
partners with eight countries in Africa, and I understand you 
believe there is some room for growth there. Can you comment, 
how might those plans for an Army regionally aligned brigade 
and Air Force Africa Partnership Flight in supporting those 
programs? Is there any option to expand or maintain those types 
of programs?
    General Ham. Senator, I believe there is. First, with 
regard to the SPP, like Admiral Stavridis, I am a big fan of 
that. It is the enduring relationships that are developed in 
the SPP that are so valuable to that effort.
    I have asked General McKinley if we could add two more 
State partners this year. I think we should look for some new 
and innovative ways to apply the SPP. For example, in a place 
like Libya where we have a newly forming relationship rather 
than a longstanding relationship, that might be a place where 
we could apply the SPP to great effect. So we will continue to 
look for opportunities such as that.
    The regionally aligned forces, the African Partnership 
Flight like African Partnership Station, the maritime component 
of that, what I think we will see in the years coming is an 
increased degree of predictability as the U.S. force presence 
is now out of Iraq and beginning to decline in Afghanistan, 
more predictable forces to be available for engagement, for 
exercises, and again, all with an eye toward increasing the 
capacity and the capability of the key African states that we 
interact with so that they can do more, contribute more to 
their own stability and to regional stability.
    Senator Brown. That is interesting you say that. I noted 
just from firsthand commentary that the rule of law training 
that the Judge Advocates Generals and others provide these new 
relationships in countries where they really do not have a rule 
of law, they do not have an understanding as to how we are able 
to balance the civilian and military especially in places like 
Paraguay and other countries as well. That is very important, 
and I appreciate both of your support of that program.
    I was wondering--General, I might as well stay with you. In 
your opinion, who should be the folks that will teach the 
Libyans how to safely store all of the unserviceable weaponry 
floating around Libya? Who do you think should be running that 
train?
    General Ham. At present, it is a DOS-led activity to try to 
help the Libyans, along with the neighboring states, first, to 
gain control, find out what weapons were in existence and then 
try to claim them under central government control, and then 
following that, do an assessment of the serviceability, what 
are the needs. I am very comfortable with that process to have 
the DOS lead. We help. We are part of that process, but I think 
it is okay, and as it is a government-to-government activity, I 
think, that works okay.
    Senator Brown. I might as well just wrap up with you on the 
no-fly ban with seven Americans working in Egypt. I know it is 
not your AOR. But I was wondering if there is any impact on 
AFRICOM's approach to other countries in the region potentially 
having similar types of problems. Are there any issues there?
    General Ham. None noted, sir, but it is not a question I 
have asked but we can.
    Senator Brown. Thank you.
    Admiral, I have one final question and then I will wrap it 
up with my inquiring. Our relationship with Pakistan has 
obviously a direct impact on your ability to maintain lines of 
communications through their country. Our combat footprint in 
Afghanistan, as it evolves, we obviously have a huge logistical 
tail that follows. How will this affect EUCOM's relationship 
with U.S. Transportation Command (TRANSCOM) to facilitate an 
adequate flow of equipment along the Northern Distribution 
Network?
    Admiral Stavridis. It is a terrific question that we are 
wrestling with because, as you correctly say, in order to get 
all of our equipment out of Afghanistan over the next 2 or 3 
years will be a significant logistical task. I am in contact 
constantly with General Fraser, TRANSCOM, to ensure that we can 
move it through that Northern Distribution Network, and that 
gets into a lot of complex politics along that route, to say 
the least.
    On Pakistan, I think we are moving in a somewhat better 
direction than we were, say, 6 months ago, 5 months ago. So 
hopefully we will have access both to those southern and the 
northern routes. But, I think, hope for the best, plan for the 
worst, and we are doing that.
    Senator Brown. Thank you, both.
    Thank you, Mr. Chairman.
    Chairman Levin. Thank you, Senator Brown.
    Senator Udall.
    Senator Udall. Thank you, Mr. Chairman.
    Good morning, Admiral. Good morning, General. Thank you for 
taking the time to be here with us today.
    General Ham, if I might, I would like to turn to you. You 
may remember that during your confirmation hearing last year, I 
noted that your predecessor had cosponsored a study by the 
Defense Science Board (DSB), on the trends and implications of 
climate change for national and international security. The 
study has special emphasis on Africa. The report was published 
last October and is in my view a detailed and thoughtful 
analysis of ``observable, measurable, and real'' impacts of 
climate change. The report also contains assessments of the 
consequences of climate change that ``will continue to have 
major consequences for the political, economic, and geographic 
world.''
    So the basic conclusion of the DSB was that changes in 
climate patterns present new challenges to regional security 
and stability. The report goes on to warn that failure to 
anticipate and mitigate the impacts increases the likelihood of 
more failed states and the potential for conflict.
    I was also really interested in the specific 
recommendations of the report regarding the role of DOD and 
combatant commands as a part of whole-of-government effort to 
help avoid such humanitarian and security crises. In my view, 
those conflicts could pose a serious threat to U.S. national 
security interests in Africa and elsewhere.
    Could you comment on your personal views on the overall 
findings and recommendations of the DSB, and would you agree 
that resource scarcity and the impacts of climate change have 
the potential to cause or aggravate conflicts in your AOR?
    General Ham. I believe, Senator, there is no question but 
that environmental security can have a dramatic effect on 
overall security both in individual states and more regionally.
    I would tell you my frank assessment is that we are having 
better success in response to environmental security challenges 
than we are finding traction for preventive or predictive 
actions that could be taken. On the good side, we have 
incorporated in a number of regional exercises, which we 
conduct over the course of this fiscal year, 16 exercises 
involving as many as 30 different African states that will have 
as a component of that exercise response to an environmental 
disaster of some sort, mostly water-related either flood or 
drought.
    We are finding that the African nations are very accepting 
and understanding of the security impacts of such issues. As I 
indicated, though, we are finding--and perhaps because it is 
more difficult, less traction on the preventive steps than we 
are on response.
    Senator Udall. That makes complete sense.
    There were specific recommendations in the report regarding 
the role of combatant commands, including AFRICOM. I know you 
have just spoken to those in a general way. Are there any 
additional comments you would want to make on specific 
recommendations that are in the DSB?
    General Ham. Senator, one is the presence of some subject-
matter experts, specifically water experts, on the staff, again 
leading to the interagency nature of the command. So we have 
had in the past representatives from the U.S. Army Corps of 
Engineers and from the U.S. Geological Survey present on the 
staff to help us with those issues. We are currently gapped 
right now. We do not have folks present, but both those 
organizations are sending people to us we hope will join us 
this summer.
    Senator Udall. I think you anticipated my next question 
which was it strikes me that we need to develop the data and 
systems to help identify the actions necessary to avoid or at 
least mitigate the effects of climate. Is that what you were 
just speaking to?
    General Ham. I would agree with that, sir, and again, it is 
not just defense. It is working with the USAID, with others, 
and in many cases, USAID partnered with nongovernmental 
organizations to assist African countries in planning and 
preparing for the impacts of environmental change.
    Senator Udall. Finally, on this subject--and thank you for 
your attention and interest in this--could you provide your 
views concerning whether actions to address the humanitarian 
and security effects of climate change should be an integral 
part of a whole-of-government conflict avoidance strategy? 
Perhaps it could be addressed within the newly established 
Global Security Contingency Fund framework or other multi-
agency efforts focused on avoiding conflict.
    General Ham. Sir, necessarily it must be a whole-of-
government approach. No one element of the government has all 
the resources, authorities, or capabilities to address the 
impacts on security of environmental change. To that end, I 
think we have a responsibility at AFRICOM to work very closely 
not only with the Chiefs of Mission in Africa who have the 
responsibility to pull together that whole-of-government 
effort, but also with the various bureaus in DOS, with USAID 
central, and with others to make sure that we are, first of 
all, aware of one another's capabilities and finding increased 
opportunities to synchronize our efforts, again with an end 
toward assisting the African countries to deal with what is an 
increasingly serious security matter that ultimately 
contributes to our security by them being more secure.
    Senator Udall. So we deploy all of our influence, our 
power, our smart power, our kinetic power, any combinations. 
Thank you for that insight.
    Let me turn to the concept of strategic communication. Can 
you define what you mean by strategic communication, Admiral, 
and why you think it is so important for the military?
    Admiral Stavridis. I can. I think that in the 21st century, 
as we seek to deliver security--and it ties to this whole-of-
government idea, and it is really a whole-of-society idea. At 
the end of the day, we need to communicate on motives. We need 
to communicate our actions. We need to be in a position to 
convince others that we are a force for good--we, the military; 
we, the United States of America; we, the larger society as a 
whole. To do that effectively, you have to use all the modern 
tools. You have to use Facebook and Twitter, Linkedin, all of 
those kinds of things. But as I said to Senator Brown a moment 
ago, in the end, personal contact trumps everything. So a 
combination of all those things, crafting a strategic approach, 
that is strategic communications.
    Senator Udall. General, do you have a point of view as 
well?
    General Ham. I am seated next to the master. So I have 
learned from him.
    But I would echo that. Of course, in many parts of Africa, 
it is less developed than Europe. So the extension of mass 
media and other social networking is really starting to grow, 
and what we are finding is that it is growing exponentially. It 
is not the incremental approach that we saw as we have been 
growing up with the military over the past several years, but 
they leap ahead in various places in Africa. So part of our 
role, I think, is not only understanding that ourselves and how 
do we leverage that to our advantage, but encouraging it and 
helping Africa militaries that we are partnered with for them 
to take advantage of this as well, and some have done so quite 
effectively.
    Senator Udall. I know the Hart-Rudman Commission Report, 
which was issued shortly before September 11 and still, I 
think, has some very salient recommendations, talked about 
military-to-military relationships and the importance of 
expanding those to prepare for a coming 21st century 
asymmetrical environment. There was also, Admiral, talk of more 
people-to-people versus embassy-to-embassy kinds of contacts 
and you are both describing those opportunities.
    So thank you for your time. Thank you for your service.
    Chairman Levin. Thank you, Senator Udall.
    Senator Ayotte.
    Senator Ayotte. Thank you, Mr. Chairman.
    Thank you, General Ham, Admiral Stavridis. I want to say to 
Admiral Stavridis, thank you for your distinguished service to 
our country and we wish you all the best in the future. It will 
certainly be a loss around here. We will miss you.
    I wanted to just follow up briefly with what Senator Brown 
had said and also lend my support to the SPP of the National 
Guard. I think it has been a very effective and not only cost-
effective but a very strong way for us to represent our 
interests in a collaborative way around the world. I appreciate 
that.
    I also wanted to follow up on Senator Brown's question 
about the MEADS program. In the 2012 NDAA, we essentially said 
that this committee wanted to cut off funding for MEADS. As I 
understand it, in the 2013 budget, there is still $400 million 
allocated for the MEADS program. With $15 trillion in debt, 
that is a really hard sell to my constituents, that we should 
allocate $400 million for a system that we will never procure 
or use, particularly at a time when there is a need to upgrade 
some of our Patriot systems that we will be using.
    So I guess I would ask you to pursue that process very 
rigorously because I do not think there is going to be a lot of 
sympathy around here to allocate money for a weapons system 
that we will never procure. I appreciate your efforts in that 
regard, and I would like to see that happen sooner. Thank you.
    The question I had also is in looking at the 2013 budget, 
last year in the Defense Authorization Request (DAR), I had 
concerns about the maritime prepositioning systems (MPS). In 
particular, in the 2012 proposal, the Navy announced plans to 
place 6 of the 16 ships from the 3 squadrons of the MPS into 
reduced operating status. In particular, it was the forces in 
the Mediterranean. As a result of that, I introduced to the 
NDAA an amendment that was adopted that would require--because 
we heard concerns from the Marine Corps, General Panter, about 
what that would do. General Panter said it would translate to 
potentially a slower response time in support of combatant 
commands.
    This is a very critical part of the world when you think 
about our ability to respond in the Mediterranean with what we 
see happening right now. In that area of the world, you have 
Syria, Israel, and Egypt, all in that area. As I look at the 
2013 budget, to my knowledge, we have not yet received that 
certification from the Secretary of Defense in terms of the 
impact of readiness on a reduced operating status. Now in the 
2013 budget, we are actually eliminating the squadron in the 
Mediterranean even though the unrest in that area--you think 
about Israel, Syria, Egypt, and Libya. Certainly even from when 
it was an initial recommendation in 2012, really the 
circumstances have actually changed. Now we are going to 
eliminate that prepositioned force.
    I wanted to know what the strategic rationale was for that 
and also what your view is in terms of an impact on readiness. 
This is a real concern. I understand we are in a constrained 
budgetary time, but we certainly, when you think about the 
critical area of the world that we are talking about, do not 
want to put ourselves in a position where we are not able to 
respond promptly in those areas, particularly with our ally, 
Israel.
    Admiral Stavridis. Thank you, Senator. I will also see if 
General Ham might want to comment here because those forces, as 
you correctly point out, the MPS capability would be at my 
disposal or his disposal.
    Senator Ayotte. Right.
    Admiral Stavridis. Certainly the budget is part of this. We 
are always looking within DOD to try and rationalize resources. 
As you say, there are 16 total of these ships. By reducing the 
number globally, in effect we take more risk in the theater 
where you do not have the ship available. Part of the decision 
is that we have additional stocks of prepositioned equipment in 
Norway in a static setting up there. I can provide you for the 
record some information on that. It gets into some 
classification issues.
    So we, all of us globally, combatant commanders, looked at 
how can we try and find the best mix of maritime prepositioning 
assets. So I am comfortable, although I recognize that it 
includes additional risk in this area. I will be glad also to 
follow up on the Norway piece and to give you a little fuller 
explanation of that for the record and also give you the full 
status of the process of moving the ships. They will actually 
be there at least through this summer. They will be operating 
in exercises in the Baltic for us, and I will get you the 
details on that timeline.
    [The information referred to follows:]

    There are eight storage facilities in central Norway for Marine 
Corps Prepositioning Program-Norway (MCPP-N). The Norwegian Defense 
Logistics Organization/Marine Expeditionary Brigade maintains this 
equipment and their headquarters is located in the Trondhiem suburb of 
Lade. The equipment is stored in six cave sites, bored into the sides 
of mountains of solid rock, as well as in two airfield locations. Three 
of the cave sites hold ground equipment that includes vehicles, 
engineer assets, and supply items. The other three caves contain only 
ammunition. The airfield locations hold equipment to support Marine 
Corps aviation, but this does not include prepositioned storage of 
Marine Corps aircraft. The MCPP-N is actively employed for exercises to 
include Exercise African Lion, Cold Response (Norway), Baltops and 
Saber Strike (Baltics), and Agile Spirit (Georgia), in addition to 
enabling the Special Purpose Marine Air Ground Task Force Black Sea 
Rotational Force. In addition, MCPP-N is actively employed in 
contingencies across the EUCOM AOR and elsewhere, to include 
humanitarian assistance to Georgia, Russian wildfires, the earthquake 
in Turkey, and support to Operation Iraqi Freedom and Operation 
Enduring Freedom.

    Senator Ayotte. I appreciate that, Admiral.
    I do not know if you have anything to add, General Ham?
    General Ham. Senator, I would simply say that I agree with 
that. The ability to move the land-based prepositioned 
equipment very quickly throughout the region remains a very 
important capability. So cooperative security locations and 
other basing, I think, helps to offset the risk of the loss of 
the MPS. Again, it is a tough, tough decision and we did 
wrestle with this--the combatant commanders and the OSD staff. 
I am okay with it, but I would tell you, just barely okay with 
it.
    Senator Ayotte. Yes. We are certainly taking on additional 
risk with this.
    One of the concerns that I have, as I have articulated, is 
the original reduction that prompted my amendment to the NDAA 
was actually recommended at a time prior to our involvement in 
the conflict in Libya, prior to much of what is happening in 
Syria right now and the Arab Spring, really when the initial 
recommendation came out.
    So one thing I would appreciate is pursuant to the 2012 
NDAA, I had an amendment in that that said even to go to 
reduced operating status, that the Commandant of the Marine 
Corps would do an assessment on the impact on readiness and 
that also the Secretary of Defense would submit to us an impact 
on readiness and what risks we are taking on in that area of 
the world. So, I would appreciate your follow-up on that.
    Admiral Stavridis. Yes, Senator.
    Senator Ayotte. I appreciate your testimony on this today.
    I would say, General Ham, I do have a follow-up based on 
last year when you appeared before our committee, and I 
certainly appreciate it. As I understand your written 
testimony, you have certainly expressed concern about the 
collaboration between terrorist groups in Somalia, North 
Africa, Nigeria, coordination of al Qaeda, and also the 
coordination of al Shabaab and al Qaeda, the merger on February 
9 of those two groups, which had worked together before but 
clearly more of a merger.
    Last year I asked you if we detained a member of al Qaeda 
that was planning an attack on us or our allies, where would we 
detain and interrogate that individual. You told me last year 
that you would need some lawyerly help answering that one.
    Has anything changed in 10 months? Do we now have a 
detention facility if we capture someone under your command who 
is a member of al Qaeda who is planning an attack on our 
country where we will detain them to interrogate them?
    General Ham. Senator, we do not have a detention facility 
in the AFRICOM AOR. There have been some instances where such 
individuals have been held aboard a U.S. ship awaiting final 
determination as to where that individual would then be 
transferred. Again, each case is a little bit different 
depending on the nationality of the individuals involved, but 
that is probably in the near-term about the best solution that 
we have at present, is aboard a U.S. ship until such time as a 
longer-term detention decision is made.
    Senator Ayotte. But you would agree with me that on a ship, 
we can only hold them for so long, and if we have to do a 
longer interrogation of someone, that is not a permanent 
solution to how we can detain and interrogate these individuals 
and have the sufficient time if we need a longer interrogation.
    General Ham. Absolutely, ma'am. A U.S. Navy ship is not a 
good long-term solution.
    Senator Ayotte. Thank you, sir.
    Chairman Levin. Thank you very much, Senator Ayotte.
    Senator Reed, I believe, is next. Senator Reed.
    Senator Reed. Thank you.
    Let me join my colleagues, Admiral Stavridis, and commend 
you for your extraordinary service to the Navy and the Nation. 
I know you will continue to serve in many different capacities.
    Welcome, General Ham.
    One of the key actors in your region is Russia. There is an 
election. Can you give us your estimate of post-election--I 
think we can assume who is going to win--how effective they 
will be in terms of dealing with two of the critical issues we 
face which is the Iranian and Syrian situation since they do 
have some great leverage in both areas?
    Admiral Stavridis. I think, as I look at Russia, I see, 
first and foremost, an election, and I think we all know that 
elections in any country bring their own set of dynamics that 
play up to the point of the election and then there is a period 
of time after an election when there is room for maneuver and 
potentially some change. So I will make a general comment to 
that effect.
    When I look at Russia today, I see a mixed picture of some 
areas of good cooperation. They are very helpful to us, for 
example, in Afghanistan with the Northern Distribution Network, 
with their assistance to the ANA, with helicopter sales. They 
have donated weapons and ammunition to the ANSF. They have 
every reason to want us to succeed. They talk about it 
frequently. So in Afghanistan, we see a zone of cooperation.
    I think in counterterrorism we see zones of cooperation. I 
think in counternarcotics--they have a particular problem, 
heroin addiction--we see areas of cooperation. They are a very 
strong partner in piracy operations at sea.
    So on the plus side, I see a number of areas of 
cooperation.
    On the other hand, we have areas where we disagree 
fundamentally with the Russian Federation; over Georgia, for 
example.
    At the moment, in the middle is missile defense, which is 
an area that we would hope to move over to the cooperative 
side, assuming we can do it in a way that protects classified 
information and makes sense. But at the moment, that is an area 
of contention between the two nations.
    You mentioned Iran and Syria. I will leave it to the senior 
cabinet officials to talk to positions here, but I think 
Secretary Clinton recently has spoken to a sense that Russia 
has not been helpful, for example, in Syria. Will that change 
after the election? I think it will depend on events on the 
ground in Syria as well as on the election itself. So we will 
have to wait and see.
    On Iran, Russia has been helpful at times, but could they 
do more and exert more leverage? I think they could, and I 
would say the same answer pertains. I think after an election 
is the time you start to see where things really go.
    This will come to a head from a NATO perspective as we find 
out whether or not the newly elected president of Russia 
chooses to come to the NATO Summit. NATO's hand is out to have 
a NATO-Russia Summit meeting as part of that May Summit. It is 
here in the United States in Chicago. I think we will know more 
after the election when we see that. So I would say, sir, that 
is an indicator to watch.
    Senator Reed. One follow-up with respect to Iran, and that 
is there is the political leadership in Russia which is mingled 
with their national security leadership, et cetera. Do those 
audiences appreciate the potential threat to Russia alone if, 
in fact, Iranians were to have nuclear materials and their 
close relationship with other elements, some of which the 
Russians have been jousting with for years now?
    Admiral Stavridis. In my conversations with my 
interlocutors in Russia, I would answer that question by saying 
yes. They are aware of those concerns. They are concerned about 
it.
    Senator Reed. Thank you.
    Another question, Admiral Stavridis, and that is you have 
conducted Austere Challenge exercises. You have a program with 
our cybersecurity. Can you generally comment about how the NATO 
allies are doing in terms of their cybersecurity, their 
cooperation with us, are they moving ahead, are they falling 
behind, et cetera?
    Admiral Stavridis. Sure. The good news is our partners in 
NATO are among the most sophisticated actors in the world of 
cyber. So there is a lot of capability there. They are moving 
forward with some encouragement from us to create a Center of 
Cybersecurity and Excellence in Tallinn, Estonia, which makes 
sense because that was a nation that has undergone a 
cyberattack. We have enhanced within the alliance command 
structure our ability to defend ourselves much like U.S. Cyber 
Command here in the United States is working.
    In terms of: could they be doing more, absolutely. So I am 
pushing them very hard in this direction. The Secretary General 
is pushing the allies very hard. I would say cyber and the 
special forces are two areas of real growth and emphasis that 
we are going to have going forward in the alliance, sir.
    Senator Reed. Just quickly is this another potential point 
of contention with the Russians? As you all get better, do they 
get more nervous?
    Admiral Stavridis. I think that as in everything with 
Russia, there is potential for cooperation and there is 
potential for conflict. I would say cyber offers both of those 
opportunities, frankly.
    Senator Reed. General Ham, again, thank you for your 
leadership in AFRICOM.
    Going forward, one of the initial impressions from our 
experience over the last several years in Iraq and Afghanistan 
is partnering with local security forces and developing their 
capacity, and partnering with governments to develop their 
capacity will be a key aspect of our national security and also 
a cost-effective way to be there before the shooting starts and 
perhaps prevent it.
    Can you comment about what you are doing in Africa, and 
particularly in the Horn of Africa, with this kind of 
mentoring? Are you vetting our forces with their forces or 
developing a cadre of experts who understand culture and the 
local mores?
    General Ham. Senator, thanks. I think that is one of the 
capabilities that the general purpose forces across the U.S. 
military now are comfortable with this idea of security force 
assistance. That does not mean that every soldier, sailor, 
airman, and marine is a cultural expert. We still require those 
with great in-depth capability to lead some of these efforts.
    But as an example, the support that the United States has 
provided particularly to Uganda, Burundi, and Djibouti--they 
have contributed forces to the AMISOM in Somalia--has, I think, 
been one example of where U.S. assistance can really make a 
difference. We do not accompany those forces in the operational 
area, but we are intimately involved in a DOS-led, usually 
contractor-executed, and augmented by uniformed U.S. military 
programs in their home countries to prepare them for this 
mission. I think this is a pretty good model for how we can 
operate effectively in Africa.
    Lastly, I would say, Senator, that we do not have in Africa 
the scale of the missions that were required in Iraq and 
Afghanistan, and that allows us to have a much more tailored 
approach that is specifically designed for the circumstance in 
each individual country.
    Senator Reed. Thank you very much.
    Thank you, Mr. Chairman.
    Chairman Levin. Thank you, Senator Reed.
    Senator Sessions.
    Senator Sessions. It is great to be back with Senator 
Graham after being in Libya together and meeting the University 
of Alabama professors that now run the Government of Libya. 
[Laughter.]
    Senator Graham. I want to be on the record denouncing 
Senator McCain's attack on the University of Alabama. Even 
though I am into SEC and you all beat us routinely, I am still 
standing by you. [Laughter.]
    Senator Sessions. I guess I would say that it was 
encouraging that they have had a revolution, a long-term 
dictator is gone, and you wonder what will happen. Will it be 
better or worse? These were two Ph.D.s in electrical 
engineering. The Deputy Prime Minister got his degree at Cal 
Tech, and Dr. El-Keib got his at North Carolina State, and 17- 
and 20-year professors, and able to go back home to a country 
they had to leave because of oppressive leadership.
    General Ham, with regard to Egypt--and it is not your 
command. I think that is CENTCOM. But Egypt, Libya, Tunisia--on 
a scale from hopeful to concerned about their future, where 
would you put the needle there?
    General Ham. Senator, for Libya and Tunisia, the two 
countries in the AFRICOM AOR, I am hopeful. Tunisia is a little 
more further along than Libya is, having had elections now and 
forming a government that I very much appreciate your spending 
some time with them and getting to know them. There is a real 
sense of optimism and forward progress in Tunisia. We are 
looking for opportunities that we can assist in the security 
realm to keep that momentum moving forward.
    While I am hopeful, there are more hurdles to be overcome, 
I think, in Libya at present, but it seems to me that the 
National Transitional Council, the interim government, is 
really striving to map out a good way ahead to deal with the 
many challenges that they must confront not only in the 
security realm, but in economic development, humanitarian 
issues, economic trade, and establishment of writing a 
constitution. The challenges are immense. It seems to me that 
they are taking a very good, methodical approach. They will 
need a lot of help, but I remain optimistic.
    Senator Sessions. You are correct that the Prime Minister 
and Deputy that I just referred to and the others are interim. 
There will be an election. It remains to be seen what may 
develop after that.
    Egypt, I think, is likewise. We will have to see how that 
government develops, but we felt that there were some positive 
signs. I certainly felt that.
    Admiral Stavridis, congratulations on your service. Thank 
you for your service.
    I would just say I am personally somewhat pleased that we 
will draw down that second brigade out of Europe because we 
have a financial crisis in America. We had Secretary Panetta 
before the Senate Budget Committee yesterday, and there was a 
pretty grim discussion. Senator Conrad--he is not running for 
reelection. He loves this country. He thinks that there will 
have to be more cuts than what we are already looking at.
    I believe the $489 billion in cuts that we are not looking 
at is enough, and I believe we need to alter the sequester. But 
I do not believe the sequester will be eliminated. I am not 
going to vote to eliminate the sequester because that is the 
minimum cut, $2 trillion over 10 years out of expected 
expenditures of $47 trillion. So we are reducing it from only 
$47 trillion to $45 trillion in projected expenditures over the 
next decade. So it worries me.
    Admiral Stavridis, I am concerned. I know Europe has 
financial problems, but you might not know that per capita the 
United States with $44,000 in debt for every man, woman, and 
child is greater than every country in Europe, including 
Greece. So we are at a point where the Europeans cannot just 
depend on the United States for their security, and we are at 4 
percent GDP on defense. They are at 2 percent, really happily 
living under our umbrella.
    What could you tell us about the prospects that Europe 
would maintain that 2 percent, increase it, or is there a 
danger that it would go even below that?
    Admiral Stavridis. I am going to start with the bad news, 
which is they are not even spending 2 percent, Senator. 
Unfortunately, they are running right about 1.6 percent, and 
the goal that they have agreed to in a NATO context is a 
minimum of 2 percent. Of the 28 nations in NATO, only between 5 
and 8, out of 28, depending on how you measure it, are even 
hitting that 2 percent goal. So they are not stepping up to the 
bar that they have set for themselves.
    I think that the United States should continue to 
forcefully make that point in as many fora as possible, and I 
am glad you bring it up so I can address it publicly. I speak 
frequently to leaders in Europe about this, and it is not 
sustainable over time that Europe, which has roughly a $15 
trillion a year GDP, roughly the same as the United States. So 
these are two economies that very much have great, robust 
capability, although both are facing, as you correctly point 
out, a lot of stress from debt and a variety of other 
overhangs. So I think we need to continue to make this point 
forcefully with the Europeans.
    As to the prospects over time, if the European economy does 
recover--and I think it will over time. These are capable 
people. It is an extremely advanced part of the world, high 
education. I think over time we will be able to get this to 2 
percent and hopefully a little above that, which would be, I 
think, a much more balanced place for it to be.
    Senator Sessions. I just feel like our allies and friends 
have to understand that that is an awfully small price to pay 
for freedom.
    Mr. Chairman, I will just note that over the last 3 years, 
DOD's base budget has increased 10 percent, averaging about 3 
percent a year, whereas over the last 3 years, Medicaid has 
increased 37 percent. Spending on the Department of Education 
over a 3-year period compared to the previous 3-year period has 
increased 70 percent. Food stamps have increased 300 percent 
since 2001. That is about $80 billion now. It is a very large 
item in our budget.
    So I guess I would tell you that the myth is that defense 
is the great, fastest growing item in the budget is not true. 
The myth is that the wars in Iraq and Afghanistan that have 
caused our deficit is not accurate. The wars as of last year 
had cost about $1.3 trillion over 10 years, whereas the single 
deficit last year was $1.3 trillion. So the wars are costly. 
They have been very much a costly item, but it is not driving 
our deficit.
    So I would just say that I do not think we need to go 
forward with this second part of the cuts, the sequester. I 
believe the remaining five-sixths of the U.S. Government needs 
to be scrutinized and about half of the Government receive no 
cuts whatsoever. In real dollars, over a 10-year period of 
time, if the sequester were to take place, DOD would take a 20 
percent cut. So the remaining five-sixths in the same 
adjustment factor would have a 50 percent increase.
    I know that this is an issue that Senator Graham and I 
talked about on the trip. Defense is going to have to tighten 
its belt. There is no doubt about it, but we need an overall 
belt-tightening in our Government, not just on DOD.
    Chairman Levin. Thank you, Senator Sessions.
    Senator Manchin.
    Senator Manchin. Thank you, Mr. Chairman. Thank you both 
for your outstanding service.
    If I may start with Admiral Stavridis. West Virginia is a 
very patriotic State. We have a high percentage of all of our 
people that have served and are still serving. With that being 
said, the question I get most asked when I go back home is do 
we still need the presence or basically the presence of our 
European theaters. I know that you are planning on drawing down 
from the 70,000 to 60,000. It is in that neighborhood. There 
are still 25 major bases.
    During the last BRAC, it was basically the American bases 
that got cut, nothing overseas that I know of. But I am told 
now that that would be the direction they would go. There would 
have to be overseas before there would be any more American 
bases cut.
    I think the question is as we draw down the forces, can we 
consider strengthening relationships in other ways so that we 
can decrease our force presence even further in Europe? Is 
there a need to have the presence of the European theater?
    Admiral Stavridis. Let me answer it in two ways very 
quickly to say why Europe, and I think that is a fundamental 
question. A lot of people ask me all the time--I am the U.S. 
European Commander and people say, why do we have about 80,000 
troops there so many years after the Cold War? I would argue 
that even as we continue to bring it down--and I will come to 
that in a minute--I think there is still good value in a 
presence in Europe because of the geographic importance. It is 
not just Europe. It supports General Ham in Africa. It supports 
General Mattis in CENTCOM. It is a strategic platform that 
allows us access in and around the region. We do have an 
alliance and a commitment. That is part of the answer.
    Then finally, the bang-for-the-buck, the reason we have 
40,000 allies in Afghanistan with us is, at least in part, 
because of those longstanding relationships that are built in 
Europe.
    Now, having said all that, having hopefully at least given 
part of the answer, why are we there, I will make the point 
that we are continuing to decrease that presence. Since the end 
of the Cold War 20 years ago, we have come down 75 percent. So 
back in the Cold War, we had almost 400,000 DOD personnel 
there. We had 1,200 bases, and we needed them at that time 
because of the Russian threat and so forth. But that trajectory 
down has taken us down 75 percent. We are now coming down 
another 15 percent with this round, which is acceptable, in my 
view.
    I would conclude by saying that I would anticipate over 
time, over the decade, we will continue to drive that down 
because our allies are capable and they can take this on.
    Senator Manchin. Strategically, we will always have some 
sort of a presence or platform in Europe.
    Admiral Stavridis. I think so. Right, right. But it is a 
matter of finding that balance and where is the bottom of that 
curve. I think over time we will continue drawing down.
    Senator Manchin. General Ham, if I may. Last month the 
terrorist groups, al Shabaab and al Qaeda, have merged or we 
were told they merged. What does that merger mean for us in the 
United States?
    General Ham. Senator, they did. Al Qaeda senior leaders and 
al Shabaab formally announced on the 9th of February that they 
have aligned. This confirms a longstanding suspicion. There 
have certainly been indications of that for several years, but 
this formalized it.
    The question we ask ourselves is: why now? Why did they 
make this announcement public now? Some have postulated--and I 
tend to agree with this--that perhaps one of the motivations 
for such a public announcement is because al Shabaab is under 
duress by the African forces which are operating in Somalia, 
and this may have been an opportunity or perceived to be an 
opportunity by al Shabaab to garner some support for their 
effort. So, I think, actually while it does formalize something 
we suspected, it may actually indicate weakness.
    Senator Manchin. I know that we are running out of time 
here. I am not going to take all of my time because my dear 
friend, Senator Graham, has some questions to ask. So I will 
come back at a later time, and then we are going to have to be 
voting here pretty soon. So with that, Mr. Chairman, thank you, 
and I will ask later.
    Chairman Levin. Yes, thank you very much, Senator Manchin, 
for that courtesy.
    Here is the situation. The vote has begun. Senator Graham 
is now going to be recognized, and when his time is up, if 
there is nobody else here, then we will recess until someone 
does get back here, which will happen because Senator 
Blumenthal is coming back. I believe Senator Shaheen was coming 
back. So there will be additional Senators.
    So Senator Graham, when you are done, if you could turn it 
over to whoever is back. If not, just recess it. Thanks.
    Senator Graham. I'll do that. Thank you, Mr. Chairman.
    Thank you both for your service.
    We are going to try to get through all of the world in 7 
minutes, if possible.
    Let us start with the concept of al Shabaab and al Qaeda 
forming an alliance, General Ham. Under the authorization to 
use military force, do we have the legal authority to have a 
drone attack against al Shabaab members?
    General Ham. In selected cases, yes, sir. If an individual 
is determined through a review process to be authorized to 
use----
    Senator Graham. Do you think that Congress should look at 
granting greater authority or--we will just get back to that 
later because I very much want to make sure that the executive 
branch has the blessing of Congress because I think what they 
are doing with drones has been very, very helpful.
    Admiral, do you believe it is important strategically that 
Afghanistan end well for us?
    Admiral Stavridis. Yes, sir, I do.
    Senator Graham. Winning to me would be withdrawing our 
forces in a fashion that we could leave where Afghanistan has 
security forces sufficient to defeat the threats they face, al 
Qaeda, the Taliban, and that over time, governance will take 
off.
    The Strategic Partnership Agreement that we are negotiating 
with the Afghans--do you think that is vitally important as to 
the outcome of this conflict?
    Admiral Stavridis. I am not the expert on it because I am 
the NATO Commander looking at Afghanistan. But I will give you 
an opinion, which is that it is extremely important because it 
protects the long-term viability of this process.
    Senator Graham. Is there a common view on the ground in 
Afghanistan that people are at the best-case-scenario confused 
about whether or not we are going to stay or leave, and the 
enemy is using that against us?
    Admiral Stavridis. I think that we have a strategic 
communications challenge to convince the people of Afghanistan 
that we are going to stay.
    Senator Graham. The theory is if we did a Strategic 
Partnership Agreement with the Afghans where we have an 
enduring relationship past 2014 in the areas of the economy, 
political alliances, and a post-2014 military presence, that 
would send the right signal to Pakistan, Iran, and the Taliban 
that we are not abandoning Afghanistan. We are going to have a 
relationship, and the Taliban will never come back militarily. 
Is that not the goal of the Strategic Partnership Agreement?
    Admiral Stavridis. As I understand that U.S. one, I would 
add, Senator, that NATO is trying to work out a post-2014 
relationship, and I would say it sounds very much like you 
described.
    Senator Graham. Would you agree that if we do not get this 
right, in case President Karzai may be watching C-SPAN today, 
that if we do not get a Strategic Partnership Agreement before 
May where the United States is committed to an enduring 
relationship, it is going to be very hard to convince NATO as 
an organization to do it? Do you agree with that?
    Admiral Stavridis. I think it would be very helpful to 
NATO's moving forward to have its primary member have concluded 
that.
    Senator Graham. Do you agree that the home run for us as a 
Nation and the world-at-large regarding Afghanistan is before 
the NATO conference, have a Strategic Partnership Agreement 
between the United States and Afghanistan, that in May NATO 
commits past 2014 to at least a training presence, and that 
NATO nations contribute to funding the ANSF? Those three things 
would be a great outcome. Do you agree with that?
    Admiral Stavridis. I do.
    Senator Graham. I would just say to our Afghan partners and 
friends that if you do not get the Strategic Partnership 
Agreement, then the other things are not going to happen, and 
if President Karzai continues to insist on us turning over 
3,044 law-of-war prisoners that we hold at Parwan prison 
humanely, a great center of intelligence gathering, if he 
insists turning those prisoners over to an Afghan legal system 
that does not have the capacity or the maturity to deal with 
them, then he is making a grave mistake because I, a big 
believer in the outcome in Afghanistan, cannot go home to South 
Carolina and tell the people in my State that if we let these 
prisoners go over to the Afghan system, they will not be out in 
a matter of days or weeks, going back to killing Americans and 
coalition forces. So that is not really a question as much as 
it is a statement.
    Now, the Koran burning incident was upsetting to Americans. 
I know it was upsetting to the Afghan people, and I am sure 
some of this was spontaneous, but to the Afghan people, you are 
not advancing your nation in the eyes of the world when you 
kill Americans who left their families to go and help your 
families. The young men and women who have been killed as a 
result of this, Americans, left their families, the security of 
their Nation to help Afghanistan develop. This was unfortunate, 
inadvertent, and we are all sorry, but we need to understand 
the big picture here. So on behalf of the American people who 
are upset about what has happened to their loved ones and the 
people we care about, I stand behind that sentiment and would 
urge the Afghans to control this.
    The good news, after talking to General Allen, is that the 
ANSF have stood between their people and our people and have 
done a very good job from what I can tell trying to protect our 
interests the best they can.
    I just hope that the Afghan religious community will 
understand that we are there to help and we do make mistakes 
because we are human beings. But nothing justifies this kind of 
behavior.
    Now, are you understanding of why General Allen felt a need 
to apologize as a military commander of forces in the field?
    Admiral Stavridis. I did not have a conversation with him.
    Senator Graham. I feel like what he did was in the best 
interest of our troops, and I talked to him today about that. 
He said he felt that he needed to set the record straight and 
man-up to this and let the Afghan people know that this was 
inadvertent and we apologize because we made a mistake. I hope 
the Afghan people will understand that this is a two-way 
street.
    When it comes to the President of the United States' 
statement, I understand too that President Bush, when we made 
mistakes on his watch, General Allen told me that he thought 
the apology by the President was helpful to the cause. So all I 
can tell Republican and Democratic Members of Congress is that 
I do not like the way the world is, but it is the way it is, 
and we have people in harm's way over there and we need to 
understand what is best for them.
    Now, when it comes to Africa, General Ham, the effort to 
help Libya and Tunisia--this moment is going to pass if we are 
not quick about it. Do you agree that the militias have to be 
controlled in Libya?
    General Ham. I agree with that, sir.
    Senator Graham. That we have a window of time here to 
engage both countries, and it is in our national security 
interest to provide the assistance that Libya and Tunisia need 
on the security front because this window will close.
    General Ham. I agree.
    Senator Graham. Thank you both for your service.
    We will be in recess, since no one is here and we will come 
back after the vote. [Recess.]
    Chairman Levin. The committee will come back to order. We 
appreciate your understanding, gentlemen.
    We will call on Senator Blumenthal, I believe he comes 
next.
    Senator Blumenthal. Thank you, Mr. Chairman.
    I want to join all of my colleagues in thanking both of you 
for your very distinguished and dedicated service. I was very 
privileged and grateful to join Senator McCain, Senator Graham, 
Senator Sessions, and also Senator Hagan on the trip that has 
been referenced earlier, although I am not quite as alarmed 
about the subversive influence of the University of Alabama in 
Libya, but it is worth watching. [Laughter.]
    I want to begin my questioning by making a reference to 
some of the trends that were mentioned by Senator McCain, most 
particularly in Tunisia, the threats across the border and the 
apparent infiltration of al Qaeda in that area. I think, 
General Ham, you referred to it in some of your remarks and 
mentioned that you were concerned about it. I wonder if you 
could elaborate somewhat on the threats that are posed in 
Tunisia and in Libya by the porous borders that both of them 
have and perhaps what we can do about them.
    General Ham. Senator, first of all, thanks for joining on 
the trip. It is a pretty fascinating region of the world and 
certainly a fascinating time to be there.
    What I am concerned about in both Tunisia and Libya is the 
negative influence that the presence of violent extremist 
organizations (VEO) will have in those two countries as they 
seek what I believe to be a very positive way forward in 
establishing representative governments and governments that 
are legitimately serving the people. It is very clear that 
extremists organizations, notably al Qaeda with some direction 
from al Qaeda's senior leaders, seek to undermine that good 
governance that the Tunisians and the Libyans seek. So I think 
that is the real threat that is posed.
    It is clear that in the mid-2000s there were many North 
Africans who sought to go fight against the United States and 
its coalition partners in Iraq, and Libya was a transit point 
for the flow of those foreign fighters. It seems to me that al 
Qaeda is seeking perhaps to reestablish some of those networks.
    So, I think we need to partner very closely with the 
security forces, the armed forces of Tunisia and Libya, to 
prevent the reestablishment of those networks, to prevent those 
VEOs from undermining the progress that both countries are 
seeking.
    Senator Blumenthal. Is there anything that we can enable or 
anything specifically that DOD is doing to enable that 
cooperation to become more robust?
    General Ham. Senator, they are. We are expecting within the 
very near future a specific request from the Government of 
Tunisia to our ambassador in Tunis with some specific 
requirements, and we certainly are anticipating that some of 
those requirements will be for security assistance. We had a 
very good bi-national commission conference in Tunis a few 
weeks ago to start to work out those details. I am very 
satisfied with the progress of the military-to-military 
relationship that is developing with the new government. We 
need to sustain that.
    Similarly with the Libyans, we are forming a good 
relationship. We now do have an Office of Security Cooperation, 
the organization that can orchestrate security assistance, 
IMET, and training and the like. So we are moving in the right 
direction, but we need to sustain that effort.
    Senator Blumenthal. Thank you.
    Admiral, I want to just briefly note your testimony that 
``submarine forces provide assurance, deterrence, and valuable 
contributions to the forward defense of the United States.'' 
That is a quote from your testimony. I take that to mean that 
you are a strong proponent of continuing and enhancing our 
undersea warfare capability.
    Admiral Stavridis. I am, and in the context of EUCOM, the 
range of missions that our submarine force performed for me as 
a combatant commander go from the very highest end when they 
operate in under-ice missions in the high north, they operate 
in conjunction with other very sophisticated forces. So they 
are very capable at the high end, but I continue to be 
impressed with their abilities in the lower end of conflict and 
security.
    Two examples: First would be piracy. Surprisingly, perhaps, 
we find submarines are effective as ISR platforms that are very 
helpful in that regard. Second, then in our mutual work 
together in Libya, we were fortunate to have U.S. submarines 
capable of launching Tomahawk cruise missiles, for example, in 
a very effective and immediate way. So the submarine force 
really does operate across the spectrum, not just at that high 
end of anti-submarine warfare that we traditionally think of.
    Senator Blumenthal. They perform a very versatile mission.
    Admiral Stavridis. Exactly, yes, sir.
    Senator Blumenthal. I want to briefly ask whether you are 
satisfied that there is sufficient support for the 
extraordinary work that is done at Landstuhl and other medical 
facilities for our wounded warfighters when they come back. I 
have been so impressed by the kind of care that you have 
provided to troops coming back to Connecticut and elsewhere, 
young men who have lost limbs and who have been saved from 
battle, but are given real hope of restoring normal lives 
because of the tremendous care that is provided there.
    Admiral Stavridis. Sir, I will tell you of all of the 
things that I do in EUCOM, in many ways I am most proud of the 
work of our folks at Landstuhl. They are just extraordinary and 
I know many members of the committee, as you say, have been 
through and seen that.
    If I could highlight something, one of the, if you will, 
signature injuries of this conflict is emerging to be traumatic 
brain injury (TBI). Now, we have a very capable unit that does 
that, over 30 people dedicated to it. We have what we call the 
SyNAPSE Program. We tailor the TBI treatment to each one of 
these young men and women. We have exceptional physical 
therapists that we have gone out and hired. So we do the whole 
spectrum of care there. I am very proud of our work in TBI.
    Lastly, I want to just say thank you to the committee for 
the support for the follow-on hospital which is up in front of 
the committee now, and we have received good support on that 
and we appreciate it.
    Senator Blumenthal. The SyNAPSE Program is really one of 
the most promising medical activities in the world today, I can 
say without too much exaggeration. So I really thank you for 
it.
    Just to follow on one of the points that Senator McCain 
raised, in our visit to Libya, we were told about the numbers, 
huge numbers, of freedom fighters there who have, I think, been 
taken to other countries with wounds very similar to those that 
are suffered by our warfighters in Afghanistan. I wonder 
whether there is any possibility that we could provide more 
care for them there.
    Admiral Stavridis. I am willing to explore that, and I will 
work with General Ham who would handle the departure end of 
that, and I will take a look at it. We do have, for example, 
troops from Georgia, who I mentioned earlier, our very staunch 
allies, with us in Afghanistan. So there is some precedent for 
that, but it is a very specific process and I will take a look 
at that, sir.
    Senator Blumenthal. Just to finish with one quick question 
about the cooperation with Israel in the event of an attack on 
Iran's nuclear armaments or capabilities. Could you give us 
your assessment on the cooperative missile defense programs 
that we have with Israel, if you could in this setting, either 
the Arrow missile defense or the David's Sling, as to how 
successful our joint missile exercise has been?
    Admiral Stavridis. I think to do justice to that, I need to 
move that into a classified setting. But I will say that our 
cooperation with Israel across every element of military 
activity is robust and is capable and is serious. I will 
provide you a detailed answer on the missile defense.
    [The information referred to follows:]

     [Deleted.]

    Senator Blumenthal. Thank you. Again, thank you to you both 
for your excellent testimony today and your tremendous service 
to our Nation.
    Thank you, Mr. Chairman.
    Admiral Stavridis. Thank you for your service as well in 
the Marine Corps, sir.
    Senator Blumenthal. Thank you.
    Chairman Levin. Thank you very much, Senator Blumenthal.
    Senator Shaheen.
    Senator Shaheen. Thank you, Mr. Chairman. Hopefully we are 
almost finished.
    I want to thank both of you, General Ham and Admiral 
Stavridis, for your service to the country. Admiral, I 
particularly appreciate your willingness to work with me over 
the last 3 years in my position as chair of the European 
Affairs Subcommittee of the Senate Foreign Relations Committee. 
We will certainly miss you as you go on to another post.
    Mr. Chairman, I have a brief statement that I would like to 
submit for the record on the upcoming NATO Summit in Chicago. I 
know that you have addressed this a little bit, Admiral.
    Chairman Levin. It will be made part of the record.
    [The prepared statement of Senator Shaheen follows:]

              Prepared Statement by Senator Jeanne Shaheen

    I want to thank Chairman Levin and Senator McCain for convening 
this important hearing today to receive testimony on U.S. European 
Command and U.S. Africa Command in review of the National Defense 
Authorization Request for Fiscal Year 2013. I look forward to hearing 
from our witnesses about the challenges and opportunities before the 
U.S. military in these two critical regions of the world.
    As the chair of the Senate Foreign Relations Subcommittee on 
European Affairs, I would like to take a brief moment to discuss the 
upcoming North Atlantic Treaty Organization (NATO) Summit in Chicago 
and its significance for the United States and our transatlantic 
allies.
    The importance of the U.S.-European security relationship cannot be 
overstated, nor can America's commitment to our allies across the 
Atlantic. Europe is a critical partner of the United States, and our 
European allies remain America's go-to partners when security 
challenges arise around the world. Even as we refocus on the Asia-
Pacific region and rebalance our footprint in Europe, we will continue 
to work closely with Europe across the spectrum of critical threats we 
face--on Iranian nuclear matters, proliferation, and international 
economic issues, as well as in Syria, Afghanistan, and other regions of 
the world.
    This May, Chicago will host the NATO Summit--the first on American 
soil since 1999. This meeting presents a unique and timely opportunity 
to reiterate that the NATO alliance continues to wield unprecedented 
influence in our world and remains a critical element of U.S. and 
European security. We have our problems, and we should address those, 
but the Chicago Summit is a chance to remind the world that NATO still 
represents the most capable military alliance the world has ever seen.
    This year's Summit will need to address a few critical issues. 
Afghanistan, of course, will be at the top of the agenda, and the 
recent protests there underscore the volatile and dangerous situation 
that our alliance continues to face on the ground. Other--perhaps less 
profile--issues will need to be addressed at this year's Summit as 
well.
    The first of these is NATO's Smart Defense initiative. In a time of 
declining budgets, it is important that we work together to generate 
maximum returns on our investments while maintaining overall capability 
and interoperability. We need to pool and share resources where 
necessary to ensure that we get the most out of our limited defense 
dollars.
    However, Smart Defense cannot be an excuse for continued under-
investment by our European allies. According to the NATO Secretary-
General's 2011 Annual Report, only three countries are spending at or 
above 2 percent of their gross domestic product, the recommended level 
of defense spending agreed upon by the alliance. We need to see more 
investment from our European counterparts to ensure that we can bring 
the full spectrum of capabilities to the table when needed.
    From the organization's experience in Libya, we should identify 
capability gaps and lessons learned to improve our alliance's strengths 
and weaknesses. There were certainly problems in Libya--namely, a 
shortage of intelligence, surveillance, and reconnaissance assets, 
refueling capabilities and ammunition--and the operation should not be 
viewed as a perfect model for future efforts. However, NATO acted 
quickly when others would not and could not, and we were ultimately 
successful in protecting the people of Libya from a brutal dictator. We 
should build on our successes in Libya and begin to address any 
shortfalls in Chicago.
    Another important issue to be addressed at Chicago is the continued 
allied support for NATO's ``Open Door'' policy. Understanding that the 
prospects for enlargement at this Summit are slim due to outstanding 
political matters, it is important that we make our commitment credible 
by advancing aspiring countries, including Georgia, down the path of 
future NATO membership.
    Finally, NATO's relationship with Russia will no doubt draw 
additional headlines in the lead-up to the Chicago Summit. The Russian 
presidential election and possible disagreements on missile defense 
could complicate any possible progress between NATO and Russia in 
Chicago.
    It is important to recognize that we do share a wide range of 
interests with Russia outside of missile defense, including security in 
Afghanistan, counterterrorism, and proliferation. We should engage 
Russia on issues where our interests overlap while recognizing that 
Russian participation in Chicago (or lack thereof) should not 
overshadow other critical issues that the Summit must address this 
year.
    As we approach this year's Summit, we should address these crucial 
issues to continue building on past progress. To maintain NATO's 
relevance for the future, we must also find a way to introduce the 
organization to the next generation of citizens and leaders who are not 
yet familiar with this alliance's many past successes and its future 
potential. A NATO that is relevant for the 21st century is flexible, 
adaptable, and able to transform itself--and is postured to make smart 
defense investments, grow in membership where appropriate, and take on 
new missions whenever necessary.
    I look forward to working with the White House, the Pentagon, 
European Command, and the Department of State to make Chicago a 
successful outcome that reinforces the critical role NATO plays in the 
world both today and in the future.

    Senator Shaheen. Thank you.
    As we all know, this is really the first Summit on U.S. 
soil since 1999. It is an opportunity for us to both highlight 
the successes at NATO and also to address some of the upcoming 
challenges.
    I know, or at least I understand, that you talked a little 
bit about the Smart Defense Initiative, and I am sure that is 
something that will be discussed in Chicago. I do have some 
concerns. While I understand that it is an important initiative 
and it makes sense to better pool and coordinate our resources, 
I do have some concerns that it not be used as an excuse to 
further reduce defense spending among our NATO allies. I wonder 
if you could comment on that.
    Admiral Stavridis. I would be glad to.
    We, as in the military committee, all the chiefs of 
defense, General Dempsey and his 27 colleagues, myself as the 
Supreme Allied Commander for Europe, and the Supreme Allied 
Commander Transformation, General Stephane Abrial, have all 
addressed very specifically this point that we are recommending 
constantly and strongly to our political leadership that Smart 
Defense not be used as an excuse to lower, particularly in the 
case of European partners, already too low budgets. So we are 
in complete agreement with you and we will continue to press 
that at the political level. I think the United States in its 
role as a significant actor in the alliance should continue to 
press that as well.
    Senator Shaheen. What kind of response are we getting?
    Admiral Stavridis. At this point, I would say that we are 
getting a respectful hearing on that viewpoint, but the proof 
will be in the defense budgets as they roll out after the 
Summit. We need to continue to monitor that and put real 
pressure on it.
    The initiatives that are part of Smart Defense I wholly 
subscribe to, everything from Baltic air policing to missile 
defense, the alliance ground surveillance system, pooling of 
helicopters, marine patrol aircraft, and so forth. But I think 
this has to be done in a way that does not permit a reduction 
at least below the 2 percent goal, which we are not meeting now 
on the European side of the equation. So I am in full agreement 
with you, Senator.
    Senator Shaheen. Libya has afforded, as everyone has said, 
an excellent example of the success of NATO, and it is 
undoubtedly the most successful cooperative military effort of 
its kind in history. It seems to me that one of our challenges 
is to better--I do not want to say ``message''--but better 
educate some of the new emerging leaders about NATO's--not only 
its history and current successes, but its importance for the 
future. I wonder if you could talk about that as well.
    Admiral Stavridis. I would be glad to.
    First of all, I agree that the Libyan campaign was a very 
successful one, began with a U.S.-led coalition under General 
Ham, did excellent work for, I think, 2 weeks--Carter, 
roughly--and then NATO came in for the last 7 months of the 
operation. It showed the ability to move from a coalition 
setting into an alliance command structure operation. It showed 
all of the positives that you alluded to.
    It showed us areas we need to do better in. We need better 
alliance ISR. We need better alliance refueling capability. We 
need better alliance intelligence and targeting. We need to be 
better at strategic communications. We are addressing all of 
those areas as a result of what we have learned.
    In terms of telling the story of Libya, I agree completely 
with that. I have an article actually in the Foreign Affairs 
Magazine this month that I co-wrote with Ambassador Ivo H. 
Daalder, U.S. Ambassador to NATO, titled ``NATO's Victory in 
Libya,'' dated February 2, 2012. We are, at every level in 
NATO, working hard to get the story out. It is challenging 
because the news cycle moves on and we are on to the next 
challenge in the international security world. But I do believe 
that the Libyan campaign is one that--for all of the lessons 
learned on it, I think on balance it has been very positive. We 
will draw those lessons. We will continue to push them forward, 
and I think the Summit will be another opportunity to do so.
    Senator Shaheen. I think that is true. I had the 
opportunity to meet with Ambassador Daalder yesterday to talk 
about some of these same issues.
    I am not going to ask you to comment on this. I know 
Senator McCain raised the issue of Georgia, and I understand 
that that will be coming up in Chicago. I would hope that even 
though enlargement is on hold for the Chicago Summit, that 
there will be an effort to make sure that countries like 
Georgia, Bosnia, Macedonia, and those countries who are 
interested in being part of NATO, have some reason to continue 
to be supportive and to be encouraged about the efforts that 
they are engaging in.
    Admiral Stavridis. Senator, I agree. On Georgia, as I said 
to Senator McCain, of the 50 countries that are operating with 
us in Afghanistan, Georgia today is the second largest troop-
contributing nation on a per capita basis. As they contribute a 
second battalion, they will become the highest on a troop-
contributing basis. It is very real. They are in the fight. I 
was visiting with a Georgian lieutenant colonel, a triple 
amputee, at Landstuhl. These are brave--a brave nation and 
brave soldiers who stand with NATO, and we need to be mindful 
of that as we go forward.
    Senator Shaheen. I agree with that. I think they are very 
proud of their contribution. I know that we all appreciate it 
very much.
    There was some good news this week about the Balkans. 
Serbia's candidacy to the European Union (EU) was formally 
accepted. I think that is very positive. But as you know too 
well, even though some of the border issues between Kosovo and 
Serbia have calmed down somewhat, it seems to be only one 
incident away from having that break out into conflict again. I 
wonder if you could talk about what progress you are seeing and 
what Serbia's EU candidacy means for helping to calm the 
situation between Kosovo and Serbia.
    Admiral Stavridis. I can. As always, to put a context on 
this, we should remember that in 1999 NATO was dropping bombs 
in Belgrade. We were actually attacking Belgrade. We had, at 
one time, 50,000 troops in Kosovo as part of a large mission 
there. So the good news is we have come a long way in a decade 
and a bit. Today we are down to around 5,000 troops. When I 
took the watch as SACEUR, we had 15,000 troops there. So we 
have brought them down and we have maintained a safe and secure 
environment. So I think the trajectory is good.
    In terms of where we are at this moment, we are at a bit of 
a plateau as we wait, as you said, for the EU candidacy to 
settle, and now the next big muscle movement will be the 
election, which I believe will be in May. After that point in 
time, we will reassess the security situation. I am hopeful 
that the EU-led talks between Serbia and Kosovo will continue 
very slowly, painfully, and incrementally to bear fruit and 
that by the summer I can make a recommendation to further 
withdraw the troops. That is my hope at the moment. However, 
again, I think we are on a bit of a plateau in a holding state 
while we let the dust clear from the latest good news that you 
started out with and see if it has a longer manifestation in 
country.
    Senator Shaheen. Again, thank you both very much.
    My time has expired. Thank you, Mr. Chairman.
    Chairman Levin. Thank you very much, Senator Shaheen.
    Let me just ask a question following up on Senator 
Blumenthal's questions relative to Israel. I am only going to 
ask you about things that are in the public domain.
    My understanding is that in 2010 that there was a large 
joint military exercise with Israel involving missile defenses. 
Is that correct?
    Admiral Stavridis. Yes, sir.
    Chairman Levin. That that was the largest U.S.-Israel 
military exercise of any kind up to that point.
    Admiral Stavridis. I would guess that is correct.
    Chairman Levin. One of the things that we are able to 
contribute to that missile defense and have contributed, 
because there have been test missiles fired by Iran and I 
believe maybe by Syria as well, is that--and this is public 
information--missile launch data from satellites in real time 
is shared with Israel.
    Admiral Stavridis. Senator, I would really prefer to give 
you a classified answer to that.
    Chairman Levin. Okay. I am pretty sure that is 
unclassified, but let us know if it is or not.
    Admiral Stavridis. Okay, sir.
    Chairman Levin. If it is unclassified, make sure you 
confirm that.
    Admiral Stavridis. Yes, sir, I will.
    [The information referred to follows:]

     [Deleted.]

    Chairman Levin. It is also my understanding that it is in 
the unclassified world that we share information on missile 
tracks with our X-band radar with Israel. You can give us the 
same answer. You can confirm if that is in the public domain.
    Admiral Stavridis. I will.
    Chairman Levin. But that is my understanding.
    Now, we were going to have an exercise that was scheduled 
with Israel I believe a few months ago, which was then delayed 
by their defense minister's request. Is that correct?
    Admiral Stavridis. Sir, we mutually arrived at a decision 
to postpone the exercise--it is called Austere Challenge--until 
the fall. We are now actively pushing forward on conducting 
that exercise.
    Chairman Levin. You will be able to confirm what it is that 
we contribute to that exercise, but whatever it is, does that 
add significant capability to Israel's missile defense?
    Admiral Stavridis. Yes, sir. You alluded earlier to the 
Juniper Cobra exercise of several years ago. This is continuing 
that very robust level of cooperation across a variety of 
activities to include missile defense. I am happy to provide 
great detail on this at a classified level for you, sir.
    Chairman Levin. That involvement of our--whatever our 
involvement is--and you will confirm that it is as described by 
me as in the public realm. That involvement does add 
significant capability to Israel's missile defense?
    Admiral Stavridis. Yes, sir.
    Chairman Levin. Senator Shaheen, it is you and me between 
them and lunch.
    Senator Shaheen. I just wanted to hear what you had to say.
    Chairman Levin. In that case, we began with our gratitude 
and I hope universally expressed up here to both of you, but 
since this is your last appearance, Admiral Stavridis, we 
single you out for special thanks today and good luck to you 
and your family.
    Admiral Stavridis. Thanks a lot, sir.
    Chairman Levin. We will stand adjourned.
    [Questions for the record with answers supplied follow:]

               Questions Submitted by Senator Carl Levin

                              SOCIAL MEDIA

    1. Senator Levin. Admiral Stavridis and General Ham, one of the key 
observations from the Arab Spring was the significant role that social 
media (e.g., Facebook, Twitter, and other internet tools and sites) 
played in mobilizing social movements. As a result, there has been 
significant research and development (R&D) activity to build tools to 
better understand public sentiment, opinion, and activity as expressed 
via social media. To what extent does social media help understand 
trends and activity in the your area of responsibility (AOR) compared 
to more traditional open source media channels?
    Admiral Stavridis. Social media provides U.S. European Command 
(EUCOM) with a level of situational awareness that is not always 
available through traditional media and other open source channels. 
What makes social media unique is that it allows operators and 
intelligence analysts the opportunity to observe an operational picture 
in real time, based on first-hand accounts of individual activists, 
special interest groups, and individuals seeking information without 
the filter of traditional media outlets.
    Given the critical importance of understanding our audiences to 
success in strategic communication efforts, social media provides 
further opportunities to better understand the issues and narratives 
that drive the people well before the information surfaces in the 
mainstream media. It also provides opportunities to observe and assess 
the effects of our engagement efforts.
    Social media has the potential to better forecast trends, because 
it allows for direct two-way communication with the people on the 
ground. However, robust automated tools and capabilities must be 
developed and employed by the command to visualize social media 
activity and trends. EUCOM is already working with the U.S. Government 
Interagency, academia, and public-private partners on this effort.
    General Ham. In our AOR, the internet is not as prevalent as in 
most parts of the world and traditional media is still the way a 
majority of the population receives their news. When collecting 
information to understand public opinion, we use social media as one 
source which, when combined with more traditional sources such as print 
media and polling, provides a more complete understanding. For breaking 
events and incidents, we use the real-time data available on social 
media sites as a valuable source as we develop our assessment.

    2. Senator Levin. Admiral Stavridis and General Ham, to what extent 
is your combatant command involved in developing a monitoring and 
analysis capability in this arena?
    Admiral Stavridis. EUCOM is currently in the process of an 
initiative to establish an Unclassified Information Sharing Cell to 
develop, monitor, and employ information available in social media 
channels. The cell will utilize existing command resources within 
intelligence, planning, operations, strategic communication, public 
affairs, and communications directorates to integrate the use of social 
media and crowd-sourcing in the planning and conduct of operations.
    General Ham. We are currently working with the Office of the 
Assistant Secretary of Defense for Research and Engineering on a funded 
project to develop a tool for predictive analysis based on data mined 
from all sources including social media. The tool will locate and sort 
the vast amount of data available on the web allowing accurate and 
actionable information to support decision making, improve real-time 
situational awareness, and support long-term analysis for strategic 
planning and messaging. The tool and accompanying dashboard will enable 
the identification of a baseline of media behavior before a significant 
event and the analysis of the significance of elevated post event media 
activity. It will also detect trends using pattern recognition based on 
web source data.

    3. Senator Levin. Admiral Stavridis and General Ham, to what extent 
has your combatant command interacted with the Department of Defense's 
(DOD) Human, Social, Cultural, and Behavioral (HSCB) Program for help 
on this front?
    Admiral Stavridis. We have not interacted with that program.
    General Ham. We conducted informal discussions with the leadership 
of the HSCB Program for several years. In the last year, the HSCB 
briefed members of our Intelligence Directorate Social Science Research 
Branch on their current research agenda. We also discussed areas of 
mutual interest suitable for future collaboration.
                                 ______
                                 
            Questions Submitted by Senator Claire McCaskill

                              CONTRACTORS

    4. Senator McCaskill. Admiral Stavridis, our European allies and 
partners have played a major role in supporting the planned transition 
of operations to the Afghan Government by providing army and police 
trainers, as well as other forces to support our efforts in 
Afghanistan. Currently, our European allies contribute approximately 25 
percent of the mentoring teams required to train Afghan National 
Security Forces (ANSF) in the field and are deeply involved in the 
Afghan National Police (ANP) training program. Non-U.S. Government 
coalition personnel are involved in the ANP training program at the 
Afghan Ministry of Interior, at training sites, and in the field. 
Currently, non-U.S. Government coalition personnel comprise 
approximately 66 percent of the 778 trainers and mentors at the 24 
North Atlantic Treaty Organization (NATO)-led ANP training sites in 
Afghanistan, 16 of which are led by NATO countries other than the 
United States. The U.S. training mission in Afghanistan relies heavily 
on contractors to train and mentor police forces in Afghanistan. In 
their capacity within the ANP training program, do our European allies 
rely on contractors hired by DOD to support their roles mentoring and 
training Afghan police forces?
    Admiral Stavridis. NATO has long-recognized the potential benefits 
of improving the sharing of contract information among member nations 
deployed on operations. Since 2010, Supreme Headquarters Allied Powers 
Europe (SHAPE) has solicited support from the allies aimed at improving 
contract visibility within NATO, but has made little progress as each 
ally has individual caveats on contract information-sharing. While in 
theory the ability to share contract data between NATO and 
International Security Assistance Force (ISAF) member nations and the 
NATO Command Structure is an excellent idea, the actual practice has 
not yet come to fruition.
    Because contracting information for operations in Afghanistan is 
held at the national level, this question may be better answered by 
U.S. Central Command (CENTCOM).

    5. Senator McCaskill. Admiral Stavridis, do our allies share in any 
of the financial burden of using these contractors?
    Admiral Stavridis. We do note that many multinational ISAF forces 
rely on DOD contractors for support. We also acknowledge that SHAPE 
does not have visibility into national requirements and the sharing of 
the cost burden of using these contracts.
    Because contracting information for operations in Afghanistan is 
held at the national level, this question might be better answered by 
CENTCOM.

    6. Senator McCaskill. Admiral Stavridis, EUCOM is responsible for 
conducting major joint training exercises with our European allies. In 
support of the ISAF in Afghanistan, EUCOM trains military units of our 
European allies that are preparing to deploy to Afghanistan. Are 
contractors involved in training exercises and the pre-deployment 
training of our European allies, and if so, what role do contractors 
play in this training?
    Admiral Stavridis. U.S. Army Europe (USAREUR) conducts a 
significant portion of the predeployment training for ally and partner 
nation forces deploying to Afghanistan. USAREUR employs contractors for 
a variety of missions: specifically, Up-Armored High Mobility 
Multipurpose Wheeled Vehicles; Mine Resistant Ambush Protected (MRAP) 
vehicles; and Counter Improvised Explosive Device (CIED) training.

    7. Senator McCaskill. Admiral Stavridis, are contractors being used 
to provide training that could be done by DOD military or civilian 
personnel?
    Admiral Stavridis. Contractors provide joint training in lieu of 
military or civilian personnel that have been reduced by billet cuts. 
However, and more importantly, they possess the skills that are 
essential to implementing the joint training system at EUCOM and across 
the joint enterprise.

                               FOOTPRINT

    8. Senator McCaskill. Admiral Stavridis, according to your posture 
statement, over the past 22 years, EUCOM has reduced inventory by 
approximately 75 percent, and over the past 8 years, EUCOM has closed 
or consolidated over 200 sites of various sizes across the theater. 
However, DOD has called for two rounds of Base Realignment and Closure 
(BRAC), one in 2013 and another in 2015. Before we consider such a 
measure, it is imperative that we look at the necessity of overseas 
bases first. Current plans call for pulling down an additional two 
brigades from Europe. Has EUCOM conducted any analysis on how bases and 
other sites can be consolidated or closed after this move occurs?
    Admiral Stavridis. As you indicate, EUCOM has just announced the 
inactivation of two heavy brigades in Europe that allows the closure of 
11 sites comprising the Bamberg and Schweinfurt communities in Germany. 
We routinely evaluate our European basing requirements, as we are doing 
now, and this work will contribute to the ongoing study, being 
conducted by the Office of the Under Secretary of Defense (Acquisition, 
Technology, and Logistics) on basing capacity as well as the overseas 
basing study directed by section 347 of the National Defense 
Authorization Act (NDAA) for Fiscal Year 2012 (NDAA, CPL 112-81J).

          CAMP LEMONNIER CONTAINERIZED LIVING UNITS RENOVATION

    9. Senator McCaskill. General Ham, according to your testimony, in 
order to reduce fuel costs at Camp Lemonnier, the containerized living 
units (CLU) will be renovated through a $1 million project funded by 
the DOD Operational Energy Plans and Programs Office. The CLUs will be 
redesigned incorporating energy efficient air conditioning units, 
increased insulation, and reflective exterior coatings. As part of the 
project, a highly energy efficient SuperCLU will be developed. The 
projected energy savings are 54 percent for CLUs and 82 percent for 
SuperCLUs, thus reducing fuel costs for Camp Lemonnier. How long will 
it take for the fuel savings to offset the cost for the $1 million 
renovation project?
    General Ham. Assuming a fuel cost of $3 per gallon, it will take 
approximately 2 years for the energy savings to offset the cost of 
renovating the 72 CLUs.

    10. Senator McCaskill. General Ham, have you conducted any analysis 
as to whether it would be less expensive to forgo the renovation of 
older CLUs and instead replace them with SuperCLUs once development is 
complete?
    General Ham. We have not conducted such an analysis since R&D of 
the SuperCLUs is still ongoing.
                                 ______
                                 
               Questions Submitted by Senator Joe Manchin

                        STRATEGIC COMMUNICATION

    11. Senator Manchin. Admiral Stavridis, you've been a leading 
proponent of effective strategic communications throughout your career. 
I think that all of us would agree that what's going on in Afghanistan 
right now is a strategic-level challenge. You may have summed it up 
correctly in an article that you wrote for the National Defense 
University: ``There will be moments when no matter how effective the 
plan, the message is not going to have any effect.'' Since our 
strategic communication has real consequences on the men and women in 
combat, could you give me your perspective on why strategic 
communication is so important for the military?
    Admiral Stavridis. Strategic communication is a critical component 
of military effectiveness. It is reflected in Sun Tzu's ancient Chinese 
military treatise, The Art of War: ``Supreme excellence consists in 
breaking the enemy's resistance without fighting.'' Strategic 
communication also has real consequences on the men and women in 
combat, as a successful campaign may reduce, or in the best case 
eliminate, the need for combat.
    Strategic communication is an enduring process aimed at more 
perfectly aligning military activities and diplomatic efforts to 
achieve long-term national strategic objectives. I consider strategic 
communication as an enabler for our policy and planning decisions and 
actions; it is the vital process that provides truthful information 
about those decisions and actions to key stakeholders; communicates it 
in a culturally sensible fashion; uses messengers who are likely to be 
well-received; measures the results of our efforts diligently; and 
adjusts both message and method of delivery accordingly.
    Importantly to our troops on the ground, effective strategic 
communication leverages and elevates their efforts to ensure they are 
seen and understood as we intend, and helps them achieve the important 
national goals we are fighting for. As failed strategic communication 
can deeply undermine our efforts, it is critical that we continue to 
invest in strengthening our ability to comprehensively employ this 
methodology.

    12. Senator Manchin. Admiral Stavridis, what are some of your best 
practices of strategic communication?
    Admiral Stavridis. Effective strategic communication is an enduring 
process that shapes how we are understood and seen as a military and as 
a Nation. It is best applied over the long-term with steady pressure, 
tightly linked to achieving our national strategic objectives. It must 
be leader-driven, and kept at the strategic level. The leader's 
emphasis is critical to get members throughout the command to do their 
part to achieve our strategic objectives. This massing of a broad range 
of activities, enacted at multiple echelons, aimed at achieving 
strategic objectives, provides the power of strategic communication.
    Understanding our audiences is the golden rule of strategic 
communication, and one that is often missed. A solid, deep 
understanding of the cultures and narratives of the people we address 
is central to gaining their understanding. We need to invest the 
necessary time and resources here, or we risk misunderstanding by our 
friends and opponents with real and significant consequences.
    Involving the whole-of-government, if not whole-of-society, greatly 
enhances our effectiveness as we communicate our motives through our 
actions and words. We need to convince others that we are a force for 
good--we, the military, the United States of America, and our society 
as a whole. Good coordination with the Department of State (DOS) and 
other agencies is vital to making our messages synchronize and 
resonate. We then need to use modern social media tools, employ 
personal contact, and leverage traditional means of outreach to 
effectively execute our strategic communication plans.
    Lastly, we need to continue to seek ways to measure and assess our 
effectiveness in order to see if we are truly reaching our audiences 
and having the intended effects, and then adjust as needed. Strategic 
communication is a powerful military tool that we must employ with the 
type of professionalism, thought, and planning that we put into other 
endeavors.

                                 KOSOVO

    13. Senator Manchin. Admiral Stavridis, I'm very proud of what our 
Active Military and our National Guard have done in Kosovo. Last year, 
a Guard unit from Wheeling, WV, helped defuse clashes between ethnic 
Serbs and Albanians in northern Kosovo. Last year, you also announced 
force reductions in Kosovo. We started at about 50,000 peacekeepers in 
1999 and now we have about 6,000. Does that mean you're comfortable 
with the progress being made there?
    Admiral Stavridis. Kosovo remains a delicate and potentially 
challenging situation, but it is an excellent example of how military 
peacekeepers support and facilitate the political dialogue and progress 
necessary for a sustainable peace. Belgrade and Pristina struggled, but 
eventually succeeded in reaching initial agreements that should 
ultimately set the stage for a political agreement. These new 
agreements will change the Rule of Law situation in northern Kosovo 
over the long-term. However, in the short-term, the agreements will 
likely lead to more ethnic turbulence that requires peacekeepers, 
perhaps for longer than desired but still only across the foreseeable 
horizon. The Kosovo police and security forces are developing well, 
with significant support and oversight from NATO, the European Union 
(EU), and the United States. Their capacity to deal with situations 
internally continues to improve, and they will eventually be prepared 
to replace NATO and EU Rule of Law Mission in Kosovo (EULEX) in the 
provision of security for Kosovo.

    14. Senator Manchin. Admiral Stavridis, I've read reports of 
friction at some of the border crossings recently. Can you give me an 
update?
    Admiral Stavridis. Kosovo Serb hardliners in northern Kosovo 
(including politicians, members of the Serbian Orthodox Church, 
students, organized crime figures, and ordinary citizens), backed by 
illegal Serbian parallel structures, resist integration efforts by the 
Government of Kosovo or attempts by the international community to 
expand Pristina's sovereignty. Serbian hardline groups will likely 
continue using roadblocks to impede international Freedom of Movement 
(FOM) in northern Kosovo, while potentially employing violence to 
counter any Kosovo Force (KFOR) or EULEX efforts to remove them. Any 
KFOR or EULEX operations in north Kosovo that appear to support 
Government of Kosovo institutions will likely be met with hostility by 
Kosovo Serbs, who are postured to maintain robust resistance. Patience, 
coupled with political pressure and dialogue backed by the continued 
presence of KFOR and EULEX, will be required to work through this set 
of challenges.

    15. Senator Manchin. Admiral Stavridis, the new defense strategy 
lays out a plan to reduce the use of large contingency operations with 
smaller specialized forces. Do you think the force structure used to 
secure Kosovo can be applied to other peacekeeping operations in the 
future?
    Admiral Stavridis. To a degree, yes. The unique aspect of the NATO 
operation in Kosovo was that it was a U.S.-led operation only during 
the initial kinetic phase in 1999. The NATO peacekeeping mission has 
been under European leadership, with the U.S. contribution almost 
always less than 20 percent. I consider this a European security 
challenge where our allies have done most of the heavy lifting, 
allowing our contribution to remain smaller and more focused on key 
tasks. To duplicate this success in future operations would require 
coalition partners that are trained, equipped, and enabled with 
political support from their governments. Germany, Austria, and Italy 
consistently provide the Kosovo Force with the largest contributions 
and key leadership. About one third of the NATO mission in Kosovo comes 
from current recipients of ongoing U.S. security cooperation programs 
and activities. Croatia, for example, provides utility lift 
helicopters, while Poland, Ukraine, and several other Eastern European 
nations provide ground forces, staff officers, and community liaison 
teams vital to maintaining a safe and secure environment.

                   RELOCATION OF U.S. AFRICA COMMAND

    16. Senator Manchin. General Ham, the decision to relocate the U.S. 
Africa Command (AFRICOM) headquarters from Germany was postponed to 
2012. Since EUCOM and AFRICOM are the only two geographic combatant 
commands located outside of the United States, I'm very concerned that 
U.S. taxpayers are not reaping the economic benefits that a military 
base brings. I'd rather have American dollars spent in West Virginia 
than in Germany. Have you done an assessment on how much it would cost 
to move AFRICOM?
    General Ham. AFRICOM has not done an assessment on the cost of 
moving our headquarters, but the Office of the Secretary of Defense 
(OSD) is currently leading a comprehensive, congressionally-mandated, 
Basing Alternatives Study, which will assess the cost-benefit with 
moving the headquarters from its current location to the United States. 
We provided the requisite operational data to support the analysis of 
the comparative costs, benefits, and risks.

    17. Senator Manchin. General Ham, if you have done an assessment on 
the cost of moving AFRICOM, did you include the economic benefits to 
the local economy in your assessment?
    General Ham. We have not done an assessment on the cost of moving 
our headquarters.

                                 PIRACY

    18. Senator Manchin. General Ham, by some estimates, the annual 
cost of piracy to the global economy ranges from $7 billion to $12 
billion. In 2012 alone, Somali pirates attacked 26 vessels, hijacked 4, 
and took 64 people hostage. Have U.S. and NATO forces made any progress 
in reducing piracy off the Horn of Africa?
    General Ham. [Deleted.]

    19. Senator Manchin. General Ham, how effective are these 
counterpiracy operations and what can we do differently?
    General Ham. The international response to Somali piracy is 
achieving some success. Although pirate attack rates have not declined, 
the rate of successful attacks has dropped by nearly 50 percent. The 
increased use of industry-accepted best practices, such as embarked 
armed security teams, has played a role in reducing attack success 
rates; to date, not a single vessel with an embarked security team has 
been successfully hijacked. Increased interdictions by coalition and 
international forces may also be contributing to the lower number of 
successful pirate attacks. However, due to the continuing trend of 
higher ransom payments, piracy-generated revenue has remained steady.
    A sustainable solution to piracy requires addressing conditions on 
land. Stability and economic development are necessary to provide 
viable economic alternatives to pirate activity. Counterpiracy 
operations at sea must be complemented by improvements to governance in 
Somalia to include strengthening of law enforcement and judicial 
systems. Disrupting the financial networks which sustain Somali piracy 
must also be an area of focus. The recent London Conference on Somalia 
reinforced the international community's commitment to working with the 
Somali people to support the political and economic progress needed to 
consolidate recent security gain and is, I believe, a positive step 
toward developing alternatives to piracy.
                                 ______
                                 
               Questions Submitted by Senator John McCain

                             CAMP LEMONNIER

    20. Senator McCain. General Ham, you note in your written testimony 
that new mission requirements necessitate new facilities and upgrades 
at your only enduring base in Africa at Camp Lemonnier, Djibouti. I 
know that the Department of the Navy has been working on a master plan 
for over a year to construct an austere base for thousands of U.S. 
military personnel with an emphasis on anti-terrorism force protection 
and safety. This committee has raised concerns in the past that the 
small footprint of 500 acres at Camp Lemonnier will result in 
significant force protection vulnerabilities. Are you confident that 
the plan for construction of the base will provide adequate safety and 
security for our forces deployed there?
    General Ham. Force protection is a primary consideration during the 
updating of the Camp Lemonnier master plan. My force protection and 
safety concerns were provided and discussed with the Department of the 
Navy along with the long-term vision and requirements. All planned 
construction projects are being sited and designed in accordance with 
the Unified Facilities Criteria for DOD overseas construction. The 
ongoing master plan incorporates applicable anti-terrorism force 
protection standards. The master plan will incorporate best practices 
and designs to meet both force protection and Unified Facilities 
Criteria guidance. I will continue to be engaged with the development 
of the master plan and ensure we have taken the necessary steps to 
ensure the safety and protection of all tenants.

    21. Senator McCain. General Ham, what can be done to mitigate force 
protection risks, such as expanding the footprint of the installation?
    General Ham. Expanding the footprint of Camp Lemonnier is not a 
U.S. Government option at this time. While we are in discussions with 
the Government of Djibouti regarding a possible runway expansion over 
ground that is not included in the current implementing arrangement, 
enlarging the Camp runs counter to our desire to diversify operating 
locations in the region. I envision moving towards a smaller steady 
state population at Camp Lemonnier to best employ the space we have and 
allow three-vice six-story barracks. Routine and random force 
protection drills are conducted in concert with our Djiboutian hosts as 
well as French and Japanese neighbors at the Camp. We are in compliance 
with all governing force protection requirements.

    22. Senator McCain. General Ham, when do you expect to approve the 
master plan?
    General Ham. The master plan for Camp Lemonnier is being developed 
by the Department of the Navy. We continue to coordinate with the 
Department of the Navy as they complete the plan. As part of this 
process, we provided our operational requirements, long-term vision, 
and concern for force protection and safety. I expect the master plan 
will be released by the Department of the Navy in the summer of 2012.

    23. Senator McCain. General Ham, will you share the plan and the 
total costs with this committee?
    General Ham. Yes, I look forward to sharing the master plan for 
Camp Lemonnier once it has been released through the Department of the 
Navy and OSD.

           RHINE ORDNANCE BARRACKS REPLACEMENT MEDICAL CENTER

    24. Senator McCain. Admiral Stavridis, replacement of the Landstuhl 
Regional Medical Center has been a priority for DOD due to its 
deteriorating condition, and the critical role that the hospital and 
its staff played in savings lives over the last decade of conflict in 
Iraq and Afghanistan. Do you concur with the Army's position that 
rebuilding the hospital capacity at the Rhine Ordnance Barracks remains 
a top priority, even as U.S. involvement in Iraq and Afghanistan 
decline and the United States reduces its presence in Europe?
    Admiral Stavridis. The Rhine Ordnance Barracks Replacement Medical 
Center remains one of my highest priority military construction 
projects. The critical mission the hospital plays in saving lives does 
not end with any individual conflict. The mission is ever present to 
ensure sailors, soldiers, airmen, and marines have the best chance of 
survival when the Nation calls for the use of military forces. I am 
committed to providing this capability, which services the EUCOM, 
CENTCOM, and AFRICOM theaters and beyond, as required.

    25. Senator McCain. Admiral Stavridis, given the fact that DOD is 
still assessing the exact number of personnel to be restationed from 
Europe and the number and location of bases to be closed, does DOD 
still need a $1.2 billion hospital, and if not, what do you estimate 
should be the size and cost of the new hospital?
    Admiral Stavridis. The Rhine Ordnance Barracks Replacement Medical 
Center's mission is two-fold. Although the hospital serves the military 
and dependant populations of Europe, and Germany in particular, its 
most critical mission is to save the lives of America's warfighters. 
This requirement is not impacted by announced posture movements within 
the EUCOM area of focus; the requirement is based upon EUCOM, CENTCOM, 
and AFRICOM plans. EUCOM is working with the Office of the Assistant 
Secretary of Defense (Health Affairs), the Tricare Management Activity, 
and the European Regional Medical Command to review the size of the 
medical facility and the scope of medical services to be provided in 
order to ensure we ask the American people to pay only for what is 
needed. It is estimated that the Office of the Secretary of Defense 
(Health Affairs) will provide, via the Secretary of Defense, a report 
to Congress addressing the size and scope of the medical center before 
the end of the summer.
                                 ______
                                 
               Questions Submitted by Senator John Cornyn

                       NATO PARTNER CONTRIBUTIONS

    26. Senator Cornyn. Admiral Stavridis, the NATO agreement requires 
NATO partners provide at least 2 percent of their GDP for their 
defense, yet many NATO members are failing to meet this goal. In your 
opinion, how does the failure of NATO members to meet their 
contribution requirements impact the capabilities of NATO as an 
organization and the national security of the United States?
    Admiral Stavridis. The recommended level of defense expenditures, 
agreed by NATO nations, remains at 2 percent of GDP. While some nations 
meet this goal, many do not.
    The challenges of balancing defense investment and budgetary 
pressures, with an equitable burdensharing among sovereign nations, is 
neither a new problem nor one easily resolved.
    While encouraging nations to meet agreed spending goals, we should 
remember that NATO continues to successfully operate at unprecedented 
levels in operations far beyond its borders--to NATO and partner forces 
serving in Afghanistan, Kosovo, and in counterpiracy operations off the 
coast of Somalia.
    As a military commander, my concern remains that the alliance 
maintains sufficient forces and capabilities to meet the demanding 
commitments of these current operations as well as the resources 
necessary to address the broad range of future risks and potential 
security challenges.
    Continuing economic pressures in many of the allied nations makes 
it imperative that the allies utilize the available resources wisely. 
The NATO Secretary General's Smart Defense Initiative is intended to 
meet our collective defense needs more efficiently through greater 
collaboration and coherence of effort among nations, with a 
prioritization of capabilities to meet the most urgent needs while 
seeking multinational solutions where possible. Smart Defense will 
develop common capabilities between NATO nations so that individual 
nations, who may not be able to afford the desired capabilities on 
their own, are able to develop them jointly. Nations are working toward 
a number of substantive, multinational projects, the first of which 
will be highlighted at the Chicago 2012 Summit with a view to making 
the resulting capabilities available to NATO.
    Despite its members' fiscal challenges, NATO is making required 
adjustments to ensure it paces the future security environment. 
Discussions in Lisbon in 2010 and anticipated discussion in Chicago in 
May 2012 continue to realistically address the most challenging issues 
facing the United States and the alliance, and they do so in the 
context of the current fiscal environment. That said, we will continue 
to watch this closely over the near- and mid-term.

    27. Senator Cornyn. Admiral Stavridis, do you believe the United 
States has sufficient leverage to urge greater contributions by NATO 
member nations at the same time we are facing cuts to our own defense 
budget close to $1 trillion in the next decade?
    Admiral Stavridis. U.S. leadership is critically important, and 
U.S. leadership is constructively shaping the continued investment by 
European allies into NATO interoperable capabilities--shared, pooled, 
or separate--even in these current financial and economic 
circumstances.
    NATO as an organization plays a critical role in the development of 
military capabilities by its members, the trajectory and orientation of 
national defense goals, and the common building of interoperable forces 
and equipment. This is a vital function, one that has proven essential 
to the successful execution of NATO-led missions since the end of the 
Cold War as well as other non-NATO military operations that involved 
allied forces. This role of NATO in shaping the contours of overall 
alliance capability and the content of specific capabilities will 
remain especially important for the future. We will continue to develop 
the capabilities needed to execute the missions and tasks assigned to 
the alliance.
    In this context, the United States is a leader amongst allies, even 
as NATO as a whole faces defense budget pressure. Allies continue to 
seek strong defense investments oriented toward the future, and 
oriented toward supporting operations at home and at strategic 
distance. Interoperability in equipment, forces, and training with the 
United States through the diverse set of NATO mechanisms is a top 
priority for allies and partners. The economic and financial conditions 
have impacted all NATO nations and defense spending has decreased as a 
result. However, as we approach the Chicago Summit, and look beyond the 
immediate horizon to the next 10 years, I am confident the alliance 
will build on the successful business practices of the past, implement 
with allies effective defense concepts and defense capabilities 
currently under development, and develop new initiatives that address 
the security environment today and tomorrow. Led by the United States, 
the alliance will continue to develop smart, connected forces that 
mutually strengthen and reinforce the security of nations on both sides 
of the Atlantic.

                     ANSF TRAINING FROM NATO FORCES

    28. Senator Cornyn. Admiral Stavridis, in your prepared testimony, 
you cite a poll conducted by the Asia Foundation last fall that found 
87 percent of respondents from the Afghan population stated that ``the 
Afghan National Army (ANA) was improving the security situation across 
the country.'' In recent testimony, Secretary of Defense Panetta and 
Director of National Intelligence Clapper cited concerns about 
corruption, leadership, and the ability of the ANA and ANSF to provide 
security, specifically following the departure of U.S. forces. Please 
expand on your assessment of the ability of the Afghan forces.
    Admiral Stavridis. Afghan forces continue to improve, as measured 
by their progress, in training reported through our ISAF and Afghan 
instructors and in the field where operational results tell their own 
story. The Asia Foundation report which I cited, ``Afghanistan in 2011, 
A Survey of the Afghan People,'' is based on a survey conducted in July 
2011 which polled 6,500 Afghans across the country, with 78 percent of 
respondents in rural areas and 22 percent in urban areas. This is a 
credible report from an organization with years of polling experience 
in Afghanistan which provides information corroborating a conclusion of 
steady ANSF progress. At the same time, I acknowledge the challenges of 
corruption and the ability of ANSF to sustain security after the 
termination of the ISAF mission. Yet, ANSF is making steady progress; 
and we must continue to work diligently with them to ensure a 
successful transition by directly addressing problem areas.
    As recently as this January, my ISAF trainers report positive 
results in recruiting and retention. Both ANA and ANP remain on track 
to meet their October 2012 growth targets of 195,000 and 157,000, 
respectively. This goal may be reached even before the summer. In 
January, attrition rates for the ANA fell to 1.9 percent, and for the 
ANP they fell below 1 percent. While this does not mean the problem of 
desertion is solved, it is a positive indication and we will watch it 
closely as the fighting season begins in earnest.
    Regarding the leadership issue, ANSF continues to address a 
shortage of noncommissioned officers (NCO). These individuals perform a 
crucial role in troop leadership, and will be vital to a strong ANSF as 
we move through transition and into a post-ISAF environment. Based on 
the current recruiting and training programs, we expect ANSF to 
continue to suffer from a shortage of NCOs through 2012. This is a work 
in progress, and our instructors are providing ANSF with valuable 
mentoring in their leadership training and education programs.
    I would like to offer some additional highlights from the 2011 Asia 
Foundation report which I shared with the ISAF Chiefs of Defense 
earlier this year. I think you will agree that the information paints a 
picture which supports both the progress ANSF is making, and highlights 
some of the challenges which remain to be dealt with. Those highlights 
are: Respondents indicating the ANA was ``unprofessional and poorly 
trained'' dropped from 62 percent in 2007 to 44 percent this year. 
Similarly, respondents saying the ANA needed the support of foreign 
troops and could not operate alone decreased from 77 percent in 2007 to 
60 percent in 2011. Over 50 percent of respondents reported that 
corruption is a major problem. Of those, 56 percent stated it was a 
problem in their daily lives, 64 percent said it is a problem in 
provincial government, and 76 percent indicated that corruption is a 
problem for the nation as a whole.
    I see in these results strong indications that our focus on 
improving security in Afghanistan can only be sustained in the long-
term by effective ANSF. While I am heartened by the steady progress 
highlighted by the Asia Foundation 2011 report, I acknowledge the 
complexity and difficulties facing ANSF as we approach the end of the 
ISAF mission.

    29. Senator Cornyn. Admiral Stavridis, given your recent assessment 
that NATO is likely to continue its partnership with Afghanistan well 
past the end of combat operations, please provide an assessment of the 
training Afghan forces are receiving from NATO trainers.
    Admiral Stavridis. The growth and professionalization of the ANSF 
form a strategic priority for transition. Overall ANSF generation is on 
track to support transition to an ANSF security lead. NATO continues to 
support ANSF training by providing trainers, mentors, and advisors. 
This training is producing steady improvements in ANSF capabilities.
    Some illustrative examples follow: Both the ANA and ANP are on 
track to meet their October 12 growth targets (ANA 195,000, ANP 
157,000; 352,000 total) several months early.
    ANSF effectiveness is steadily improving: 71.3 percent of the ANA 
Kandaks and 58 percent of ANP Units are rated as either ``effective 
with advisors'' or ``effective with assistance;'' 5.2 percent of the 
ANA Kandaks and 23.9 percent of the ANP Units are rated as 
``independent with advisors.''
    The ANSF is demonstrating an improved ability to plan and execute 
operations independently or with minimal ISAF support. Beginning in 
late March 2012, Operation Naweed will become effective, putting the 
ANSF in the lead to defend the sovereignty of Afghanistan.
    Literacy training programs are making gains throughout the force. 
Over 58 percent of the ANSF has had some level (1st, 2nd, or 3rd grade) 
of literacy training. There are over 3,000 literacy instructors 
providing almost 4,000 classes.
    The ANSF continued to increase the quality and quantity of its 
instructors through Train the Instructor (T2I) and Master Skills 
Instructor Courses (MSIC).
    The goals for training the ANSF remain on track through the initial 
entry courses. Course enrolment remains consistent, while fill rates 
exceed course capacities. There still remains a chronic shortfall in 
the growth of the desired number of NCOs who provide key unit level 
leadership, especially in training and in combat. To address this 
shortfall, the ANP continues to focus efforts on recruiting direct-
entry NCOs and training and promoting patrolmen in order to increase 
their NCO ranks, while ANA is aiming to promote experienced and 
qualified soldiers from within their ranks over time.

                       FORCE STRUCTURE IN EUROPE

    30. Senator Cornyn. Admiral Stavridis, you state in your prepared 
testimony that the core of EUCOM's strategy is the ``realization and 
revalidation of the strategic linkage between Europe and the United 
States. America's European allies remain our Nation's most reliable and 
enduring strategic partners.'' In your opinion, if we lessen our 
footprint in Europe by two Army brigade combat teams (BCT), replacing 
them with rotational forces, how will this impact the strategic link 
and cooperation with our European allies?
    Admiral Stavridis. The initiative to reinvigorate the U.S. 
commitment to the NATO Response Force (NRF) is key to ensuring that our 
strategic link with our European allies remains strong. This concept 
includes a U.S.-NRF commitment bolstered by the allocation of a CONUS-
based BCT, with predictable battalion-sized rotations to Europe to 
participate in significant NRF training activities. These rotations 
will reinforce our commitment to Europe, exercise our capability to 
deploy ground forces, and afford the opportunity to sustain our 
interoperability with NATO.

    31. Senator Cornyn. Admiral Stavridis, according to the DOD's new 
strategic guidance, a ``strategic opportunity to rebalance the U.S. 
military investment in Europe'' has been created and ``in keeping with 
this evolving strategic landscape, our posture in Europe must also 
evolve'' toward ``innovative, low-cost, and small-footprint 
approaches.'' The Army is implementing this guidance by decreasing its 
European presence by two heavy brigades, but the Air Force's European 
footprint will not change much. Do you believe there are also 
opportunities for the Air Force footprint in Europe to evolve toward 
more use of rotational forces, instead of permanently stationed units? 
If so, please elaborate.
    Admiral Stavridis. EUCOM's Air Force footprint has continuously 
evolved to meet the strategic needs of the Nation. In the past, this 
has translated to a significant drawdown of forces and infrastructure, 
including the reduction of multiple fighter squadrons and ancillary 
units in theater. During the past several years, EUCOM's air forces 
have reduced manpower by approximately 4,000 personnel (11 percent), 
realigned 17 units, returned an F-16 squadron and part of an F-15 
squadron, and closed 2 installations and 44 sites. Additionally, we 
recently announced the inactivation of the 81st Fighter Squadron (A-10) 
currently stationed at Spangdahlem, Germany, and the 603rd Air Control 
Squadron currently stationed at Aviano, Italy. These reductions will 
drive the need for rotational presence to support operational 
requirements.
    The remaining permanently stationed Air Force units in theater, 
along with traditional Air Force enabler units and installations, 
provide critical forward-based strategic capability to meet global 
national security objectives in addition to executing EUCOM's Theater 
Campaign Plan, supporting other combatant command requirements, and 
helping to represent the U.S. commitment to our European allies, 
including our Article 5 commitment to the NATO alliance. For example, 
forward-based fighters and support assets were absolutely essential to 
the ability of the Nation to respond quickly to, and sustain operations 
in, Libya. Also, logistics, mobility, communications, and intelligence 
operations (among others) executed or supported by installations in 
theater are critical to, and directly enable, operations in the CENTCOM 
and AFRICOM AORs.
    We will continue to assess our force structure via the Global 
Posture Executive Council to ensure to the extent possible that 
recommendations related to forces, footprint, and relationships within 
the EUCOM AOR are aligned to support operational needs while, at the 
same time, maximizing resource efficiency. These forward assigned 
forces and associated footprint are the fundamental enablers of U.S. 
defense activities overseas. They are central to defining and 
communicating U.S. strategic interests to allies, partners, rivals, and 
adversaries.

                            MISSILE DEFENSE

    32. Senator Cornyn. Admiral Stavridis, you mentioned in your 
prepared testimony that ``despite continued disagreements at political 
levels over missile defense . . . cooperative activity continues to 
increase'' with Russia. What is your assessment of the way ahead for 
discussions regarding missile defense in your AOR?
    Admiral Stavridis. Although Russia does not currently appear ready 
to have a military-to-military Ballistic Missile Defense (BMD) 
dialogue, EUCOM continues to support Joint Staff and OSD attempts to 
restart stalled BMD discussions within their respective bilateral 
policy- and technically-focused working groups with the Russian General 
Staff and Ministry of Defense. While Russia has declined to participate 
in direct U.S.-Russian military-to-military or BMD discussions since 
mid-2011, ostensibly pending resolution of its political-level 
concerns, I see progress in the forum of the NATO-Russia Council (NRC), 
in which the United States has a voice in the process. For instance, 
the Russian Federation recently agreed to participate in a NRC-led 
Theater Ballistic Missile Defense Computer Assisted Exercise (CAX). 
Additionally, Russia has been invited and is expected to observe the 
Capstone Event in Suffolk, VA, from 18-19 April 2012, for Nimble Titan 
12--a global BMD policy and strategy wargame including participants 
from 12 NATO states and NATO as an organization.

    33. Senator Cornyn. Admiral Stavridis, do you feel that the Russian 
presidential election will help or hinder further discussions?
    Admiral Stavridis. To a degree it may help, as both sides know each 
other already and the internal pressure in Russia to beat the anti-NATO 
drum during the election has lessened. However, over the last several 
years, we have repeatedly made clear to Russia that NATO missile 
defense in Europe poses no threat to Russia's strategic nuclear 
deterrent. As Ambassador McFaul has said regarding the Russian 
presidential election: ``No matter who is the President, we're going to 
stick to our policy.'' Therefore, we will continue to engage Russia to 
seek pragmatic solutions to mitigate the threat posed by the 
proliferation of ballistic missiles.

                          AFRICOM HEADQUARTERS

    34. Senator Cornyn. General Ham, as you note, AFRICOM's only 
enduring presence on the continent is Camp Lemonnier, Djibouti, which 
``provides an essential command and control and logistics hub for 
Combined Joint Task Force Horn of Africa.'' You go on to acknowledge 
that your current headquarters location in Stuttgart, Germany, has been 
a topic of discussion since AFRICOM's establishment. I understand that 
OSD is leading a comprehensive study of the factors involved in the 
AFRICOM headquarters basing, but in your opinion, would it 
detrimentally affect AFRICOM's mission and capabilities to locate the 
AFRICOM headquarters in the United States rather than in Europe?
    General Ham. The OSD is currently leading a comprehensive, 
congressionally-mandated, Basing Alternatives Study which will assess 
the cost-benefit with moving the headquarters from its current location 
to the United States. We provided the requisite operational data to 
support their analysis of the comparative costs, benefits, and risks.
    Strategically and operationally, our current location provides for 
effective command, control, and coordination of operations. We 
demonstrated this during Operation Odyssey Dawn (OOD) in Libya. A key 
factor in OOD's successful execution was that the headquarters lies in 
the same time zone (3 hours) of the entire African 
continent, including Combined Joint Task Force-Horn of Africa, the 
command's Service components, EUCOM and our European allies and 
partners active in Africa.
    Cost is also a consideration. Alternative options must account for 
the expense associated with a move from Stuttgart, including the 
infrastructure costs related to any new headquarters facility. Travel 
to the African continent to meet face to face with our partners, where 
strong personal relationships are valued and critical for working 
effectively together to address threats, is essential and will be a 
recurring obligation regardless of headquarters location.
    Until a final decision is made, we will continue to accomplish our 
mission from Stuttgart, where our proximity to Africa, both 
geographically and in terms of time zones, facilitates our ability to 
build relationships with our African partners, and where our 
servicemembers, civilians, and their families can serve from a safe and 
well-supported location. Once the study is complete, we will comply 
with the guidance and decision of the Secretary of Defense.

                   FAILED STATES AND TERRORIST GROUPS

    35. Senator Cornyn. General Ham, as you note, Africa accounts for 
14 of the world's 20 weakest states, according to Foreign Policy's 2011 
``Failed States Index.'' Failed states make fertile breeding grounds 
for extremist and terrorist organizations to grow and thrive. I am 
particularly concerned by your testimony of the potential for 
strengthening of ties between al Shabaab, al Qaeda in the Islamic 
Maghreb, and Boko Haram with al Qaeda in the Arabian Peninsula and al 
Qaeda senior leaders in Pakistan. What is your assessment of the 
intention of these groups to pose threats to U.S. troops in theater, 
U.S. allies, and the U.S. Homeland?
    General Ham. [Deleted.]

                             LIBYAN WEAPONS

    36. Senator Cornyn. General Ham, you note that many Manportable Air 
Defense Systems (MANPADS) ``disappeared from unsecured storage sites in 
Libya during the conflict last year and could potentially be trafficked 
to extremist groups.'' MANPADS in the hands of terrorists could pose 
serious threats to civil aviation worldwide, to U.S. deployed forces, 
and to our Homeland security. Please provide an update on the 
inspection teams' efforts to account for and secure these missiles.
    General Ham. The U.S. Interagency MANPADS Task Force is led by DOS 
which is best positioned to provide a current update on the inspection 
teams' efforts.
    DOD is a member of this Task Force. AFRICOM personnel work closely 
with the Task Force, contribute key military input to coordination with 
our African partner nations, and have participated in several of the 
visits by the Task Force to the African continent. We also conduct 
exercises and theater security cooperation engagements with nations 
bordering Libya focused on strengthening their capability to 
counterillicit trafficking.

    [Whereupon, at 12:25 p.m., the committee adjourned.]


DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR 
               2013 AND THE FUTURE YEARS DEFENSE PROGRAM

                              ----------                              


                         TUESDAY, MARCH 6, 2012

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

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

    The committee met, pursuant to notice, at 9:32 a.m. in room 
SH-216, Hart Senate Office Building, Senator Carl Levin 
(chairman) presiding.
    Committee members present: Senators Levin, Lieberman, Reed, 
Webb, McCaskill, Hagan, Manchin, Shaheen, Blumenthal, McCain, 
Chambliss, Brown, Ayotte, Graham, and Cornyn.
    Committee staff members present: Richard D. DeBobes, staff 
director; and Leah C. Brewer, nominations and hearings clerk.
    Majority staff members present: Jessica L. Kingston, 
research assistant; Michael J. Kuiken, professional staff 
member; Peter K. Levine, general counsel; Jason W. Maroney, 
counsel; William G.P. Monahan, counsel; Michael J. Noblet, 
professional staff member; and Roy F. Phillips, professional 
staff member.
    Minority staff members present: Ann E. Sauer, minority 
staff director; Adam J. Barker, professional staff member; 
Christian D. Brose, professional staff member; Paul C. Hutton 
IV, professional staff member; and Diana G. Tabler, 
professional staff member.
    Staff assistants present: Jennifer R. Knowles, Mariah K. 
McNamara, and Brian F. Sebold.
    Committee members' assistants present: Vance Serchuk, 
assistant to Senator Lieberman; Carolyn Chuhta, assistant to 
Senator Reed; Ryan Ehly, assistant to Senator Nelson; Gordon 
Peterson, assistant to Senator Webb; Casey Howard, assistant to 
Senator Udall; Chad Kreikemeier, assistant to Senator Shaheen; 
Jordan Baugh, assistant to Senator Gillibrand; Lenwood Landrum, 
assistant to Senator Sessions; Clyde Taylor IV, assistant to 
Senator Chambliss; Charles Prosch, assistant to Senator Brown; 
Brad Bowman, assistant to Senator Ayotte; and Matthew Rimkunas, 
assistant to Senator Graham.

       OPENING STATEMENT OF SENATOR CARL LEVIN, CHAIRMAN

    Chairman Levin. Good morning, everybody. This morning we 
continue the committee's review of the posture of our combatant 
commanders to meet the security challenges and operational 
requirements in their areas of responsibility (AOR) in light of 
the President's budget request for fiscal year 2013.
    Our witnesses are General James N. Mattis, USMC, Commander, 
U.S. Central Command (CENTCOM); and Admiral William H. McRaven, 
USN, Commander, U.S. Special Operations Command (SOCOM). Thank 
you both for your dedicated and distinguished service to our 
Nation. Also, on behalf of the committee, please extend our 
heartfelt gratitude to the military men and women serving with 
you. Many have served multiple deployments, often directly in 
harm's way. We thank them for their dedication and courage, and 
we thank their families, whose support is so essential.
    As reflected in the President's budget request of $88 
billion for overseas contingency operations in fiscal year 
2013, the conflict in Afghanistan remains our military's 
foremost security challenge. The Afghanistan mission is 
entering a critical phase of transition. The drawdown of the 
33,000 U.S. surge force is scheduled to be completed by the end 
of this summer and the remaining 68,000 U.S. troops in 
Afghanistan are to continue to be reduced at a steady pace 
thereafter through 2014, according to President Obama.
    U.S. and coalition forces have begun to move from the 
combat lead to an advise-and-assist role in support of the 
Afghan Security Forces (ASF) as those forces increasingly 
assume the lead for providing security. This transition is to 
be completed by 2014, when the ASF will have assumed the 
security lead throughout the country.
    As the U.S. troop presence in Afghanistan winds down, our 
Special Operations Forces (SOF) will assume greater and greater 
responsibility for the Afghanistan mission and for advising and 
supporting the ASF. Even after 2014, our U.S. military plans on 
having an ongoing presence in Afghanistan to train the Afghan 
forces, conduct counterterrorism operations, and provide key 
enablers, such as logistics, airlift, and intelligence support.
    The recent violence in Afghanistan following the 
unintentional and regrettable burning of Korans at a U.S. 
military base is deeply troubling. President Obama has 
expressed his regret, and I would hope that President Karzai 
would condemn the killing of six American soldiers as part of 
that violence.
    While these events could weaken the level of trust between 
the United States and ASF, Secretary Panetta has reaffirmed 
that the United States remains committed to the current 
approach in Afghanistan, saying that the recent attacks on our 
troops ``will not alter our commitment to get this job done.''
    The success of the Afghanistan mission will depend on 
building the capabilities of the ASF. At the end of the day, 
the conflict in Afghanistan is an Afghan war and it will be up 
to the ASF to win it. For this reason, I am concerned by news 
accounts that the United States is circulating within the North 
Atlantic Treaty Organization (NATO) a proposal to reduce the 
ASF by as much as one third. According to the Wall Street 
Journal, under this proposal the size of the Afghan army and 
police would be reduced from 352,000 personnel this year to 
230,000 after 2014. Lieutenant General Daniel Bolger, the head 
of the NATO Training Mission in Afghanistan, is cited as saying 
this proposal is based on ``what the international community 
will provide financially and what the Afghans can provide for 
themselves.''
    I am surprised and I am disappointed to hear our military 
commanders are focusing on Afghan force size based on what they 
think might be affordable instead of what number of ASF they 
believe will be needed to maintain security. It strikes me as 
unwise to base decisions on the future size of the Afghan army 
and police exclusively on projections of future affordability, 
instead of military requirements to secure the gains that have 
been made at great cost and to prevent a Taliban return to 
power.
    The sustainability of the progress on security in 
Afghanistan will also be affected by a number of issues, 
including the progress of reconciliation talks with the 
Taliban, whether Pakistan chooses to play a constructive role 
in those talks, eliminating the threat from insurgent safe 
havens in Pakistan, the establishment of a long-term strategic 
partnership between Afghanistan and the United States, and the 
Karzai Government's efforts to improve governance, deliver 
services, increase government revenues, fight corruption, and 
promote inclusive and transparent elections. General Mattis, 
the committee is going to be interested in your assessment of 
the progress on security in Afghanistan and the sustainability 
of security gains through 2014 and beyond.
    There is a strong determination on this committee and in 
this Congress to do all we can to counter the threat posed by 
Iran, and in particular, to stop Iran from acquiring nuclear 
weapons. The National Defense Authorization Act (NDAA) included 
breakthrough sanctions with respect to Iran by requiring 
foreign financial institutions to choose between maintaining 
ties with the U.S. financial system or doing business with the 
Central Bank of Iran, especially relative to the purchase of 
Iranian petroleum and related products. President Obama has 
appropriately focused considerable and determined diplomatic 
effort ``to prevent Iran from getting a nuclear weapon,'' and 
he has repeatedly said that there are ``no options off the 
table'' to achieve that goal.
    General Mattis has the task of conducting the prudent 
planning and assembling the military options for the President 
relative to Iran in case they are needed.
    I'm going to put the balance of my statement in the record, 
except for the following: The new strategic guidance and 
priorities emphasize the importance of special operations 
personnel for counterterrorism operations, capacity-building, 
and other theater security cooperation activities in support of 
the geographic combatant commanders. Admiral McRaven, recent 
published reports indicate that you are seeking new authorities 
that you believe would help SOCOM be more responsive to the 
geographic combatant commanders' requests for special 
operations personnel and the unique capabilities that they 
provide. The committee looks forward to your comments on these 
reports and learning more about any authorities that you 
believe may be necessary to fulfill SOCOM's global missions.
    Finally, General, we would appreciate your comments 
relative to the events in Syria, as to what you believe the 
options might be to end that slaughter of Syrian civilians by 
the Government of Syria. We are all determined that we want to 
end it. The question is what are the military options that 
might be available in the case that they were seized upon as 
being one of the ways to do that, and we would very much 
appreciate your comments on that.
    Gentlemen, again, our thanks to both you and the men and 
women who serve with you for your great work.
    [The prepared statement of Senator Levin follows:]

                Prepared Statement by Senator Carl Levin

    This morning we continue the committee's review of the posture of 
our combatant commanders to meet the security challenges and 
operational requirements in their areas of responsibility, in light of 
the President's budget request for fiscal year 2013. Our witnesses are 
General James Mattis, Commander, U.S. Central Command (CENTCOM), and 
Admiral Bill McRaven, Commander, U.S. Special Operations Command 
(SOCOM), who is making his first posture statement since taking command 
last summer.
    Thank you both for your dedicated and distinguished service to this 
Nation. Also, on behalf of this committee, please extend our heartfelt 
gratitude to the military men and women serving under CENTCOM and 
SOCOM. Many have served multiple deployments, often directly in harm's 
way. We thank them for their dedication and courage, and we thank their 
families, whose support is so essential.
    As reflected in the President's budget request of $88.4 billion for 
Overseas Contingency Operations in fiscal year 2013, the conflict in 
Afghanistan remains our military's foremost security challenge. The 
Afghanistan mission is entering a crucial phase of transition. The 
drawdown of the 33,000 U.S. surge force is scheduled to be completed by 
the end of this summer, and the remaining 68,000 U.S. troops in 
Afghanistan are to continue to be reduced ``at a steady pace'' 
thereafter through 2014, according to President Obama. U.S. and 
coalition forces have begun to move from the combat lead to an advise-
and-assist role in support of the Afghan National Security Forces as 
those forces increasingly assume the lead for providing security. This 
transition is to be completed by 2014 when Afghan security forces will 
have assumed the security lead throughout the country. As the U.S. 
troop presence in Afghanistan winds down, our Special Operations Forces 
will assume greater and greater responsibility for the Afghanistan 
mission and for advising and supporting the Afghan security forces. 
Even after 2014, our U.S. military plans on having an ongoing presence 
in Afghanistan to train the Afghan forces, conduct counterterrorism 
operations, and provide key enablers such as logistics, airlift, and 
intelligence support.
    The recent violence in Afghanistan, following the unintentional and 
regrettable burning of Korans at a U.S. military base, is deeply 
troubling. President Obama has expressed his regret. I would hope 
President Karzai would condemn the killing of six American soldiers as 
part of this violence. These violent incidents have the effect of 
weakening the level of trust between U.S. and Afghan forces, but 
Secretary Panetta has reaffirmed that the United States remains 
committed to the current approach in Afghanistan, saying that the 
recent attacks on our troops ``will not alter our commitment to get 
this job done.''
    The success of the Afghanistan mission will depend on building the 
capabilities of the Afghan National Security Forces. At the end of the 
day, the conflict in Afghanistan is an Afghan war, and it will be up to 
the Afghan forces to win it.
    For this reason, I am concerned by news accounts that the United 
States is circulating within NATO a proposal to reduce the Afghan 
security forces by as much as one third. According to the Wall Street 
Journal, under this proposal the size of the Afghan army and police 
would be reduced from 352,000 personnel this year to 230,000 after 
2014. Lieutenant General Daniel Bolger, the head of the North Atlantic 
Treaty Organization Training Mission in Afghanistan, is cited as saying 
this proposal, which is estimated to cost $4.1 billion annually, is 
based on ``what the international community will provide and what the 
Afghans can provide for themselves.'' I am surprised and disappointed 
to hear our military commanders are focusing on Afghan force size based 
on what they think might be affordable instead of what number of Afghan 
security forces are needed to maintain security. Decisions on the size 
of the Afghan army and police 2 years from now need to take into 
account conditions at that time. It strikes me as extremely unwise to 
base decisions on the future size of the Afghan army and police 
exclusively on projections of affordability instead of military 
requirements to secure the gains that have been made at great cost and 
to prevent a Taliban return to power.
    The sustainability of the progress on security in Afghanistan will 
also be affected by a number of issues, including: the progress of 
reconciliation talks with the Taliban; whether Pakistan chooses to play 
a constructive role in those talks; eliminating the threat from 
insurgent safe havens in Pakistan; the establishment of a long-term 
strategic partnership between the Government of Afghanistan and the 
United States; and the Karzai Government's efforts to improve 
governance, deliver services, increase government revenues, fight 
corruption, and promote inclusive and transparent elections. General 
Mattis, the committee will be interested in your assessment of the 
progress on security in Afghanistan and the sustainability of security 
gains through 2014 and beyond.
Iran
    There is a strong determination on this committee and in this 
Congress to do all we can to counter the threat posed by Iran and, in 
particular, to stop Iran from acquiring nuclear weapons. The National 
Defense Authorization Act included breakthrough sanctions with respect 
to Iran by requiring foreign financial institutions to choose between 
maintaining ties with the U.S. financial system or doing business with 
the Central Bank of Iran, especially relative to the purchase of 
Iranian petroleum and related products. President Obama has 
appropriately focused considerable and determined diplomatic effort 
``to prevent Iran from getting a nuclear weapon,'' and he has 
repeatedly said there are ``no options off the table to achieve that 
goal.'' General Mattis has the task of conducting the prudent planning 
and assembling the military options for the President on Iran, in case 
they are needed.
Terrorism
    The U.S. campaign against the global jihadist movement had a number 
of significant successes in the last year--most notably operations 
against Osama bin Laden and Anwar al-Awlaki. These successes struck 
major blows to al Qaeda's senior leadership and one of its most active 
affiliates, al Qaeda in the Arabian Peninsula. As a result of these 
operations and sustained pressure in Pakistan, Yemen, Somalia, and 
North Africa, al Qaeda and its affiliates are showing strain. However, 
al Qaeda is nothing if not resilient. Secretary Panetta and others have 
highlighted that al Qaeda continues to become more decentralized. 
Recent reports indicate that elements of the al Qaeda in Iraq are 
migrating to Syria to take up the fight of the opposition in the hope 
of establishing a hub for its violent ambitions.
    Continuing to pressure the network of al Qaeda operatives is 
critical to our security and our Special Operations Forces will 
continue to lead these efforts. While the preponderance of deployed 
Special Operations Forces are in the CENTCOM area of responsibility, 
special operators are also deployed to dozens of countries around the 
world, working to counter the influence of al Qaeda and its affiliates 
and helping to build the capacity of our partner nations to confront 
the common threats we face. Admiral McRaven, I hope you will update the 
committee on the progress of these efforts to counter these groups 
globally.
Syria
    Over the past year, the international community has acted to 
prevent a mass atrocity in Libya and is currently bearing witness to 
the Syrian army waging war against its own citizens. This committee 
will be hearing from Secretary Panetta and Chairman Dempsey on Syria 
tomorrow, but we are also interested in General Mattis' view on the 
situation and its impact across his area of responsibility.
U.S. Special Operations Command
    The new Defense Strategic Guidance and Priorities emphasize the 
importance of special operations personnel for counterterrorism 
operations, capacity building, and other theater security cooperation 
activities in support of the geographic combatant commanders. Admiral 
McRaven, recent published reports indicate that you are seeking new 
authorities that you believe would help SOCOM be more responsive to the 
geographic combatant commanders' requests for special operations 
personnel and the unique capabilities they provide. The committee looks 
forward to your comments on these reports and learning more about any 
authorities you believe may be necessary to fulfill SOCOM's global 
missions.
    At last year's posture hearing, the previous SOCOM Commander, 
Admiral Olson, stated his concern that the Special Operations Force was 
``beginning to fray around the edges'' after 10 years of war. To 
address this concern, Admiral Olson established a ``Pressure on the 
Force'' Task Force to look for new ways to reduce the strain on these 
forces. The committee looks forward to hearing more about your efforts 
to implement the recommendations of this task force and other 
initiatives that provide support to special operations personnel and 
their families.

    Chairman Levin. Senator McCain.

                STATEMENT OF SENATOR JOHN McCAIN

    Senator McCain. Thank you, Mr. Chairman, and let me thank 
our distinguished witnesses, who are two of the most impressive 
military leaders currently serving our Nation. We're all 
grateful for their many years of dedicated service. We're also 
grateful for the men and women they lead in CENTCOM and SOCOM, 
amazing Americans of every Service who carry on the fight after 
a decade of war.
    Admiral McRaven, this is your first time testifying before 
this committee as the Commander of SOCOM, and it's fitting that 
you do so alongside General Mattis, a seasoned veteran of this 
committee's hearings who has the scars to prove it.
    Nowhere is the work of America's special operators more 
persistent and important than in CENTCOM's AOR. These forces 
play an instrumental role in ongoing counterterrorism 
operations both in the region and around the globe.
    While al Qaeda's senior leadership has been diminished by 
sustained pressure against them in Pakistan, al Qaeda's global 
operations have become increasingly decentralized and no less 
deadly. Regional affiliates seek safe haven in countries beset 
by weak governments and internal instability, particularly in 
places like Yemen, the Horn of Africa, and the Trans-Sahel.
    This is why SOCOM's ongoing efforts to build the capacity 
of partner nations in troubled regions remain a vital component 
of our strategy to disrupt and defeat these terrorist 
organizations. I'm concerned, however, that as the 
administration seeks to decrease the size of our military's 
conventional ground forces, many people are already coming to 
see SOF as a fix-all to the myriad security challenges that our 
country faces.
    I look forward to your thoughts, Admiral, as to the proper 
role of special operations in the total force and what more can 
be done to ensure that these operators are not stretched at the 
expense of their unique core responsibilities.
    General Mattis, all of us have the utmost respect for you, 
but we do not envy you. Few of our military leaders have more 
on their plate, from supporting our friends in Jordan, Egypt, 
Saudi Arabia, and the United Arab Emirates, to keeping a 
watchful eye on the fragile but very different situations in 
Bahrain, Yemen, and Lebanon.
    In Afghanistan, despite the progress that our troops are 
making on the ground, we are at an impasse with President 
Karzai on the negotiation of a strategic partnership agreement, 
which is critical to sustaining our goals and locking in 
lasting success. In Pakistan, our relationship remains fraught 
by a series of setbacks and a lack of trust, largely arising 
from the fact that the country's intelligence service continues 
to support terrorist groups such as the Haqqani network that 
are killing Americans.
    In Iraq, Prime Minister Maliki continues to centralize 
power at the expense of the other political blocs, while the 
threat posed by al Qaeda appears to be growing, along with the 
kinds of horrific, spectacular attacks like the one we saw 
yesterday.
    The Iranian regime continues working to subvert Iraq and 
many other countries in the region. Its recent attempt to 
assassinate the Saudi ambassador in Washington, as well as 
Israeli officials in Southeast Asia and the Caucasus, suggest a 
growing and increasingly reckless threat, a threat that would 
expand exponentially if the Iranian regime were to acquire the 
nuclear weapons that it clearly seeks. Unfortunately, the 
impressive international effort to impose crippling sanctions 
appears to have done nothing to dissuade Iran from its military 
nuclear pursuits.
    Then there is Syria. After a year of bloodshed, the crisis 
has reached a decisive moment. It is estimated that nearly 
7,500 lives have been lost. Syria today is the scene of some of 
the worst state-sponsored violence since the Balkans. Bashar 
Al-Assad and his top lieutenants appear to be accelerating 
their fight to the finish, and they're doing so with the full 
support of Russia, China, and Iran. A steady supply of weapons, 
ammunition, and other assistance is flowing to Assad from 
Moscow and Teheran and, as the Washington Post reported on 
Sunday, Iranian military and intelligence operatives are likely 
working in Syria to support Assad.
    The President has made it the objective of the United 
States that the killing in Syria must stop and that Assad must 
go. He has committed the prestige and credibility of our Nation 
to that goal, and it is the right goal. The United States has a 
clear national security interest in stopping the slaughter in 
Syria and forcing Assad to leave power.
    The end of the Assad regime would sever Hezbollah's 
lifeline to Iran, eliminate a longstanding threat to Israel, 
bolster Lebanon's sovereignty and independence, and remove a 
committed state sponsor of terrorism that is engaged in the 
proliferation of weapons of mass destruction. It would be a 
geopolitical success of the first order and a strategic defeat 
for the Iranian regime.
    However, it is not clear that the present policy will be 
able to achieve our goals in Syria. In recent testimony to this 
committee, the Director of National Intelligence (DNI) stated 
that if the status quo persists, Assad could hang on for the 
foreseeable future. That was before the city of Homs fell. With 
each passing day, the international response to Assad's 
atrocities is being overtaken by events on the ground in Syria.
    What opposition groups in Syria need most urgently is 
relief from Assad's tank and artillery sieges in the many 
cities that are still contested. But time is running out. 
Assad's forces are on the march. Providing military assistance 
to the Free Syrian Army and other opposition groups is 
necessary, but at this late hour, that alone will not be 
sufficient to stop the slaughter and save innocent lives. The 
only realistic way to do so is with foreign air power, and the 
time has come for it.
    Air strikes would help to establish and defend safe havens 
in Syria, especially in the north, in which opposition forces 
can organize and plan their political and military activities 
against Assad. These safe havens could allow for the delivery 
of humanitarian and military assistance, including weapons and 
ammunition, body armor, tactical intelligence, secure 
communications equipment, food and water, and medical supplies. 
These safe havens could also help the Free Syrian Army and 
other armed groups in Syria to train and organize themselves 
into more cohesive and effective military forces, likely with 
the assistance of foreign partners.
    Rather than closing off the prospects for some kind of a 
negotiated transition that is acceptable to Syria's opposition, 
military intervention is now needed to preserve this option as 
credible. Assad needs to know that he will not win. But right 
now, unfortunately, Assad seems to think he can win, and for 
good reason, I'm afraid.
    I look forward to hearing our witnesses' advice about how 
we can change the balance of power against Assad so as to 
finally end his bloodshed and brutal rule in Syria.
    Thank you, Mr. Chairman.
    Chairman Levin. Thank you very much, Senator McCain.
    Let me call on you, General Mattis.

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

    General Mattis. Thank you, Mr. Chairman, Senator McCain, 
and members of the committee. I appreciate this opportunity to 
discuss the CENTCOM region. I have submitted a written 
statement and request it be accepted into the record.
    Chairman Levin. It will be.
    General Mattis. It's my privilege to appear today alongside 
an admired leader and good friend, Admiral Bill McRaven. No two 
commands work more closely together than SOCOM and CENTCOM.
    Let me begin with what I see today in the region. The Arab 
Awakening is manifesting differently in each country. While we 
may hope for and certainly we firmly support all efforts for 
more democratic governments in the region, the Awakening's 
origins are not necessarily a rush for democracy. Rather, this 
Awakening stems from a breakdown in the social contract between 
governments and their people. Unjust or unresponsive regimes 
have fallen or are in the throes of falling, as is the case in 
Syria. However, the transition to a democratic government is 
never easy, as we see in Egypt. Further, it is not clear what 
the resulting governments will look like.
    Challenges remain beyond the promise of the Arab Awakening. 
Iran and its surrogates continue to orchestrate violence 
worldwide, as evidenced by its plot to kill the Saudi 
Ambassador here in Washington, DC. Iran presents the most 
significant regional threat to stability and security. Its 
reckless behavior and bellicose rhetoric have created a high 
potential for miscalculation.
    While we've made security gains in the fight against 
terrorists, the threat remains. Al Qaeda and associated groups 
continue to kill innocents from the Levant to Yemen and are 
adapting in the face of U.S. pressure. While we maintain our 
pressure on this enemy, we are nesting our military efforts 
inside four broad U.S. diplomatic objectives: first, support 
for each country's political reform to adapt at their own pace; 
second, support for economic modernization that provides the 
people ownership of the future; third, a renewed pursuit of 
Middle East peace, recognizing the status quo is not 
sustainable; and finally, we stand firmly with our friends in 
supporting regional security, territorial integrity of the 
sovereign nations, and the free flow of commerce.
    As the military commander for the CENTCOM AOR, my 
overarching goal is to prevent further conflict. We seek to 
deter those with hostile intent and, should deterrence prove 
unsuccessful, we provide military options to the President. As 
our President has said, our strong presence in the Middle East 
endures and the United States will never waver in defense of 
our allies, our partners, or our interests.
    The military challenge will be determining how we retain a 
sustainable presence and operational flexibility in a fiscally 
constrained environment. Although we are withdrawing some 
ground forces from the region, we are not withdrawing our 
support for long-time allies and partners, nor are we pulling 
back our commitment from a region that too many times has taken 
a commitment of American blood and treasure to restore 
stability.
    Through persistent military-to-military engagement, our 
troops reassure our friends and temper adversary intentions. 
Security cooperation activities, such as foreign military 
sales, international military education, security force 
training, and multinational exercises, are cost-effective means 
for building our friends' defensive capabilities, allowing us 
to operate in concert with allies and friends, and to rapidly 
respond in times of need.
    A sustained joint presence with a pronounced naval 
character, supported by embarked troops, agile SOF, strong 
aviation elements, and an expeditionary Army ready, 
demonstrates our commitment to allies, underwrites regional 
stability, familiarizes our forces with the theater, and builds 
partners' abilities to protect themselves, all while we're 
providing timely response to crises.
    There are some other key needed capabilities that we have: 
improved counter-improvised explosive device (C-IED) efforts to 
protect our troops from a pervasive threat that extends well 
beyond Afghanistan; information operations and voice programs 
to counter adversary information and recruiting on the 
Internet; improved intelligence, surveillance, and 
reconnaissance assets that enable us to locate an elusive 
enemy; and intelligence expertise to support our deployed 
elements.
    We also need specific resources that are vital to the 
Afghanistan campaign. Coalition support funds, the Commanders' 
Emergency Response Program (CERP), Afghan Infrastructure Fund, 
and reintegration authority enable us to meet urgent 
humanitarian and infrastructure needs of a population that is 
increasingly secured by its own forces, forces we have been 
building and training through the Afghan Security Forces Fund.
    In conclusion, I appreciate the essential resources you 
provide, which enable us to carry out the strategy assigned to 
us. We ask only for what we need and what we request is 
critical as we carry out the transition in Afghanistan and 
continue on course to achieve our desired strategic end-state 
there by December 2014, as laid out at the NATO conference in 
Lisbon.
    Thanks to congressional support and to the sacrifices of 
our military families, our forces represent America's awesome 
determination to stand by our friends and maintain regional 
stability in defense of our values and interests.
    I look forward to answering your questions.
    [The prepared statement of General Mattis follows:]

            Prepared Statement by Gen. James N. Mattis, USMC

                            I. INTRODUCTION

    In over 30 years of supporting U.S. Forces in the U.S. Central 
Command (CENTCOM) area of responsibility (AOR), I have never witnessed 
it so tumultuous. Change is the only constant and surprise continues to 
be the dominant force in the region. Across the AOR at large, both 
opportunities and challenges exist. The CENTCOM AOR encompasses the 
world's largest energy Reserves, yet also some of the most crucial and 
vulnerable chokepoints. It is home to a rich array of cultures, 
religions and confessions; but also tainted by radicals, violent 
extremists, malign networks and state-sponsored agents and 
unconventional proxies who seek to violently exploit those differences. 
These problems are coupled with systemic challenges of poor governance, 
a large youth demographic bulge and insufficient economic opportunity, 
and the social construct between governments and their people breaking 
down in numerous places.
    CENTCOM is postured to address these challenges, while working 
closely with the Department of State and other agencies to promote 
peace and stability. The CENTCOM AOR remains of great strategic 
importance to other world powers and is vital to many of America's most 
enduring national interests. The historic transformation underway 
throughout the region requires extensive U.S. engagement. We must see 
this Awakening for what it is, not for what we wish it to be: the 
Awakening reflects a breakdown in the social contract; it may or may 
not embrace democracy as a result of the understandable unrest.
    The defense of our interests in the AOR comes at a grim cost. Over 
10 years of war in this theater have cost us precious casualties, 
including more than 612 killed and 8,251 wounded since I took command 
in August 2010. At the same time, it has also brought out the best of 
our All-Volunteer Force and produced a generation of elite leaders as 
your troops proved themselves the equals of previous generations of 
combat veterans who answered their country's call.

                        II. STRATEGIC LANDSCAPE

Arab Awakening
    While the Arab Awakening will manifest differently in each country, 
it is important that we see what is happening in its true context: 
while we may hope and support efforts for more democratic governments, 
its origins lie in the breakdown of that social contract between 
governments and their people. Unjust or unresponsive regimes have 
fallen or are in the throes of falling as is the case in Syria. Of all 
the uncertainties associated with this ongoing movement, one thing is 
certain--the region is never going back to what it was. The Arab 
Awakening continues to impact countries across the region and the world 
with an uncertain future and redefined political landscape. Popular 
calls for more responsive government continue to move at different 
paces and it is too early to discern its final stage. Our ability to 
respond demands unprecedented flexibility and balancing of national 
interests.
    Though coalition efforts succeeded in supporting the rise of a new 
Libya, Syria is unraveling in disarray. Additionally, working closely 
with the Gulf Cooperation Council (GCC), the United States contributed 
to the ongoing transition of power in Yemen; however, violence 
continues to plague that country, some of it fomented by Iran and much 
of it fomented by al Qaeda in the Arabian Peninsula (AQAP). While 
transformation is underway across the region as a result of the Arab 
Awakening, malign efforts by other regional actors--particularly Iran--
to influence the ultimate outcome represent perhaps the greatest 
immediate- and long-term threat to regional stability. As Egypt 
continues its transition to a fully-functioning democracy, our 
bilateral relationship is likely to face challenges along the way, as 
evidenced by the tension that has resulted from the nongovernmental 
organizations (NGO) raids and their aftermath. We must adapt our 
military approach and stay steadfast to our values as we remain engaged 
in the region. We will be pragmatic, principled and proactive. We must 
be prepared for all contingencies in case of crisis, but there is 
reason for optimism despite some pessimistic forecasts.
Middle East Peace
    It should come as no surprise that the lack of a sustainable 
solution to the Palestinian-Israeli conflict is a preeminent flame that 
keeps the pot boiling in the Middle East, particularly as the Arab 
Awakening causes Arab governments to be more responsive to the 
sentiments of their populations. The inability to resolve tensions 
between the state of Israel and the Palestinians imposes a heavy cost 
on our activities in the AOR, and is raised in almost every meeting I 
have with key leaders in the region, particularly in the Arabian 
Peninsula and Levant. A peace agreement between Israel and the 
Palestinians would facilitate more public, robust support by regional 
partners for U.S. initiatives, bolster regional collaboration and 
remove fertile ground for extremism and resentment to flourish. We owe 
it to the next generation to do everything possible to solve this 
vexing issue that gives so much fuel to extremist ideology.
Non-State Threats in Undergoverned Areas
    Our terrorist adversaries are networked and globalized, not bounded 
by geography, rules or specific organizational or hierarchical lines. 
They operate in the shadows of undergoverned spaces and safe havens, 
and remain ever determined to harm us, our allies and innocent 
civilians around the world. The successful targeting of al Qaeda 
leadership has weakened the organization from a morale perspective as 
well as a command and control standpoint. Yet there is a resiliency as 
the threat morphs and other franchises arise that must be met by more 
than military power alone. We must focus on undercutting ideological 
extremism in order to reduce its attractiveness to disappointed 
peoples.
    Although we have achieved substantial success against the terrorist 
threats we face in the AOR, the global threat is not stabilized, and is 
in fact evolving. Years of activity have allowed al Qaeda to syndicate 
relationships with other violent extremist organizations as, for 
example, we have just witnessed with respect to al Shabaab. There are 
strong indications of resilient and possibly stronger al Qaeda elements 
emerging in locations outside of Iraq and the Federally Administered 
Tribal Areas in Pakistan. Iraq, too, will be challenged to hold al 
Qaeda at bay. These same organizations also seek to exploit the turmoil 
and foment regional tensions amidst the Arab Awakening. We must remain 
vigilant as al Qaeda attempts to reconstitute and consolidate in areas 
more hospitable to their pernicious activities. In short, this fight is 
not over.
    At the same time, Iran poses the single greatest threat to U.S. 
interests and to our friends and stability in the region, and poses a 
global threat through its world-wide proxy network as recent attacks 
have demonstrated.
Naval Presence
    With the withdrawal of our last troop units from Iraq, excluding 
our men and women in the Office of Security Cooperation-Iraq (OSC-I), 
and as we continue to draw down in Afghanistan and transition 
operational lead to the Afghanistan National Security Forces (ANSF), 
our ground-based troop presence across the region is decreasing. 
However, as the President has stated, ``our strong presence in the 
Middle East endures . . . and the United States will never waver in 
defense of our allies, our partners, or our interests.'' The question 
then becomes, how do we maintain our presence with a light footprint?
    To accomplish this, the CENTCOM AOR will assume an increasingly 
maritime character with Special Operations Forces and strong air 
enablers. Naval forces--with embarked troops--provide presence and a 
cost efficient means of rapidly projecting power in a crisis to execute 
contingency operations. Sustained naval presence and response forces 
provide a lighter ``footprint'' on the ground, and are vital for 
reassuring our partners, deterring those with malign intent and 
tempering destructive actors from fermenting trouble in our region.
    The maritime environment also permits freedom of action unfettered 
by international boundaries and agreements. However, the stacked 
Iranian threats in our AOR of ballistic missiles, long range rockets, 
mines, small boats, cruise missiles and submarines demand stronger 
naval presence and capability to protect vital sea lines of 
communication. I view with concern efforts to decrease our naval 
presence and capability when our volatile AOR and the threats of the 
future are increasingly maritime. Demands on our naval forces will only 
grow in the future; I anticipate that we will need more maritime 
missile defense, anti-fast attack craft capabilities, amphibious ships 
and mine-countermeasure capability, and intelligence, surveillance, and 
reconnaissance assets. Maintaining a credible naval force covered by 
sufficient aviation combat power is essential for demonstrating our 
enduring commitment to regional partners, building trust and 
relationships and rapid projection of power in a crisis. We are working 
to address our near-term capabilities and I am grateful for the 
committee's strong support.

                         III. FISCAL REALITIES

    We are entering a period of increased national fiscal austerity. 
This reality may force us to do less in the region; however, we will 
not do it less well and the quality of our performance will remain the 
best in the world. Our strategy starts with what we determine the Armed 
Forces must be capable of doing, bounded by a clear articulation of the 
objectives--or ``ends''--we seek to achieve in the region. Our approach 
and posture are predicated upon several national-level documents, chief 
among them the National Security Strategy and the newly published 
Defense Strategic Guidance. We seek to match our regional ends with our 
methods--or ``ways''--and our resources--or ``means''--and determine 
how to mitigate risk. Key to our success is making grounded projections 
into the future rooted in hard-learned lessons from our current 
conflicts and which provide an operational shock absorber when the 
inevitable surprises present themselves--and to do so while ensuring we 
are responsible stewards of every dollar allocated.
    Specific to CENTCOM and its components, we operate austerely 
according to our needs, not our wants. We prioritize our efforts to 
leverage the expertise and capabilities of others. My headquarters 
structure is expected to decrease 30 percent over the next 5 years. We 
are rigorously reviewing every contract and we intend to increase our 
effectiveness while we excel in meeting efficiency goals. General Allen 
and his team are doing detailed, commendatory work in scrubbing 
requirements to pursue an Afghan-right approach and provide cost-
savings back to the Department as demonstrated by the return of $1.6 
billion in the fiscal year 2012 Afghanistan Security Forces Fund 
request last fall.
    While new Strategic guidance prioritizes the Pacific region, we 
remain committed to our strategic interests in the Middle East. We will 
stand by our friends and partners in the region and that is not going 
to change. Our military approach will necessarily evolve and adapt and 
our partners will become even more important as we work to ensure 
regional security and stability. Our efforts in the Middle East reflect 
a multilateral coalition-building approach with traditional allies in 
the region and we fight alongside the largest wartime coalition in 
recent history in Afghanistan. We have forged key partnerships 
throughout the Gulf region both bilaterally and through the GCC. These 
efforts promote cost-sharing, and in fact, directly contribute to U.S. 
economic interests through security assistance purchases.
    As we work to maintain the cohesion of the coalition and our 
momentum in security operations in Afghanistan, it will be necessary to 
include those critical and unwavering partners who stand by us but who 
would not be able to participate without some training, sustainment and 
reimbursement support from the United States. These efforts would not 
be possible without the resources and funding you provide. To that end, 
your support for the Commanders' Emergency Response Program and 
Afghanistan Infrastructure Fund provides key tools we need to build 
capacity for a successful transition. I also appreciate your attention 
to the Afghanistan Security Forces Fund and reintegration authority--
key, flexible tools in accomplishing this part of our mission.

             IV. STRATEGIC PRIORITIES, VISION AND APPROACH

    The 2011 National Security Strategy identifies four broad, enduring 
American interests as:

         The security of the United States, its citizens, and 
        U.S. allies and partners
         A strong, innovative, and growing U.S. economy in an 
        open international economic system that promotes opportunity 
        and prosperity
         Respect for universal values at home and around the 
        world
         An international order advanced by U.S. leadership 
        that promotes peace, security, and opportunity through stronger 
        cooperation to meet global challenges.

    Our overarching goal is to support U.S. objectives through peaceful 
means and to prevent conflict. However, in the case of impending 
conflict, my job is to provide the President feasible military options. 
Throughout history, not being militarily prepared for operations and 
contingencies has never proven a reliable path to keep the peace. 
Therefore, we are and will remain prepared to respond to crises, deter 
and prevent war and ensure military readiness and flexibility. 
CENTCOM's vision for the AOR is a region where improved security leads 
to greater stability and where regional cooperation helps to isolate 
and counter those who would use violence in pursuit of their goals.
    CENTCOM's strategic approach is to build and maintain a robust and 
flexible force posture that promotes regional stability through 
relationships with key allies and partners. We will accomplish this by 
consistently conducting military-to-military engagements--which builds 
trust--and by promoting security cooperation with partners, while 
retaining the right to self-defense and force protection. Additionally, 
events do not occur according to the neat lines and areas of 
responsibility we draw on the map of the world. Security challenges 
posed by piracy, violent extremist organizations and criminal elements 
based in the Horn of Africa impact operations in the CENTCOM AOR. 
Broadly, the challenges in our AOR are not isolated, and most solutions 
require extensive collaboration with our allies within and beyond 
CENTCOM's boundaries. In the future, it will become increasingly 
important to invest in building relationships and the capacity and 
capability of our partners to respond to emerging challenges.
    The United States has the power to both inspire and intimidate. 
Going forward, we will emphasize the power to inspire. A major 
component of inspiring is building relationships through a diplomatic 
approach. Strengthening our relationships with allies, forging greater 
collaboration with international partners and ensuring effective 
coordination within our own government will continue to hallmark our 
approach. Exceptional U.S. civil-military partnerships among U.S. 
Government interagency actors like those forged these last 10 years are 
the gold standard that must be sustained in all our endeavors. In that 
regard, I applaud Secretary Clinton's Quadrennial Diplomacy and 
Development Review initiative, which is strengthening in unprecedented 
ways interagency collaboration to achieve U.S. Government objectives.
    CENTCOM military efforts will continue to firmly nest with and 
buttress diplomatic efforts. A good start point is four principles of 
our foreign policy in the Middle East. Support for peaceful democratic 
change; at their own pace: for every nation must ultimately incorporate 
the will of their people that we are watching unfold across the region 
with the Arab Awakening. Support for economic modernization to bring 
the benefits of economic progress to the wider population: so more 
people have a sense of hope and ownership. Renewed pursuit of a 
comprehensive Arab-Israeli peace to achieve a two-state solution: 
because the status quo is not sustainable. As Harvard professor C.H. 
McIlwain said in 1937, ``the preservation of the status quo is a 
solution that can satisfy none but the contented and just now most men 
are not contented''. Our own enduring stake in regional security and 
territorial integrity: to check mischief of malign actors and reduce 
terrorist threat to all nations.
    Using these four principles as our guideposts, CENTCOM will work 
toward five broad strategic objectives in the AOR. We will promote 
common interests in order to enhance stability and security as we 
defeat violent extremist organizations (VEOs) that threaten the U.S. 
Homeland, our overseas interests, or U.S. allies. Importantly, we will 
counter the proliferation, acquisition, and use of weapons of mass 
destruction. We will support Department of State's broader diplomatic 
objectives by assisting in setting the conditions that will enable 
representative government and prosperity. Lastly, we will prepare U.S. 
and partner forces to respond to emerging challenges.
    Through persistent military engagement, CENTCOM will maintain a 
presence in the region to protect vital interests, prevent future 
conflict, ensure access in the event of a crisis and invest in future 
regional security. Acknowledging each country's unique circumstances, 
we will advance our strategic objectives through a tailored approach by 
seeking a nexus of common interests and identifying common ground with 
partners that puts us on a trajectory for shared, long-term benefit. 
Trust and harmony of effort among partners are what counts when the 
inevitable crises strike: Our fundamental premise is every country has 
something to contribute through strong regional relationships to 
strengthen our collaborative efforts. Numerous nations in the region 
trust us--making our presence and pursuit in building enduring military 
relationships all the more paramount.
    Military-to-military engagements serve as vital connective tissue 
in our relationships with partners and allies as the United States 
seeks to respond effectively to the Arab Awakening, while continuing to 
pursue regional stability and security. CENTCOM seeks to build partner 
capacity and competencies--developed through training, professional 
military education, foreign military sales, bilateral and multi-lateral 
agreements and exercises. Building partner capacity is the long-term 
solution to reduce costs on the United States and to defend our 
interests in a fiscally constrained environment. The result is 
competent partners--technically and tactically capable of taking lead 
on issues of mutual interest--having as much at stake as we do. Years 
of nurturing our military-to-military relationship with Jordan and 
United Arab Emirates contributed to the mutual trust and 
interoperability necessary for their support of Libyan operations. The 
Egyptian military, while not perfect in its leading of the transition, 
has performed more responsibly than anyone would have presumed. Without 
years of assistance and partnership with the United States, this would 
not have been the case. When you compare the Egyptian military's 
actions with the events continuing to unfold in Syria as the Syrian 
military continues to ruthlessly use lethal force with impunity against 
the Syrian people--the value of properly constructed, ethical military-
to-military engagement is clear.

                         IV. REVIEW OF THE AOR

    The primary threats to these interests from those with hostile 
intent are: state-based aggression; non-state actors/VEOs; weapons of 
mass destruction; and some combination thereof. Each of these threats 
is in play across this dynamic AOR.
    There is only one state in our AOR actively seeking to destabilize 
the region and actively fomenting violence--Iran. The combination of 
Iran's potential nuclear weapons aspirations, defiance of international 
obligations and norms, employment of proxies to attack others around 
the world to include U.S. Forces, and regional hegemonic goals make 
Iran the single greatest threat to regional stability--and to the 
security of the United States--in the Central region. Iran and its 
surrogates foment much of the malign activity across the AOR. From 
active attempts to exploit the Arab Awakening, to working to undermine 
and subordinate the democracy in Iraq, to supporting the Assad regime 
in Syria, to heightening Shiite-Sunni tensions, to active support for 
Lebanese Hezbollah, Iran's activities are motivated by its hegemonic 
ambitions, despite its growing regional and international isolation. An 
Iranian decision to develop nuclear weapons will have a destabilizing 
effect on the region and could motivate its neighbors to proceed with 
their own nuclear development programs. Iran's well-established pattern 
of deceit and reckless behavior has progressively increased the 
potential for miscalculation, and is the primary catalyst pushing the 
region toward an arms race or armed conflict.
    While the fight against violent extremism continues in Afghanistan, 
military progress is undeniable. The ISAF Campaign Plan is succeeding; 
even while progress and violence coexist. While significant risks 
remain and development of the Government of Afghanistan's economic and 
governance capacity is a persistent challenge, we continue the effort 
to neutralize the enemy in Afghanistan while transferring the lead for 
security to ANSF which has made great strides in growth, quality and 
effectiveness. The Afghans are proving themselves on the battlefield 
and I am optimistic that the 2014 date, established in Lisbon by NATO, 
is achievable for the Afghans to be in the lead across the entire 
country.
    The insurgency is less capable, physically and psychologically, 
than in previous years. The ISAF Coalition has broadly arrested 
insurgent momentum--limiting insurgent freedom of movement, killing or 
capturing leaders and fighters, and in many areas effectively 
separating the insurgents from the population. The enemy's reliance on 
high-profile attacks and assassinations of Afghan senior leaders 
illustrates our enemy's limited military options against ISAF and the 
ANSF, and diminished capacity to influence events on the ground. 
Violence is down in Helmand and Kandahar and enemy efforts to sustain 
attacks in Kabul have failed. Yet, the insurgency remains both 
resilient and capable, so we must remain vigilant and resolved as our 
gains are reversible.
    Execution of the major elements of this complex campaign--
transition, surge recovery, ANSF growth, evolution to security force 
assistance, reconciliation and establishing an enduring force--must be 
comprehensive, maintain hard-fought momentum, and preserve coalition 
unity. I appreciate your continued support of the Afghanistan Security 
Forces Fund and reintegration authority, which are key to building on 
our successes. General Allen and his team, in partnership with the 
Department of State and GIRoA, are carefully examining plans to train, 
equip and sustain the ANSF and have revised our approach to be 
appropriate to the situation. Additionally, as U.S. drawdown proceeds, 
preservation of enablers in terms of logistics, medical evacuation, 
communications and air support (among others), will be essential for 
our partners, many of whom have expressed concern over potential loss 
of these capabilities. As these major efforts proceed, increasingly 
integrating Coalition and partner-nation plans and insights will be 
critical to maintaining Coalition support in the lead up to the NATO 
summit in Chicago in May and through 2014. This, the largest coalition 
in recent military history, validates the common interest of our 
international and regional partners, and we must sustain our ``in 
together out together'' approach in our mutually supporting efforts. 
Continued support of the Coalition Support authorities, to include lift 
and sustainment, will enable key partners to maintain their active 
engagement in support of security transition and in training and 
advising the Afghans to build on the momentum in establishing 
independent operations.
    In Pakistan, the threats we face come together in a potentially 
dangerous nexus. The unstable environment in Pakistan is exacerbated by 
terrorist attacks and tenuous government control in parts of the 
country, economic distress, radicalization of segments of the 
population, a military over-stretched, strained relations with India, 
repeat natural disasters and more. The United States has a vested 
interest in Pakistan and, despite challenges to the bilateral U.S.-
Pakistan relationship, Pakistan remains a regional partner and must 
play a constructive role if Afghanistan is to achieve long-term 
security.
    Although 2011's challenges were numerous--from fall-out over Wiki-
leaks and the Ray Davis incident to significant tensions following the 
raid that killed Osama bin Laden, Haqqani Network attacks on our 
Embassy in Kabul, and the tragic Salala incident in which 24 Pakistani 
troops were killed in a cross-border friendly-fire incident--our focus 
must remain on shared strategic interests. A candid, constructive 
military-to-military partnership can help establish common ground from 
which to act against our common enemy. Pakistani intelligence support 
has been critical to neutralization efforts against al Qaeda senior 
leadership even while some aspects of its security policy appear self-
defeating. Cross-border coordination is improving between ISAF and 
Pakistan's military. Continued support for the Pakistan 
Counterinsurgency Capability Fund, Foreign Military Financing, 
International Military Education and Training, and the Coalition 
Support Fund for Pakistan provides the tools to enable this military-
to-military partnership and pursue what are truly shared interests.
    Our successful military drawdown from Iraq puts the need to develop 
a new strategic relationship with the Iraqi government at the forefront 
of our regional policy. The OSC-I has been established and testifies to 
our respect for Iraqi sovereignty. Our relationship going forward will 
be based on mutual respect between two sovereign nations. CENTCOM will 
work to expand security cooperation activities and deepen our military-
to-military ties with Iraq while helping to expand its military 
engagement with key regional partners. Simultaneously, we remain clear-
eyed, recognizing Iran's access to and efforts to subordinate Iraq and 
work to counter that malign influence. OSC-I--working under Chief of 
Mission authority and with the full support of CENTCOM--is the lead 
proponent for executing the military component of our intent. Thank you 
for your fast action in support of our special authority for OSC-I and 
for your continued patience as we work through a successful transition. 
The danger from al Qaeda in Iraq is still serious and it remains 
capable of spectacular attacks against the people and the government 
there even as it takes advantage next door in Syria to mount attacks 
there.
    We witnessed last year the benefit of mature military-to-military 
relationships as the Arab Awakening unfolded in Egypt unlike how it's 
unfolding in Syria. Although there have been challenges--including the 
ongoing NGO issue--the Egyptian military continues to facilitate the 
transition to democracy and civilian rule. As Egypt makes progress in 
its democratic transition, CENTCOM will remain committed to our 
longstanding relationship with the Egyptian military. Field Marshal 
Tantawi is enabling the democratic process to unfold, presidential 
elections are upcoming, and the Supreme Council of the Armed Forces 
will transition to a freely-elected, civilian government by the end of 
June. Transition periods are difficult, but this situation presents 
unique opportunities to reaffirm and enhance U.S. relations with the 
Egyptian military and emergent civilian government via sustained 
diplomatic and military-to-military engagements. In a democratic 
system, everyone is free to share their views, and those views may not 
always be compatible with our own. But I believe the prospects for a 
continued close and positive relationship with Egypt--even if it is 
more complicated than it has been in the past--are better because of 
the long standing ties between our two nations.
    Jordan remains one of our staunchest regional allies, ready to 
stand by us when we need them and one that has deployed side by side 
with U.S. Forces. Jordan has shared interests with the United States--
and other responsible Middle East nations--in regional stability and 
reform. We remain grateful for King Abdullah's leadership in hosting 
direct discussions between Israeli and Palestinian negotiators. The 
Jordanian Armed Forces leadership is committed to its partnership with 
the United States and understands that in order to stay relevant, they 
must adapt their forces. To that end, they are conducting a Strategic 
Defense Review aimed at transforming the military to a lighter, more 
adaptable force capable of operating against today's threats.
    As the sole multi-confessional institution providing stability in 
Lebanon, the Lebanese Armed Forces (LAF) is the principal governmental 
organization viewed with respect by Lebanese from across their society. 
We support the LAF through a variety of programs as they perform a 
balancing role in maintaining peace and addressing Lebanon's 
territorial integrity. Over the years, our efforts with the LAF have 
been crucial in building the capability and capacity to serve as a 
counterbalance to Lebanese Hezbollah (LH). In that sense, these 
programs have served security in the country and region, and warrant 
our continued support. Our shared goal is to offset the influence of LH 
and malign Iranian influence--which are very strong.
    Events in Syria will have strategic repercussions throughout the 
region. The Syrian regime has a substantial chemical-biological weapons 
capability, a significant integrated air defense system, thousands of 
shoulder-launched anti-air missiles and a wholly unsustainable 
political hierarchy. The tumultuous security situation continues to 
deteriorate as the Assad regime escalates the level of lethal force 
employed upon its own people. As a result, the regime is battling for 
its survival against a popular uprising, raising the prospect of a 
civil war. The bravery of the Syrian people is laudable but the options 
available to address the situation are extremely challenging.
    We continue to see growing signs of GCC unity and cohesion, and a 
growing appetite for U.S.-GCC multilateral exercises, air, sea, and 
land. The Gulf states have demonstrated a strengthened willingness to 
work with one another, and with international partners, to counter 
malign influence in the region. Our State Department is working with 
the GCC to formalize our security policy coordination among and with 
GCC member states. GCC member states are stalwart partners and we 
continue our close collaboration with them, both bi-laterally and 
multi-laterally.
    The United Arab Emirates (UAE) has been a valued partner in 
operations in Desert Shield/Desert Storm, Bosnia, Kosovo, Somalia, 
Afghanistan, and Libya and we continue to deepen our military 
relationship. The Emirates recently completed their very successful 
participation on Operation Unified Protector in Libya and continue 
their support to Operation Enduring Freedom in Afghanistan. In an 
effort to strengthen its air and missile defense capability, the UAE 
recently signed a Foreign Military Sales case for their purchase of the 
Theater High Altitude Area Defense system, valued at approximately $3.5 
billion. The UAE was the first foreign government to purchase this 
system. The UAE's many contributions today and close military ties over 
many years marks this partner among our strongest friends.
    The deep U.S.--Bahrain security relationship is the cornerstone for 
our collective security in the Gulf region. Home to our sole main 
operating base in the Mid-East, Bahrain provides key support for U.S. 
interests by hosting U.S. Navy's 5th Fleet and providing facilities for 
other U.S. Forces engaged in regional security. Bahrain faces a 
challenge balancing the demands for greater political participation by 
its citizens and the maintenance of security and stability as it 
continues needed political reform. In this regard, the small island 
nation is a microcosm of the tensions sweeping through the region. 
After the unrest a year ago, the government invited in a group of 
internationally respected human rights and legal experts to lead the 
Bahrain Independent Commission of Inquiry (BICI). The government gave 
full support to its investigation. The BICI findings and 
recommendations were received by the King on live television and the 
government's positive response to the recommendations is encouraging. 
While implementing the recommendations is not an easy task, the 
Government of Bahrain has taken encouraging steps on reform, and it is 
important we support the efforts they've undertaken to date. Dialogue 
between the government and opposition groups is essential. One of the 
greatest bulwarks against Iranian influence is a strong and stable 
Bahrain that is inclusive and respects the rights of all its people. 
Bahrain is an important partner, and has been a reliable friend through 
good times and bad. It is showing now, by learning from its mistakes, 
that it is equally committed to this important relationship.
    Qatar hosts significant U.S. military capabilities and has taken an 
increasing role in pursuit of regional stability, supporting operations 
in Libya with both military and humanitarian aid. Qatar will continue 
to pursue an assertive and independent foreign policy and is playing an 
important role in an effort to stop Syrian brutality, including through 
an Arab League resolution suspending Syria's membership. Qatar has also 
placed wide-ranging sanctions on Syria in response to the Assad 
regime's violence against its own citizens.
    Oman is strategically located along the Strait of Hormuz and the 
Indian Ocean and has played a steadying role and voice of moderation in 
the region for many years. Internally the Sultan remains admired and he 
addressed demonstrators' concerns in early 2011 in positive ways. We 
have shared appreciation of the situation in the Gulf and Oman provides 
valued military advice for maintaining stability.
    Kuwait remains a steadfast friend of the United States and has been 
indispensable in facilitating U.S. troop and equipment flow in and out 
of the AOR. Kuwait's foreign policy will continue to be grounded in its 
long-standing strategic alliance with the United States. We maintain a 
robust security cooperation program with the Kuwaitis and their support 
for U.S. Forces is essential for maintaining collective regional 
security.
    For decades, security cooperation has been a cornerstone of our 
relationship with the Kingdom of Saudi Arabia. As we face ever more 
sophisticated regional challenges in the Middle East, upgrading Saudi 
Arabia's defense capabilities sustains our strong military-to-military 
relations, continues operational interoperability, and helps the 
Kingdom prepare to meet regional threats. In difficult times, the 
Kingdom has demonstrated its willingness and capability to use its 
military capabilities to fight as part of a coalition against regional 
hegemony. Modernizing the Saudi military and allowing the Kingdom more 
prompt access to equipment deters hostile actors and ensures the 
security and stability of the Kingdom coupled with our longstanding 
military ties.
    Following the signing of a GCC-backed plan under which President 
Saleh handed over his executive powers to the Vice President, a 
national unity government was formed and a presidential election took 
place on February 21, 2012. Yemen has a new leader after over three 
decades of rule by President Saleh. Following an extended period of 
internal strife, Yemen is poised for effective political transition. 
The GCC plans also provided for the creation of a Military/Security 
Committee which has played a key role in de-escalating the security 
situation and will be instrumental in reorganizing the military and 
security structure in Yemen. The new Yemeni government will need 
assistance in order to reorganize its military under civilian control 
and build capacity to deal with critical national security threats. We 
are supporting military professionalization and look to continue our 
relationship in the fight against AQAP in accordance with our national 
policy. We expect increased Iranian malfeasance in an attempt to 
undercut Yemen's efforts to create a peaceful path to the future.
    The Central Asian States are key to our Afghanistan campaign 
because the Northern Distribution Network (NDN) is a critical part of 
ISAF's resupply and retrograde efforts. Over the past 2 years, the 
expansion of the NDN for transportation to and from Afghanistan has 
been one of the most significant areas of cooperation with our Central 
Asian partners. Central Asia shares similar threats from the Afghan 
border regions and CENTCOM military assistance focuses on building the 
capacity to fight against violent extremists. We are committed to 
preventing violent extremist organizations from using Central Asia as a 
base for terrorist operations and strengthening relationships based on 
shared understanding of the terrorist, criminal and narco-trafficking 
threats. Military assistance is focused on building counterterrorism 
capacity.
    Our relationship with Kazakhstan continues to mature. We have 
recently signed new agreements for 5 years of defense cooperation and 
Kazakhstan continues to contribute to the Afghanistan mission. In 2012, 
Kazakhstan desires to expand the number of nations participating in 
Exercise Steppe Eagle, a peacekeeping exercise co-sponsored by 
Kazakhstan and the United States.
    Kyrgyzstan continues to be a key partner for U.S. efforts in 
Afghanistan and the region. The peaceful transition of power to 
President Atambayev demonstrated the Kyrgyz Republic's effort to 
sustain democratic reforms. Our military relationship continues to 
improve, particularly in the areas of regional security and military 
security cooperation. Additionally, the Kyrgyz Republic aims to deploy 
a U.S.-trained peacekeeping mission within the next 2 years.
    For Tajikistan building and maintaining counterterrorism, border 
security and counternarcotics capability to protect our mutual 
interests from the threat of violent extremist organizations are 
paramount to regional stability. In concert with our counterterrorism 
efforts, we are working with Tajikistan to improve disaster response. 
Tajikistan is committed to deploying their U.S.-trained peacekeeping 
battalion on a United Nations peacekeeping mission in 2012. We continue 
to explore options to facilitate the transit of goods and services in 
support of ISAF with this important partner.
    Our security cooperation with Turkmenistan continues to develop 
along lines consistent with our mutual objectives of countering violent 
extremists and improving border security to counter narcotics 
trafficking.
    Our relationship with Uzbekistan continues to improve in a 
deliberate, balanced way driven by regional security considerations, 
expansion of the NDN and mutual benefit. Security cooperation serves to 
provide increased U.S. access and influence in cultivating engagement 
for humanitarian and democratization efforts. We recently signed new 
agreements providing important new capabilities in support of 
Afghanistan and expect cooperation to continue to progress in a 
methodical step-by-step manner that addresses security threats of our 
mutual concern.

                    VI. CRITICAL NEEDS AND CONCERNS

    The improvised explosive device (IED) remains one of the greatest 
threats to our men and women serving in harm's way. The ubiquitous 
nature of the IED threat networks, operating in an environment 
characterized by the easy flow of dual use components through 
legitimate businesses with access to readily available explosive 
materials, presents an ominous threat to our Nation's security 
interests at home and abroad well beyond the end of mission in 
Afghanistan.
    An effective counter-IED (C-IED) effort requires specific and 
focused capabilities to address both the threat networks and their 
devices. It is critical that DOD maintain an ability to continually 
identify likely capability gaps and focus our supporting communities of 
interest to develop viable solutions. The Joint IED Defeat Organization 
(JIEDDO) has been instrumental in coordinating the research and 
development (R&D) community to provide material solutions, rapidly 
harnessing the latest technologies and concepts in order to field 
effective and timely C-IED requirements to the warfighter. The 
synchronization of JIEDDO's three lines of operation--Attack the 
Network, Defeat the Device, and Train the Force--builds on the 
experience amassed over the past decade enabling the combatant 
commanders a capability to defeat the IED as a weapon of strategic 
influence. Expanding the community of practice to academia and industry 
in focused pursuit of pre-detonation detection measures is the next 
step in this important effort.
    ISR capabilities remain vital to our ability to operate in denied 
areas and support multi-intelligence collection across all domains. We 
must sustain our capabilities and continue enhancements that keep us 
ahead of threats while supporting all plans and operations. In addition 
to communications and hardware assets we rely upon, the imbedded 
Intelligence Community personnel and liaisons at CENTCOM provides 
continuous expert support to the command and all deployed elements. 
Sustaining this effort is critical to CENTCOM's ability to stay abreast 
of regional dynamics and the changing threats.
    Information operations provide CENTCOM a key non-lethal, 
traditional military tool to counter all threats and ``win'' in the 
strategic messaging campaign. As an example, we conduct Regional Web 
Interaction Program (RWIP) activities online to degrade violent 
extremist organizations' recruiting and fund raising. RWIP activities 
are coordinated with a number of U.S. Government departments and 
agencies, focus solely on undermining extra-governmental violent 
extremist organizations that pose a potentially lethal threat in our 
region, and do not address the American public nor are they a Public 
Diplomacy tool to increase popular support for any U.S. policy.

                            VII. CONCLUSION

    I appreciate your support for CENTCOM as you fulfill your role as 
the responsible overseers of the American people's tax dollars. To that 
end, I would like to extend my personal gratitude for your continued 
support to our men and women in uniform. We intend to earn your respect 
by being the best possible stewards of resources allocated in this 
challenging time: we will continue to challenge assumptions with cost-
saving measures in mind.

    Chairman Levin. General, thank you so much.
    Admiral McRaven.

   STATEMENT OF ADM WILLIAM H. McRAVEN, USN, COMMANDER, U.S. 
                   SPECIAL OPERATIONS COMMAND

    Admiral McRaven. Good morning. Chairman Levin, Ranking 
Member McCain, and distinguished members of the committee. 
Thank you for the opportunity to appear before you today and to 
represent the extraordinary men and women of SOCOM. It is an 
honor to command the world's finest SOF, a force serving side-
by-side with our broader military and interagency teammates. I 
am proud to appear today with my good friend and next-door 
neighbor, Jim Mattis. Admittedly, though, Jim is rarely there, 
but when he's there, he's a great neighbor.
    With your permission, I'll submit my written posture 
statement for the record and open with some brief remarks.
    This morning I'd like to provide you an overview of SOF's 
role in addressing our Nation's ongoing and emerging security 
challenges. Secretary Panetta recently outlined how he viewed 
the future joint force. He called for low-cost, lean, 
technologically-advanced, agile, responsive, innovative, 
efficient, and effective forces able to address a variety of 
challenges and adversaries. As I read those characteristics, I 
am struck at how accurately they describe your SOF and what we 
bring to our Nation's arsenal.
    SOF have had a tremendous impact on our Nation's security 
and never more so than during the last 10 years of war. Since 
September 11, our forces have doubled in size, now at 66,000, 
our budget has tripled, and the number of deployed SOF has 
quadrupled to meet the emerging demands. However, even with 
that growth, our $10.4 billion budget in fiscal year 2013 still 
comprises only 1.7 percent of the total Department of Defense 
(DOD) budget. Simply put, SOF remains relevant, in high demand, 
and offers an unparalleled return on the Nation's investment.
    As we evaluate today's rapidly evolving strategic 
landscape, it is clear that the demand for SOF capabilities 
will remain high. Our near-term focus is on winning the current 
fight against violent extremism. First and foremost, we will 
sustain our efforts in Afghanistan in support of International 
Security Assistance Force (ISAF) by continuing the application 
of SOF's direct and indirect approach.
    The direct approach, lethal and precise, continues to 
degrade extremist leadership and their facilitation networks. 
The indirect approach, which I believe offers the greatest 
opportunity for victory, builds security and governance through 
efforts such as village stability operations (VSO) and 
development of ASF. Both the direct and indirect approaches 
continue to have daily positive impacts on ISAF strategy.
    Our sacrifice and effort in Afghanistan has been 
tremendous, and we continue to make this our highest priority. 
In addition to our efforts in Afghanistan, we also strive to 
maintain persistent presence globally. Today, U.S. SOF are in 
78 countries around the world supporting U.S. policy 
objectives. In the Pacific, Africa, Latin America, Europe, and 
other regions, SOF's unique skills, cultural knowledge, and the 
ability to work with partners create effects far above our 
relatively small numbers. All of these international 
engagements are done with the complete support and approval of 
the respective geographic combatant commanders and the chiefs 
of mission.
    In addition to our focus on winning the current fight, I am 
committed to strengthening our support to the geographic 
combatant commanders by reinforcing and enabling their theater 
SOCOMs. The theater SOCOMs are sub-unified commands of the 
geographic combatant commanders and provide the regional 
commander his special operations capability. As the force 
provider for those SOF capabilities, SOCOM will ensure theater 
SOCOMs have the human capital, the capability, and the SOF 
expertise to meet the geographic combatant commanders' 
requirements.
    Another important aspect of SOFs' utility to the geographic 
combatant commanders is our ability to partner with other 
national SOF units. Since the establishment of service SOF in 
the 1960s and then SOCOM in 1987, our relationship with our 
allied partner force around the world has strengthened each 
nation's SOF and each nation's ability to deal with their own 
security problems. We must continue to build these 
relationships wherever possible.
    To win the current fight and strengthen our support for the 
geographic combatant commanders, it will be necessary to ensure 
our force and their families remain strong. My predecessor, 
Admiral Eric Olson, established a task force to examine the 
fraying around the edges in our SOF community. We confirmed 
that a decade of war, coupled with a consistently high demand 
for SOF, has exerted a physical and emotional stress on our 
force and families.
    I am committed to taking care of our people with the best 
support we can provide. I have put a general officer and my 
command sergeant major in charge of the preservation of the 
force and families. They are empowered to implement innovative 
solutions across the SOCOM enterprise, to improve the wellbeing 
of our warriors and their families.
    In conclusion, the demands on SOF will not end in the 
foreseeable future. With your strong advocacy, we will continue 
to sustain a world-class special operations capability, thereby 
providing the Nation a decisive edge in addressing the 
challenges that affect us today and will undoubtedly emerge 
tomorrow.
    It is an honor to appear before you today as the Commander 
of SOCOM. You can take pride in what the men and women of SOCOM 
are accomplishing around the world each and every day. Thank 
you for your continued support. I look forward to answering 
your questions.
    [The prepared statement of Admiral McRaven follows:]

           Preapred Statement by ADM William H. McRaven, USN

    Mr. Chairman and distinguished members of the committee, thank you 
for this opportunity to address the committee in my first posture 
statement as the 9th commander of U.S. Special Operations Command 
(SOCOM). As always, we deeply appreciate your continued commitment and 
support of U.S. Special Operations Forces (SOF) around the world.
    In response to a rapidly evolving strategic landscape and an 
increasingly constrained fiscal environment our leadership has recently 
issued new strategic guidance to focus the efforts of the Department of 
Defense (DOD). My intent today is to provide a brief review of how SOF 
will support this guidance while also highlighting SOCOM's 
responsibilities, authorities, structure and major programs and 
initiatives.

      SOCOM ASSIGNED RESPONSIBILITIES, AUTHORITIES, AND STRUCTURE

    As the only Unified Combatant Command legislated into being by 
Congress, SOCOM has a distinct appreciation for the advocacy and unique 
authorities given to us since 1986. We are one of nine Unified 
Combatant Commands and similar to others in many regards, yet SOCOM is 
distinct in that we exercise numerous Service, military department, and 
defense agency-like responsibilities under guidance provided by the 
Secretary of Defense (SECDEF) and Chairman of the Joint Chiefs (CJCS), 
the Unified Command Plan, and Title 10, Section 167 of the U.S. Code.
    Unlike combatant commands with specific geographic areas of 
responsibility, SOCOM is a functional combatant command with global 
responsibilities. We are the lead Combatant Command tasked with 
synchronizing the planning of global operations against terrorist 
networks. SOCOM is also responsible for providing, training, and 
recommending sourcing solutions for combat-ready SOF forces supporting 
the Geographic Combatant Commands' (GCC) requirements. While these 
forces normally deploy under the control of the GCCs' Theater Special 
Operations Commands, SOCOM can execute global operations against 
terrorist networks when directed to do so by the President or SECDEF.
    SOCOM is also the lead component with executive agent-like 
responsibilities for the North Atlantic Treaty Organization (NATO) SOF 
Headquarters (NSHQ) responsible for strengthening the role of NSHQ in 
fostering special operations capabilities within NATO. This includes 
advocacy for resources, personnel, and funding within DOD; sharing best 
practices and lessons learned; and providing the latest releasable U.S. 
policy, strategy, operations, tactics, and training for NSHQ-supported 
SOF. This advances a worldwide network of SOF professionals conducting 
operations to increase, return, or develop peace and stability in 
support of U.S. national interests.
    Through the foresight of Congress, SOCOM is empowered by unique 
legislated budget and acquisition authorities in Major Force Program-11 
(MFP-11). MFP-11 allows rapid and flexible acquisition of ``SOF-
peculiar'' equipment and modification of service common systems to meet 
special operations requirements. MPF-11 funding supports SOF's 
persistent global presence meeting the SECDEF's guidance for forces 
``agile, flexible, and ready for the full range of contingencies and 
threats.'' We appreciate the Committee's authorization of $10.5 billion 
for fiscal year 2012. In fiscal year 2013, the command is requesting a 
total of $10.4 billion; $7.8 billion of baseline and $2.6 billion of 
Overseas Contingency Operations (OCO). This includes beginning the 
transition of funds from OCO to the base SOCOM budget in recognition of 
the enduring nature of many of our global requirements.
    The total fiscal year 2013 SOCOM budget request is 1.7 percent of 
the overall proposed DOD budget. When combined with the Service-
provided capabilities necessary to enable our operations we still 
represent less than 4 percent of the DOD total.
    Unique to Special Operations, our 1208 authority remains critical 
to funding SOF's work with indigenous forces in support of 
counterterrorism operations around the world. We appreciate the 
committee's extension of this funding through 2015 and its approval of 
increasing the annual cap to $50 million in 2012. Your continued 
support with 1208 has provided us the flexibility to support current 
operations today and rapidly address emerging operations tomorrow.
    Collectively these funds support a force with a current strength of 
approximately 66,100 personnel (growing to near 71,100 by fiscal year 
2015), spread across 5 subordinate component commands: the U.S. Army 
SOCOM, Air Force SOCOM, Naval Special Warfare Command, Marine Corps 
Forces SOCOM, and the Joint SOCOM.

                  SOF SUPPORT FOR 21ST CENTURY DEFENSE

    As articulated in Sustaining U.S. Global Leadership: Priorities for 
21st Century Defense, the global security environment presents an 
increasingly complex set of challenges and opportunities. By their very 
nature, SOF are particularly well-suited to respond to this rapidly 
changing environment, and I fully expect the operational demands placed 
upon SOF to increase across the next decade, and beyond.
    As the current CJCS General Martin Dempsey recently noted, ``We're 
at a strategic inflection point, where we find a different geopolitical 
challenge, different economic challenges, shifting of economic and 
military power.'' Strategic trends and challenges are producing a 
distinct change in the character of conflict. Insurgents, transnational 
terrorists, criminal organizations, nation states and their proxies 
exploit gaps in policy developed for the more predictable world of 
yesterday. Increasingly these threats are networked, adaptable, and 
empowered by cyberspace to find new ways to recruit, train, finance, 
and operate. In short, the strategic environment is changing--quickly 
and constantly.
    The decade of war after September 11 has proffered many lessons; 
among them, specific to SOF, is the complementary nature of our direct 
and indirect approaches and how these SOF approaches are aligned to 
this changing strategic environment. The direct approach is 
characterized by technologically-enabled small-unit precision 
lethality, focused intelligence, and interagency cooperation integrated 
on a digitally-networked battlefield. In today's global 
counterterrorism fight, U.S. SOF continues to directly degrade al Qaeda 
and its affiliates' leadership around the world, greatly reducing their 
ability to effectively plan and conduct operations. Extreme in risk, 
precise in execution and able to deliver a high payoff, the impacts of 
the direct approach are immediate, visible to public and have had 
tremendous effects on our enemies' networks throughout the decade.
    As al Qaeda and other extremist organizations attempt to franchise 
their ideology and violence globally, we will likely remain engaged 
against violent extremist networks for the foreseeable future. As 
Secretary Panetta recently stated, ``We need to continue to put 
pressure on them, whether they're in Pakistan, whether they're in 
Yemen, whether they're in Somalia, whether they're in North Africa.'' 
The direct approach will remain a hallmark capability for SOF in order 
to provide the necessary means to disrupt this threat. However, the 
direct approach alone is not the solution to the challenges our Nation 
faces today as it ultimately only buys time and space for the indirect 
approach and broader governmental elements to take effect. Less well 
known but decisive in importance, the indirect approach is the 
complementary element that can counter the systemic components of the 
threat.
    The indirect approach includes empowering host nation forces, 
providing appropriate assistance to humanitarian agencies, and engaging 
key populations. These long-term efforts increase partner capabilities 
to generate sufficient security and rule of law, address local needs, 
and advance ideas that discredit and defeat the appeal of violent 
extremism.
    While both approaches build trust and confidence with our partners 
and assure them of our support and reliability, the indirect approach 
values local-led efforts to buy down our partners' security threats. 
Here, SOF amplifies our partners' capabilities, epitomizing the 
SECDEF's assertion that ``building capacity elsewhere in the world also 
remains important for sharing the cost and responsibilities of global 
leadership.''
    As for the future, the indirect approach will be critical in the 
fight to deter, disrupt and deny sanctuary to our enemies. Therefore, 
we must use this approach to strengthen and foster a network of 
mutually supporting partnerships that are based on shared security 
interests. Through this network of relationships, SOF can provide a 
hedge against strategic surprise by identifying and working 
preemptively to address problems before they become conflicts.
    One way SOF achieves this goal through the indirect approach is 
through forward and persistent engagement of key countries. Small in 
scale by design, this engagement directly supports the Country Teams' 
and GCCs' theater plans to counter threats to stability. This approach 
directly supports the SECDEF's direction that, ``Whenever possible, we 
will develop innovative, low-cost, and small-footprint approaches to 
achieve our security objectives, relying on exercises, rotational 
presence, and advisory capabilities.'' Throughout the year, SOF 
conducts engagements in more than 100 countries worldwide. At the heart 
of this presence is the operational context and access it provides.
    Operational context is the thorough understanding of the 
environment gained through the knowledge and experience built in 
personal relationships from multiple visits to the same locations. This 
includes understanding the local culture and society, language, 
economy, history, politics and leadership, physical and virtual terrain 
as well as the enemy. It provides insight into the society's beliefs, 
values, and motivations. The addition of Cultural Support Teams (U.S. 
females attached to SOF units in Afghanistan) furthers this cause, 
enabling dialogue and routine interaction with the Afghan females 
normally isolated from exposure to male SOF personnel. This depth of 
context makes SOF more precise in enabling early action to maximize 
desired effects and minimize unintended consequences.
    The successful application of the indirect approach is evident in 
the ongoing relationship between SOF and the Armed Forces of the 
Philippines (AFP). This effort originally began when SOF deployed to 
the terrorist safe haven of Basilan Island in 2002 to assist the AFP in 
operations against the insurgent group Abu Sayyaf. Immediately upon 
arrival, SOF personnel conducted a series of engagements with the local 
residents to learn their basic needs and grievances as a precursor to 
severing their ties with the insurgents. As SOF trained and advised the 
AFP personnel leading the security efforts, they coordinated a 
comprehensive interagency and multinational program to address water, 
security, medical care, transportation, and education needs. As a 
result, people in the area continue to support AFP and SOF's presence 
today facilitating the return of economic prosperity and stability to 
the region.
    Other examples of the indirect approach are SOF's contributions 
supporting interagency diplomacy and development efforts. Currently, 22 
Military Information Support Teams (MISTs) and 4 Regional Information 
Support Teams (RISTs) support the Department of State by augmenting and 
broadening their public diplomacy efforts. MIST elements are requested 
by U.S. Chiefs of Mission and work under their direction to blend the 
embassy's Mission Strategic Plan and the GCC's Theater Campaign Plan.
    SOCOM also supports interagency development efforts by deploying 
civil-military support elements (CMSEs) to address refugees, displaced 
persons, populations at risk, and humanitarian or disaster assistance. 
CMSEs are engaged in 17 countries today and are forecasted to expand to 
20 countries in fiscal year 2013 and 30+ countries by fiscal year 2017. 
Today, SOF Civil Affairs (CA) elements are integral to Joint Special 
Operations Task Forces (JSOTFs) in Afghanistan, the Trans-Sahel, and 
the Philippines to support population-focused indirect approaches to 
combat violent extremism. To support these increasing demands, SOCOM 
added a fifth SOF CA battalion in fiscal year 2012 to ensure 
regionally-oriented CA support is available to each GCC.
    These underreported, yet vital, contributions are designed and 
prioritized to create long-term effects beyond the direct, kinetic 
actions that are essential for winning the current fight. In the end, 
it will be such continuous indirect operations that will prove decisive 
in the global security arena. Of course, both direct and indirect 
approaches will continue to be necessary and mutually supportive 
elements of effective SOF employment. Nowhere is this more true than in 
the emerging SOF requirements for SOF in Afghanistan.
    As total forces start to draw down in Afghanistan, SOF's unique 
ability to simultaneously blend direct and indirect approaches will 
likely drive increasing requirements for SOF. While the aggregate 
number of total personnel in Afghanistan will decrease as we approach 
2014, the SOF contribution may increase by some small amount. 
Currently, SOF constitute 8 percent of the forces in Afghanistan, but 
has the lead for two major elements of operations; Village Stability 
Operations/Afghan Local Police (VSO/ALP) initiatives and the ongoing CT 
mission. In conjunction with other ISAF elements, SOF have recruited 
and trained nearly 11,000 ALP who are vetted by our Afghan partners. 
There are now VSO in 57 districts increasing stability and enabling 
local governance, development, and security at the village level. 
Additionally, our Afghan Commando partners are making significant 
progress in CT operations. Virtually all CT operations are now 
partnered with the Afghans and an increasing number are led by Afghan 
elements with SOF fulfilling an advisory and supporting role. To 
command and control these efforts, SOCOM currently provides an 
operational SOF headquarters and the requisite planning capabilities 
which directly support the ISAF commander.
    While supporting U.S. Central Command efforts in Afghanistan 
remains our top priority, we also recognize that providing SOF 
capabilities to the other GCCs is critical to mitigating regional 
threats to stability. Even with the conclusion of operations in 
Afghanistan, historical deployment data reveals a constant demand for a 
``steady state'' deployed force of nearly 12,000 SOF to support the 
GCCs' requirements. Continuation of the QDR-directed SOF growth is 
essential to meeting this current and projected demand for SOF. By 
fiscal year 2017, we assess our programmed growth will provide adequate 
capacity to meet contingency demands without having to accept undue 
risk in global CT operations. Because SOF are uniquely recruited, 
assessed, selected, and trained to perform these difficult missions, 
the projected 3-5 percent growth rate through fiscal year 2017 is the 
maximum rate of growth that is sustainable.
    In the 25 years since SOCOM's creation, the global environment has 
undergone, and continues to experience major change; established powers 
falling, new ones rising, and the number and scope of threats 
increasing exponentially. The attacks of September 11 forced the United 
States to confront the growing danger posed by ideologically-driven 
non-state actors. As a result, we have been involved in a decade long 
war that has been costly not only in terms of our fallen and injured, 
but also financially. These costs, combined with today's constrained 
fiscal environment, are forcing us to be more innovative and inclusive 
in the development of solutions to our global security challenges. To 
effectively address these problems, we must work closely with our 
allies and partners to effectively build partner nation capacity, 
integrate forces where appropriate, and improve information sharing.
    Europe's NSHQ serves as an example of how SOF has adapted to the 
realities of today as it typifies the potential of an integrated 
multinational approach. Secretary Panetta's recent comment that, ``most 
European countries are now producers of security rather than consumers 
of it'' helps to validate the success of NSHQ and recognizes the 
contribution that our NATO partners have made to the current fight. 
Consequently, SOCOM will continue to bolster and strengthen the 
vitality of U.S. SOF's contribution to NATO through our increasing role 
as the NSHQ lead component and advocate to the Joint Staff and Office 
of SECDEF.
    Another example of how SOCOM and the SOF community are adapting to 
the current environment is exemplified in how we are preserving our 
force's capabilities to meet the enduring nature of war. My predecessor 
Admiral Eric Olson initiated a Pressure on the Force and Families 
(POTFF) study to examine the effects of a decade of continuous combat 
operations on the SOF community. The study identified core problems, 
their underlying factors, and captured best practices of Service and 
SOF support programs. The research included more than 400 non-
attribution focus groups, consisting of more than 7,000 servicemembers 
and more than 1,000 spouses from 55 different SOF units located at home 
and overseas. The results of the study illustrated two primary sources 
of ongoing stress. First is the lack of predictability resulting from a 
demanding operational tempo, exacerbated by significant time spent away 
from home for training. Second is an increased difficulty for our force 
when reconnecting and reintegrating into family activities.
    Armed with these findings, I have appointed a Brigadier General and 
my Command Sergeant Major to transition the Pressure on the Force and 
Families Task Force to the Preservation of the Force and Families Task 
Force. More than simply a name change, this inter-disciplinary team is 
empowered to build and implement innovative solutions across the SOCOM 
enterprise to improve the well-being of our force and families. While 
we understand that this begins with increasing predictability, the 
holistic approach will also ensure we provide responsive counseling, 
medical, psychological, and rehabilitative care to our SOF warriors and 
their families.
    Many SOF-specific support programs and organizations do exist and 
are addressing portions of the challenges we face. Resiliency programs 
are facilitating early identification of underlying SOF issues relating 
to physical, mental, and spiritual well-being. Programs such as Naval 
Special Warfare Command's Third Location Decompression Program and the 
Tactical Human Optimization, Rapid Rehabilitation and Reconditioning 
Program (THOR3) are noteworthy. The Third Location Decompression 
program allows operators time to stop and stand down at an enroute 
location easing the transition from combat to domestic life. During 
this time, evaluations are conducted to assess members' well-being and 
identify early areas of concern. THOR3 is designed to train, educate, 
and evaluate SOF on human performance, rehabilitation, and nutrition to 
optimize battlefield effectiveness. THOR3 has improved recovery time 
and increased return-to-duty rates from acute and chronic injuries.
    Additionally, the SOCOM Care Coalition program provides outstanding 
support to SOF warriors and their families and is a model advocacy 
effort within DOD. For the life of a wounded, ill or injured SOF 
warrior, the Care Coalition tracks and supports the member through the 
rehabilitation and reintegration process whether returning to duty or 
transitioning to civilian life.
    But the required solutions go beyond these care programs and 
rehabilitative services. Based on our findings, we are also focused on 
improving how our PERSTEMPO (to include time away from home) is used to 
track and report individual and unit readiness. Ultimately, this will 
be incorporated into the force generation process to provide us a more 
accurate picture regarding the health of our force, units' availability 
for deployment, and predictability as a key element of long-term 
performance and resiliency.
    Additionally, SOCOM will continue to work with the Services to 
secure priority access to local ranges and training areas reducing 
SOF's need to ``travel to train.'' Increasing this priority and access 
for deploying SOF units will further improve predictability and 
PERSTEMPO. I have spent much of the last few months visiting each of my 
component commands to listen and talk with the force and families and 
address POTFF-related issues ensuring we are on the right track.
    We have a resilient force and it remains steadfast in its mission. 
While SOF capabilities are not in danger of degradation now, we must 
and will continue to look for ways to mitigate potential problems in 
the future. We will continue to work with the Services and this 
committee to develop solutions to this problem. We recognize and 
appreciate your long-standing advocacy and funding of support programs 
for our warriors.
    Finally, in order to drive and sustain change within our 
formations, SOCOM is forging a comprehensive leadership development 
program designed to train, educate, and manage the career paths of 
future SOF leaders. We will develop tailored SOF professional military 
education to provide the tools required for today's complex 
environment, and we will work with the Services to more effectively 
manage career progression of SOF leaders including key combined, joint, 
and interagency assignments.

                    FUNDING AND EQUIPPING THE FORCE

    SOCOM has a solemn obligation to appropriately fund and equip the 
warriors from whom we ask so much sacrifice. We also recognize the 
increasingly austere fiscal environment for the Department. To that 
end, SOCOM is in compliance with the Department's Savings and 
Efficiencies guidance and that model has been incorporated into SOF 
business practices. SOCOM is in a fiscally sound position, but the 
force requires continued support. The President's budget request for 
fiscal year 2013, if approved, is an essential step towards meeting the 
growing demand on our force by providing SOCOM the resources required 
to sustain our programs and initiatives.
    SOCOM's funding request for fiscal year 2013 totals $10.4 billion 
of which $7.8 billion is baseline and $2.6 billion is OCO funding. 
Fiscal year 2013 begins the directed migration of requirements 
previously funded with OCO resources into the baseline appropriation. 
Nearly $960 million will migrate to the baseline from OCO, supporting 
approximately 37 percent of fiscal year 2013 global SOF operations and 
sustainment costs.
    Last year, SOCOM made a significant investment in Military 
Construction (MILCON) to better support SOF operations, training, 
maintenance, and storage facility requirements. This effort was 
targeted at addressing MILCON shortfalls attributable to new 
capabilities and missions, force structure growth disconnects, and 
primarily, inherited antiquated infrastructure. SOCOM is committed to 
sustaining a consistent level of funding to satisfy our critical 
infrastructure needs. As such, the fiscal year 2013 MILCON request of 
$536 million equates to 6.8 percent of SOCOM's baseline MFP-11 funds 
and is in line with the command's new Strategic Planning and 
Programming Guidance of a 6 percent minimum funding level for MILCON. 
The fiscal year 2013 budget includes 21 construction projects in 9 
States, 1 overseas, and 1 at a classified location.
    Also critical to meeting the demand for SOF capabilities worldwide 
is SOCOM's ability to execute rapid acquisition of its material and 
service programs. SOCOM's acquisition enterprise remains at the 
forefront of DOD, continuing to meet the high demand to deliver and 
field critical material requirements and new technologies. Key to 
success is our major recapitalization and modernization effort to 
incorporate enhanced capabilities in our rotary, fixed-wing, and 
maritime mobility platforms. We are grateful for strong congressional 
support in fiscal year 2012 enabling us to continue with these efforts.
    The need for SOF Combat Support (CS) and Combat Service Support 
(CSS) has increased due to programmed operator growth over the past 
decade. By design, SOF are inherently lean and we have not attempted to 
grow organic ``enablers'' that duplicate Service-provided capabilities 
at the same rate as our operational elements. Therefore, leveraging the 
logistical support of the Services continues to be important.
    The heavy-lift rotary wing MH-47G Chinook has completed the Service 
Life Extension Program with 61 MH-47Gs delivered. The upgrade of MH-
47Gs to a Block 2 configuration is underway and a new program to build 
eight additional monolithic hull MH-47Gs was initiated to bring the 
total number to 69 by fiscal year 2015. The MH-60 recapitalization 
effort to replace the MH-60L/K with the MH-60M delivered 6 new MH-60M 
aircraft, bringing the total number delivered to 12.
    The vertical mobility of the tilt-rotor CV-22 continues to deliver 
unmatched speed and range to SOF battlefield commanders. Twenty-three 
of the planned 50 aircraft are fielded to date. We completed 
modification of 12 MC-130Ws with a Precision Strike Package (PSP) which 
continues to perform superbly in combat. SOCOM has started the AC-130J 
recapitalization effort, using the MC-130W PSP as a key risk reducing 
capability. The MC-130J program is on track to replace our aging MC-
130Es and MC-130Ps, with core HC/MC-130J aircraft having successfully 
completed developmental testing in June 2011.
    Our Non-Standard Aviation Program continues to demonstrate great 
success in operations around the world. Looking forward, we have 
several initiatives to more efficiently meet demand.
    The modernization of our maritime mobility systems is underway with 
significant developments occurring this year. Competitive prototype 
contracts for the Combatant Craft-Medium (CCM), as a replacement for 
the Naval Special Warfare Rigid Hull Inflatable Boat and Mk V fleets, 
were awarded this fall with development of test articles expected in 
September 2012. Thanks to congressional support, the purchase and 
fielding of 24 High Speed Assault Craft will provide a critical 
``bridge'' capability to SOF until the CCM is complete.
    As the land contingent of SOF mobility, the SOF Family of Special 
Operations Vehicles provides a variety of specialized combat wheeled 
vehicles for SOF missions. These vehicles are modified to achieve 
required performance for global deployments across a wide range of 
environments and threats. These SOF-unique vehicles provide enhanced 
tactical mobility and force protection, as well as platforms to support 
command, control, communications, intelligence, surveillance, and 
reconnaissance (ISR) capabilities. Two specific programs underway are 
the Non-Standard Commercial Vehicles (NSCV) and the Ground Mobility 
Vehicle (GMV 1.1). The NSCV provides low profile commercial vehicles 
modified with ballistic protection and communications equipment 
enabling SOF to operate non-obtrusively supporting a multitude of SOF 
missions. The GMV 1.1 is the next variant of medium vehicles designated 
to replace the SOF-modified, service-common High Mobility Multipurpose 
Wheeled Vehicle. This vehicle satisfies the critical need to deploy 
from the CH-47 aircraft internally.
    Protection and casualty care improvements for our SOF warriors 
continues with research, development, testing, and acquisition of 
personal protective equipment. Recent Office of the Secretary of 
Defense ballistic test initiatives have been integrated into the SOCOM 
acquisition process and several mission-specific protective systems are 
now available. Optimization of signature management and camouflage 
initiatives provide multi-spectral protection for SOF operators.
    Continued progress in information communications and networking 
capabilities with our SOF Deployable Node (SDN) family of Wide Band 
SATCOM systems is providing increased access to the SOF Information 
Environment (SIE) voice, data, and video services for our deployed 
headquarters and operational elements worldwide. In fiscal year 2013 
our command focus areas are providing greater access to the SIE for SOF 
operators by downsizing system profiles, engineering common and 
scalable components, extending access through SDN to wireless users, 
and providing SIE access to maritime and ground mobility platforms.
    SOCOM continues to advance our technical surveillance and 
intelligence collection programs through evolutionary technology 
insertions, while making SOF ISR data more discoverable and external 
information more accessible with our Defense Common Ground/Surface 
System. Our other investments include a mix of manned and unmanned 
airborne ISR systems as well as the accompanying Processing, 
Exploitation, and Dissemination capabilities and supporting 
communications architectures. Although we continue to pursue 
investments in airborne ISR capability, including High-Definition ISR 
technology, we also rely heavily on the Services to expand their 
capabilities and capacity that benefit DOD across the board.
    Our effort to identify key emerging technologies beneficial to SOF 
ensures our forces are equipped with the right capabilities to detect 
and engage our adversaries. This includes conducting collaborative 
technology discovery, coordinating research and development activities, 
and rapidly integrating and inserting new technology developments for 
equipment and techniques across the force. This process will align SOF 
capability gaps with technology enablers to focus ongoing efforts 
across the Science and Technology enterprise as well as identify 
additional innovation that is required to address these gaps.

                               CONCLUSION

    During 2011, we saw significant emphasis on the employment of SOF. 
SOF operators, to a degree greater than ever before, performed missions 
that they were selected, trained, and equipped to do.
    SOF are a source of deep national pride. Their ingenuity, 
perseverance, spirit, and skill are unprecedented. In significant ways, 
our forces are creating visible and dramatic effects of the greatest 
magnitude across the globe. I consider it a profound honor to lead such 
an extraordinary group of professionals--it is a privilege to represent 
them before this committee.
    As always, our success is only possible because of your continued 
advocacy for SOF and our assigned missions. Your support for the 
President's budget will ensure our continued ability to successfully 
address the most challenging security demands of our Nation. Thank you.

    Chairman Levin. Admiral, thank you so much.
    We'll try a 7-minute round for our first round.
    General Mattis and Admiral McRaven, first let me ask you 
about the fiscal year 2013 budget and the administration's 
recently revised strategy. Does the 2013 budget request reflect 
the recently revised strategy, General?
    General Mattis. Yes, sir, it does.
    Chairman Levin. Admiral?
    Admiral McRaven. Yes, sir, it does.
    Chairman Levin. General, do you support that budget 
request?
    General Mattis. I do, completely.
    Admiral McRaven. Absolutely.
    Chairman Levin. In the wake of the violence following the 
burning of Korans in Afghanistan, including the killing of at 
least six American soldiers, Secretary Panetta has said that, 
``this violence is not going to alter our commitment to get 
this job done'' in Afghanistan. He added that, ``our goal is 
that by the end of 2014 the Afghans will have the 
responsibility to govern and secure themselves.''
    General, following the violence over the Koran-burning 
incident, should we modify our strategy in Afghanistan?
    General Mattis. No, Mr. Chairman, I don't believe so. I'm 
delighted to defend our strategy. I believe it is working. We 
should not allow a few criminals and malcontents to define the 
ASF. Even their performance during these last 2 weeks--
disciplined, restrained, standing by us--is an indication that 
this is a force that's come a long ways.
    Right now, the ASF is nearly at the 352,000 personnel mark 
that we had set up. It shows that the Afghans are willing to 
fight for their country. We want it to be at 352,000 by 
October. We should be there within 60 days. We're on track, Mr. 
Chairman.
    Chairman Levin. How do the events which occurred, where we 
had some Afghans killing Americans and other coalition forces 
and their own people, strike you? Is that a significant shift 
in terms of either the Afghans' willingness to take on the 
Taliban or the reliability of the Afghan army?
    General Mattis. Sir, treachery has existed as long as 
there's been warfare, and there have always been a few people 
that you couldn't trust. I'm one of those who has slept 
peacefully under Afghan boys guarding me back in 2001. No force 
is perfect. I would just remind everyone that even Jesus of 
Nazareth had 1 out of 12 go to mud on him.
    My point is that no matter what selection process you use, 
you're going to have somebody who doesn't make the standard. In 
this case, the overwhelmingly positive response by the ASF, 
even in the face of what was a very disappointing and 
unintentional mistake by the U.S. Forces, did not shake their 
confidence in us, it did not shake the teamwork.
    I think that right now it does not cause us any question 
about the overwhelming reliability. At the same time, prudent 
measures, taken with the full support of the Afghan chain of 
command--unprecedented, I might add, absolutely unstinting 
support--means that we're on the right track to address what is 
a bona fide insider threat concern.
    Chairman Levin. Thank you.
    According to the Wall Street Journal the United States has 
proposed reducing the size of the ASF from the 352,000 end 
strength goal for this year to 230,000 after 2014 as a way of 
reducing the cost of sustaining the ASF. First of all, what's 
your reaction to that? Is this something which we have decided 
upon and, if so, why are we projecting the need for Afghan 
troops 2 years in advance, as the security force needs of 
Afghanistan?
    General Mattis. I understand your question, Mr. Chairman. I 
completely support General Allen's recommendation that we hold 
at 352,000 ASF through 2015. While there can be any number of 
varying levels of maturity of planning or thinking going on, 
the conditions on the ground will have to determine the size of 
that force. But between now and 2015, I think, to sustain the 
gains we've made, especially after 2014 when our troops will 
have been largely withdrawn other than advisers, the 352,000 is 
a prudent measure.
    Chairman Levin. As far as you know, has a decision been 
made relative to that?
    General Mattis. I am confident there has not been a 
decision made on that.
    Chairman Levin. I want to change the subject a bit to VSO. 
Some have accused Afghan local police units of serious abuses 
against the populations that they're tasked to protect. I'm 
wondering whether or not you have a response to that. I ask you 
both because you're both very much involved in the Afghan local 
police and their support by our SOF and general purpose forces.
    First, General, what is your response to the criticisms 
that we've read of the Afghan local police program? Then, 
Admiral, I'd like to ask you the same question.
    General Mattis. Mr. Chairman, that program is under the 
provincial governors' command. They're not on their own out 
there. They have U.S. SOF as advisers living alongside them. It 
is interesting that during all these months of difficulty with 
this insider threat, as we called it, where we've had some of 
our troops attacked, not one of these troops living out on the 
very edges of the battlefield, in small groups, has been 
attacked.
    We find that those forces are ethical. We keep a close 
watch on them. If we get any indication of unethical behavior, 
violent behavior, or taking advantage of their position, it's 
investigated immediately, and we keep a very close watch on it.
    Chairman Levin. Admiral?
    Admiral McRaven. Yes, sir. General Allen investigated some 
of these allegations, had a joint investigation with the 
Afghans, and they found the allegations to be false.
    As General Mattis mentioned, the VSO program and the Afghan 
local police, in particular, are, in fact, part of the Ministry 
of the Interior. So that chain of command goes right back to 
the central government and gives it some credibility from the 
tribal level, the village level, up to the central government. 
We think this is very important.
    There are currently about 11,000 Afghan local police and we 
are growing to about 30,000 over the next couple of years. We 
think this is an exceedingly important program for the 
stability of Afghanistan.
    Chairman Levin. Thank you both very much.
    Senator McCain.
    Senator McCain. General Mattis, after all the sanctions 
have been imposed on the Iranian regime, do you believe the 
regime has been at all dissuaded from pursuing a nuclear 
weapons capability?
    General Mattis. No, sir, I have not seen that.
    Senator McCain. General Mattis, are there strong 
indications that al Qaeda is making a comeback in Iraq?
    General Mattis. Yes, sir, notably in the western Iraq area, 
but the threat is extending into Baghdad.
    Senator McCain. General Mattis, the Director of the Defense 
Intelligence Agency, General Burgess, testified last month that 
the Assad regime and its military remain ``a viable, cohesive, 
and effective force.'' In the same hearing, the DNI, James 
Clapper, testified that, absent some kind of external 
intervention, Assad will ``hang in there and continue to do as 
he's done.''
    Do you agree with General Burgess' and Director Clapper's 
assessments?
    General Mattis. Sir, Assad has chosen violence. I think his 
military is under more pressure every day. Their desertion rate 
is going up. But in aggregate, I agree with General Burgess' 
assessment.
    Senator McCain. If current conditions persist, absent 
external intervention, how long do you think Assad could remain 
in power? Indefinitely?
    General Mattis. I don't think indefinitely, sir. But I 
would be very slow to put a time horizon on it. I think he's 
going to be there for some time because I think he will 
continue to employ heavier and heavier weapons on his people. I 
think it will get worse before it gets better.
    Senator McCain. Recent reports of increased Iranian 
involvement, as well as Russian arms supplies, make it worse. 
Would you say that Assad's crackdown, especially in recent 
events in Homs, is gaining or losing momentum?
    General Mattis. He's gaining physical momentum, sir, on the 
battlefield. I think he's creating more enemies. I think he's 
creating more international pressure against him. But on the 
tactical battlefield, he is clearly achieving what he wants to 
achieve.
    Senator McCain. I think we would agree that Syria out of 
the hands of Assad and a chance to be free and democratic would 
be one of the greatest blows to Iran. Would it be in America's 
strategic interest to see Assad go?
    General Mattis. Yes, sir, it'll be the biggest strategy 
setback for Iran in 20 years when Assad falls; not if, but 
when. He's going to go.
    Senator McCain. Fundamentally, we went to the Balkans 
because ethnic cleansing and genocide were taking place in 
Bosnia and Kosovo in the 1990s. Do you see a difference between 
the kind of slaughter that's going on in Syria now and the kind 
that was going on in Kosovo and in Bosnia? There may be a 
difference in scale, but do you see the same sort of actions 
being taken by the government?
    General Mattis. Certainly each situation is unique, but as 
far as the trend, I would not disagree with your 
characterization.
    Senator McCain. Under current conditions, would simply 
providing arms to the opposition be sufficient to help them end 
the violence and to force Assad to leave power?
    General Mattis. Sir, providing arms would be a policy 
option. I think we'd have to do our best to determine who we're 
providing the arms to and follow the physician's oath of 
``First, do no harm,'' to make certain what we're doing is 
actually going to reduce the scale of violence ultimately. It 
may go up for a short time, but I think you'd have to look at 
it very closely, because the longer this goes on the more 
potential there is for al Qaeda and for basically a full-scale 
civil war.
    Senator McCain. Have you seen any evidence that al Qaeda 
has had any significant role in the Syrian opposition today?
    General Mattis. Yes, sir, we have, in terms of the rather 
spectacular improvised explosive device (IED) attacks.
    Senator McCain. Every time I've seen one of these crises, 
the first question is: We don't know who these people are, and 
it could be al Qaeda. I heard that in Egypt; I heard that in 
Tunisia; and I heard it in Libya: We don't know who these 
people are and they're probably al Qaeda.
    You know what that flies in the face of, General? People 
who yearn for liberty and not being under the rule of an 
oppressive, brutal dictatorship. So all of a sudden now we will 
again assume: Well, it's al Qaeda. I've just returned from a 
trip to Egypt, Tunisia, and Libya, and there's always the 
threat of extremism. But there's no doubt the people that made 
the revolution were not al Qaeda. In fact, they were in direct 
repudiation of al Qaeda.
    Frankly, one grows a little weary of this: We don't know 
who they are and they're probably al Qaeda.
    Admiral, do you think we can find out who they are?
    Admiral McRaven. Sir, I think it's always prudent to find 
out who your allies are and who your enemy is.
    Senator McCain. Is it prudent to stand on the side of 
freedom and democracy against one of the most oppressive 
dictators in the world?
    Admiral McRaven. No, sir.
    Senator McCain. Is that prudent?
    Admiral McRaven. No, sir.
    Senator McCain. Isn't that what the United States has been 
standing for for a couple of hundred years at least? Isn't that 
why we fought wars?
    So frankly, I grow irritated and I grow angry when I see 
and meet these people who have sacrificed their very lives and 
their family and are wounded, when I visit a hospital in 
Benghazi where a whole shipload of wounded young men have just 
returned. I didn't see a single one of them that was al Qaeda, 
not a single one. I didn't see a single one of them that died 
before my eyes that was al Qaeda.
    So I suggest we find out who these people are. I guarantee 
you that you will find out that it's not al Qaeda; it's people 
who have the same yearnings that are universal, and that's 
freedom, democracy, and our God-given rights.
    I would hope we would spend some time with your unique 
capabilities in finding out who these people are. I'm surprised 
you haven't tried to do that before. You should do it, because 
this conflict is going to go on and a whole lot of people are 
going to die if we allow the status quo to prevail and the 
slaughter to continue because ``we don't know who they are.''
    Senator Lieberman [presiding]. Thanks, Senator McCain.
    General Mattis, Admiral McRaven, thanks very much for being 
here. Thanks for your leadership. Honestly, as I consider the 
records both of you have had and what you're doing now, I don't 
think we could have two better people in the positions that 
you're in, and we ought to be very grateful to you for that.
    General Mattis, I always look forward to your testimony 
because in some sense I feel when I read your stuff or I listen 
to it that I'm back in the classroom, because you do have a 
very developed sense of history. I just want to read in the 
context from your submitted testimony: ``In over 30 years of 
supporting U.S. Forces in the CENTCOM AOR, I have never 
witnessed it so tumultuous. Change is the only constant and 
surprise continues to be the dominant force in the region. 
While transformation is underway across the region as a result 
of the Arab Awakening, malign efforts by other regional actors, 
particularly Iran, to influence the ultimate outcome represent 
perhaps the greatest immediate and long-term threat to regional 
stability.''
    Then I'm skipping here, but again I thought this is an 
interesting perspective, which maybe we miss in all the tumult 
in the region: ``There is only one state in our AOR actively 
seeking to destabilize the region and actively foment violence, 
and that is Iran.'' I think that helps us put things in 
context.
    Let me go back to something that Senator McCain touched on, 
but I want to ask you if you could go into it in a little more 
detail; it's about Syria. Can you describe in more detail, what 
is the extent of both Iranian and Russian military assistance 
to the Assad government at this time?
    General Mattis. Senator, the Russians have provided very 
advanced integrated air defense capabilities, missiles, radars, 
that sort of thing, that would make imposition of any no-fly 
zone challenging if we were to go in that direction. In terms 
of Iran, they are working earnestly to keep Assad in power. 
They have flown in experts. They are flying in weapons. It is a 
full-throated effort by Iran to keep Assad there and oppressing 
his own people.
    Senator Lieberman. So the Iranians, to the best of your 
knowledge, have some expert or high-ranking personnel that have 
come from Teheran to Damascus to assist the Syrian forces?
    General Mattis. They have, sir, yes.
    Senator Lieberman. Generally speaking, what kinds of 
hardware, military assistance, and systems are they providing 
to the Syrian army?
    General Mattis. They're providing the kinds of weapons that 
are being used right now to suppress the opposition. They're 
providing eavesdropping capability to try and pick up where the 
opposition networks are at. They're providing experts who I 
could only say are experts in oppressing. They're pretty well-
schooled. They know how to oppress their own people in Teheran. 
They've flown them into Damascus to help Assad do the same 
thing.
    Senator Lieberman. I'm generally sympathetic to the 
argument that Senator McCain just described, that the 
international community, for reasons that are both humanitarian 
and strategic, really just can't sit back any longer and watch 
Assad do what he's doing. My own sentiment is that eventually 
he'll fall, but when there's such a disproportion of military 
power between the government and the opposition, he can really, 
as you suggested earlier, hang on for a long time and the 
killing can go on for a long time.
    We actually saw this in the Balkans in some sense in the 
1990s before we finally got involved and stopped it.
    I don't minimize the difficulty of getting involved here, 
but I do want to say that your answer to the last question, 
which I appreciate, does lead me to say this. Some people say 
if we, our Arab allies, or the European Union, get involved and 
provide weapons to the opposition army, that we will be 
militarizing the conflict. But the conflict is already 
militarized in one sense. It's only militarized adequately on 
one side. The Iranians and Russians are providing a lot of 
military support to the Assad government and the opposition 
doesn't have much of that at all.
    Has the White House asked you as head of CENTCOM to prepare 
any contingency plans for possible assistance to the Syrian 
opposition?
    General Mattis. Senator, I'd prefer to answer that question 
in a closed hearing, if I could, sir.
    Senator Lieberman. The chairman had to go away to another 
meeting, but I hope we will have the opportunity to have a 
closed hearing before this is over. I note for the record that 
I don't believe that Senator McCain believes that we should do 
this on our own. I hope we can help organize something, but I 
gather that the Saudis and Qataris are now actively thinking 
about at least supplying some weapons to the Syrian opposition.
    Let me move to another area. This also goes to Iran. I have 
heard reports that the Iranian regime is now involved more 
actively in malign activities in other countries in the region 
in a way that poses some threat to our forces in the region. I 
want to ask you to talk about that. I'm thinking particularly 
of Yemen, but if beyond Syria there are other areas in your AOR 
where you feel Iran is beginning to threaten our forces, I 
would like to hear about it.
    General Mattis. Sir, they're fighting basically a shadow 
war every day. They're moving weapons into Sudan. They're 
sending them into Yemen. They are trying to make inroads there 
by passing out money and ordnance to various factions in Yemen 
as they take their first steps towards some kind of a democracy 
in their future, having come out of a very good election.
    We see what they're doing in Damascus. They recognized that 
their link to Lebanese Hezbollah will be cut if, in fact, 
Bashar Assad falls. We see this throughout the region. The 
Iranians have never gotten along that well with the Taliban, 
and yet they're willing to help the Taliban to some degree to 
fight us in Afghanistan. We also see their mischief all around 
the world, of course, right down here to Washington, DC, where 
they attempted to kill an Arab ambassador.
    So this is an ongoing effort, I think, with this regime, 
it's something we simply have to accept as part of their modus 
operandi, and we certainly take a lot of prudent steps to 
maintain our own force protection. But we also see them trying 
to find their way in and take advantage of any of these Arab 
Awakening causes that come up. They've tried it in Cairo. I 
think they were pretty well rebuffed there. The Iranian 
revolution is not being seen as an example for any of the Arab 
nations in their awakening.
    So it's not completely successful, but at the same time 
it's highly concerning.
    Senator Lieberman. Is all this activity in the region by 
Iran evidence that they really have hegemonic ambitions, that 
they want to stretch out across the region, or can we not 
conclude that?
    General Mattis. Sir, I think that is one of the reasons 
we're seeing the unity of the Gulf Cooperation Council right 
now and the way the Arab League is banding together and 
becoming a force for initiating operations, whether it be in 
Libya or in other areas. There are concerns about Damascus. I 
think what we're seeing is the whole region is becoming aware 
of this effort on Iran's part and it's causing a more unified 
opposition to them, almost akin to 1948 in Western Europe, when 
NATO was formed out of a fear of the Soviet Union and their 
forces.
    Senator Lieberman. It's a very significant parallel.
    Thank you very much, General.
    Senator Brown is next.
    Senator Brown. Thank you, Mr. Chairman.
    Thank you both for your service. Admiral, thank you for 
taking the time to come in. I think it was Senator Levin who 
actually referenced the Afghan local police program, which I 
had an opportunity and honor to observe as a soldier this 
summer. I have to go out and visit with the Special Forces and 
see that program at work and visit many of the villages and 
speak with the tribal leaders and also the soldiers that were 
there.
    To me, it's the program we should have implemented from day 
one. The value for the dollar is incredible. The amount of 
cooperation between the tribal leaders and people of the 
villages and the Special Forces is unheard of. It's never 
happened like it's happening now, that check-and-balance, when 
one village is actually coming to the aid of another village 
when they're being attacked or harassed. It's never happened, 
and that's obviously because of the advent of just a simple 
road connecting those villages.
    That's why it's very important to continue with the 
infrastructure in that region, so they can get from point A to 
point B and see what the other village is doing, create trade 
with that village, come there and be the safety and security 
for that village, and vice versa.
    Is that your observation, that those types of positive 
activities are a result of our involvement in the Afghan local 
police program?
    Admiral McRaven. Sir, it absolutely is. The Afghan local 
police program is one component of VSO, which really looks at 
security, governance, and then economic development. The Afghan 
local police are part of that security aspect at the village 
level, linking the village to the district, and then the 
district to the province, and then the province eventually to 
the central government. We think the program is working 
exceedingly well.
    Senator Brown. Thank you.
    General, I also had the opportunity as a result of my 
military duty to actually go to the detainee facility and 
participate in a board to determine whether that detainee 
should be released. It was not dissimilar to our drug boards 
and other types of boards that seem to be in concert with 
everything that I've been taught as a Judge Advocate General.
    I found it fascinating. I also found it a little bit 
troubling because the Strategic Partnership Agreement with the 
Afghan Government is absolutely important. It's something we 
need to get signed and implemented right away, because it puts 
to bed the notion that we're packing our bags and leaving. 
However, accelerating the transfer of detainees to Afghan 
custody presents real concerns for me.
    I don't think they have the capacity at this point, based 
on my personal observations, to assume the security of these 
detention facilities. I found it was one of the best run 
facilities I have ever seen. I've been down to Guantanamo Bay 
(GTMO). In my old senate district back home in Massachusetts, I 
was responsible and participated in getting funding for three 
or four prisons.
    General, is that your understanding as well? Are you 
concerned about that transfer and whether they can handle that?
    General Mattis. Yes, sir, we are. We're in negotiations 
with them now. Ambassador Crocker is leading those negotiations 
with General Allen right alongside him. I think the most 
important thing is that we figure these things out and not go 
into an agreement. What we want is the right agreement and, as 
you point out, we want to make certain we're not turning people 
over before the Afghans are ready to take care of them and then 
we end up with abuse or some failure in terms of how we take 
care of these prisoners.
    Senator Brown. It's a top-notch facility. I know they're 
expanding it. I've seen the caliber of Afghan corrections 
officers or soldiers who would be manning it. I have to be 
honest with you. I have deep concerns. This is something I want 
to, probably with Senator Graham, monitor very, very closely, 
along with you. I know Ambassador Crocker and General Allen are 
obviously working that through.
    Regarding Iraq, I am concerned, as others are, about the 
vacuum that's been created. Al Qaeda in Iraq has carried out 
more attacks this year alone than it did in the entire second 
half of last year. Do you think there's a security vacuum there 
now since we've left?
    General Mattis. It's not a security vacuum, Senator Brown. 
But it is a less capable Iraqi security force without our 
capabilities there. They're scrambling to try and fill in those 
gaps. We are working with our small footprint there to help 
them fill in those gaps. But it's a concern, I know, for the 
Iraqi Government and it's a concern for Ambassador Jeffries.
    Senator Brown. Do you think al Qaeda is making a comeback 
in Iraq?
    General Mattis. Yes, sir, they are. It's not significant. 
It won't threaten the government. It will kill a lot of 
innocent people.
    Senator Brown. What about the favoritism in the Iraqi 
Government for the majority Shia political party? Do you think 
that's fueling another insurgency potentially, and does this 
play right into al Qaeda's hands to create that instability?
    General Mattis. It's not playing into al Qaeda's hands yet, 
and I think that there has been some progress back into a 
political dialogue here in the last couple of weeks, that I 
think is back on the right track. So I give you a cautious, 
optimistic view of this, but it's very, very cautious at this 
point.
    Senator Brown. Regarding Syria, do you see that Iraqi al 
Qaeda are moving over to Syria to fight against the Syrian 
regime? How do you think this affects our understanding of the 
Assad opposition?
    General Mattis. Al Qaeda is just trying to increase the 
chaos because they like ungoverned spaces. I don't think they 
have a moral bone in their body. They're simply opportunistic. 
I don't think that they characterize or represent or define the 
opposition to Assad. That they would try to take advantage of 
it I have no doubt. It's in their genes. But they do not define 
the opposition to Assad.
    Senator Brown. Admiral, can you comment on the 
contributions of the Guard and Reserve elements in SOCOM? How 
do you view their role now and how do you view the role in the 
future?
    Admiral McRaven. Sir, thank you. The Guard and Reserve have 
been absolutely essential to SOCOM's capability and their fight 
here in the last 10 years and really since the establishment of 
SOCOM back in 1987. We have two Reserve units, the 19th and the 
20th Special Forces Groups, that do phenomenal work for us in 
Afghanistan. We have the 193rd Special Operations Wing, which 
flies some of our unique Guard and Reserve assets.
    So we are very strongly enabled by the Guard and Reserve 
across all Service components of special operations. We expect 
that they will continue to be well-resourced in the years to 
come and play a vital role in U.S. special operations.
    Senator Brown. You welcome that role?
    Admiral McRaven. Absolutely, sir.
    Senator Brown. Thank you.
    Thank you, Mr. Chairman.
    Senator Lieberman. Thanks, Senator Brown.
    Senator Reed.
    Senator Reed. Thank you very much, Senator Lieberman.
    Gentlemen, thank you for your extraordinary service to the 
Nation and to the men and women that you lead with such 
distinction and their contributions also.
    General Mattis, you indicated that the most significant 
threat in your region is Iran. Given the issue of strategy 
focus, where if you have limited resources you have to keep 
maximum pressure on the key threat, can you comment about what 
could happen if we either coordinated, supported, encouraged, 
or even participated in military operations in Syria with 
respect to the Iranians? Would this be neutral in terms of our 
efforts? Would this disrupt international collaboration? Would 
this create unanticipated and unwarranted advantages to the 
Iranians?
    General Mattis. Sir, I think that if we went into providing 
options, whatever they are, to hasten the fall of Assad, as 
long as those were put together in a coalition international 
form it would cause a great deal of concern and discontent in 
Teheran.
    Senator Reed. But the one area that would be problematic 
would be something that was perceived as unilateral or so 
dominated by the United States that this lack of international 
collaboration could undermine our intentions and our motives; 
is that true?
    General Mattis. I think international collaboration would 
be essential to the successful outcome.
    Senator Reed. So in effect we're working on, as we speak, 
pulling together that international context for efforts that 
are directed to the ultimate demise of the Assad regime; is 
that a fair characterization?
    General Mattis. Yes, sir.
    Senator Reed. Let me just take it one step further, because 
there's been discussion of establishing safe areas and safe 
havens. Operationally on the ground, let's assume that could be 
done. It would seem to pose some problems. First, the Syrian 
military forces are very well-organized and robust and fairly 
proficient. I don't know how long they would tolerate those 
safe havens.
    But second, given safe havens, I think it would imply that 
someone would have to go in and organize training and organize, 
literally, an army. That could take months, if not years. Are 
those considerations being thought through carefully and what 
it would mean in terms of commitment and resources, and again 
deflecting efforts away from other more serious threats?
    General Mattis. Sir, I have not been directed to do 
detailed planning on these. I would prefer to take some of this 
in the closed session. But it would require regional or 
surrounding state support to do something like this. I've 
looked at the maps and there are no terrain-delimiting features 
where we could create those safe havens. In other words, you 
would have to create them using military forces. It's not like 
the mountains of northern Iraq, where the Kurds could be up in 
that area against Saddam Hussein.
    It would be a significant commitment of resources. Of 
course, the international aspect could reduce our commitment if 
we got sufficient participation from others.
    Senator Reed. Thank you very much.
    General Mattis and Admiral McRaven, one of the difficult 
points negotiating a strategy framework with the Afghans is the 
persistence of President Karzai to resist operations of our 
forces at night, even his own forces. Can you, Admiral McRaven, 
comment on how critical this is to us, and is there a way to 
somehow ameliorate his concerns but to continue to be 
tactically effective?
    Admiral McRaven. Sir, we think the night raids are 
essential for our task force to go after high-value 
individuals. The high-value individuals that we pursue during 
the course of a 24-hour period or days or weeks generally bed 
down at night. They are much more targetable at night, and, in 
fact, I think if you look at it tactically, what you find is 
the Afghans are actually much safer if we target an individual 
at night because there aren't so many people out and about in 
the little villages.
    What we have done to reduce the Afghans' anxiety on this is 
the Afghan special forces are in the lead on all of our night 
operations. I think this is an important point. I know it is an 
important point that General Allen and General Mattis have 
made, as well as Ambassador Crocker, to President Karzai, is 
that these are his forces that are, in fact, surrounding a 
particular compound, trying to call out the specific 
individual, and the first forces through the door. We think 
that is the best way to reduce the Afghans' concerns.
    But it is a critical tactical component of what we do every 
day in Afghanistan.
    Senator Reed. General Mattis, do you have any comments?
    General Mattis. I would emphasize, Senator Reed, that there 
is less chance of collateral damage, of innocent people being 
killed. I think that on a moral level, besides the military 
efficiency aspect, dictates that we continue these operations 
so long as the enemy keeps an active force in the field.
    Senator Reed. Thank you.
    One of the principal assumptions going forward is that we 
will be able to operate with the Afghan National Forces (ANF), 
their police forces, their special forces, and their army 
forces, at small unit levels, which means essentially small 
groups of U.S. and NATO personnel embedded with larger units. 
This is in particular something that your Special Forces 
soldiers and other operators do.
    The recent attacks by Afghan military forces against 
American forces, literally the one-on-one violence, to what 
extent has that caused you to reevaluate that approach and that 
assumption, Admiral McRaven?
    Admiral McRaven. Sir, as General Mattis mentioned earlier, 
we have not had any what we refer to as green-on-blue incidents 
with respect to our partner relationships from SOF with the 
Afghans. But that's not to say, as General Mattis mentioned, 
that there couldn't be treachery in the ranks. I think we are 
always cognizant of that.
    Having said that, we have built these partnerships over 
many years. They're very strong partnerships. We have great 
respect for our Afghan partners. We think that this strategy of 
partnering with the Afghans is absolutely essential to victory 
in Afghanistan.
    Senator Reed. General Mattis, any comments about the Afghan 
National Army (ANA) less so than the special operations 
community?
    General Mattis. Sir, the ANA is definitely defined by the 
tens of thousands of boys who fight loyally alongside us. Their 
casualties are routinely significantly higher than ours. 
They're doing much of the fighting now, and there's an 
increasing need for us to have mentors among them as they take 
the lead.
    This will be something where we'll take every prudent 
measure, but at the same time it eventually comes down to the 
trust between young men fighting alongside each other. This is 
characterized by a high degree of trust overwhelmingly, 
although these tragic incidents become understandably what we 
hear about.
    Senator Reed. Thank you, gentlemen.
    Thank you.
    Senator Lieberman. Thank you, Senator Reed.
    Senator Ayotte.
    Senator Ayotte. Thank you, Mr. Chairman.
    General Mattis and Admiral McRaven, thank you for your 
distinguished service to our country.
    General Mattis, I wanted to ask you about the recidivism 
rate from Guantanamo Bay (GTMO). The Associated Press ran a 
story yesterday which I believe is misleading, and the headline 
was: ``Not so many Guantanamo reoffenders.'' The story said 
that: ``Far fewer detainees released from GTMO have rejoined 
terrorist activities than previously reported.''
    However, before this committee this is an issue that I've 
questioned many individuals about. Last year, Director Clapper 
said that the reengagement rates from former GTMO detainees who 
were confirmed or suspected of reengaging was 27 percent. In 
fact, just 3 weeks ago he was before our committee again and he 
actually said that the reengagement rate of those who had 
reengaged, who we've confirmed are in the fight or suspected to 
be reengaging, was actually increased, close to 28 percent. I 
believe it's 27.9 percent.
    Of course, we've heard the same testimony from Secretary 
Gates as well as Secretary Vickers, that the way that we 
calculate the recidivism rate is not just those who have 
returned, but those who are suspected of returning to the 
fight.
    One of the big issues we have, of course, is that it's 
difficult to determine who has reengaged because we're so poor 
at confirming once they have reengaged. We can't always 
reconfirm who's out there, who's back fighting us again. Often 
we find them when we encounter them in the battlefield or 
elsewhere.
    In my view, one terrorist reengaging us is one too many. 
The reason we've tracked both those who have reengaged and 
those we suspected reengaged is because that is a more accurate 
reflection of where we are with reengagement rates. There are 
two individuals I'd like to ask you about, General Mattis, who 
have reengaged in the fight. They are Said Al-Shihri and Abdul 
Zahir, two former GTMO detainees who've been released. One 
became a leader in al Qaeda in the Arabian Peninsula and the 
other became a leader in the Taliban in Afghanistan. Both of 
these former GTMO detainees have been actively involved against 
us and our allies.
    Can you update the committee on the status of these two 
former illustrious GTMO detainees and what types of activities 
they're engaging in against us and our allies?
    General Mattis. Yes, thank you, Senator. On Shihri, he is 
the number two man in al Qaeda in the Arabian Peninsula. That's 
in Yemen. He is their number two military commander right now. 
He is engaged in active operations and we can confirm that.
    On Zahir, he is a Taliban commander in Afghanistan and 
again engaged with us. I could get back to you with more 
specifics on what we've picked up in a classified setting.
    Senator Ayotte. I look forward to having more detail on 
that.
    [The information referred to follows:]

    [Deleted.]

    Senator Ayotte. But just to put it in perspective, both of 
these individuals are engaged in activities to kill Americans 
or our allies, are they not?
    General Mattis. That's correct, Senator.
    Senator Ayotte. I can't imagine how frustrating it must be 
for our troops to reencounter someone we've had already in 
detention. One of the concerns I have had is what do we do if 
tomorrow we recapture them, in terms of where do we detain them 
to interrogate them?
    Admiral McRaven, you testified before the committee last 
year that, for example, if we got Ayman Al-Zawahiri that we 
couldn't hold him in Afghanistan, that we needed a long-term 
detention facility, that that would be helpful.
    Where are we on that? What would we do if we captured, for 
example, the two individuals we just talked about again 
tomorrow in terms of interrogating them? Where would we hold 
them under the law of war? Have we solved this problem? Have we 
moved forward at all on it?
    General Mattis. Senator, I am confident that we would be 
able to hold them. Each case is looked at individually, so I 
cannot tell you in advance how we would do it. But if they're 
listening, I'd suggest they don't sleep well at night, because 
we're after them and we will hang onto them if we get them. I'm 
not quite certain where we'll put them, but we will be 
interrogating them if they're alive, and we will do our best 
not to see them on the battlefield again.
    Senator Ayotte. But we don't have a designated facility, 
because we're essentially not taking anyone else in GTMO, as 
far as I understand it, pursuant to the administration's 
policy?
    General Mattis. There is not a designated facility, no, 
ma'am.
    Senator Ayotte. One of the concerns I have is we certainly 
can't hold everyone on a ship, particularly if we have to hold 
them in long-term detention. Would you both agree with me on 
that principle?
    General Mattis. Yes, ma'am.
    Admiral McRaven. Completely.
    Senator Ayotte. So it's not clear where we would put them 
if we captured them tomorrow?
    General Mattis. No, ma'am. We have captured some people and 
we have been able to facilitate their transfer to a detention 
facility.
    Senator Ayotte. I would hope that we would not bring those 
two individuals to the United States, because I'd have a hard 
time explaining that to my constituents when we have the 
availability of the GTMO detention facility. I would hope that 
wouldn't be an option, given how dangerous both of those 
individuals are. Do you think that's a good option, bringing 
them to the United States?
    General Mattis. That's a policy decision, ma'am. It's 
certainly an option for the President to consider.
    Senator Ayotte. Why wouldn't we just use the facility 
that's secure at GTMO?
    General Mattis. Ma'am, I'm probably not the right person to 
ask the question. It's a policy decision and I have no 
reservations as long as we have a facility to put them.
    Senator Ayotte. Admiral, is there anything you'd like to 
add on this?
    Admiral McRaven. Ma'am, in the case of Shihri and Zakir, if 
they are captured in Yemen and Afghanistan respectively, then 
obviously we have agreements with both the Yemenis and the 
Afghans that they could be held in their country of origin. So 
right now, for those two individuals, I think that would be the 
likely solution.
    Senator Ayotte. Admiral, I just wanted to follow up 
briefly. When you were before the committee last year for your 
confirmation hearing, I had asked you about Ayman Al-Zawahiri 
and I asked you the scenario if we caught him tonight in 
Pakistan where would we place him for long-term detention. Last 
year you said you weren't sure what we would do in that 
circumstance.
    Has anything changed since then?
    Admiral McRaven. No, ma'am, nothing has changed since then.
    Senator Ayotte. Okay. Certainly we couldn't put him in 
Afghanistan. We can't take individuals who we've captured 
outside of Afghanistan, for example in Pakistan or Yemen, and 
bring them to Afghanistan for detention?
    General Mattis. That's our practice now, is not to do that, 
that's correct. It would take a government-to-government 
agreement to do something like that.
    Senator Ayotte. Where we already have existing issues we're 
trying to resolve with the Afghans on the secure way to deal 
with the detainees that they have now.
    So thank you, both of you.
    Senator Lieberman. Thanks, Senator Ayotte.
    Next is Senator Nelson.
    Senator Nelson. Thank you, Mr. Chairman.
    Let me add my appreciation for your service as well. Thank 
you.
    I have a number of concerns about our presence in Iraq at 
the current time. I don't think that I have a clear 
understanding of what our mission is there. It's further 
complicated by the fact that we have questions about the new 
embassy, which is a significant building in terms of size, with 
a significant number of security contractors located there, 
perhaps not even functioning in a security role outside of the 
embassy. The embassy continues to be expanded, and I understand 
perhaps the Department of State (DOS) now is in charge of 
establishing what our mission in Iraq is.
    Can either of you help enlighten me about what our mission 
truly is in Iraq today and how that might relate to the 
providing of security by contractors and the continuing 
expansion of a building that seems to be gargantuan in size 
already? General Mattis?
    General Mattis. Sir, as far as our mission in Iraq, it's 
going from a military-led effort in Iraq over the last 8 years 
to a DOS-led mission under the ambassador. I do have a 
lieutenant general with a small footprint on the ground, part 
of the Office of Security Cooperation-Iraq, and they are 
engaged in everything from the sale of certain military 
equipment, providing contractor-led training, to organizing the 
Iraqis who want to go to military schools in the United States 
so we maintain those relationships. That's what they're doing.
    As far as the security contractors who actually protect the 
embassy, those come under DOS. But, having been there recently, 
they're simply doing the guard duty you would expect in a high-
threat area.
    As far as the size of the building, Senator, I'm really not 
competent to respond on that question, sir.
    Senator Nelson. But it is big, isn't it?
    General Mattis. It's big, sir.
    Senator Nelson. Thank you.
    I'm trying to understand the role of the contractors there 
in providing security. In other embassies in other countries do 
we require ourselves to provide security or do we look to the 
host nation to provide security?
    General Mattis. Sir, the host nation provides the external 
security outside the grounds. Inside the grounds, it's 
sovereign territory and we do that. We do it generally with 
contract guards. Many of them are long-serving guards there. 
Inside the embassy building itself, you have Marine Corps 
security guards.
    Senator Nelson. Is that the way it works in Baghdad?
    General Mattis. Yes, sir, it is.
    Senator Nelson. The Iraqis provide the external security?
    General Mattis. They do, sir.
    Senator Nelson. If our personnel are moving from one place 
to another, who provides the security?
    General Mattis. That security is provided by our own 
contract guards.
    Senator Nelson. What level of security would the Iraqis 
provide externally to the embassy?
    General Mattis. In that zone, when you go there, sir, you 
see their checkpoints are set up some blocks away. They have 
patrols that go by. It's not just for our embassy; it's for 
other embassies in town as well, as they provide the kind of 
diplomatic security that's expected around the world. Here in 
Washington, DC, some policemen can provide it because the 
threat is very low. In a place like Baghdad, prudent measures 
require Iraqi army and Iraqi police to do the external security 
in a much more visual, obvious way.
    Senator Nelson. Turning back to Iran, as we all know, the 
threat in Iran is real. You've discussed the relationship of 
Iran to Syria, to Hezbollah. On the television show, 60 
Minutes, Secretary Panetta said that there was a red line for 
us. I know in the discussions between Mr. Netanyahu and the 
President in the last several days there seemed to be some 
closing of the gap on our different ideas about dealing with 
Iran and the growing concern.
    What actions, military or otherwise, should we be 
considering in connection with Iran? I don't mean to put you in 
a classified position, but just generally could you give us 
your idea?
    General Mattis. Yes, sir. The Iranian threat is basically 
along four lines. There's their nuclear program, where they're 
enriching more uranium than they need for any peaceful purpose, 
and through denial and deception, they have tried to keep that 
program going. The International Atomic Energy Agency (IAEA) 
has tried its best to monitor it. They've had an unfortunate 
visit there recently.
    The second threat is the long-range rocket and ballistic 
missile threat. That one has the attention of all of our 
friends in the region as far as how they protect against that.
    The third threat is the maritime threat, and so we're going 
to have to be prepared to keep the sea lanes open.
    The fourth threat is the Quds Force, the Iranian Ministry 
of Intelligence and Security (MOIS), their secret service, 
their surrogates, proxies like Lebanese Hezbollah, and other 
terrorists that they fund. On that one, it's largely a police 
and intelligence-driven effort as we try to contain that, but 
also our SOF work that issue very, very closely.
    So there are four basic threats and we look to how we can 
check each one of those, working alongside some of the most 
enduring long-term partnerships we've had with some of the 
countries out there.
    Senator Nelson. Since this is a budget hearing, in your 
opinion, does the current budget proposal deal sufficiently 
with the kinds of threats and the responses that we are now 
providing to those threats?
    General Mattis. It absolutely does, Senator Nelson. I can 
say this, though, because I'm first among equals when it comes 
to the combatant commanders. Basically, if I need something, I 
go to Secretary Panetta and I get it. So I'll just tell you 
that I'm well-resourced, sir.
    Senator Nelson. Admiral McRaven, from your perspective?
    Admiral McRaven. Sir, I'm also exceedingly well-resourced.
    Senator Nelson. You don't think that the budget was 
prepared under different assumptions and the circumstances have 
now changed with regard to that?
    Admiral McRaven. No, sir.
    Senator Nelson. General?
    General Mattis. We will always have to adapt, sir. But 
right now I think the strategy is well-supported by the budget.
    Senator Nelson. If circumstances were to change to where 
military action was required, would we be having to change 
circumstances then as well?
    General Mattis. Senator, active operations along those 
lines would be very expensive. Obviously, that's one of the 
characteristics of war. We're doing everything we can to try 
and deter war, to try to keep the stability, the peace, or what 
passes for peace, in the Middle East 1 more year, 1 more month, 
1 more week, 1 more day, to allow Secretary Clinton and the 
diplomats to convince Iran this is not in their best interest, 
to go the way they're going now.
    Senator Nelson. Would that apply in any engagement that we 
might have in Syria as well? Very expensive, and probably not 
provided for in the budget?
    General Mattis. I'm absolutely certain it would apply, sir.
    Senator Nelson. Admiral?
    Admiral McRaven. Yes, sir.
    Senator Nelson. Thank you, gentlemen.
    Thank you, Mr. Chairman.
    Senator Lieberman. Thank you, Senator Nelson.
    Senator Cornyn.
    Senator Cornyn. Thank you, Mr. Chairman.
    General Mattis, Admiral McRaven, thank you for your service 
to our country.
    I want to focus a little bit on Iran, not surprisingly, in 
light of your testimony, General Mattis, where you say that 
their reckless behavior and bellicose rhetoric create a high 
potential for miscalculation in the region. In another area of 
your testimony, you say it represents perhaps the greatest 
immediate and long-term threat to regional stability.
    I wonder if you would agree with the characterization of a 
think tank here in Washington, the Center for Strategy and 
Budgetary Assessments (CSBA), when they define Iran's strategy 
as anti-access/anti-denial (A2AD) strategy, designed to take 
advantage of the unique geographic attributes of the Persian 
Gulf? Rather than confront U.S. Forces generally directly, Iran 
could attempt to use ballistic missiles or terrorist proxies to 
coerce Gulf states to deny U.S. Forces permission to operate 
from their sovereign territory.
    Without going on to describe that further, I wonder if you 
would agree with that characterization of Iran's strategy or if 
you have a different way you would characterize it?
    General Mattis. Senator, I would agree that A2AD is their 
modus operandi as they look toward active operations if it 
comes to that. But I would also add to the two threats they 
outlined, I would add the ballistic missile, long-range rocket 
capability they have.
    Senator Cornyn. If the United States had a reliable source 
of oil from a friendly source, would we be as concerned about 
Iran's threat to block the Strait of Hormuz?
    General Mattis. I believe we would be, Senator, because of 
the vital interest to the world economy, which would have 
immediate and significant impact on our own economy and our own 
way of life if one nation, Iran, the only nation that's 
threatened to close the Strait, did so.
    Senator Cornyn. Just to list the areas in the Middle East 
where Iran has its very clear fingerprints, I think it's 
helpful to remind ourselves from time to time just how they 
operate in Lebanon, through Hezbollah, a terrorist 
organization. In the West Bank and Gaza, we know that Hamas has 
received funding from Iran. We know that in Iraq, that Iran was 
the source of many of the explosively-formed penetrators that 
killed U.S. servicemembers. Of course, in Afghanistan and now 
in Syria.
    Is there any other place that I've left off the list that 
Iran's fingerprints are most obvious?
    General Mattis. Absolutely, sir. I would add Yemen. I would 
add they've tried to get involved in the internal aspects in 
Bahrain of the shaking out there of the opposition to the 
government and the efforts by the government to engage that 
opposition. We believe Iran is probably trying to undercut that 
because they would not want to see those elements get together 
and come up with a Bahraini solution.
    In Kuwait, they've had their spies captured. They've gone 
all over the place, sir. They enjoy this sort of thing. I would 
add that in Gaza, however, Hamas' pulling out on Assad, I don't 
know what the effect is going to be on Iran continuing to fund 
them since they've just pulled out support from Assad when, 
obviously, Tehran wanted them to continue supporting Assad. So 
we'll have to watch and see what happens there.
    Senator Cornyn. What do you think Iran's reaction would be 
if there was a coalition of forces that intervened in Syria to 
stop the bloodshed there and the Assad regime? Would they sit 
quietly on the sidelines?
    General Mattis. No, sir. They'd try through their proxies 
and their surrogates to do some mischief there. I don't think 
you would see anything overt. I think they would try to keep 
their fingerprints off it, especially seeing that it would get 
them cross-wired with an international coalition of some kind.
    Senator Cornyn. I know you've alluded to al Qaeda activity 
as opportunistic in the region. Part of their activity is to 
create sectarian strife and conflict. But it strikes me that, 
although al Qaeda is a non-state actor, its goals share a lot 
in common with that of Iran in terms of creating instability 
and conflict in the region, which then provides space for them 
to grow in power and influence.
    Do you agree with that or do you have a different view?
    General Mattis. Coming from two different directions, 
obviously, al Qaeda would prefer to see Shias killed, as 
they're doing in Iraq, killing innocent Shias there. Iran, on 
the other hand, heightens the tensions between Sunni and Shia 
from a Shia perspective. Frankly, I don't know what the 
advantage they see accruing to themselves for it, but it goes 
to your point: They're both doing the same thing; they just 
come from a different direction on it.
    Senator Cornyn. Admiral McRaven, do you have any views on 
that?
    Admiral McRaven. Sir, I think General Mattis' 
characterization captured it well.
    Senator Cornyn. I guess the challenge that the United 
States has is that Israel has said they will do whatever they 
need to do in their national self-interest to prevent Iran from 
gaining a nuclear capability that would threaten their 
existence. Secretary Panetta has said that gaining a nuclear 
capability would be a red line that Iran would not be able to 
cross. The President of the United States said yesterday that 
his policy was not one of containment; it was to stop Iran.
    You've talked, I think eloquently, about delay for a day or 
a week or months. But, having said that, nothing that we have 
attempted so far by way of sanctions has appeared to deter Iran 
on this pathway toward a nuclear weapon, where do you see this 
headed?
    General Mattis. Sir, I hate to speculate on something like 
this because in public I cannot make any casual statement. 
However, Iran has obviously missed several opportunities to 
engage positively with the IAEA, to respond to the U.N. 
Security Council resolutions. They're very much a problem and I 
don't see this going in the right direction until the full 
effect of the sanctions can accrue. I say ``until'' because 
even now as we see inflation and unemployment going up, the 
internal frictions have to start telling. At some point I think 
the Iranian people are going to question, is this the right 
direction?
    So if we can keep this in a diplomatic, economic track and 
get full advantage of what these sanctions and the 
international isolation are doing; this country basically lacks 
any significant strategy ally. There are some that have blocked 
for their own reasons resolutions in the U.N., regrettably. But 
I don't see them having allies, and I don't count that little 
fellow down in Venezuela as a very significant ally.
    Senator Cornyn. If I can just conclude on this, Mr. 
Chairman.
    It sounds to me like we have a race, one to see if 
sanctions are successful in causing the regime to implode and 
thus deny their aspirations for a nuclear weapon; but if that 
doesn't occur fast enough, there's another parallel track where 
they are on a pathway to achieve a nuclear capability. The 
question is, for us and for the world, who's going to win that 
race, sanctions or a nuclear weapon?
    General Mattis. Yes, sir. I'm not sure that Iran needs to 
implode. I think that they can come to the realization that 
this organization that's running the country right now with 
these cosmetic elections they're running--they're not real free 
and fair elections--that this leadership is not what those 
people deserve. At some point, I hope they would say, we want 
to stop this program, and somehow those voices would be heard 
in a way that convinced them that they had to. The best we can 
do otherwise, sir, is delay them. Only the Iranian people can 
stop this program.
    Senator Cornyn. Thank you very much.
    Thank you, Mr. Chairman.
    Senator Lieberman. Thank you very much, Senator Cornyn.
    Senator Webb.
    Senator Webb. Thank you, Mr. Chairman.
    Let me begin the same place I began last year with you, 
General Mattis. This comment extends to Admiral McRaven as 
well. If you look at these two gentlemen's records of service 
in the military, the ultimate reward of competent leadership is 
command. If you look at the number of times that command shows 
up on both of these leaders' military files, there's no two 
better people we could have in the positions that you are in, 
and you have my thanks for the contributions that you're making 
on behalf of our country.
    I'd like to clarify something just as a result of the 
discussion that has occurred during this hearing. I don't think 
it's accurate for those who are pushing for a faster pace move 
toward military involvement in Syria to characterize those, 
including myself, who have been asking for us to be very 
careful in terms of how we define the opposition movements as 
simply some reductionist statement about al Qaeda.
    I have put the question to General Dempsey, I put it to the 
DNI, James Clapper, my concern that we move forward in a 
careful way to define how much of this opposition is domestic, 
how much of it is regional, and indeed whether or not al Qaeda 
has been a player in it. In all of these situations we've seen 
over the last year, it's really important to stay on an 
examination of those realities.
    General Mattis, as you pointed out in your opening 
statement, a good deal of what has been going on has been, for 
lack of a better term, the rupture of a social contract, such 
as it was, in this region. Again as you said, it's not 
predictable that there's going to be a democratic movement or a 
democratic result in some of these countries. In fact, the 
implications of what has been happening are going to play out 
over years. We're just not going to see a quick resolution in a 
way that we can say if it's a democracy or something else.
    So it's very important to be careful in terms of what sort 
of military assistance would take place, if it were to take 
place, and with whom. I think I'm hearing that today and I'm 
glad that I am.
    One of the pieces that I think has been missing from this 
discussion, not just here but in other hearings, is how we 
should be approaching China and what we should be expecting and 
asking from China in terms of asking for their assistance in 
terms of increasing the stability in the entire region. I think 
this is a good opportunity to get some feedback from you, 
General Mattis, on this.
    We've been talking about Iran. We've been talking about 
Russia. There was a resolution proposed in the Senate Foreign 
Relations Committee that originally did not even mention 
China's participation. There was also the veto of the U.N. 
Security Council resolution.
    In the region, I think we should be expecting more out of 
China in terms of stepping forward to attempt to resolve some 
of these issues. Pakistan calls on their most important friend. 
We have the sanctions that we've been attempting to move on 
Iran and we're not seeing clear assistance there.
    With respect to the situation in Syria, I've been asking, 
why would they, why would China not support the type of 
resolution that went before the Security Council? Let's be 
honest here. This is a system of government that has not been 
afraid to repress its own people. Probably the most glaring 
example of a repressive regime that survived over the past 23 
years is the Chinese regime that sent tanks and troops onto its 
own people at Tiananmen Square in 1989.
    We hope that their system has evolved beyond that by now, 
but perhaps that does play into these situations.
    General, can you give us an idea of what it's been like to 
interact with the Chinese in the region in which you're 
responsible?
    General Mattis. I can't give you too much on that, Senator. 
I'll tell you, on counterpiracy efforts, there's a pretty fair 
collaborative effort, at the low tactical level, ship-
commander-to-ship-commander, there have been no problems 
between us out there on the station in the Gulf of Aden. I 
notice that on Iran that China did come out with a rather 
strong statement that Iran getting a nuclear weapon was not in 
their interests and they did not support that effort.
    I don't have very much contact with the Chinese in my 
region, though, sir. It's very, very limited. I would suggest 
it's probably more in the DOS realm; relations are pretty 
absent as far as military-to-military.
    Senator Webb. I would venture that in terms of cooperation 
on antipiracy there is a clear benefit, even on a tactical 
level, to the Chinese because now they're operating their navy 
in an area that they weren't operating in before. We welcome 
collaborative efforts, but I don't think we should look at that 
as some statement of national intent here.
    I know this is principally a diplomatic question, but I 
hope that we might be able to pursue ways to encourage China to 
help us resolve these larger issues, whether it's Korea, 
whether it's Burma, but particularly in this region, where they 
clearly have geographic and strategic reasons to be further 
involved, even in a place like Afghanistan, where they know 
that they've now started moving economically. But we need to 
hear more from China.
    Admiral, I think my time is going to run out. I have a 
question and I'd just like in a general sense to hear your 
policy with respect to officers who handle classified 
information that might, even on a temporary basis, end up in 
the hands of foreign nationals. Is there a policy if that were 
to occur?
    Admiral McRaven. Yes, sir, absolutely. Anybody that 
transfers classified information without the approval of the 
U.S. Government with that process falls under the Uniform Code 
of Military Justice (UCMJ) with a violation of the UCMJ.
    Senator Webb. What about just through negligence? They left 
something laying around?
    Admiral McRaven. Same thing, sir.
    Senator Webb. Okay, thank you very much, sir.
    Thank you, Mr. Chairman.
    Senator Lieberman. Thank you, Senator Webb.
    Senator McCaskill, I really apologize. I've seen you 
sitting there, but I think Senator Blumenthal in terms of 
original arrival is on the list first.
    Senator McCaskill. Okay, no problem. I'll wait.
    Senator Blumenthal. If Senator McCaskill has another 
commitment, I'd be happy to----
    Senator McCaskill. Absolutely not. Go ahead.
    Senator Blumenthal. Thank you.
    Senator Lieberman. Thanks.
    Senator Blumenthal.
    Senator Blumenthal. Thank you. Thank you, Mr. Chairman.
    I want to add my thanks to both of you and the men and 
women under your leadership for your really extraordinary 
service, which I had the privilege to see a bit firsthand 
during my second trip to Afghanistan last February with Senator 
McCain and Senator Graham and others of my colleagues. As I 
mentioned to you, Admiral McRaven, I was particularly impressed 
by the really remarkable achievements of our special operators 
there. The numbers tell a powerful story, but so do the more 
anecdotal information, particularly about turning over a lot of 
this work and training to the Afghans themselves, which I think 
is a really unprecedented achievement in our military history 
in terms of special operations.
    I hope that we all keep sight of that work and also, 
General, the work that all of our men and women there are 
doing, despite the incidents that may sometimes cloud the 
clearer picture that we should have and the appreciation that 
we should always maintain of the service and sacrifice and the 
achievements, a real success there.
    I want to begin by asking, Admiral, whether you are 
satisfied with the work that is being done in terms of turning 
over that function to the Afghans themselves, of the night 
raids, the SOF, and what we can do, if anything, to help you in 
that very critical part of your mission?
    Admiral McRaven. Yes, sir. I've actually been very pleased 
with the progress. We have a number of efforts ongoing and have 
for quite some time in our partnership with the Afghans. U.S. 
SOF have had a collaborative effort with the Afghan commandos. 
They have built an Afghan special forces element. Some of our 
other special forces have partnered with all the Afghan partner 
units, and these are the forces that predominantly do the 
direct action raids and are leading on those direct action 
raids.
    We also have our NATO SOF brethren that are partnered with 
a number of Afghan forces as well. So across the SOF spectrum, 
it is all about partnership and it is all about the Afghans 
leading in that partnership. Our progress certainly over the 
last year has accelerated dramatically and I'm very pleased 
with the glide slope we're on right now.
    Senator Blumenthal. One of the impediments, I think, to 
understanding generally in the American public about how 
successful we've been, not just in targeting and taking out 
those elements of the al Qaeda and Taliban leadership, but also 
with the very, very small number of civilian casualties that 
have occurred, is that the numbers are classified. But they are 
powerfully impressive. So I would just put a pitch to you that 
if we can declassify some of this information, it would really 
enhance the appreciation and understanding of the American 
public in general.
    I want to move to a topic that has concerned me for a long 
time, the continued flow of IED bomb-making material from 
Pakistan, which is the source of the vast predominant part of 
the components that go into the roadside bombs, and of course 
the roadside bombs themselves cause the majority of casualties 
to our troops.
    We had testimony recently from James Clapper, the DNI, and 
from Lieutenant General Burgess, and Director Clapper very 
specifically said that his view is that Pakistan is not making 
a significant effort to stop the flow of those bomb-making 
components. I wonder if either of you have any views on that 
topic?
    General Mattis. Senator, it has been an area of 
frustration. It has been a serious topic of dialogue with us. 
They have passed laws now that will enable them to make arrests 
that they could not make before in this regard. They have also 
put together their C-IED strategy here in the last few months, 
and I need to get back into Pakistan and talk with them more 
about it. There is some reason for more optimism today than if 
I was testifying last year, but I need to do more homework 
before I can give you a complete answer.
    At the same time, Pakistan, as you know, it's called the 
Federally Administered Tribal Area for a reason up in the north 
there. It's a very unique status that it's had since Pakistan 
became a country, and their level of sovereignty over 
everything that goes on there has also been at times nebulous.
    So there are a number of factors that come to bear and I 
hope to give you a better report on this within about a month 
or 2, 3 at most, about where I really think they're at, are we 
seeing real progress or not.
    Senator Blumenthal. I appreciate your care and caution in 
commenting on the work that the Afghans and the Pakistani 
forces are doing in this area. My view is that they have not 
yet made a significant effort to stop the flow of ammonium 
calcium nitrate and other bombmaking components, based on 
everything that I have seen and heard. So I would appreciate 
any additional update you can give me at an appropriate time.
    [The information referred to follows:]

    [Deleted.]

    Senator Blumenthal. In the time I have left, I'd like to 
turn to a subject that really concerns all of our men and women 
in uniform, the proposals for changes in the retirement and 
health care systems. You in particular, General Mattis and 
Admiral McRaven, work with some of the most dedicated career 
professionals in our military. I am greatly concerned by the 
potential impact that some of these proposals could have on the 
ability of our military to attract the quality of people, and 
they are people of truly extraordinary quality, as you know 
better than I. But I have been very powerfully impressed by the 
kinds of people we are attracting.
    Could you give me any concerns you have about these 
proposals and the ability of our military forces to attract and 
keep the kind of career professionals we have now?
    Admiral McRaven. Sir, I'll start on this and then turn it 
over to General Mattis. We see right now our recruiting goals 
in terms of SOF are up from previous years. I think if you 
polled a lot of those young men and women coming in, they 
probably wouldn't cite the health care and the retirement 
benefits as the reasons that they are joining. However, it 
could very well be the reason that they stay after a certain 
point in time.
    I think as we move forward we need to do some very prudent 
and careful looking at the retirement and the health care 
system, so that we keep those experienced noncommissioned 
officers (NCO) and officers in and take care of them for the 
services that they have rendered over the life of their 
careers.
    General Mattis. Senator, I would agree with Admiral 
McRaven. I've been on recruiting duty. Very few people come in 
and ask a lot about health benefits, unless they're quite old, 
and in the Marine Corps we didn't let them in, as you know from 
your service.
    But on retention, I think it's something we have to look at 
very carefully. The point I make to our soldiers, sailors, 
airmen, and marines out in the field when I'm asked about it 
is: You will still have one of the best retirement systems, no 
matter what, because I'm confident that the Secretary of 
Defense and the Chairman of the Joint Chiefs will only bring 
forward those proposals that keep us able to attract the high-
quality young men and women who look beyond the political 
rhetoric that goes on every day and sign up to defend this 
country.
    So I'm optimistic that we'll find the right way forward on 
this, sir.
    Senator Blumenthal. Thank you very much. I think it is so 
profoundly important that we find the right way forward, 
because our greatest asset is the people, the men and women who 
serve and sacrifice for us. As much as we may talk about the 
hardware and the weapons systems and all the rest of it, our 
people are our greatest asset.
    Thank you very much.
    Senator Lieberman. Thanks, Senator Blumenthal.
    Senator McCaskill, patience is once again rewarded.
    Senator McCaskill. Thank you, Senator Lieberman.
    Correct me if I'm wrong, but I think that the last time I 
checked the gross domestic product (GDP) in Afghanistan without 
us is around $2 billion, and the GDP with us is around $16 
billion. Does that sound about right? Am I off there, General 
Mattis?
    General Mattis. I'd hate to say it's right, but it sounds 
about right.
    Senator McCaskill. By the way, thank you both for all of 
your service and your leadership. I have said repeatedly I am 
supportive of what we are trying to do in Afghanistan. But I 
have become increasingly skeptical about the infrastructure 
projects that we are spending money on. I have followed the 
saga of CERP from my first days on this committee. I have 
watched it have successes and, frankly, one of the things I've 
noticed is that, while everyone thinks the idea is good, we are 
yet to have an objective study that shows the value of a lot of 
the CERP money.
    Now we have what I am affectionately calling the Son of 
CERP, which is the Afghanistan Infrastructure Fund (AIF), which 
is part DOS money and part DOD money, which, while not 
unprecedented in our history, is very unusual for our military 
to be building major infrastructure while we're engaged in a 
fight on the ground.
    There's a reason for that, because I think typically the 
military would say the security needs are a problem and the 
sustainment is a problem. It seems like we've blown over some 
of those considerations as we have engaged in some of this 
infrastructure building. I can give you anecdotally disasters 
in Iraq. In fact, I am trying to compile all of the 
infrastructure we built in Iraq and what the status is of it 
today.
    But I think everyone knows it's not a pretty picture: how 
much got blown up; how much was never utilized; and how much 
sits crumbling. That's an incredible amount of resources of our 
country that we've invested.
    Which brings me to the request for fiscal year 2013 for 
CERP and AIF. The projects that are being funded in fiscal year 
2012 with this new AIF that DOD has requested, are three power 
projects, three transportation projects, and three water 
projects. According to the briefing that my office has 
received, you will finish these projects with fiscal year 2012 
money, but some of them are not going to be finished until 
2014.
    Juxtaposition this with what we're envisioning in terms of 
drawing down. We have requests for 2013, and my question to 
you, General Mattis, would be what are those for? What is the 
almost billion dollars that we're requesting in CERP and AIF 
for? What major projects are we going to build beyond the ones 
that the fiscal year 2012 money is going to finish? How many 
years forward are we going to be working on those, and how many 
contractors will we leave on the ground as we try to manage our 
transition out of Afghanistan? Then I'll get to sustainment.
    General Mattis. Senator, I need to go back and take part of 
that question for the record so what I give you is absolutely 
accurate. I will tell you, ma'am, that we would not disagree 
that we've had significant problems in the midst of a war 
trying to do something that, as you point out, we've not done 
before.
    However, we've also gone through a very rigorous scrub year 
by year now to try to reduce it to what is actually necessary, 
not what is good to have, but what is absolutely necessary to 
the counterinsurgency (COIN) campaign. It's a different kind of 
war that we fight today. The enemy has identified our strengths 
and has decided to fight us in a way that does not lend itself 
to us using our strengths--our mechanized divisions, our 
aircraft carriers--as the tool to win. They are enablers, but 
what we have to do is reach the people, and the reason we're in 
Afghanistan--and I know that you've supported us over the years 
on this--is to keep it from becoming again a terrorist safe 
haven for attacks on us.
    Part of what we're trying to do here is take a society that 
was turned upside-down 30 years ago and bring it back into a 
way forward that at least provides the most basic services. 
We're not talking about things that perhaps at one time some 
more idealistic people were coming in with, a much broader idea 
about what we could do there.
    So let me get back to you on this, what the major projects 
are, and I'll give it to you in great detail. I would tell you 
that the AIF was an attempt to break out of CERP, to give more 
fidelity to you for your oversight. I have no reservations 
about providing this, and if it can't stand the scrutiny that 
you give it, then we'll change it.
    [The information referred to follows:]

    The Afghanistan Infrastructure Fund (AIF) serves as a key force 
multiplier for Department of Defense and Department of State 
activities. AIF supports the overall counterinsurgency strategy and 
fuels economic growth while improving credibility of the Government of 
the Islamic Republic of Afghanistan (GIRoA) with its own people. AIF is 
the economic cornerstone and is vital to the transition plan for 
redeploying U.S. Forces. It provides the average Afghan citizen visible 
improvements to the quality of life under GIRoA and these improvements 
serve to discredit the influences of the insurgency. Specifically, AIF 
provides the long-term power distribution solution for a significant 
sector of the Afghan population and improves agricultural irrigation in 
the Helmand Valley region, a former enemy stronghold.

    Senator McCaskill. I understand. Maybe I'm being a little 
cynical here. But I think part of this happened because it's 
very hard to get the funds for major infrastructure through the 
DOS budget.
    Speaking of sustainment, we have big projects that were 
funded through DOS, that have not been sustained even in 
Afghanistan, and particularly as you look at the power plant. 
You look at the power plant in Kabul and it is hundreds of 
millions of dollars, and it's sitting there idle for most of 
the time, used for just overload situations. They're still 
buying electricity from the Stans. I don't think they have the 
capacity or the resources to operate what we've built for them.
    That brings me to sustainment. On the highway funds, I 
looked at some of the materials that you provided my office on 
sustainment on the roads. Right now we have hundreds of 
millions of dollars we're putting into road and bridge projects 
which, by the way, as an aside, I will say we desperately need 
in this country. They're not going to get built while we build 
them, and we're not going to have to pay off the bad guys to 
create the security in order to build them.
    There is no revenue in place right now to maintain or 
support these roads after we leave. In fact, there's not even a 
government road authority to focus on the networking operation. 
There was talk in the briefing that we received that we think 
they could.
    To me, it has a lot more credibility that the government is 
delivering these services, which is ultimately the theory 
behind COIN, that we're trying to make the Afghanistan 
Government look like it's a real government to the people of 
Afghanistan, so they like them better than the Taliban.
    Why aren't we requiring that the government do that first, 
that the government provide some kind of gas taxes or some kind 
of revenue that would maintain these roads, or at least a 
government-wide authority that would allow them to operate a 
system of roads and bridges in Afghanistan, before we put 
hundreds of millions of dollars of American taxpayers' money 
into these projects?
    General Mattis. Senator, they're very good questions. I 
won't tell you I have all the answers, but we are consistent 
with your view right now in everything we're doing. If they 
cannot sustain it, we're not going to build it. If it can't be 
sustained by the Afghans themselves then it's not going to be 
part of the program.
    But I think we have to remember where we started there, and 
even finding educated people is difficult. There's not a big 
bench of people that we draw from. But I'm simply outlining the 
problem. We owe you a solution and I will get back to you with 
more specifics about the way ahead here.
    [The information referred to follows:]

    U.S. Forces-Afghanistan (USFOR-A) uses the Commander's Emergency 
Response Program (CERP) to, among other things, fund transportation 
improvement projects to provide the Afghanistan populace security, 
development, and governance by increasing freedom of movement. Proposed 
CERP projects must include a signed agreement with local ministry 
entities to provide sustainment for the completed project. USFOR-A 
identified the need to partner with the U.S. embassy personnel and the 
Government of the Islamic Republic of Afghanistan Ministry of Finance 
to ensure those sustainment estimates are included in their budgeting/
spending plans. The U.S. Congress created the Afghanistan 
Infrastructure Fund (AIF) to eliminate the large infrastructure 
requirements levied upon CERP and yet provide a means to address large-
scale infrastructure construction and repairs to support the 
Afghanistan Government's ability to provide for basic needs of its 
populace, like reliable power, water, and transportation 
infrastructure. There is a need to improve Ministry of Finance support 
for funding and training for Ministry of Public Works personnel to 
ensure highway projects funded with AIF are sustained.

    Senator McCaskill. I don't want anyone to misinterpret my 
willingness to pull some of this money out and put it in the 
highway trust fund in this country as not supporting what our 
military is trying to do there. But as we are transitioning 
out, it's almost like the two views are not matching up here. 
You know what the problem is, General, honestly; we can do this 
stuff, and Afghanistan can't. Let me give you all credit as 
leaders of an amazing organization. You tell the people under 
you that we want to do something, you know what? They're going 
to do it.
    So we can build these roads. We can build this power grid. 
We can contract, we can do all of this, and it is a can-do 
attitude that is so part of our culture that I think sometimes 
there is a sense of denial about whether or not we can do it, 
but how this ends up at the end. I want to tell you, I believe 
with every intellectual capacity I have that this is not going 
to end up well on these infrastructure projects, that it's not 
going to be a good ending, that there are not going to be roads 
and bridges and cars, and that the Afghanistan Government is 
not going to have a good handle on this, especially in light of 
the time that you face in terms of us drawing down.
    So I want these things to match up and I want to be 
realistic. I do think this part of the COIN strategy needs even 
more examination because I listened to Israeli Prime Minister 
Bejamin Netanyahu talk about it talking like a duck, quacking 
like a duck, looking like a duck, and it being a duck last 
night. This really looks like nation-building in every essence 
of the word, and I think there is more nation-building here 
than there really is COIN. That's my bias at this point, but I 
am certainly willing to be talked out of that bias with good 
objective proof points.
    General Mattis. Let me try, Senator. If I can't then we'll 
have to change something.
    Senator McCaskill [presiding]. Thank you. Thank you very 
much, General.
    Thank you, Admiral.
    I will call on Senator Hagan. She's the only one left.
    Senator Hagan. Thank you. Thank you, Madam Chairman.
    Senator McCaskill. I was looking around, seeing who else I 
could call on. But I guess it's just you.
    Senator Hagan. Last but not least.
    General Mattis and Admiral McRaven, thank you so much for 
your testimony today and even more so for your service to our 
country. I agree with Senator McCaskill, we certainly do have a 
can-do attitude and you can do great things, and I really do 
appreciate it.
    Admiral McRaven, thank you for coming by my office 
yesterday. I did want to go over a question that we talked 
about. Several public reports have indicated that you are 
seeking several new authorities to give you more control over 
the deployment and utilization of SOF. For example, the New 
York Times recently reported that you want authority to deploy 
SOF without going through the traditional force generation 
process managed by the Joint Chiefs.
    I know we've discussed this, but if you could also go over 
again: Are you seeking authorities that would provide SOCOM 
with additional control over the deployment and utilization of 
SOF?
    Admiral McRaven. Thank you, Senator Hagan. First, I 
appreciate the question. I appreciate the opportunity to set 
the record straight. As you said, there's been a lot in the 
news about this lately.
    Every 2 years the Joint Staff goes through a staffing drill 
to look at the Unified Command Plan (UCP), which defines the 
roles, responsibilities, and the missions of the combatant 
commanders. Every year we go through a review of the forces 
which talks about the assignment of forces to those commanders.
    What we at SOCOM have done is we are participating in that 
staffing process. Right now it is an internal process. My 
recommendations have not even gotten to the Chairman, much less 
the Secretary or the Commander in Chief yet. So I think it's 
premature to talk about what my recommendations are in an open 
forum.
    However, having said that, what I would like to set the 
record straight on is that we will never deploy forces to a 
geographic combatant command without that commander's approval. 
We never go into another country without getting country 
clearance from the Chief of Mission, and the Chief of Mission 
always has a vote in whether or not U.S. Forces arrive in the 
nation that he or she is sitting in.
    So there is nothing in my recommendations now, nor will 
there ever be, that talks about circumventing either the 
geographic combatant commander or the Chief of Mission.
    Senator Hagan. I think it's important to set that record 
straight, so thank you.
    General Mattis, the Jordanians and the Turks share the 
longest border with Syria and they stand to bear the brunt of 
any refugee flows out of Syria. Senior officials from both 
governments have publicly stated that President Assad must go 
and they have indicated a willingness to receive the Syrians 
fleeing from the conflict.
    But there's been little discussion about what the 
Jordanians and the Turks are willing to do to support Arab or 
western efforts to aid or arm the opposition in Syria. What is 
your understanding of the Jordanian and Turkish views on the 
situation in Syria, and would they support the provision of 
non-lethal and/or lethal assistance to the Syrian opposition?
    General Mattis. Thanks, Senator. I don't want to speak for 
them. I'll give you my view of it. I don't think they want to 
see the opposition armed right now. I think they want to see a 
more defined end-state. They want to know better who it is 
they're arming. But again, I don't want to speak for them. I 
think that the refugee flows would be very destabilizing in 
either country, but especially so in Jordan, if they came in, 
because of the internal dynamics in the country there and our 
inability to get the Middle East peace process reenergized that 
might give some view of a Palestinian state, that would take 
some of that pressure off the country and leave only the 
refugees for them to consider.
    As it stands now, I don't think they want the refugees 
inside Jordan. I think they want to set up the camps inside 
southern Syria and help them there. I know the King would do 
that.
    Senator Hagan. Is anything like that going on?
    General Mattis. There are humanitarian efforts under the 
Red Cross and the Red Crescent. Certainly both governments are 
looking toward what they can do for refugees, yes, ma'am.
    Senator Hagan. Thank you.
    Admiral McRaven, concerns have been raised in the past that 
the heavy concentration of SOF in the CENTCOM AOR is degrading 
the cultural and language expertise of special operations 
personnel who have been traditionally focused on other parts of 
the world. You told the committee last year that one of the 
command's top challenges is to better understand the people and 
conditions in the places that we go.
    How are you addressing the tension between the demand for 
SOF in CENTCOM and the need to maintain regionally aligned 
expertise elsewhere? It's a big world.
    Admiral McRaven. Yes, ma'am, it is. As I mentioned earlier 
today, we're in about 78 countries globally. So as we develop 
particularly our SOF officers and NCOs, part of their career 
path is to get language and cultural training. As you well 
know, at Fort Bragg this really is the center of excellence in 
terms of our throughput for those NCOs and officers.
    Right now we have a pretty robust program that looks across 
the globe at our cultural and language requirements. I'm pretty 
satisfied with where we are. The issue is, as General Mattis 
well knows, about 80 percent of my forces are in CENTCOM. 
Having said that, that doesn't diminish the effort we are 
putting into the cultural training or the language training 
with respect to those other folks that are deployed globally.
    It will be a function of balancing and probably 
reemphasizing some languages and some cultures as we move from 
a CENTCOM-centric environment to a more globally balanced 
environment over time.
    Senator Hagan. Thank you.
    From time to time there are reports of Iranian support to 
the Houthis in northern Yemen. Given the ongoing surge by al 
Qaeda in the Arabian Peninsula, the matter of Iran's 
involvement in Yemen has been getting less press. General 
Mattis, can you update me on Iran's activities in north Yemen 
and are they continuing to provide material support to the 
Houthis?
    General Mattis. They are providing material support. 
Compared to last year at this time, they're providing more, to 
include weapons, not just money. But, interestingly, they are 
also trying to influence now the non-Houthi tribes and invite 
their political leadership to Tehran on expense-paid vacations 
basically, to meet with certain leaders there. So it's very 
interesting. What you and I have seen over the years with the 
Houthis is now expanding in Yemen.
    Frankly, I think Tehran sees the Lebanese Hezbollah kind of 
mental model for where they want to go down there.
    Senator Hagan. Have the Saudis raised concern with you 
about Iranian involvement in Yemen?
    General Mattis. Yes, ma'am.
    Senator Hagan. What's your assessment of the new government 
in Yemen? Are they interested in continuing to cooperate on 
counterterrorism matters?
    General Mattis. I believe they are, yes.
    Senator Hagan. What's the current status of DOD's security 
assistance programs with respect to Yemen, particularly the 
assistance program authorized under the most recent NDAA?
    General Mattis. Senator, the long delay in President Saleh 
leaving basically derailed some of our programs. During the 
internal frictions that were going on, we didn't want our 
people engaged in what was really something the Yemenis had to 
sort out on their own. So we're going to have to get with 
President Hadi and his organization now and start working this 
forward again.
    We've taken a little bit of a lull, frankly, in what we 
were doing, but not across the board, not in all areas. I can 
speak more in private with you on some of that.
    Senator Hagan. Thank you, Mr. Chairman.
    Chairman Levin. Thank you, Senator Hagan.
    Senator Shaheen.
    Senator Shaheen. Thank you, Mr. Chairman.
    General Mattis, Admiral McRaven, thank you both for being 
here this morning and for your service to the country.
    General Mattis, I'd like to begin asking you about what's 
happening with Pakistan. I had the opportunity to travel in 
August with Chairman Levin actually to Afghanistan and to see 
firsthand what was happening at that time in Afghanistan. One 
of the things that we did was fly over the Khyber Pass, and it 
was surprising to me because, obviously, I hadn't been there 
before, to see just the extent of trucks and vehicles and 
people lined up to cross at the Khyber Pass. Obviously, that 
was before the decision to close the Pass in November.
    I wonder if you could talk about how important it will be 
to reopen the Khyber Pass? Last week General Fraser said that 
being able to get through the Pass would be important if we're 
going to withdraw personnel and equipment on the timetable 
that's been proposed. So please talk about where we are in 
negotiating reopening of the Khyber Pass and how important that 
will be.
    General Mattis. It is important to us. We have proven that 
we can sustain the campaign through the Northern Distribution 
Network and through what we call our multi-modal, which is 
basically part by air and part by sea, resupply of our effort 
there.
    However, we do need the ground lines of communications 
through Pakistan. As far as the status of that discussion, I 
will fly to Pakistan here in about 10 days and we'll reopen the 
discussion. I think the parliamentary process as far as the new 
relationship with the United States will be reported out by 
that point. I think their military will be able to engage with 
us. They've been waiting for the parliamentary process to be 
done and that's why there's been a bit of a delay.
    Senator Shaheen. When you say they've been waiting for the 
parliamentary process to be done, does that mean they're 
looking for civilian blessing of reopening the Khyber Pass, or 
are they waiting for General Kayani and the military to support 
that effort?
    General Mattis. I think what happened was the parliament 
took up the issue about the relationship with the United 
States. There's been disappointments on both sides. That 
parliamentary committee has reported out to the parliament, as 
I understand it, or will very shortly, and I anticipate General 
Kayani will then have the parliament's framework for how this 
relationship will move forward, and will do what two different 
countries do, some with shared interests and some of our 
interests are not shared, and we'll try to work a way forward.
    Senator Shaheen. But you're optimistic that we will see 
some progress on that?
    General Mattis. Yes, ma'am, I am.
    Senator Shaheen. One of the other things we heard about on 
that trip was the importance of the cooperation that had gone 
on in the past on the border between Afghan, Pakistan, and ISAF 
troops in avoiding border incidents. Obviously, that situation 
seems to have deteriorated since that time. Can you talk about 
where we are in those relationships and whether there's hope to 
get them back on track to restore the kind of communication 
that would allow us to avoid those border incidents?
    General Mattis. Senator, even in our worst days here in the 
last several months when we were unable to talk about reopening 
the ground lines of communication and there was a lot of 
friction and statements in the press on both sides, even in 
those worst days our brigadiers and our colonels and our majors 
were meeting as we tried to coordinate better to avoid the 
tragedy that happened in late November.
    It's actually been the one area where I can tell you we 
have not been hobbled. It's actually gotten better under this 
crisis that we've been through and the tragedy of those 
Pakistani soldiers that were killed by friendly fire, our fire. 
So it's going better now in the effort to preclude this from 
happening ever again.
    Senator Shaheen. We're actually seeing that on the ground?
    General Mattis. Yes, ma'am.
    Senator Shaheen. It's not just at the negotiation level?
    General Mattis. There are border coordination meetings 
going on now at different levels, and as soon as we get hit 
from the other side of the border we're calling the Pakistani 
military. In other words, the communication channels now are 
more mature. It's not perfect. I don't want to make this look 
like it's all okay. We have a lot of frictions along a badly 
demarcated border in some areas. But at the same time, it's the 
one area that held in there when everything else kind of came 
off the track, and it's the one area we're making progress on. 
We've exchanged standard operating procedures (SOP) for near-
border operations. So when we're operating near the border, we 
have a shared SOP for how we will communicate.
    Senator Shaheen. Thank you. That's encouraging.
    General Mattis. Yes, ma'am.
    Senator Shaheen. Admiral McRaven, I want to also say, while 
I'm talking about our visit to Afghanistan, we visited one of 
the special operations efforts in one of the villages along the 
Pakistani border, and it was very impressive. Talking to some 
of the young men who were serving and hearing their enthusiasm 
for the work that they were doing was really inspirational. So 
thank you very much for that.
    Admiral McRaven. Thank you, ma'am.
    Senator Shaheen. I'm pleased to see that the Navy is 
considering enhancements to the Virginia-class subs. In New 
Hampshire we pay a lot of attention to what's going on with the 
Virginia-class subs because they're worked on at the Portsmouth 
Naval Shipyard.
    Can you talk about the work that's being done there and 
whether you're confident that the investment in that submarine 
technology is going to be what's needed and what additional 
capacity that will allow us to be able to do that is important?
    Admiral McRaven. Yes, ma'am. So I don't lead you astray, 
I'd prefer to take that kind of question for the record and 
then get back to you. What I can tell you, though, is that when 
it comes to special operations engagement with the Navy and 
particularly as the Navy begins to build or refurbish 
submarines, we are always part of that discussion. So whether 
it's the Virginia-class or other classes, the Navy has been 
exceptionally helpful in making sure that new special 
operations capabilities are incorporated into the submarines, 
because Navy SEALs and some of the Marine Corps SOF work off 
submarines quite often.
    [The information referred to follows:]

    The work accomplished at Portsmouth Naval Shipyard (PNS) is managed 
and executed by the Naval Sea Systems Command (NAVSEA). Special 
Operations Command (SOCOM) has no direct efforts with the Shipyard; 
however, through our partnership with the Navy and NAVSEA, we 
coordinate several projects. One of the more important efforts for Navy 
Special Operations Forces (SOF) is the management and planning of yard 
activities for the Dry Deck Shelter (DDS).
    The DDS is a unique and highly valued national asset, in service 
for nearly 30 years. There are currently six DDSs, the first one built 
in 1982 by Electric Boat, and fielded on the USS Georgia (SSGN 729). 
The remaining five were built between 1987 and 1991 by Newport News 
Shipbuilding. The DDS service life has been extended to 40 years. With 
the first DDS reaching end of service life in 2022, significant efforts 
must be performed to determine an adequate replacement for the DDS to 
ensure a seamless, operational transition. The urgency to identify a 
replacement DDS is due to the increased reliance on this system by SOF 
and the Naval Submarine Force as the dynamics of missions change 
frequently, and a recognition that an interruption in availability 
could severely affect national security. Accordingly, the Navy and 
SOCOM have initiated efforts to develop the next generation DDS 
capability to continue support for current and future SOF and Navy 
undersea operations. Several new designs for the next generation DDS 
have been proposed, but the final solution is yet to be identified. 
Navy identification of an investment in a next generation DDS should be 
seriously considered in fiscal year 2013 in order to optimize the 
design, minimize the cost, and ensure a smooth transition.
    The Ohio-class SSGNs are a highly valued host platform for SOF, due 
to their unique capabilities and expansive capacity; SSGNs are the only 
platform capable of deploying with dual DDSs, supporting the capability 
to sustain a large contingent of SOF operators capable of conducting 
multiple mission sorties, over an extended period of time, to the level 
of a special operations undersea campaign. This enduring SOF 
requirement for dual DDS operations can be traced back to the USS Sam 
Houston (SSBN 609) and USS John Marshall (SSBN 611), and cannot be 
fulfilled by any other submarine platform in the Navy inventory.
    SOCOM and the Navy are exploring alternatives to sustain similar 
undersea platform capabilities in anticipation of SSGN retirement from 
the fleet in the mid-2020s; the Navy is not considering construction of 
a new SSGN submarine. An alternative proposed by the Navy is to extend 
the length of the Virginia-class SSNs by approximately 90 feet 
[Virginia Payload Module (VPM)]. Although not the primary requirement 
for design of the VPM, the concept could include enhanced SOF 
capabilities as compared to legacy Virginia capabilities. While the 
class was designed from the beginning to support SOF, the added hull 
section will allow the submarine force to support a wider range of 
missions than currently possible with SSNs. However, VPM-equipped SSNs 
will not be able to provide SSGN-level SOF support given their smaller 
size.

    Senator Shaheen. Thank you.
    Thank you, Mr. Chairman.
    Chairman Levin. Thank you, Senator Shaheen.
    Senator Manchin.
    Senator Manchin. Thank you, and let me just say to both of 
you, as an American and a West Virginian, I appreciate your 
service and I'm very, very proud of what you do for our 
country.
    With that being said, I'd like to go on to a few things. I 
have problems with the presence that we have and the direction 
that we've gone in Afghanistan. I've been very open about that. 
But with that, what you all do is unbelievable.
    General Mattis, we now reportedly have 150,000 contractors, 
compared to 94,000 men and women in uniform, in Afghanistan. To 
me that is troubling. Do you know the percentage of the 
contractors that are ex-military?
    General Mattis. I wouldn't even hazard a guess, but I'll 
take the question, Senator, and try to get an answer for you.
    [The information referred to follows:]

    Although we do not collect this information, we recognize that many 
of the types of people who would gravitate to these private contractor 
jobs in combat areas are the same people who would have prior military 
service. While we cannot give a specific numerical answer to the 
question, of the total contractor population working in Afghanistan, 22 
percent (or approximately 25,300) are U.S. citizens and a smaller 
number yet are doing military skill-set-type work.
    I understand that our reliance on contractors could be competing 
with those who might otherwise reenlist. However, at our current and 
projected end strength, the military cannot retain all of the fine 
junior noncommissioned officers who wish to remain on Active Duty as we 
simply haven't the room to retain all of them. That said, we cannot 
identify any direct negative impact on readiness or our combat 
capability by those who leave Active Duty for service as a contractor.
    According to a Congressional Research Service report dated May 13, 
2011: ``Using contractors to perform non-combat activities augments the 
total force and can free up uniformed personnel for combat missions. 
Since contractors can be hired faster than the Department of Defense 
(DOD) can develop an internal capability, contractors can be quickly 
deployed to provide critical support capabilities when necessary. Using 
contractors can also save DOD money. Contractors can be hired when a 
particular need arises and be let go when their services are no longer 
needed. Hiring contractors only as needed can be cheaper in the long 
run than maintaining a permanent in-house capability.''
    I offer this point because we are doing everything possible to 
reduce the costs of this war while retaining full military 
effectiveness and keeping faith with our troops.

    Senator Manchin. Here's what I run into, sir. In the 
airports I stop the so-called soldiers of fortune, if you will, 
and I ask them where they're going? They're going to the front 
line, Afghanistan.
    I ask them also how many of you are ex-military? Almost to 
a tee, it's 100 percent.
    I ask this follow-up question: If it had not been for the 
contracting that attracted you with the higher salaries, would 
you still be in the military? Almost unequivocally, yes.
    That tells me something's wrong. Then when I hear people 
say that we're going to be cutting back DOD and we'll be 
weakening, and they want to play political football with this. 
To me, we could cut back on contractors and basically put a 
certain amount of that towards our men and women in uniform. 
General Mattis, your budget, and Admiral McRaven, your request, 
we waste more money with contracting a year than you have asked 
almost for half of your budget.
    To me, we could strengthen our men and women in uniform, 
strengthen our military, by basically drawing down what we do 
and the amount of money we spend on contractors. I don't think 
that should be a political football. That's just common sense 
in West Virginia. We say we're going to take care and 
strengthen the people that basically are on the front lines and 
not continue to spend so much money in attracting our best and 
brightest when they get their 10 years and, boom, they're 
dropping over.
    I don't know if you can speak on this or not. But to me, 
when I go home people ask me: What are we doing? Why are we 
spending so much money trying to rebuild a nation in 
Afghanistan that doesn't care for us that much and doesn't want 
us there? We had more of our so-called allies killing Americans 
since February than we do al Qaeda and all the terrorists.
    I don't know. General, please comment on this, and then, 
Admiral, what do you believe? How could we better strengthen 
your budget to do the job that we're allowing contractors to do 
now, but do it much more economically? Is that doable?
    Admiral McRaven. Sir, I will tell you that the budget I 
have right now meets all the needs for U.S. SOF for fiscal year 
2013.
    Senator Manchin. Would that be saying as long as you have 
the contracting support? If you didn't have that contractor 
support and we asked you to do the job that they're doing, 
could we do it more effectively and efficiently?
    Admiral McRaven. Sir, I will tell you, the contractors play 
a very vital role and no one should diminish the role that they 
play. It is expensive, but there are places and times where 
having a contract force works well for us, as opposed to 
putting uniformed military to use, whether it's a training 
mission, a security guard mission, et cetera. There are some 
places where you would rather have uniformed military than 
contractors.
    So while I don't want to speak to the total size of the 
U.S. Government's contracting force, what I will tell you is 
that I think there is an appropriate balance between uniformed 
personnel and contractors, and the contractors do a good 
service.
    Senator Manchin. As a civilian, what I found disturbing is 
that when I was over there--I've been there twice now--and I 
talked to the different servicemembers and I asked, when are 
you getting out; when you're getting out, are you going to 
reenlist? No, I'm not; I'm going to go over here and make three 
times more. Sir, that's disturbing. As a civilian, a taxpayer, 
and a lawmaker, it's disturbing. You go home to West Virginia 
and explain that our best and brightest are going out because 
they're going to go right back and do the same job in a 
civilian uniform, making two to three times the pay that they 
were in the military.
    Admiral McRaven. Sir, we had some of this problem early on 
within the special operations community after September 11, 
where we saw a number of our senior NCOs who looked over the 
fence, at what the contractors were providing and decided to 
make that leap at the time.
    However, I will tell you our experience within special 
operations is most of those folks regretted that move. While it 
is only anecdotal in terms of their service, I can tell you the 
few that did get out regretted it. While we had a trend, we 
were able to correct that trend through appropriate bonuses and 
pays, but the fact of the matter is when we were able to 
correct that trend and we talked to some of those soldiers, 
sailors, airmen, and marines, a lot of them said, hey, we 
preferred to serve.
    By the way, when you look at it from a cost-benefit 
analysis, you're much better off staying in the military over 
the long haul, because the retirement package is very sound, it 
is very good. A lot of these young fellows really just didn't 
do the basic calculation early on.
    Senator Manchin. I'm troubled by this. But also, with our 
presence now with the turn of events in Afghanistan, I'm 
understanding we have slowed, or basically stopped, the 
withdrawal of our troops because of the violent unstable 
situation we have there. Is that slowing down or are we still 
on course to draw down, General Mattis?
    General Mattis. No, Senator, we have not stopped it. We 
have pulled the first 10,000 troops out. We have the plan 
coming, I think I'll have it on April 1, for the next 23,000 to 
come out.
    Senator Manchin. You're talking about just people, just our 
men and women in uniform, correct?
    General Mattis. That's correct.
    Senator Manchin. Not contractors?
    General Mattis. That's correct.
    Senator Manchin. So contractors, we could even keep the 
same or beef up?
    General Mattis. Yes, sir, or reduce.
    Senator Manchin. Yes, I would hope that. But I'm saying 
that's not been the case.
    General, how many contractors do we still have in Iraq?
    General Mattis. Under the U.S. military, sir, I need to 
take it for the record, but I think it's probably around 500. 
They're doing training, they're people who can teach Iraqis how 
to use the new artillery piece or the new tank they bought from 
the United States. There are people who do that kind of 
training.
    [The information referred to follows:]

    As of the first quarter of fiscal year 2012 manual census there are 
113,491 contractors in Afghanistan. Department of State (DOS) projects 
14,000 contractors in Iraq, but currently 8,500 work under Department 
of Defense (DOD) contracts supporting both DOS and DOD missions.

    Senator Manchin. We've pulled out of Iraq, correct?
    General Mattis. Yes, sir.
    Senator Manchin. But we still have contractors doing the 
job that military would have been doing if we let military in 
there, correct?
    General Mattis. I have about 200 military personnel there, 
sir, under the Office of Security Cooperation-Iraq. That is a 
lieutenant general who is under the ambassador. They do the 
transfer of the actual equipment when it comes in. He then has 
several hundreds of instructors, and I'd prefer not to take 
them out of our ranks. I need them in the serving units.
    Senator Manchin. I know my time is up, but if I could just 
finish up. As a West Virginian, and the people in West Virginia 
support the military as strong as any State that I know of, we 
believe that we can strengthen the military's position by being 
responsible with the budget, but it would come off the backs of 
the contractors that we've built up. I want to make that very 
clear. We do not, nor would I ever vote to weaken our military. 
I would strengthen our military. But I would deplete the 
contracting and the amount of money we spend on contracting to 
do that.
    Chairman Levin. Thank you very much, Senator Manchin.
    Senator Shaheen or Senator Manchin, do you have any 
additional questions?
    Senator Shaheen. I do, Mr. Chairman.
    Chairman Levin. Sure.
    Senator Shaheen. It's not quite 12:00, so come on. We have 
a minute.
    Chairman Levin. No, we have more than a minute if you need 
it.
    Senator Shaheen. I know. I'm just kidding.
    General Mattis, I would like to turn to Syria for a minute. 
I understand there have been a number of questions this morning 
about the opposition in Syria and who they are. But I'd like to 
raise a question about the weapons and the stockpiles that are 
there. Earlier last month, Senators Gillibrand, Collins, and I 
sent a letter to the administration to raise specific concerns 
about the threat of what happens to those conventional and 
chemical weapons.
    According to a recent report, Syria probably has one of the 
largest chemical weapons programs in the world. So there are 
two concerns. First, what happens if those weapons are left 
unsecured? Could they potentially disappear and be used 
throughout the region? Second, obviously, is there any 
suggestion that Assad might actually use these weapons against 
the people of Syria? I wonder if you could comment on both of 
those questions.
    General Mattis. Yes, Senator, I can. In the conventional 
weapons, the large stockpiles there are certainly a concern. 
Out of the conventional weapons, the biggest concern I have are 
the shoulder-launched anti-air missiles, and you understand the 
danger.
    On the chemical weapons, you're right to characterize it as 
one of the largest stockpiles in the world. If left unsecured, 
it would be potentially a very serious threat in the hands of, 
I will just say Lebanese Hezbollah for example, because they're 
in close proximity.
    At the same time, they're not easily handled. Obviously, it 
takes highly trained troops to do that. I'm not saying it's a 
fait accompli that if they're left unsecured automatically 
someone can grab them and use them. They may end up frying 
themselves.
    But I think that it's going to take an international effort 
when Assad falls--and he will fall--in order to secure these 
weapons. I don't think he will use them on his own people, but 
that is speculation. We have not seen any effort to use it yet, 
but we're watching very closely. I think that what would stop 
him would be the international condemnation and probably the 
call to arms it would bring if he used chemical weapons. But 
right now that's purely speculation, Senator.
    Senator Shaheen. Given our experience in Libya with the 
Man-Portable Air Defense System, should we be more comfortable 
that in Syria those are likely to be better secured than they 
were in Libya?
    General Mattis. I think perhaps better secured until Assad 
falls, and then we'll have to see if the forces guarding those 
retain control or not.
    Senator Shaheen. Is there any planning under way to look at 
how the international community might address those weapons 
when Assad falls, in terms of coming in and making sure they 
are secure?
    General Mattis. I'm sure that would be part of the planning 
if the international community moves towards taking action. It 
would probably be a key part of the planning.
    Senator Shaheen. But there's nothing under way right now 
that you're aware of?
    General Mattis. I'd prefer to speak privately with you 
about that, Senator.
    Senator Shaheen. Thank you very much.
    Senator Manchin. If I could just follow up, Mr. Chairman.
    Chairman Levin. Sure, Senator Manchin.
    Senator Manchin. Thank you.
    To both of you, I will just say that you probably have more 
responsibility with your men's and women's boots-on-the-ground 
defending this country than any other branch right now. With 
that being said, where do you see the greatest threat we have 
as the United States?
    General Mattis. In the near-term, sir, and I'm CENTCOM-
focused, but I look at North Korea, I look at China, you pay me 
to be a little broader than just CENTCOM. But my biggest 
concern is Iran. That is the nation with four different 
threats: first, its nuclear program, where it's enriching more 
uranium than it needs for peaceful purposes, and has rebuffed 
the U.N. efforts to try to monitor it. Second, they have the 
long-range rockets and the ballistic missiles that they can use 
and hold other nations at risk from the Mediterranean down into 
the Gulf Cooperation States. Third, they have their maritime 
threat, which they've been bellicose about closing the Straits. 
Then fourth, they have their MOIS, their secret service, their 
Quds Force, surrogates like Lebanese Hezbollah, that sort of 
thing, that they have going on as they fight this shadow war.
    I think Iran is the biggest threat, Senator.
    Senator Manchin. Admiral?
    Admiral McRaven. Sir, I would agree with General Mattis 
that Iran is probably the biggest threat. But I don't think we 
should take our eye off the ball in terms of al Qaeda or the 
violent extremist networks that are out there. As you look at 
al Qaeda's senior leadership, most of which still remains in 
the federally Administered Tribal Areas, but you begin to see 
the franchises in al Qaeda in the Arabian Peninsula, East 
African al Qaeda in terms of Al Shabab, al Qaeda in the Islamic 
Lands of the Maghreb, and what they are doing in terms of North 
Africa, and the other al Qaeda franchise movements, these are 
something we need to continue to pay particular attention to 
because that cancer continues to grow, albeit at a slower rate.
    Senator Manchin. If there's support that we should be 
giving you and the resources that you're going to be needing to 
meet these threats and keeping America safe, I would hope that 
you would be forthcoming. Probably in a private setting, we 
could sit down and see how we could best make sure that 
happens.
    But again, thank you for your service. I appreciate it very 
much.
    Chairman Levin. Thank you so much, Senator Manchin.
    In terms of the risk from Iran, I had to leave here for 
about an hour so I could be with the Israeli Prime Minister and 
a number of Senators, and that's what the main focus was of 
that meeting, as I think it is of much of our concern these 
days. So your identification of Iran as the number one greatest 
threat we face, I think, is well-placed.
    With that, we will stand adjourned, again with our thanks 
to both of you for your testimony, and our thanks to you and 
the men and women with whom you serve. Thank you.
    [Questions for the record with answers supplied follow:]

           Questions Submitted by Senator Joseph I. Lieberman

             JOINT SURVEILLANCE TARGET ATTACK RADAR SYSTEM

    1. Senator Lieberman. General Mattis, as you assess your need for 
intelligence, surveillance, and reconnaissance (ISR) assets in U.S. 
Central Command (CENTCOM), what role does Joint Surveillance Target 
Attack Radar System (JSTARS) play in meeting those requirements? 
Specifically, could you perform your indications and warning and wide 
area surveillance missions without it?
    General Mattis. [Deleted.]

    2. Senator Lieberman. General Mattis, are there specific 
capabilities that should be added to JSTARS in order to enhance 
interoperability with ground forces or improve performance in relation 
to the specific threats in your area of responsibility (AOR)?
    General Mattis. JSTARS aircraft and crews continue to provide 
excellent support to ground and maritime forces in response to many 
different threats, both in a counterinsurgency environment like 
Afghanistan and increasingly in a maritime role. I welcome and endorse 
Air Force efforts to rapidly integrate the new Enhanced Land/Maritime 
Mode (ELMM) capability onto the JSTARS platform. It will greatly 
amplify JSTARS effectiveness in the maritime environment by increasing 
the sensitivity to small boat targets, even in the presence of radar 
clutter due to high sea states and by improving the geolocation 
accuracy for maritime targets. ELMM should be present on all JSTARS 
platforms deploying to the AOR.
                                 ______
                                 
           Questions Submitted by Senator Richard Blumenthal

                          MILITARY RETIREMENT

    3. Senator Blumenthal. Admiral McRaven, under the President's 
fiscal year 2013 budget proposal, there is a request for Congress to 
``establish a commission with Base Realignment and Closure-like 
authority to conduct a comprehensive review of military retirement in 
the context of total military compensation.'' Please provide the number 
and percentage of the Special Operations Forces (SOF) personnel that do 
not reach the 20-years-of-service mark, the number and percentage of 
SOF personnel who reach the 20-years-of-service mark, and the number 
and percentage of SOF personnel who reach the 25-years-of-service mark 
for the last 10 years.
    Admiral McRaven. That is a very complex question, and varies for 
each SOF specialty and for officers and enlisted. Part of the problem 
is that each of the Services is responsible for the maintenance of the 
records for each one of the military servicemembers within U.S. Special 
Operations Command (SOCOM). Once the servicemember leaves SOCOM or the 
SOF components for new units or to retire, their records fall under the 
control of the Service that they are from. Unfortunately, at this time, 
SOCOM does not maintain this data.

    4. Senator Blumenthal. Admiral McRaven, please provide any concerns 
you may have regarding the retention of SOF past the 20-years-of-
service mark, and the retention of SOF personnel if the military 
retirement system were to be reformed as outlined in the President's 
fiscal year 2013 budget proposal.
    Admiral McRaven. Retention of SOF personnel is acceptable, and each 
Service's retention model supports long-term SOF retention and force 
structure sustainment. While a struggling economy has led to some of 
the highest overall retention rates in years, many highly trained, 
skilled, and mature SOF members remain aggressively recruited in the 
civilian market, placing them at a greater risk of loss to lucrative 
opportunities in the private sector and/or with other government 
agencies. The Services' continued support of robust, SOF-focused 
retention initiatives will have a positive impact on the retention 
behavior and readiness of our SOF personnel.
    The President's fiscal year 2013 budget proposal to establish a 
Military Retirement Modernization Commission, which, if enacted, will 
recommend improvements to the military retirement system, should 
contain provisions that any major military retirement reforms include 
grandfathering for those currently serving in the military.
                                 ______
                                 
               Questions Submitted by Senator John McCain

   MANAGEMENT OF CONCUSSION/MILD TRAUMATIC BRAIN INJURY IN DEPLOYED 
                                SETTING

    5. Senator McCain. General Mattis, in June 2010, the Deputy 
Secretary of Defense issued DTM 09-033, ``Policy Guidance for 
Management of Concussion/Mild Traumatic Brain Injury (TBI) in the 
Deployed Setting,'' setting forth specific policies and procedures for 
protection of servicemembers exposed to blast or other concussive 
events, to include medical evaluation, 24-hour rest for exposed 
personnel, and reports and procedures for evaluation of recurrent 
concussions sustained by U.S. servicemembers. How has this policy been 
implemented within the CENTCOM AOR?
    General Mattis. CENTCOM Fragmentary Order 09-1656, originally 
published July 2010, directs that leaders at all levels, as well as 
medical personnel: (1) are trained in recognition of potentially 
concussive events and protection of servicemembers involved; (2) track 
personnel involved in events and use available tools to record these 
events tactically and in the medical record; and (3) screen, medically 
evaluate, and begin treatment immediately after an event. Commanders 
support implementing mandatory rest periods since they now see 97 
percent of their concussed troopers returned to duty compared to 50 
percent 2 years ago.

    6. Senator McCain. General Mattis, what is your assessment of the 
impact of this policy on operational readiness of units in a deployed 
setting?
    General Mattis. My commanders on the ground have found that the 
policy assists in operational readiness for a number of reasons. First, 
it is clear and provides specific guidance for commanders to execute. 
Second, since most concussion care centers report a greater than 95 
percent return to duty ratio, loss of manpower is minimal. And third, 
front line leaders see good, effective results in returning 
servicemembers. The policy has increased operational readiness of units 
that experience high rates of blast exposure.

    7. Senator McCain. General Mattis, would you recommend that this 
policy be extended beyond its current expiration date of July 1, 2012?
    General Mattis. Yes. The policy is currently under review for 
publication as an enduring Department of Defense (DOD) issuance. I 
support this policy as it unquestionably standardizes and improves the 
training, tracking, and treatment regarding mild TBI for our 
servicemembers.

                  U.S. NAVAL ASSETS IN THE GULF REGION

    8. Senator McCain. General Mattis, your statement notes that the 
Bahrain security relationship is the cornerstone for our collective 
security in the Gulf region. There has been some discussion about 
adding ships to the Fifth Fleet stationed at Naval Air Station (NAS) 
Bahrain. What additional ships are being assessed?
    General Mattis. The presence of U.S. naval assets in the Gulf 
region varies based on articulated requirements of the combatant 
commander and as coordinated by the Joint Staff and approved by the 
Secretary of Defense. As part of a CENTCOM request for forces, four 
mine countermeasure (MCM) ships will soon deploy from San Diego to 
Bahrain: USS Sentry (MCM 3), USS Devastator (MCM 6), USS Pioneer (MCM 
9), and USS Warrior (MCM 10). This deployment will bring a total of 
eight MCM ships in theater for a short period of time.
    The Austin-class amphibious transport dock ship, USS Ponce (LPD 
15), delayed its scheduled decommissioning to serve as an interim 
afloat forward staging base (AFSB) in support of MCMs, aircraft, and 
patrol craft (PC) ships at sea with refueling, resupply, and 
maintenance. Basing for USS Ponce has not been determined. Additional 
ships being considered include five coastal PC to be home-ported within 
the CENTCOM AOR. However, these PC are in preliminary stages of 
assessment and no decision has been reached regarding their deployment.

    9. Senator McCain. General Mattis, will these ships require any 
upgrades to waterfront facilities or piers?
    General Mattis. Upgrades to waterfront facilities and piers are 
necessary. Quay wall repair, pier replacement, ship service utilities, 
ship maintenance shops, and warehouse space are all needed to support 
ship loading. Ship berthing is constrained at Naval Support Activity 
(NSA) Bahrain and the existing pier and quay wall are in poor condition 
and require significant repairs to keep them viable in the future. 
Although the Navy routinely requires up to 2,000 linear feet (LF), the 
Navy has a lease that provides priority use of 540 LF of pier space and 
anticipates a need for more space. Waterfront development under 
construction at NSA Bahrain will provide the Navy exclusive use of 
2,000 LF of required quay wall. Current warehouse space demand exceeds 
capacity by 30 percent and no ship maintenance space exists. The 
Waterfront Development Phase IV project that was programmed by the Navy 
for fiscal year 2012 but not authorized includes a warehouse that would 
meet warehouse requirements.

       INFRASTRUCTURE REQUIRED TO SUPPORT FORCES AT ISA AIR BASE

    10. Senator McCain. General Mattis, the United States also operates 
at Isa Air Base south of Manama. What is your plan for the transition 
of this base from tents to a more robust set of facilities and 
infrastructure?
    General Mattis. We are coordinating with the Bahraini Defense Force 
on the infrastructure required to support our forces at Isa Air Base. 
We are planning for limited construction at this location but may 
improve living quarters to relocatable and arch-span buildings. 
Infrastructure planned for storage of munitions and aircraft parking at 
Isa are required to support current and future operations. The 
facilities improvements at Isa are to be U.S.-funded and the ammunition 
magazines ($87 million) and aircraft parking area ($37 million) are 
fiscal year 2011 authorized projects. We will upgrade the living 
conditions through the purchase and installation of containerized, 
relocatable buildings ($15 million).

                         U.S. FORCES IN KUWAIT

    11. Senator McCain. General Mattis, with the withdrawal of U.S. 
Forces from Iraq, we have repositioned significant forces in Kuwait and 
are in the process of redefining their roles and missions. Can you 
describe your long-term plans for U.S. Forces in Kuwait?
    General Mattis. [Deleted.]

    12. Senator McCain. General Mattis, will your plan propose an 
enduring base, and if so, where?
    General Mattis. We have proposed enduring access to five specific 
Kuwaiti bases to support efforts focused on the defense of Kuwait and 
support for regional stability. In our Theater Posture Plan we note 
those locations where we desire enduring access and capability to meet 
current and future mission requirements. The Kuwait locations are also 
noted in the Global Defense Posture Report to Congress submitted 
annually by the Office of Secretary of Defense (OSD). There are no 
plans to expand or develop new bases and there is no change to our 
previous requests for access to select Kuwaiti bases. We regularly 
adjust our requirements at each base to meet the mission requirements. 
In fact, by the end of 2013, we intend to return Camp Virginia back to 
Kuwait.
    Our basing approach is to share existing host-nation bases where 
possible to sustain our force presence and provide the capability to 
meet our directed operational requirements. We have a long history and 
partnership between our countries before, during, and after Operation 
Desert Storm that fosters a cooperative relationship at Kuwaiti bases 
to establish an enduring footprint to support our forces and mission 
requirements. These improvements ensure the required capability is 
maintained at appropriate levels of readiness and to adjust to the 
Kuwaiti plans for base development. Additionally, we have periodic 
meetings (monthly to biannually) at different levels in accordance with 
our Defense Cooperation Agreement where we discuss posture proposals 
and develop a cooperative action plan for posture development that 
supports our common security interests in the region.

    13. Senator McCain. General Mattis, will your plan involve the need 
for investments in facilities, ranges, and infrastructure, and if so, 
please provide a description of those investments.
    General Mattis. We are developing joint plans with the Kuwait 
Ministry of Defense that may require additional infrastructure. 
Potential infrastructure under consideration includes joint training 
ranges, airfield improvements, and equipment storage facilities. We are 
pursuing host-nation funding for this infrastructure since it is our 
policy to do so in Kuwait. Negotiations for the training facility 
improvements are not complete; therefore, we anticipate there will be 
shared cost for these facilities. These infrastructure plans reflect 
our military-to-mililtary relationship and are normally less expensive 
than other combatant commands.

                      AFGHAN SECURITY FORCES FUND

    14. Senator McCain. General Mattis, the Chairman of the Joint 
Chiefs of Staff, General Dempsey, recently stated that the ``key to 
long-term stability in Afghanistan is the development of the Afghan 
Security Forces (ASF).'' Yet, the budget request for the Afghan 
Security Forces Fund (ASFF)--a fund that resources the training and 
equipping of the very Afghan forces that will soon be in the lead--is 
cut nearly in half from last year. What is the reasoning behind such a 
significant cut to the ASFF, particularly given the increased role ASF 
are to assume next year?
    General Mattis. The budget request for fiscal year 2013 does not 
represent a cut but a transition to the next, less expensive, phase of 
the program. Our assistance to the Afghan National Security Forces 
(ANSF) is comprised of a build phase and a sustainment phase. The ANSF 
has been steadily growing in capability for several years and will 
achieve their planned end-strengths in fiscal year 2012. Fiscal year 
2013 represents the transition to sustaining these force levels. 
Whereas the build phase was characterized by large expenditures to 
construct infrastructure, procure equipment, and establish the training 
curriculum, the sustainment phase will focus on continuing training and 
operations and maintenance sustainment spending, which is much less 
costly.

    15. Senator McCain. General Mattis, what do you view as the most 
significant challenges to the ASF becoming an effective and sustainable 
entity?
    General Mattis. The greatest challenge for the ANSF is its 
development of a national sustainment network that integrates national-
to-tactical levels of logistics. The logistics network must procure, 
prioritize, and distribute supplies and equipment to the regional nodes 
for issue to tactical formations. Additionally, ANSF leadership must 
understand how to see and manage the process, adjusting controls and 
inputs to influence negative readiness indicators. Other challenges 
include developing a wide range of enablers to support the ANSF and the 
international financial commitment beyond 2014.
                                 ______
                                 
             Questions Submitted by Senator Saxby Chambliss

                       FIFTH-GENERATION AIRCRAFT

    16. Senator Chambliss. General Mattis, you note in your written 
statement that ``through persistent military engagement, CENTCOM will 
maintain a presence in the region to protect vital interests, prevent 
future conflict, ensure access in the event of a crisis, and invest in 
future regional security.'' Regarding ensuring access, there are 
numerous countries in the CENTCOM AOR--some of which classify as 
adversaries of the United States--that have advanced surface-to-air 
missiles (SAM) that constitute a robust defense of their airspace and 
key potential targets. Traditional 4th-generation fighters would 
generally not be capable of penetrating this airspace or striking these 
targets. Yet CENTCOM does not have any permanently-based 5th-generation 
stealth fighter aircraft or bombers which you could rely on for short 
notice or emergency operations.
    Given this lack of 5th-generation or stealth capability permanently 
stationed in CENTCOM's AOR, at the unclassified level, can you share 
what options the United States might have if we required the ability to 
quickly penetrate denied airspace on short notice, and how confident 
are you that the United States would be able to attain the access we 
need in a short-notice or emergency situation?
    General Mattis. CENTCOM maintains a robust force posture within the 
AOR, and can rapidly deploy personnel and assets on alert from outside 
the AOR. If required to quickly penetrate denied airspace, we could do 
so with a variety of land, air, and sea-based systems, to include long-
range standoff weapons. I am confident in our abilities to hold any 
adversary at risk and gain access in support of our mission goals. 
Additionally, I would be pleased to provide more details to you at the 
classified level.

                          AIRCRAFT PROCUREMENT

    17. Senator Chambliss. Admiral McRaven, I understand you are 
recapitalizing the Air Force Special Operations Command (AFSOC) fleet 
with C-130J SOF variants. Would a faster annual procurement rate of 
aircraft be beneficial in order for SOCOM to better fulfill its 
requirements?
    Admiral McRaven. Securing a common airframe as the basis for my AC-
130J gunship and MC-130J mobility fleets greatly reduces my logistics, 
maintenance, and aircrew training issues. It also improves my 
operational flexibility to shift the force to respond, as needed, with 
equally capable assets. The Air Force procures the basic MC-130J 
aircraft with Major Force Program (MFP)-4 funding on our behalf, 
therefore I defer to them to determine the most efficient procurement 
strategy; however, we believe the optimal quantity for SOCOM's AC/MC-
130 recapitalization rate is eight aircraft per year. Less than eight 
aircraft per year extends our reliance on the aging legacy fleet, thus 
forcing higher sustainment, modernization, and flying-hour costs. All 
of these factors hamper our ability to deliver timely, effective 
combat-ready aircraft.

    18. Senator Chambliss. Admiral McRaven, at the current buy rate it 
appears that some of your AFSOC squadrons will be in transition for 
several years. What is the readiness impact of an extended transition 
from older aircraft to newer aircraft within a squadron?
    Admiral McRaven. SOCOM is in the process of recapitalizing its 
fleet of legacy mobility MC-130s and AC-130 gunships, many of which are 
approaching 50 years old, and have been continuously deployed since 9/
11. The current 94-aircraft fleet of six disparate versions will be 
recapitalized into two fleets of 57 MC-130Js and 37 AC-130Js with 
significant commonality between them. A fully-recapitalized fleet will 
greatly simplify sustainment and training, while significantly 
increasing operational flexibility and combat capability. AC/MC-130Js 
will be more capable than the legacy aircraft, will have smaller crew 
compliments, and will have significantly lower costs per flying hour 
and substantially higher mission capable rates.
    Today, AFSOC has all six versions of legacy AC/MC-130s either 
deployed to the current fight or training SOF units. The current 
recapitalization plan, though extending out until 2025, is executed 
sequentially by platform and by squadron at a manageable risk level. As 
we build up MC-130Js we are retiring MC-130Es. Next will be the MC-
130Ps and then the MC-130Hs. In a few years we will begin recapping the 
AC-130H, followed by the AC-130W, and lastly the AC-130U. Sequencing 
the platforms allows us to sustain a manageable training pipeline, both 
operations and maintenance, while building up and modifying the 
supporting infrastructure. Any further negative adjustments to the 
recapitalization rate will have severe impacts to our combat readiness 
as we continue to shed the legacy support infrastructure and manage our 
personnel to match the growth in new capability. Additional disconnects 
in the programmatics will increase costs and threaten the executability 
of the overall effort.

    19. Senator Chambliss. Admiral McRaven, would the stability of a 
multiyear contract with larger annual aircraft buys improve your 
ability to respond to multiple low-intensity conflicts?
    Admiral McRaven. Having a common airframe as the basis for my AC-
130J gunship and MC-130J mobility fleets greatly reduces my logistics, 
maintenance, and aircrew training issues. It also improves my 
operational flexibility to shift the force to respond as needed with 
equally capable assets. As far as a multiyear contract is concerned, 
the Air Force procures the basic MC-130J aircraft with MFP-4 funding on 
our behalf, therefore I defer to them to determine the most efficient 
procurement strategy. My MFP-11 funding only adds the unique 
capabilities that bring the aircraft up to a required SOF standard. 
Therefore, if we increase the number of aircraft purchased through the 
Air Force program, we need to ensure the MFP-11 costs are aligned as 
well for any post production modifications we will have to do. That 
said, the optimal quantity for SOCOM's AC/MC-130 recapitalization rate 
is eight aircraft per year. Any fewer extends our reliance on the aging 
legacy fleet at a much higher rate of sustainment, while any more 
stresses our capacity to deliver timely combat-ready aircraft. This 
optimal rate also addresses the problems we anticipate with changes to 
the National Air Space and in the global air traffic management system, 
since there is a clear path for avionics upgrades on the J model that 
does not exist for the legacy platforms.
                                 ______
                                 
             Questions Submitted by Senator Roger F. Wicker

                   TRAINING OF AFGHAN SECURITY FORCES

    20. Senator Wicker. General Mattis, since fiscal year 2005, annual 
funding to train the ASF has grown rapidly from $1.3 billion to $7.4 
billion in fiscal year 2007. In 2008, DOD announced plans to double the 
size of the ASF over the next 4 years at a cost of about $20 billion. 
Building the capacity of the ASF is a key element of the 
administration's Afghanistan policy. Beyond measuring the number of 
graduates of ASF training programs, it is difficult to gauge the 
capacity and effectiveness of these troops. How capable are graduates 
of our training programs in Afghanistan?
    General Mattis. In Afghanistan, capability is relative to the 
maturity of our programs. Some graduates, such as those from the 
National Military Academy of Afghanistan (NMAA), are perhaps the most 
capable of graduates from any training/education program in 
Afghanistan, producing graduates who meet required standards. Those 
graduates with previous military experience tend to be well above the 
standard. They are all literate, educated, and have been exposed to 
military, physical, and ethical education programs.
    Measuring the capacity and effectiveness of the Afghan National 
Police (ANP) is difficult. There is only anecdotal data to date. NATO 
Training Mission-Afghanistan (NTM-A) is developing the training 
development process within the ANP-Training General Command, a process 
that includes validation and assessment of training.
    Afghan National Army Special Operations Command (ANASOC) Commando 
and Special Forces soldiers must meet minimum qualifications for entry 
into the force which far exceed that of the average Afghan National 
Army (ANA) recruit. Most ANASOC soldiers are minimally literate; with 
Special Forces soldiers having at a minimum a seventh grade level 
ability. Additional courses taught by the ANASOC School of Excellence 
(SOE) further propel their already advanced soldiers to a higher level. 
Also, SOE Programs of Instruction (POI) have been adjusted to support 
special operations requirements and incorporate values-based 
instruction with the ultimate goal of producing an ethically based, 
professional force.
    The optimism regarding the capabilities of ANSF graduates is 
evident across a broad spectrum of operations and security. This is 
evident as graduates are providing security in Kabul and better control 
of border operations resulting in increased revenues. The maturity of 
the recruiting program and the increased literacy rates are also very 
encouraging.

    21. Senator Wicker. General Mattis, how are we screening applicants 
for our training programs?
    General Mattis. ANSF applicants are screened using an eight-step 
vetting process. Recruiters work closely with village elders and 
mullahs to validate the authenticity of each candidate's application, 
which includes personal identifying information, photos, Tazkera 
(Afghan ID card provided by the regional Population Registration 
Department), and two recommendation letters from village elders or 
guarantors. Recruits are then interviewed at local recruiting centers 
and undergo criminal background investigations. Following these initial 
steps, the recruits are transported to their respective training center 
for medical/drug screening and biometric enrollment/collection. The 
biometric data is used as an extension of a recruit's criminal 
background investigation, which prevents disqualified candidates from 
returning or absent without leave personnel from joining another branch 
of the ANSF. This eight-step vetting process has proven very successful 
in identifying previous bad actors from joining the ANSF ranks and has 
aided in criminal prosecution of those linked to previous crimes. For 
example, in 2010 the Afghan Air Force had approximately 3,600 airman 
enrolled of which 17 had criminal matches and were referred to the 
Ministry of Defense for further investigation.

    22. Senator Wicker. General Mattis, what tools do you utilize to 
ensure that prospective applicants are not members of the Taliban?
    General Mattis. In addition to the eight-step vetting process, U.S. 
Forces are collecting biometrics data on prospective applicants through 
three principal biometrics collection devices. Biometric data collected 
is matched against Afghan watchlists and databases and then transmitted 
to the DOD authoritative database, the Automated Biometric 
Identification System (ABIS) in West Virginia where all data is 
retained for future reference. This has proven very successful in 
linking applicants to prior incidents such as a Herat applicant that 
was linked to recent improvised explosive device attacks in Kandahar.

    23. Senator Wicker. General Mattis, are applicants literate and 
willing to learn?
    General Mattis. The exact literacy rate in Afghanistan is difficult 
to pinpoint, although data extracted from other sources United Nations/
United Nations Educational, Scientific, and Cultural Organization puts 
the literacy rate of the ANSF at approximately 14 percent. Currently, 
the literacy program has more than 118,000 personnel in training. To 
date, more than 26,000 ANSF personnel have graduated from the program, 
achieving a level of functional literacy that will enable them to make 
meaningful contributions. On the average, 9 out of 10 recruits are 
illiterate and innumerate. All recruits who cannot prove they are 
literate upon enlistment take a placement test to check competency and 
placement at the appropriate level of training. Of these recruits, only 
5 percent demonstrate functional literacy. Qualitative evidence from 
the program demonstrates a high level of motivation among recruits. The 
importance of literacy is reiterated to recruits by their ANA or ANP 
chain of command. The recruits' achievement rate (almost 100 percent) 
in the basic literacy program reflects this motivation. The program not 
only builds military and policing capability, but is the largest adult 
literacy program in the country and is having a positive impact on the 
overall rate of literacy in Afghanistan. This will require time and a 
deliberate effort to make literacy an enduring program.

    24. Senator Wicker. General Mattis, are graduates of our training 
programs able to comprehend American military values of respect for 
civilian authority, rule of law, et cetera?
    General Mattis. Yes, more and more every day. NTM-A continues to 
increase its focus on professionalization of the ANSF as it reaches its 
growth targets. The ANA Company Commander's Legal Course focuses on the 
ANA's military justice system and the law of armed conflict. ANP 
training includes Afghan Law, Constitution of Afghanistan, Afghan 
Statutory Law, Sharia Law, Code of Conduct, and the Inherent Law of 
Officers and Noncommissioned Officers (NCO). Human rights are woven 
into all ANP training.
    The Afghan Ministries of Defense and Interior continue to improve 
and increase leadership development by focusing on increasing the 
quality and the capacity of officer and NCO training. Both ministries 
have approved a respective Core Values Statement, a one-page document 
that identifies their core values under ``God, Country, and Duty.''
    Planning and initial steps to incorporate the six values 
(Integrity, Honor, Service, Respect, Courage, and Loyalty) into all ANA 
training curricula is ongoing. Moreover, all NMAA graduates are able to 
comprehend American military values and have been exposed to respect 
for civil authorities, rule of law, and ethics classes. However, though 
graduates might be well-versed in such values, their practical and 
intellectual application is questionable, especially if it conflicts 
with cultural norms.
    The ANASOC has its own comprehensive values campaign aimed 
precisely at professionalizing its force. Many of the topics covered in 
the Law of Land Warfare and Humans Rights already exist as core values 
within its campaign. Values such as Respect, Integrity, and Duty are 
principal components of it. ANASOC fully embraced the ANA's six core 
values and also expanded upon them to address the challenge of 
developing a professionalized SOF. ANA leadership fully embraces 
ANASOC's values campaign and may institute it force-wide.

    25. Senator Wicker. General Mattis, are these graduates able to 
effectively lead their own forces and pass on knowledge obtained from 
their American trainers?
    General Mattis. One of NTM-A's top priorities is the development of 
effective leaders and trainers. There are very capable senior leaders 
within the ANA, and together, we are focused on improving the officer 
and NCO corps for the future. Graduates of the ANA leadership training 
programs are able to help train future ANA leaders.
    The overall effectiveness of training the force and future leaders 
of the ANP continues to improve. Recruitment campaigns targeting NCOs 
are already paying significant dividends to close the leadership gap 
quickly, which is expected to be completely resolved by early 2013. 
These NCOs are better educated, more capable, and ready to assume 
leadership roles sooner due to their literacy levels and motivation to 
serve. Leadership programs have been instituted within the Ministry of 
the Interior to ensure longevity of the force. The ANP has a robust 
train-the-trainer program that has resulted in over 95 percent of 
training in the field being handled by Afghans.

    26. Senator Wicker. General Mattis, I am particularly concerned 
that local political considerations on the ground in Afghanistan may 
override the practical need for U.S. combat troops to help maintain a 
stable and secure environment. Would an expedited withdrawal from 
Afghanistan that is not conditions-based be irresponsible, given our 
expenditure of American blood and taxpayers' dollars?
    General Mattis. An expedited withdrawal or change of mission from 
Afghanistan that is not conditions-based invites potential risks to 
surge recovery, future shaping of U.S. Forces, and setting the enduring 
coalition force to enable a successful transition to the Government of 
Afghanistan. The Lisbon Declaration of 2010 sets the goal for an 
enduring presence and long-term partnership which will complement the 
International Security Assistance Force (ISAF) security mission and 
continues well beyond. As the ANSF surge force reaches its goal of 
352,000 by October 2012, coalition forces are required to set 
conditions so ANSF transition can occur responsibly. A withdrawal that 
is not conditions-based will destabilize progress and incur risks to 
ISAF, the coalition, and the Afghan Government.
    An early withdrawal by the United States, especially given a 
financially-constrained environment, would also provide reasons for our 
partners to question U.S. commitment and curtail, or even prematurely 
end, their support to the coalition.

                            REGIONAL UNREST

    27. Senator Wicker. General Mattis, last year's protests throughout 
the Middle East demanded reform and a shift to free and open 
democracies in numerous countries that are traditionally ruled under 
authoritarian regimes. Do you believe American action in Libya had an 
impact on America's image in Afghanistan?
    General Mattis. It's problematic to compare actions in Libya with 
the conflict in Afghanistan; they were and are fundamentally different 
conflicts. Our objectives in Libya were to protect civilians from 
violence caused by their own government and hold the Qaddafi regime 
accountable to an U.N.-mandated cease fire. In Afghanistan, our 
objective is to disrupt, dismantle, and defeat al Qaeda and their 
extremist allies while simultaneously preventing their capacity to 
threaten America and our allies in the future. One mission was about 
supporting a universal right to self-determination, the other is about 
preventing a loosely-governed country from being exploited by foreign 
terrorists and used as a safe haven from which to plan and carry out 
terror attacks today and in the future.
    What matters most to the Afghan people is that our actions are 
commensurate with our words. The Afghan people have endured decades of 
violence and sacrifice and deserve our commitment. We must: transition 
security responsibly so that Afghans can determine their own future; 
continue to be sensitive to civilian casualties and collateral damage; 
support the Afghan Government and its security forces with advice, 
training, and equipment; and lead the international community to 
encourage future economic support.

    28. Senator Wicker. General Mattis, if American forces were engaged 
directly in Syria, would that fuel anti-American sentiment in the 
region?
    General Mattis. Unilateral American military action in Syria would 
be a volatile anti-American stimulant, both in the region and 
internationally. The Syrian problem is best resolved by maximizing 
international efforts supporting the involvement of regional partners. 
I support the nations of the Gulf Cooperation Council and the Arab 
League in their efforts as they look to bring another resolution to the 
U.N. Security Council. I think the United States must support regional 
solutions developed in concert with leaders from nations across the 
region such as Jordan, UAE, Qatar, and Saudi Arabia.

    29. Senator Wicker. General Mattis, has unrest in Bahrain, Qatar, 
or other partner-nations had an impact on our operations and force 
projection in the region?
    General Mattis. Regional unrest in Bahrain and other partner 
nations has not significantly impacted CENTCOM operations or force 
projection. We continually assess regional stability and, when 
appropriate, increase force protection measures to cope with unrest and 
mitigate risk to force and risk to mission.

                                 PIRACY

    30. Senator Wicker. General Mattis, piracy continues to threaten 
commercial shipping of U.S. and foreign-flagged ships in virtually the 
entire CENTCOM AOR. What are CENTCOM and Naval Forces Central Command 
(NAVCENT) doing to reduce the vulnerability of the U.S. commercial 
fleet from piracy?
    General Mattis. Piracy is a challenge to the international maritime 
community, both commercial and military. The sum of efforts by the 
Combined Maritime Forces, European Union (EU) Naval Forces, and the 
NATO Counter Piracy Task Force have placed up to 30 military vessels at 
any given time in key locations to deter piracy attacks. In his 
capacity as the Commander of Combined Maritime Forces, the NAVCENT 
Commander hosts a quarterly shared awareness and deconfliction 
conference in Bahrain to ensure multi-national cooperation of 
counterpiracy activities in the region. The conference also includes 
civilian international maritime organizations and delegates from non-
affiliated countries such as China, Russia, Japan, and India. CENTCOM 
continues to communicate to the maritime industry the importance of 
adherence to established best management practices, such as utilizing 
well-trained security teams to deter piracy. Military coalition efforts 
combined with increased adherence to best management practices has 
lowered the success rate of hijackings in 2011 to 15 percent from 28 
percent in 2010.

    31. Senator Wicker. General Mattis, are you a strong advocate of 
the use of private security teams aboard commercial vessels?
    General Mattis. Like terrorism, acts of piracy pose a transnational 
security threat that emanates from areas plagued by conflict, weak 
governance, and economic insecurity. While attempted attacks have 
risen, their success level has declined due to the use of best 
management practices which includes the use of highly trained security 
teams and sustained naval presence. Statistically, vessels that have 
embarked credible private-armed security teams have had a 100 percent 
success rate of preventing pirate takeover. The private security teams 
can make a contribution, however their employment can become complex 
for a variety of legal reasons. Two years ago the U.S. commercial 
shipping industry was largely opposed to using private-armed security 
teams. Over the past year, their use was endorsed by the International 
Maritime Organization (IMO) and some insurance companies. Many shipping 
companies have begun to employ them and support appears to be growing.

                           BLUE DEVIL PROGRAM

    32. Senator Wicker. General Mattis, I understand the Blue Devil 1 
integrated ISR program is resulting in spectacular results in 
Afghanistan, according to recent testimony from Air Force leadership. I 
also understand that the Blue Devil 2 program is designed to increase 
this ISR capability dramatically, and that former Secretary of Defense 
Gates stated that the Blue Devil 2 program is urgently needed to 
eliminate combat capability deficiencies that have resulted in combat 
fatalities. Combatant commanders have routinely stated that persistent 
ISR is a capability that needs additional capacity. Does CENTCOM 
continue to maintain a requirement for the integrated high-definition 
optical and signals intelligence sensor-to-sensor cueing capability 
which is the purpose of the Blue Devil 2?
    General Mattis. [Deleted.]

    33. Senator Wicker. General Mattis, do you agree, given DOD's 
determination, that this initiative was urgently needed in Afghanistan 
to address combat deficiencies?
    General Mattis. CENTCOM has a standing requirement for persistent 
surveillance that has not substantially changed since the Blue Devil 2 
initiative was first proposed by the U.S. Air Force in the fall of 
2010. What has changed is Blue Devil 2's potential to meet that 
requirement. Schedule delays, system integration challenges, and severe 
under-performance in weight and endurance objectives drove the Air 
Force decision to de-scope the program, with CENTCOM concurrence.

    34. Senator Wicker. General Mattis, would it be a significant 
mistake to stop work and not deploy this much-needed aircraft to 
Afghanistan?
    General Mattis. [Deleted.]

    35. Senator Wicker. General Mattis, do you agree that combat troops 
in Afghanistan would immensely benefit from the Blue Devil 2's 
capabilities if the Air Force removed mission creep from the program 
and went back to the original requirements?
    General Mattis. [Deleted.]

                            IRANIAN THREATS

    36. Senator Wicker. General Mattis, Iran has threatened to shut the 
Strait of Hormuz, a transit point for a fifth of oil traded worldwide, 
if sanctions are imposed on its crude exports. The Chairman of the 
Joint Chiefs of Staff, General Martin Dempsey, has stated that Iran has 
the ability to block the Strait of Hormuz for a period of time. What is 
your definition of ``a period of time''?
    General Mattis. [Deleted.]

    37. Senator Wicker. General Mattis, Vice Admiral Mark Fox 
acknowledged that Iran's military is capable of striking a blow against 
U.S. Forces in the Persian Gulf. What is your assessment on how much 
damage Iran could inflict on U.S. interests and assets?
    General Mattis. Iran has numerous ways to strike U.S. interests and 
inflict damage to both U.S. and partner-nation forces in the region. 
Iran has ballistic missiles which can reach U.S. Forces in the region, 
our partner nations in the Gulf, Israel, and Turkey in the broader 
Middle East, and NATO partners in southeastern Europe. Iran has 
extensive maritime threats such as submarines, small attack and PC 
armed with anti-ship cruise missiles, suicide boats packed with 
explosives, shore-based coastal defense cruise missiles, maritime SOF, 
and thousands of naval mines. Iran's navy can inflict economic damage 
by threatening vital Gulf shipping lanes and approaches to major Gulf 
Cooperation Council commercial port facilities. They can use advanced 
cruise missiles to reach the entire Strait of Hormuz and majority of 
the Gulf of Oman and Arabian Gulf. Iran can also employ unconventional 
capabilities (such as special forces, surrogates, and proxies) to 
strike U.S. and partner interests globally, as illustrated in last 
year's Quds Force attempt to assassinate Saudi Arabia's ambassador to 
the United States.

    38. Senator Wicker. General Mattis, the United States has four 
Avenger-class mine-sweeping ships in the Gulf--USS Ardent, USS 
Dextrous, USS Gladiator, and USS Scout. The U.K.'s Royal Navy has 
another four vessels--the HMS Pembroke, HMS Middleton, HMS Quorn, and 
HMS Ramsey. Due to recent rhetoric from Iranian leadership regarding 
closing the straits and along with thousands of mines the Iranians 
possess, is there a need to reposition additional mine-hunting/mine-
sweeping assets to the Gulf?
    General Mattis. The presence of U.S. naval assets in the Gulf 
fluctuates based on the needs and requirements of the combatant 
commander and as approved by the Joint Staff and the Secretary of 
Defense. As part of a CENTCOM request for forces, four additional MCM 
ships will deploy from San Diego to Bahrain: USS Sentry (MCM 3), USS 
Devastator (MCM 6), USS Pioneer (MCM 9), and USS Warrior (MCM 10), and 
are scheduled to arrive in the CENTCOM AOR in June. The addition of 
these MCM ships will bring the total in theater to eight, thus meeting 
the established requirement. Four MH-53 helicopters have also deployed 
to the CENTCOM AOR to increase mission capabilities. The USS Ponce is 
en route to act as an afloat staging base for said operations, and 
efforts are underway to build a task force comprised of U.S. and 
partner-nation mine-hunting/mine-sweeping assets.
                                 ______
                                 
               Questions Submitted by Senator Rob Portman

                             C-27J PROGRAM

    39. Senator Portman. General Mattis, was your estimate for Overseas 
Contingency Operations (OCO) funding for operations in Afghanistan in 
fiscal year 2013 informed by the Air Force decision to divest the C-27J 
program by September 2012?
    General Mattis. Our OCO request was not informed by the Air Force's 
decision to divest the C-27J program, since our request was only for 
our headquarters portion of funding, not for operations. Since Services 
ultimately bear the costs, they work together with OSD to generate OCO 
estimates for operations in Afghanistan. The Air Force could best 
explain how their decision to divest the C-27J program impacted their 
OCO request for operations.

    40. Senator Portman. General Mattis, based upon the missions 
supported to date by the C-27J, what combination of CH-47s, C-130s, or 
contractor airlift will be required to fill the mission of two or four 
C-27Js, as originally planned?
    General Mattis. One C-130H or C-130J will meet the current and 
projected cargo and passenger movements of two C-27Js. Limitations on 
CH-47 blade hours and airfield security requirements make both the CH-
47 and contracted air undesirable.

    41. Senator Portman. General Mattis, what is your estimate of the 
cost for fiscal year 2013 for two or four C-27Js fulfilling resupply 
missions in Afghanistan, as opposed to those missions supported by a 
combination of CH-47s, C-130s, or contractor airlift?
    General Mattis. Following the present course of action to mitigate 
the reduction of two C-27Js for direct-support airlift in Afghanistan, 
mobility specialists have determined that one additional C-130 can meet 
the requirement. Air Force Central Command (AFCENT) Operations 
Directorate, Plans, and Joint Matters (A3-X) determined the following 
costs based on a range of hourly usage rates: at $9,000 per hour and 
projected to fly 1,943.5 hours per year, the C-27J will cost 
approximately $17,491,500.00; at $10,400 per hour, with a projected 
1,050.1 hours annual equivalent, the C-130H will cost approximately 
$10,921,400.00; and finally, at $9,100 per hour, with a projected 790.2 
hours annual equivalent, the C-130J will cost approximately 
$9,556,200.00 per year. CH-47s are not a suitable replacement and 
contract airlift was not considered in the analysis due to current 
threat levels severely limiting--even prohibiting--service to C-27J 
transited locations in Afghanistan.

    42. Senator Portman. General Mattis, what is your estimate of fuel 
required for fiscal year 2013 for two or four C-27Js fulfilling 
resupply missions in Afghanistan as opposed to those missions supported 
by a combination of CH-47s, C-130s, or contractor airlift?
    General Mattis. The current course of action to continue the direct 
support airlift in Afghanistan provided by two C-27Js without 
interruption is to replace them with one C-130. The cargo capacity of 
the C-130 is approximately twice that of the C-27. AFCENT Operations 
Directorate, Plans, and Joint Matters (A3-X) determined the following 
comparative fuel projections for fiscal year 2013 for each air frame 
and based on the load capacity for each:

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                               Estimated Flight
                      Airframe                        Number of Aircraft   Pallet Positions   Hours per Airframe    Gallons of Fuel    Total Fiscal Year
                                                                                                     Type           Usage per Hour    2013 Fuel Estimate
--------------------------------------------------------------------------------------------------------------------------------------------------------
C-27J...............................................                  2                   3             1,943.5                 367             713,263
C-130H..............................................                  1                   6             1,050.1                 735             771,846
C-130J..............................................                  1                   8               790.2                 735             580,806
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Limitations on CH-47 blade hours and airfield security constraints 
make both the CH-47 and contracted air undesirable.
                                 ______
                                 
              Questions Submitted by Senator Kelly Ayotte

 JOINT LAND ATTACK CRUISE MISSILE DEFENSE ELEVATED NETTED SENSOR SYSTEM

    43. Senator Ayotte. General Mattis, you specifically cite the 
threat that Iranian small boats and cruise missiles represent. A 
February 25th story in the Wall Street Journal reported that ``American 
forces are modifying weapons systems on warships so they could be used 
against Iranian fast-attack boats, as well as shore-launched cruise 
missiles.'' You have been outspoken on the need for equipment upgrades 
to fill in gaps in U.S. defense capabilities and military preparedness 
in the region, and the Joint Land Attack Cruise Missile Defense 
Elevated Netted Sensor System (JLENS) program is designed to fill such 
gaps. Does CENTCOM still have a valid, unmet requirement for JLENS?
    General Mattis. [Deleted.]

    44. Senator Ayotte. General Mattis, last year the committee 
supported a reprogramming request to deploy the JLENS program to 
address these threats. When will JLENS begin this urgently-needed 
mission of protecting our forces in the Middle East?
    General Mattis. [Deleted.]

    45. Senator Ayotte. General Mattis, what is the cause of the 
current delay?
    General Mattis. [Deleted.]

    46. Senator Ayotte. General Mattis, how can this committee help 
expedite the deployment of JLENS to protect our troops?
    General Mattis. [Deleted.]

                       VIRGINIA-CLASS SUBMARINES

    47. Senator Ayotte. Admiral McRaven, as area-denial and anti-access 
threats are increasing, the need for Virginia-class submarines, which 
are ideal for these environments, grows. The President has talked about 
an increased emphasis on the Asia-Pacific--an area of operations that 
is overwhelmingly maritime in character. We are also told that by 2030, 
according to the fiscal year 2011 program of record, that we will be 
confronting a 30 percent reduction in the size of our attack submarine 
fleet and a 60 percent reduction in the undersea strike volume. Yet, 
the President's fiscal year 2013 budget delays the procurement of one 
Virginia-class submarine. Is it accurate to say that the Virginia-class 
submarine provides a critical platform for our special operators, 
especially in anti-access and area-denial environments?
    Admiral McRaven. The Virginia-class submarine platform does provide 
a world-wide SOF insertion platform that can be used for short-duration 
tasking in operational areas that employ anti-access, area-denial 
systems.

    48. Senator Ayotte. Admiral McRaven, would it be accurate to 
describe the Persian Gulf and the seas adjacent to Iran as an 
increasingly anti-access and area-denial environment?
    Admiral McRaven. Iran possesses approximately 2,440 km of coastline 
in the Persian Gulf and Gulf of Oman. Iran currently focuses on anti-
surface warfare, but has recently strengthened capabilities for anti-
surface warfare. A comprehensive layering effect of the following 
tactics would be most effective in denying areas to the Persian Gulf 
and seas adjacent to Iran; however, anti-access and area denial in this 
region has yet to be demonstrated:

        - Mine threat: Iran exercised and refined mine-laying 
        capabilities in the Strait of Hormuz in recent training events 
        and may be able to impede maritime traffic;
        - Surface threat: Iran's ability to posture subsurface assets 
        effectively remains to be seen; however, the addition of the 
        Yono submarines coupled with Iran's Kilos is possibly the most 
        significant change to Iran's undersea potential; and
        - Surface threat: Iranian small boats using swarm tactics, 
        surface vessels, and increased defenses pose a surface maritime 
        access to the Persian Gulf.

    49. Senator Ayotte. Admiral McRaven, looking well into the future, 
are you concerned about the projected 60 percent reduction in undersea 
strike volume?
    Admiral McRaven. Yes, I am concerned with the projected reduction 
in undersea strike volume, primarily because our Large Volume Host 
Submarine (LVHS), SSGN, will reach their end of service life during the 
timeframe of the reduction in strike volume. SOCOM will lose the dual 
submersible capability and the endurance to support SOF missions that 
the SSGN provides. However, SOCOM and Naval Special Warfare are working 
closely with the Navy to integrate SOF requirements into the next 
generation of undersea platforms to mitigate that impact. Cooperation 
with Navy to integrate SOF requirements during the design phase of the 
follow-on version of Virginia-class will help mitigate the physical 
limitations of the Virginia-class as compared to the SSGNs.

    50. Senator Ayotte. Admiral McRaven, how important will the 
Virginia payload module be in addressing at least a portion of this 
looming gap in undersea strike capabilities?
    Admiral McRaven. The Virginia payload module will replace some of 
the important strike capability that will go away when the four SSGNs 
are retired from the fleet in 2024 through 2026. The Virginia payload 
module will only replace 50 percent of the SOF dual Dry Deck Shelter 
(DDS) capability that has been within the submarine force since 1985. 
The Virginia class submarine can only accommodate one DDS, as currently 
configured, and the Navy is not currently considering modifying it to 
accommodate two DDSs for a dual capability due to the Virginia-class 
being much smaller than the SSGNs. Several conceptual renderings have 
been presented to the Navy and SOCOM for a next-generation shelter 
system on a Virginia-class; however, we will not know the exact 
implication of these concepts until after an Analysis of Alternatives 
is completed.

    [Whereupon, at 12:05 p.m., the committee adjourned.]


DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR 
               2013 AND THE FUTURE YEARS DEFENSE PROGRAM

                              ----------                              


                        THURSDAY, MARCH 8, 2012

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

                         DEPARTMENT OF THE ARMY

    The committee met, pursuant to notice, at 9:35 a.m. in room 
SD-106, Dirksen Senate Office Building, Senator Carl Levin 
(chairman) presiding.
    Committee members present: Senators Levin, Lieberman, Reed, 
Akaka, Nelson, Webb, Udall, Hagan, Begich, Manchin, Gillibrand, 
Blumenthal, McCain, Inhofe, Chambliss, Wicker, Brown, Portman, 
Ayotte, Cornyn, and Vitter.
    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; 
Gerald J. Leeling, counsel; Peter K. Levine, general counsel; 
Jason W. Maroney, counsel; and William K. Sutey, professional 
staff member.
    Minority staff members present: Ann E. Sauer, minority 
staff director; Paul C. Hutton IV, professional staff member; 
Daniel A. Lerner, professional staff member; Lucian L. 
Niemeyer, professional staff member; and Diana G. Tabler, 
professional staff member.
    Staff assistants present: Jennifer R. Knowles, Mariah K. 
McNamara, and Brian F. Sebold.
    Committee members' assistants present: Vance Serchuk, 
assistant to Senator Lieberman; Carolyn Chuhta, assistant to 
Senator Reed; Nick Ikeda, assistant to Senator Akaka; Ryan 
Ehly, assistant to Senator Nelson; Gordon Peterson, assistant 
to Senator Webb; Brittany Keates, assistant to Senator Begich; 
Patrick Hayes, assistant to Senator Manchin; Kevin Fink, 
assistant to Senator Gillibrand; 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; Brent Bombach, assistant to Senator Portman; 
Brad Bowman, assistant to Senator Ayotte; and Charles 
Brittingham, assistant to Senator Vitter.

       OPENING STATEMENT OF SENATOR CARL LEVIN, CHAIRMAN

    Chairman Levin. Good morning, everybody. The committee 
meets today to welcome the Secretary of the Army, John M. 
McHugh, and the Chief of Staff of the Army, General Raymond T. 
Odierno, USA, for our hearing on the Army's 2013 budget request 
and current posture.
    Secretary McHugh, thank you for your continued outstanding 
service as the Army's civilian leader. Although General Odierno 
is well known to the committee, this hearing I believe marks 
your first appearance before us as the Army's 38th Chief of 
Staff. As always, General, we thank you for your remarkable 
service and we look forward to hearing your assessment and plan 
to meet the challenges facing the Army.
    Over the last 10 years, the Army has learned from the hard 
lessons of continuous combat. It has grown and adapted its 
organization and operations. It has rapidly developed and 
fielded new weapons and technologies. It has acted with great 
compassion to meet its responsibilities for easing the often-
painful human cost of war for our troops and their families. 
After 10 years, the Army is combat-tested and proven. For all 
of this, the Nation is proud and deeply grateful.
    Two recent changes make the defense budget situation 
challenging for the Army. I should have said probably at least 
two recent changes, but here are the two: One, the Budget 
Control Act passed by Congress last summer, with the 
limitations that it places on funding for our national 
security. The Department of Defense (DOD) fiscal year 2013 
budget request meets the requirements of the Budget Control 
Act.
    Second, adapting to its changing role in the new strategic 
guidance announced by the President last January. This request 
that they've made in the budget appears to reflect the 
Department's year-long comprehensive strategic assessment and a 
corresponding new strategic guidance oriented on reshaping our 
defense establishment for the challenges of the future.
    The essential features of this new strategic guidance 
maintains focus on success in the current conflict in 
Afghanistan, but also reorients DOD on other strategic 
challenges around the world and developing the forces most 
relevant to those challenges. The new guidance deemphasizes 
ground forces for stability and counterinsurgency operations 
and increases emphasis on air and sea forces for global power 
projection. Under this strategic guidance, Army and Marine 
Corps ground forces are reduced, with the corresponding risk 
mitigated by greater reliance on the readiness and availability 
of the Reserve components and preservation of an ability to 
regenerate Active Forces.
    The Army's fiscal year 2013 budget request reflects these 
changes, but questions naturally arise about the Army's plans 
to adapt and manage risks in its size, structure, readiness, 
and modernization while at the same time preserving the quality 
of life for our soldiers and their families, which is so 
important to sustaining an All-Volunteer Force.
    For example, the new DOD strategic guidance includes an 
increased emphasis on our interests in the Asia Pacific, for 
which DOD is taking steps to reshape U.S. forces relative to 
the air and maritime demands of that region. We'd be interested 
to hear from our witnesses about the broad purpose of land 
power and the role of ground forces in an Asia Pacific-oriented 
strategy.
    The new DOD strategic guidance expressly states that the 
Nation will avoid large-scale stability operations requiring 
significant ground forces. Accordingly, the Army's size and 
force structure can be reduced, the strategic guidance 
suggests, and that would save money and still meet acceptable 
levels of strategic risk. Over the next 5 years, the Active 
Army will cut its end strength by approximately 72,000 
soldiers, ending with a force of 490,000 by the end of fiscal 
year 2017, and would still be approximately 10,000 soldiers 
above its pre-Iraq War size.
    We'd be interested to hear from our witnesses on the Army's 
plans to implement these reductions and to manage risk to its 
mission and to the health of the All-Volunteer Force. We're 
particularly concerned about the manner in which the Army will 
draw down and the plan for providing transition assistance and 
support for soldiers and their families. We simply cannot 
forget that for every 10,000 soldiers in the Army today there 
are approximately 16,000 family members as well. The added 
stress of troop reductions on an Army still at war will be 
significant and we expect the Army to manage this very 
carefully.
    The new strategic guidance also reduces the Army's force 
structure by eight combat brigades, with two of these brigades 
de-activating out of Germany. We'd be interested to hear from 
our witnesses their plans for reorganization of the Army to 
meet this requirement and whether other force changes will 
require further reductions in the total number of combat 
brigades. Also we're interested to hear from our witnesses 
their assessment of the Army's global posture and where savings 
might be realized by moving foreign-based units back to the 
United States.
    The Army continues to meet the demand for trained and ready 
forces in support of operations in Afghanistan. Hard fighting 
will continue even as we and our allies continue to build the 
Afghan security forces (ASF) so that they may take more and 
more responsibility for their own security. We know that our 
troops deploying to Afghanistan have the highest priority for 
resources to ensure that they are trained and ready before they 
go and to make sure that they have what they need when they get 
there. However, reductions in the size and structure of the 
Army, if not well managed, increase the risk of allowing the 
nondeployed force to become hollow, that is too many units with 
too few soldiers to accomplish the units' missions.
    This increases the risk for the Nation that those 
nondeployed forces may be hollow and unprepared to deploy or 
accomplish their missions if needed for an unforeseen 
contingency. We'd be interested to hear from our witnesses how 
the Army will manage the complexity of providing trained and 
ready forces for operations in Afghanistan, reduce and 
strengthen force structure, and at the same time avoid 
hollowing the nondeployed force.
    Army equipment modernization has struggled over the last 10 
years, but recent efforts by senior Army leadership have been 
aimed at rationalizing and stabilizing an achievable and 
affordable strategy. In general, the fiscal year 2013 budget 
request protects the Army's priorities for development and 
fielding of a tactical communications and data network, 
development of a new Ground Combat Vehicle (GCV) and Joint 
Light Tactical Vehicle (JLTV), as well as upgrading and 
expanding its helicopter force.
    But the Army has restructured, slowed, cut, or cancelled 
most of its ground vehicle programs, with significant risk 
implications for the health of the military vehicle industrial 
base. We'd be interested to hear from our witnesses their 
assessment of the current and future risks to the Army's combat 
and tactical vehicle industrial base and how they intend to 
manage that risk.
    The Army continues to work on reducing the cost and size of 
its operational energy footprint at home and when deployed. 
We'd be interested to hear an update on Army operational energy 
innovations that reduce the demand for energy as well as reduce 
the cost and size of the energy sources. More importantly, how 
are these innovative technologies being used by our deployed 
forces around the world?
    Finally, the Army has shown a great determination to deal 
effectively with the human cost to soldiers and their families 
of the pressures and consequences of continuous combat for 10 
years. Over these years, the Army has created many new programs 
and budgeted billions of dollars to improve the care of our 
wounded soldiers, to prevent suicides, and to support families 
before, during, and after the deployment of their loved ones. 
The American people are grateful for all that care and concern. 
The committee is interested to hear Secretary McHugh's and 
General Odierno's updates and assessments of the Army's efforts 
in these areas and their thoughts on how these programs will 
evolve in the foreseeable future.
    The Nation could not be more proud of our Army, its 
soldiers, and their families. We will with confidence depend on 
the leadership of Secretary McHugh and General Odierno through 
the tough times ahead to ensure that the Nation will always 
have the Army that it needs.
    Senator McCain.

                STATEMENT OF SENATOR JOHN McCAIN

    Senator McCain. Thank you, Mr. Chairman. I join you in 
welcoming our witnesses.
    Secretary McHugh and General Odierno, I commend you both 
for your distinguished careers and your leadership of an Army 
in the midst of organizational change. Of course, on behalf of 
all of us, we would like to express our deep gratitude for the 
service and sacrifice of our soldiers who are today risking 
themselves on our behalf.
    I believe that your mission is more challenging today than 
it has been since the late 1970s. Twenty-three Army brigades 
are currently conducting combat and training operations in 
Afghanistan. Thousands more soldiers are deployed around the 
globe. At home the Army is beginning to execute a plan to 
decrease end strength, realign force structure to meet new 
threats, sustain recently developed capabilities, and 
regenerate skill sets that have been necessarily idle since the 
invasion of Iraq.
    Your job is to do all these things simultaneously and with 
fewer resources. Against that backdrop, the Army must find ways 
to operate more efficiently and effectively. To respond to 
current requirements in Afghanistan, the Army is modifying 
brigades to create and deploy specialized training teams. To 
address future challenges, the Army has proposed aligning 
brigades with the combatant commands. The committee will be 
interested to know the Army's plans for both.
    When we look across the globe today at the various 
challenges we are confronting, what is most clear is that the 
world continues to surprise us. Al Qaeda has become 
increasingly decentralized, but no less deadly, with affiliates 
seeking safe haven in places like Yemen, the Horn of Africa, 
and the trans-Sahel. In Afghanistan, despite the progress that 
our troops are making, we are at an impasse with President 
Karzai on the negotiation of a strategic partnership agreement.
    Our relationship with Pakistan remains fraught by a series 
of setbacks arising from their continued support of the Haqqani 
network. In Iraq, Prime Minister Maliki continues to centralize 
power, while the threat posed by al Qaeda appears to be 
growing. The Iranian regime continues working to subvert Iraq 
and other countries in the region. Its threat to regional 
stability would expand exponentially if the Iranian regime were 
to acquire nuclear weapons capability.
    Finally, in Syria, after a year of bloodshed, the crisis 
has reached a decisive moment. Bashar Al-Assad appears to be 
accelerating his fight and doing so with the full support of 
Russia, China, and Iran.
    In view of instability in these strategically important 
regions and admitting our historically poor track record of 
forecasting the need for large conventional force, I reiterate 
my concerns about the scope and speed of our end strength 
drawdown. Limiting our strategic flexibility is unwise, 
especially in the current environment.
    General Odierno, I look forward to hearing your views on 
the strategic implications of drawing down to an Active-Duty 
Force of 490,000 and your vision for an Army that does not 
become merely a smaller version of its previous self, but 
reorganizes for future threats.
    Secretary McHugh, inside the DC Beltway we sometimes lose 
sight of the reality that how we fight may be more important 
than what we fight with. It's vital that the Army maximize its 
operations and maintenance funding to support training, 
especially now that more soldiers are returning to the garrison 
environment. The hollow force that followed past conflicts can 
only be avoided if training is fully resourced in conjunction 
with the personnel and equipment accounts.
    In the area of acquisition management, we are all aware of 
the Army's past challenges. As you finalize equipping and 
modernization strategies, I urge you to look carefully at 
recent history. Over the last decade, the Army embarked on a 
series of developmental programs that, because of unrealistic 
requirements, unanticipated costs, or poor contracting 
strategy, had to be descoped, rebaselined, or cancelled 
outright. Our estimates are that around $300 billion were spent 
that never became operational equipment.
    Mr. Secretary, implementing the recommendations of your 
recent Army-wide acquisition review is a good start to 
addressing these issues. We're interested to learn what further 
actions you'll take to improve the Army's procurement track 
record and requirement process.
    The committee will also be attentive to large programs 
still in the earliest phases of development to ensure they 
conform to the Weapons Systems Acquisition Reform Act (WSARA) 
and avoid mistakes of the past.
    Despite the challenges of budget constraints and the 
ongoing contingency operations that stress the force, our 
soldiers continue to perform magnificently around the globe. 
They and their families are a credit to our Nation. I thank the 
witnesses and look forward to their testimony.
    Chairman Levin. Thank you very much, Senator McCain.
    Secretary McHugh.

    STATEMENT OF HON. JOHN M. McHUGH, SECRETARY OF THE ARMY

    Secretary McHugh. Thank you very much, Mr. Chairman, 
distinguished ranking member Senator McCain, and members of 
this very august body and very important committee.
    Let me begin by saying how honored I am to be here again 
today. I'm particularly honored and, frankly, relieved to be 
joined by the 38th Chief of Staff of the Army, the gentleman on 
my left, General Ray Odierno. As you said, Mr. Chairman, many 
of us have had the opportunity to watch this gentleman in 
action on the front, making such a difference in places like 
Iraq. The opportunity to serve next to him for me is very, very 
exciting. He is clearly the right man for the right times.
    Most importantly, I want to thank all of you. You've both 
been, Mr. Ranking Member and Mr. Chairman, very gracious in 
your comments about the service and sacrifice of our men and 
women in uniform, and certainly they deserve all of that. But 
clearly this committee has been so responsible for much of the 
good that we have been able to help those 1.1 million soldiers, 
those 270,000 civilians, and their families achieve, 
particularly over the last 10 years. They would want me to tell 
you how much we recognize that and how important it is to us.
    As all of you know, today perhaps more than quite some time 
our demanding fiscal environment requires an even stronger 
partnership with Congress, with this committee, to make sure 
that we have the right resources to defeat our enemies, support 
our allies, and protect our homeland, and do so responsibly, 
decisively, and, yes, affordably.
    We believe this budget that's been placed before you 
supports these goals by laying the foundation for a gradual 
reduction of our military and civilian end strength, while at 
the same time supporting the vital modernization, training, 
soldier programs, and family support initiatives so necessary 
for the Army; an Army, though smaller, that will remain the 
strongest and most capable land force in the world as it is 
today.
    As we implement what I think can be fairly described as a 
bold new security strategy, I want to be very clear. The Army's 
combat expertise, adaptability, and strategic reach will be 
more vital than ever before. Over the last year, over the last 
decade, the Army has continued to be the decisive hand of 
American foreign policy and the helping hand of Americans 
facing the devastation of natural disasters.
    With soldiers deployed in 6 of 7 continents and in more 
than 150 nations around the world, your Army has become the 
face of American concern and the fist of military might. In the 
Pacific, we continued our long-term presence in the region with 
some 75,000 Army civilian and uniformed personnel participating 
in over 160 exercises, engagements, and operations in support 
of our allies in that vital region. In Korea, our soldiers 
provided a strong deterrent to North Korean aggression. In 
Japan and in the Philippines, we maintained our decades-old 
security relationships, training and supporting those allied 
armies.
    At the same time, in Europe our soldiers fulfilled vital 
training, stability, and peacekeeping roles in Bosnia and 
Kosovo. Then in Africa, your Army supported counterterrorism 
operations throughout the Horn and beyond.
    But foreign threats and operations were not all that we 
faced. As so many of you know so painfully firsthand, in 2011 
this Nation experienced some of the worst national disasters in 
our history. From responding to wildfires and floods to 
hurricanes and tornadoes, our soldiers and civilians from all 
components were there to help, there to rescue, and there to 
rebuild.
    Simply put, our soldiers, civilians, and their families 
have once again proven why the U.S. Army is the most capable, 
versatile, and successful land force on Earth. It is this 
ability to adapt to a myriad of unpredictable threats both at 
home and abroad that we will maintain as we move forward in 
this new security and fiscal environment.
    This budget portrays an Army fully embracing change by 
making the hard decisions now to lay the right foundation for 
the future. First, we are implementing a sweeping new defense 
strategy which emphasizes even greater engagement in the Asia-
Pacific region and the development of smaller, more agile land 
forces. Under this new framework, which was developed 
collaboratively with the top military and civilian officials in 
our Department, the Army clearly remains the decisive arm of 
U.S. combat power. Our balanced and transformed force will 
continue to be the most capable and effective land force in the 
world. That is our standard. That is what the strategy requires 
and that is what this budget supports.
    Second, we are implementing this new paradigm under the 
significant cuts, as you noted, Mr. Chairman, directed by the 
Budget Control Act, and in so doing we made many tough 
decisions, but we were always guided by certain key principles: 
First, we will fully support the current fight by providing 
operational commanders in Afghanistan and other theaters with 
the best trained and ready land forces in the world. This is 
today and will remain our top priority.
    Second, we will not sacrifice readiness for force 
structure. We must responsibly reduce our end strength in a 
manner, as the distinguished ranking member noted, that fully 
supports the new strategy, but also provides sufficient time 
and resources to properly balance our training, equipment, 
infrastructure, and soldier and family support programs within 
our mission requirements.
    Third, we will be able to build force structure and 
capabilities to handle unforeseen changes to global security. 
The Army must be able to hedge risks through an efficient and 
effective force generation process and access to a strong 
operationalized Reserve component.
    Fourth, we will maintain and enhance the Army's extensive 
commitments in the Pacific.
    Lastly, we will not let the Budget Control Act cuts be 
taken on the backs of our soldiers or their families. Although 
we have and will continue to examine where appropriate and 
realign where necessary all of our programs, we will fully fund 
those support systems that work, with special emphasis on 
wounded warrior, suicide prevention, behavioral health, and 
sexual assault programs.
    Based on these principles, we believe our budget minimizes 
end strength reductions in 2013 and 2014 to support the current 
fight in the most responsible way. We believe as well the 
budget emphasizes continued investments in vital modernization 
programs, such as the network, the GCV, and the JLTV, while at 
the same time delaying or eliminating programs which no longer 
meet urgent needs in support of our new strategy or 
transforming force. Yes, we defer certain military construction 
programs.
    The Army at its core is not programs and systems; it is 
people. Each time I appear before you I'm honored not to come 
just as the Secretary, but as a representative of our soldiers, 
civilians, and their families. These brave men and women, as 
this committee knows so very well, who have endured so much 
over the past decade, depend upon a variety of programs, 
policies, and facilities to cope with the stress, injuries, and 
family separation caused by war.
    Tragically, our suicide and substance abuse rates remain 
unacceptably high and we're aggressively pursuing multiple 
avenues to provide our personnel with the best medical and 
behavioral health support available. We must never forget that 
both our success in Iraq and Afghanistan come at a heavy price 
to our Army family. Providing the means and resources for 
whatever challenges they now face is in my opinion the very 
least we can, we must, do.
    As a final note regarding our Army family, I'd be remiss if 
I didn't mention the devastating impact that sequestration 
would have, not just on the Army's programs, systems, and 
readiness, but also on our soldiers, civilians, and their 
families. Sadly, they too would bear the cost of that inaction.
    To use an ax to cut an additional half trillion dollars 
from defense spending would be perilous enough. But to do so 
without providing DOD with any means of managing those 
reductions would be beyond risky.
    In conclusion, on behalf of the men and women of your Army, 
let me thank you again for your thoughtful oversight, 
unwavering support, and proud partnership. Today your Army has 
succeeded in Iraq, is making progress in Afghanistan, and, as 
this budget demonstrates, is poised to transform into a new, 
smaller, more balanced force, ready to meet the needs of the 
Nation.
    Thank you for your great support and leadership, and I look 
forward to your questions.
    Chairman Levin. Thank you very much, Secretary McHugh.
    [The joint prepared statement of Secretary McHugh and 
General Odierno follows:]

  Joint Prepared Statement by Hon. John M. McHugh and GEN Raymond T. 
                              Odierno, USA

                         THE STRATEGIC CONTEXT

    Our Nation has weathered difficult circumstances since the attacks 
on September 11, yet we have met every challenge. The mission in Iraq 
has ended responsibly, continued progress in Afghanistan is enabling a 
transition to Afghan security responsibility and targeted 
counterterrorism efforts have significantly weakened al Qaeda and 
degraded its leadership. In all these endeavors, the Army has played a 
leading role.
    As President Barack Obama stated in introducing his new national 
defense priorities, the country is at a turning point after a decade of 
war and considerable increases in defense spending. Even as large-scale 
military campaigns recede, the Nation will still face a growing array 
of security challenges. These new priorities focus on the continuing 
threat of violent extremism, the proliferation of lethal weapons and 
materials, the destabilizing behavior of Iran and North Korea, the rise 
of new powers across Asia and an era of uncertainty in the Middle East.
    On top of that, our Nation confronts a serious deficit and debt 
problem (in itself a national security risk) that will squeeze future 
Army budgets. However, declining defense budgets do not nullify our 
obligation to provide enough capacity and maintain a highly ready force 
that is sufficiently modernized to provide a leaner, adaptive, 
flexible, and integrated force that offers the President a significant 
number of options along the spectrum of conflict.
    Today the U.S. Army is the best-trained, best-equipped, and best-
led combat-tested force in the world. Today's soldiers have achieved a 
level of professionalism, combat experience and civil and military 
expertise that is an invaluable national asset. Our warriors have 
accomplished every assigned task they have been given. But all we have 
accomplished in building this magnificent force can be squandered if we 
are not careful. We are an Army in transition, and we look to Congress 
to assist us in the difficult work to build the Army of 2020.
America's Army--The Nation's Force of Decisive Action
    Every day, America's Army is making a positive difference in the 
world during one of the most challenging times in our history. Although 
stressed and stretched, the U.S. Army remains the most agile, adaptable 
and capable force in the world. Ours is an Army that reflects America's 
diversity and represents the time-honored values that built our Nation: 
hard work, duty, selflessness, determination, honor, and compassion.
    Today, less than one-half of 1 percent of Americans serve in the 
Army. As members of one of our Nation's oldest and most enduring 
institutions, these volunteers play an indispensible role in guarding 
U.S. national interests at home and abroad. Young men and women who 
want to make a difference in this world want to be part of our Army, 
which is why even after a decade of conflict, we continue to fill our 
ranks with the best the Nation has to offer. They have earned the 
gratitude, trust and admiration of an appreciative people for their 
extraordinary accomplishments.

2011--The Army in Transition
    Over the past year, the Army has concluded its mission in Iraq and 
commenced the drawdown of surge forces in Afghanistan while 
transferring responsibility to Afghan forces. We are beginning 
reductions in end-strength to face budgetary realities. We are also 
undertaking efforts to rebalance force structure and make investment 
decisions that will shape the Army of 2020--all during a time of war. 
These transformational efforts are both significant and unprecedented. 
As the President's new national defense priorities are implemented, the 
Army will continue its transition to a smaller yet capable force fully 
prepared to conduct the full range of operations worldwide.
    Operation Enduring Freedom
    A decade into the war in Afghanistan, the Army continues to play a 
leading role in defending our national security interests in this vital 
theater. At the start of the war, following the attacks on September 
11, elements of Army Special Operations Forces led efforts on the 
ground to bring al Qaeda members to justice and remove the Taliban from 
power, thereby denying a safe haven to terrorists. With more than 
70,000 soldiers in Afghanistan at peak strength in 2011, the Army's 
brigade combat teams conducted operations ranging from stability to 
counterinsurgency.
    Today, over 63,000 Army soldiers in both general purpose and 
special operations units continue to conduct a wide range of missions 
across Afghanistan country to help Afghan citizens lay the foundation 
for lasting security. Simultaneously, the Army provided essential 
logistics capabilities to sustain the land-locked Afghan theater. In 
fact, only America's Army could provide the necessary theater 
logistics, transportation, medical and communications infrastructure 
capable of supporting joint and combined forces for an operation of 
this size and complexity.
    Since the beginning of combat operations in Afghanistan, soldiers 
have earned 5,437 valor awards, including 241 Silver Stars and 8 
Distinguished Service Crosses. Four soldiers have been awarded the 
Medal of Honor for their heroic actions: Sergeant First Class Jared C. 
Monti, Staff Sergeant Salvatore A. Giunta, Staff Sergeant Robert J. 
Miller, and Staff Sergeant Leroy A. Petry. They exemplify the courage, 
commitment and sacrifice of all the men and women who have served in 
this conflict.
    Operation New Dawn
    In December 2011, the Army concluded more than 8 years of combat 
and stability operations in Iraq. Initially, powerful and agile forces 
liberated Iraq and then adapted to the new demand of suppressing the 
post-invasion insurgencies. Indeed, when the Nation needed a sustained 
effort to achieve its strategic objectives, the Army answered the call, 
adjusting its deployment tours from 12 to 15 months to enable a 
decisive surge in forces. Army units trained and equipped Iraq Security 
Forces, and when the mission changed, the Army executed the extremely 
difficult tasks of redeploying people and retrograding equipment to 
ensure future readiness.
    Over 1 million soldiers and Department of the Army civilians served 
courageously in Iraq. They were essential to freeing more than 25 
million Iraqi people from the tyranny of a brutal dictator, putting 
Iraq's future in the hands of its people and removing a national 
security threat to the United States.
    Success came at a great cost in blood and treasure. But even during 
the most dire times, our soldiers never wavered. Their heroic actions 
earned 8,238 awards for valor, including 408 Silver Stars and 16 
Distinguished Service Crosses. Two Medals of Honor were awarded 
posthumously to Sergeant First Class Paul R. Smith and Private First 
Class Ross A. McGinnis.
    Other Global Commitments
    In addition to the Army's unprecedented contributions in 
Afghanistan and Iraq, we have continued to conduct operations across 
the globe to prevent conflict, shape the environment and win 
decisively. Nearly 20,000 soldiers remain stationed on the Korean 
peninsula, providing a credible deterrent and investing in our 
partnership with the Republic of Korea Army. Simultaneously, Army 
Special Operations soldiers in the Pacific region continue to provide 
advice and support to the Philippine Armed Forces, enhancing our robust 
alliance. Both are examples of strategic investments in a region that 
is home to 7 of the world's 10 largest armies. (In fact, in most 
countries around the world, the army is the dominant defense force.) 
U.S. soldiers continue to serve in places such as the Sinai, Guantanamo 
Bay, Bosnia, Kosovo, and the Horn of Africa, developing and maintaining 
relationships on six of the world's seven continents.
    Defense Support of Civil Authorities
    Over the past year, the Army has continued to provide instrumental 
support to civil authorities. The Army's Reserve component proved to be 
one of our great strengths for these missions, giving the force depth 
and flexibility. The National Guard provides a distinctive capability 
for the Nation. When floods, wildfires and tornados struck from the 
Midwest to the South over the span of a few days in spring 2011, more 
than 900 National Guard soldiers supplied a coordinated response to 
address citizens' needs across the affected region. Similarly, when 
Hurricane Irene knocked out power and flooded towns across the 
Northeast in the summer of 2011, nearly 10,000 National Guard soldiers 
and airmen across 13 States delivered critical services to sustain the 
region through the crisis.
    In addition to ongoing counterdrug operations, approximately 1,200 
National Guard soldiers and airmen supported the U.S. Department of 
Homeland Security in 4 States along the southwest U.S. border by 
providing entry identification and analysis to disrupt criminal 
networks and activities.
    Army Special Operations Forces
    To conduct unified land operations, the U.S. Army fields a suite of 
Special Operations capabilities that range from the world's finest 
precision strike and special warfare forces to the world's most lethal 
combined arms maneuver formations. The Army draws from across its broad 
set of capabilities to provide the Joint commander the blend of Army 
assets required to ensure mission accomplishment. True in Afghanistan 
today, Army Special Operations Forces are also providing assistance in 
the Philippines, Yemen, the Arabian Gulf, Lebanon, Colombia, the 
African Trans-Sahel, and across the Caribbean and Central America. As 
Army regular forces become available, they will increasingly integrate 
with Army Special Operations Forces to promote trust and 
interoperability with allies and build partner nation capacity where 
mutual interests are at risk from internal or external enemies.

                           FISCAL ENVIRONMENT

Challenges of Reduced Budget
    Today's global fiscal environment is driving defense budgets down 
for our partners and allies, as well as our Nation. Historically, 
defense spending has been cyclic with significant reductions following 
the end of major conflicts. The Army understands it cannot be immune to 
these fiscal realities and must be part of the solution. Our focus 
areas for the fiscal year 2013 budget demonstrate our concerted effort 
to establish clear priorities that give the Nation a ready and capable 
Army while being good stewards of all our resources.

Challenges of Continuing Resolutions
    Timely and predictable funding enables the Army to plan, resource 
and manage the programs that produce a trained and ready force. The 
Army very much appreciates that Congress approved the fiscal year 2012 
budget earlier than had been the case in recent years when we were 
forced to operate for long stretches under continuing resolutions. 
Long-term continuing resolutions force the Army to slow its spending, 
freeze production rates and delay the start of new programs. Such 
delays pose a risk to the Army's operational readiness and investment 
strategy. We stand ready to help Congress once again pass defense bills 
in a timely manner.

Security Environment
    A series of powerful global trends continue to shape the current 
and future strategic environment: increased demand for dwindling 
resources, persistent regional conflict, empowered non-state actors, 
the continuing proliferation of weapons of mass destruction and failed 
states. We anticipate a myriad of hybrid threats that incorporate 
regular and irregular warfare, terrorism and criminality. We also face 
cyber-threats to an increasingly critical and vulnerable information 
technology infrastructure and the destabilizing effect of global 
economic downturns. Together, these trends create a complex and 
unpredictable environment in all of the Army's operational domains: 
land, sea, air, space, and cyberspace.

                    IMPLICATIONS FOR AMERICA'S ARMY

Role of the Army: Prevent, Shape, Win
    In the uncertain environment our country faces, the Army remains 
central to our Nation's defense as part of the Joint Force. No major 
conflict has been won without boots-on-the-ground. Listed below are the 
three essential roles the Army must play.
    First, our Army must prevent conflict just as we did during the 
Cold War. Prevention is most effective when adversaries are convinced 
that conflict with your force would be imprudent. The Army's ability to 
win any fight across the full range of operations as part of a Joint 
Force must never be open to challenge. It must be clear that we will 
fight and win, which requires a force with sufficient capacity, 
readiness and modernization. That means quality soldiers; agile, 
adaptive leaders; versatile units; realistic training and modern 
equipment. Prevention is achieved through credible readiness, sometimes 
requiring decisive action. Our Army must continue to be a credible 
force around the globe to prevent miscalculations by those who would 
test us.
    Second, our Army must help shape the international environment to 
enable our combatant commanders to assure our friends and contain our 
enemies. We do that by engaging with our partners, fostering mutual 
understanding through military-to-military contacts and helping them 
build the capacity to defend themselves. These actions are an 
investment in the future that the Nation cannot afford to forego. We 
must cultivate positive relationships before they are needed and be a 
reliable, consistent and respectful partner to others.
    Finally, the Army must be ready to win decisively and dominantly. 
Nothing else approaches what is achieved by winning, and the 
consequences of losing at war are usually catastrophic. With so much at 
stake, the American people will expect what they have always expected 
of us--decisive victory. The Army must never enter into a terrible 
endeavor such as war unprepared. Although we may still win, it will be 
more expensive, cost more lives and require more time.
    In addition to being trained, sized, and equipped to win decisively 
in the more traditional operational domains, the Army also will require 
robust capability in cyberspace. As the past decade of conflict has 
demonstrated, the information environment has changed the way we fight. 
Military and cyberspace operations have converged, and protecting 
information in cyberspace is more essential than ever to how our Army 
fights. The advantage will go to those able to maintain the freedom to 
operate and able to gain, protect and exploit information in the 
contested cyberspace domain. The Army must be dominant in both the land 
and cyberspace domains.

Smaller but Reversible
    As our new national defense priorities drives us to a smaller Army, 
we must avoid the historical pattern of drawing down too fast or risk 
losing leadership and capabilities, making it much harder to expand 
again when needed. It is critical that the Army be able to rapidly 
expand to meet large unexpected contingencies, and four components are 
key to that ability. First, the Army must maintain a strong cadre of 
noncommissioned and mid-grade officers to form the core of new 
formations when needed. Second, we will make significant investments in 
Army Special Operations Forces to increase their capabilities and 
provide the President with more options. Third, it will require ready 
and accessible Army National Guard and Army Reserve Forces. The Army's 
Reserve component has proven essential in contingency operations around 
the world. From Kosovo, the Sinai and Horn of Africa to Afghanistan and 
Iraq, homeland defense along America's southwest border, humanitarian 
assistance and disaster relief at home and abroad, the Army National 
Guard and Army Reserve have evolved into indispensible parts of our 
operational force and we will continue to rely on them to provide depth 
and versatility to meet the complex demands of the future. The fourth 
critical component of the Army's ability to expand is the Nation's 
industrial base. We rely on the industrial base to perform research and 
development and to design, produce and maintain our weapons systems, 
components and parts. It must be capable of rapidly expanding to meet a 
large demand. Reversibility is the sine qua non to ensuring that the 
Army can rapidly grow when our Nation calls.

                         THE ARMY'S FOCUS AREAS

Support to Operations in Afghanistan
    Our immediate focus remains on providing the best trained and most 
ready land forces in the world to win the current fight while 
maintaining responsiveness for unforeseen contingencies. The support of 
the American people is paramount to our success. We must fulfill our 
responsibilities to them without draining their goodwill and treasure.
    Despite continued challenges and tough conditions, our forces are 
making measureable progress against an adaptive enemy. Army Security 
Force Assistance Teams continue to train both Afghan National Army 
forces (now almost 180,000 strong) and Afghan National Police forces 
(made up of nearly 144,000 men and women in uniform). The increased 
capability of Afghan Security Forces is allowing security of the region 
to be turned back over to the Government of Afghanistan district by 
district. During the coming year we must continue to provide trained 
and ready forces equipped to support operations. We remain focused on 
doing everything we can to ensure that we meet our national objectives 
and provide what our brave men and women in the field need to succeed.
    In Afghanistan, the commitment and performance of our soldiers and 
civilians continues to be nothing short of extraordinary. Not only have 
they taken the fight to our enemies, but they have proven equally 
effective as emissaries. Our investment in leader development prepared 
them to operate in this demanding environment.
    In the coming year, we will continue to increase the Afghan lead of 
security responsibilities, target key insurgent leaders, retain and 
expand secure areas and help Afghan National Security Forces earn the 
support of the people through improved security capacity and 
capability. Because of its geography, distance, infrastructure, and 
harsh environment, the difficulty and complexity of the drawdown in 
Afghanistan will exceed that in Iraq. The U.S. Army is the only 
organization in the world with the capability to plan and execute a 
logistical operation this complex and difficult.
    The Army places great emphasis on properly maintaining its 
equipment to restore readiness to the force and ensure it is prepared 
to meet combatant commander requirements. The Army reset program 
reverses the effects of combat stress and restores equipment to a high 
level of combat capability to conduct future operations. Reset is a 
lengthy process, and even after the drawdown from Afghanistan is 
complete, the Army will require funding for 2 to 3 years to reset our 
equipment from the harsh demands of war.

Responsible Stewardship
    Institutional Army Transformation
    The drive to reform the Institutional Army is about doing things 
better, smarter and faster while taking advantage of available 
technology, knowledge and experience. Our Institutional Army--the part 
of the Army that trains, educates and supports Army forces worldwide--
will become more flexible by improving our ability to quickly adapt to 
changing environments, missions and priorities. The Institutional Army 
is also working to rapidly address the demands placed on the 
organization by the current and future operational environments. It 
performed magnificently to produce trained and ready forces, even while 
seeking to adapt institutional business processes.
    Further, the Army is working to provide ``readiness at best value'' 
to help us live within the constraints imposed by the national and 
global economic situation. In short, the need to reform the Army's 
institutional management processes and develop an integrated management 
system has never been more urgent. To enhance organizational adaptive 
capacity while shepherding our resources, the Army initiated a number 
of efforts, such as the Army Financial Improvement Plan, which will 
enable the Army to achieve full auditability by fiscal year 2017.
    Acquisition reform as a result of uncertain funding, insufficient 
contract oversight and an ineffective requirement determination 
process, the Army has initiated a significant reform of the way we 
develop and acquire our products and weapons. As part of this 
initiative, we have taken steps toward improvement through a series of 
capability portfolio reviews. These platforms serve to revalidate, 
modify or terminate programs based on the Army's need and the 
affordability of the program. We have also started to fix an 
inefficient procurement system that too often wastes precious resources 
and fails to provide needed systems in a timely manner. For example, 
the Army commissioned a comprehensive review of our acquisition system 
that, based on the findings and recommendations, produced a blueprint 
for acquisition reform. These changes fall into four broad areas:

         realignment of acquisition requirements combined with 
        a sharper focus on the needed competencies of acquisition 
        professionals;
         expansion of stakeholder (acquisition professional and 
        soldier end-user) participation in developing requirements, 
        planning and acquisition solicitation;
         reappraisal and streamlining of acquisition strategies 
        and the attendant risk in such streamlining; and
         improvement in the selection, development, and 
        accountability of the people involved in the acquisition 
        process.

    We are implementing these recommendations as part of our broader 
effort to reform the Institutional Army.
    Army Energy Security
    Supplying energy to our Army around the world is increasingly 
challenging, expensive and dangerous. The Army must consider energy in 
all activities to reduce demand, increase efficiency, obtain 
alternative sources and create a culture of energy accountability. 
Energy security is an imperative that can be described in two 
categories, operational and garrison.
    Operational energy is the energy and associated systems, 
information and processes required to train, move and sustain forces 
and systems for military operations. The Army is developing new 
doctrine, policies, plans, and technologies that will improve the 
management and use of operational energy to better support soldiers' 
needs. Less energy efficient systems in an operational environment 
require more fuel, increasing the number of fuel convoys and thus 
risking more lives and limiting our flexibility.
    Garrison energy is the energy required to power Army bases and 
conduct soldier training. Dependence on fossil fuels and a vulnerable 
electric power grid jeopardize the security of Army operating bases and 
mission capabilities. The impact of increasing energy prices is a 
decrease in the quantity and quality of training the Army can conduct.
    Initiatives such as cool roofs, solar power, stormwater management 
and water efficiency are positive steps toward addressing the 
challenges of energy security in the operational and garrison 
environments. Innovative and adaptive leaders, seeking ways to increase 
energy efficiency and implement renewable and alternate sources of 
energy, are key to saving lives and increasing the Army's flexibility 
by reducing costs.
    A Leaner Army
    The Army is committed to providing combatant commanders with the 
capabilities, capacity and diversity needed to be successful across a 
wide range of operations. With a leaner Army, we have to prioritize and 
also remain capable of meeting a wide range of security requirements. 
We will reduce in a manner that preserves our readiness and avoids any 
hollowing of the force. To satisfy this enduring requirement, we have 
three rheostats that must be continuously assessed and adjusted: end 
strength/force structure, readiness and modernization. We will balance 
these three foundational imperatives throughout the next several years 
to provide combatant commanders trained and ready forces in support of 
Joint Force 2020.
    Force Structure and Force Design
    The Army will maintain a versatile mix of tailorable and networked 
organizations, operating on a rotational cycle, to continue providing a 
sustained flow of trained and ready forces for the full range of 
military operations. This will give combatant commanders a hedge 
against unexpected contingencies and enable a sustainable tempo for our 
All-Volunteer Force. Over the next 5 years, the Army will decrease its 
end strength from a peak authorized strength of about 570,000 to 
490,000 Active Army, 358,000 to 353,500 Army National Guard and 206,000 
to 205,000 Army Reserve soldiers as directed. Reducing our end strength 
over a deliberate ramp through the end of fiscal year 2017 allows the 
Army to take care of soldiers, families, and civilians; to continue 
meeting our commitments in Afghanistan; and to facilitate reversibility 
in an uncertain strategic environment.
    An unpredictable and dynamic global security environment requires 
the Army, as a force in transition, to adjust and reduce its size while 
remaining flexible, capable and ready to meet the Nation's requirements 
and maintaining an ability to reverse course to readily expand if 
necessary. In accordance with the new defense priorities, the Army of 
2020 must have a versatile mix of capabilities, formations and 
equipment that is lethal, agile, adaptable and responsive. As the Army 
transitions from the current force to a leaner force, it will do so 
while remaining engaged in the current conflicts. The Army will 
prioritize force structure and committed assets in the Pacific Region 
and the Middle East, and will shape the future force to support the 
Army's requirements as part of the Joint Force to fulfill the Nation's 
strategic and operational commitments. The Army will optimize force 
structure to maintain reversibility, and achieve maximum operational 
strategic flexibility. Today we plan on reducing at least 8 Active 
component Brigade Combat Teams, however, we continue to assess the 
design and mix of these modular formations based upon the lessons from 
the last 10 years of combat. This analysis may lead to a decision to 
reorganize BCTs into more capable and robust formations, requiring 
further BCT reductions in order to increase overall versatility and 
agility for tomorrow's security challenges.
    As the Army's Active component reduces in size, the composition of 
combat support and combat service support enablers in the Active and 
Reserve components will be adjusted to give the Army the ability to 
conduct sustained operations, and to mitigate risk. The Army will 
continue to rely on the Reserve components to provide key enablers and 
operational depth. An Operational Reserve comprised of a discrete set 
of capabilities with an enhanced level of readiness will be essential. 
This force will consist of three elements: select combat formations 
prepared to respond to crisis; combat support and combat service 
support enablers employed early in support of operational plans; and 
forces aligned to support steady-state combatant commander 
requirements. Ensured access to the Reserve component is essential to 
providing the operational depth and flexibility combatant commanders 
require. During the transition, we must manage our people carefully to 
neither compromise readiness nor break faith with those who have served 
the Nation so well.
    Readiness
    Army unit readiness is measured by the level of its manning, 
training and equipping. The current Army force generation model 
(ARFORGEN) has served us well in meeting the requirements for Iraq and 
Afghanistan; however, we will adapt it to ensure we meet future 
combatant commander requirements in the uncertain, complex strategic 
environment. We envision a progressive readiness model for most Active 
and Reserve component early deploying units which will align forces for 
combatant commanders. Because of their unique capabilities, our low 
density, high demand units do not lend themselves to a rotational pool 
like ARFORGEN. These units must be sustained in a constant readiness 
model.
    The Strength of Our Army is Our Soldiers
    Soldiers and families form the foundation of unit readiness. People 
are the Army, and our enduring priority is to preserve the high-
quality, All-Volunteer Force--the essential element of our strength. 
The Army has gained the trust of the American public more than at any 
other time in recent history while developing a force that is very 
different from what it was a few short years ago. Our Army must 
maintain the public's trust while our Nation fulfills its 
responsibilities toward soldiers and their families. The U.S. Army is 
unique from other professions because our core attributes are derived 
from American values, the Constitution and law. Today's Army is 
building on a successful foundation with the trust, respect and support 
of the American people. This foundation, and our enduring commitment to 
strengthening our Army Profession, will improve our force as it adapts 
to meet the Nation's evolving needs.
    The Army is the Nation's preeminent leadership experience. The All-
Volunteer Force is our greatest strategic asset, providing depth, 
versatility and unmatched experience to the Joint Force. We must 
continue to train, develop and retain adaptive leaders and maintain 
this combat-seasoned, All-Volunteer Force of professionals. We will 
continue to adjust in order to prepare our leaders for more dynamic and 
complex future environments. Our leader development model is an 
adaptive, continuous and progressive process grounded in Army values. 
We grow soldiers and Army civilians into competent and confident 
leaders capable of decisive action. We must give our leaders broadening 
opportunities to better prepare them for the myriad challenges they 
will encounter. In addition, we must reinvigorate unit training, 
training management skills and leader development to build versatile 
units. By providing our leaders with the professional challenges they 
expect, we will retain them and nurture their adaptive spirit.
    Our challenge in the coming years is not just about attracting and 
selecting the best available candidates to be Army professionals. We 
must also engage and develop our quality, combat experienced leaders so 
that we keep them, and they, in turn, train the next generation of Army 
professionals. During the last decade of war, we have given our young 
leaders unprecedented flexibility and authority to operate effectively 
on the battlefield. We will prepare for tomorrow by building on that 
investment and ensuring that opportunities for creativity, leadership 
and advancement exist throughout the Army.
    We must draw down wisely to avoid stifling the health of the force 
or breaking faith with our soldiers, civilians, and families. Excessive 
cuts would create high risk in our ability to sustain readiness. We 
must avoid our historical pattern of drawing down too much or too fast 
and risk losing the leadership, technical skills and combat experience 
that cannot be easily reclaimed. We must identify and safeguard key 
programs in education, leader development, health care, quality of life 
and retirement--programs critical to retaining our soldiers.
    The Strength of Our Soldiers is Our Families
    In order to ensure a relevant and ready All-Volunteer Force, the 
Army will continue to invest heavily in our soldier and Family 
programs. The Army Family Covenant expresses the Army's commitment to 
care for soldiers and their families by providing a strong, supportive 
environment that enhances their strength and resilience and helps them 
to thrive. The Covenant focuses on programs, services, and initiatives 
essential to preserving an All-Volunteer Force and institutionalizes 
the Army's commitment to provide soldiers and their families a quality 
of life commensurate with their service to the Nation. Through the 
Covenant, the Army is improving the delivery of soldier and family 
programs and services, sustaining accessibility to quality health care, 
and promoting education and employment opportunities for Family 
members. We are sustaining high-quality housing; ensuring excellence in 
school support, youth services, and child care; and maintaining quality 
recreation services for soldiers and family members as they serve on 
the Nation's behalf around the world. We will not walk away from our 
commitment to our families; however, a different fiscal reality 
requires us to review our investments and eliminate redundant and poor 
performing programs while sustaining those that are high performing and 
most beneficial to our families.
    Honoring Service
    We must fulfill our moral obligation to the health, welfare, and 
care of our soldiers, civilians, and families. The effects of more than 
10 years of war and inadequate dwell time at home has resulted in a 
cumulative stress on soldiers, families, and communities that has 
significant implications for the Army and our Nation. We have 
implemented an unprecedented number of personnel-focused programs, 
including Comprehensive Soldier Fitness; Wounded Warrior Program; and 
Health Promotion, Risk Reduction and Suicide Prevention, to ensure the 
continued care, support and services that sustain the high quality of 
our force.
    Sexual harassment and sexual assault are inconsistent with the 
Army's values and our profession. It is imperative that we foster a 
climate where such misconduct is not tolerated and the dignity of our 
soldiers, civilians, and family members is respected and protected. 
Army Leaders are focused on the urgency of this issue and the level of 
commitment required to affect cultural change and combat this crime. We 
are aggressively implementing and expanding the Army's comprehensive 
Sexual Harassment/Assault Response and Prevention (SHARP) Program. The 
SHARP program is aimed at command prevention efforts at all levels, 
educating all members of our Army family, training our first responder 
professionals and supporting victims while reducing the stigma of 
reporting. One incident of this type of unwarranted and abusive 
behavior is one too many. The Army is committed to ensuring leadership 
at all levels is engaged in preventing sexual assault and harassment, 
and to appropriately holding offenders accountable.
    The Army continues to invest heavily in better understanding 
traumatic brain injury and post-traumatic stress, the invisible 
signature wounds of our recent wars. We have developed and implemented 
new prevention and treatment protocols, and we are in the third year of 
our 5-year partnership with the National Institute of Mental Health to 
identify the factors that help protect a soldier's mental health and 
those that put it at risk.
    We have also started to reduce the length of deployments to 9 
months for many of our units at the division level and below, which we 
believe will alleviate significant pressure on our soldiers and their 
families. We are doubling our efforts to ensure that each of our more 
than 18,000 soldiers currently enrolled in the Integrated Disability 
Evaluation System is carefully examined to determine whether he or she 
should return to civilian life or continue military service. A recent 
initiative between the Department of Defense and U.S. Department of 
Veterans Affairs--the Integrated Disability Evaluation System 
integrates formerly separate programs--resulting in a streamlined, more 
efficient process for servicemembers, which will reduce the backlog of 
soldiers awaiting benefits.
    As we draw down the Army, we must honor our veterans with the very 
best support, care and services they deserve as they make the 
transition from military service to civilian life. We are committed to 
our soldiers and their families, who are the strength of the Army. At 
the same time, the Army is focused on wisely managing our resources in 
the health care arena. The Army supports Defense Department proposals 
to further reduce the rate of growth in health care costs--proposals 
that are aligned with our priorities. TRICARE is a superb health 
benefit--one of the best in the country and appropriately so. Just as 
in all areas of the defense budget, we need to make decisions that 
preserve a strong benefit yet reflect the fiscal realities of the 
times. The proposals take care to exempt populations who have made the 
greatest sacrifices--those who are medically retired and those families 
who have lost their loved one while serving on active duty. The changes 
proposed are also adjusted to reflect lower adjustments for those 
retirees with lower retirement pay. Most importantly, the Department 
continues to provide resources that improve the overall health system 
for our soldiers and their families.
    The Army is using the Health Promotion and Risk Reduction fiscal 
year 2011 Campaign Plan to holistically promote health and reduce risk. 
The Campaign Plan incorporates findings and recommendations from 
Department of Defense and Army reports regarding health promotion, risk 
reduction, and suicide prevention. Health promotion and risk reduction 
activities are essential to sustain the force under the current 
operational tempo and reset our Army.
    Modernization
    The Army has global responsibilities requiring large technological 
advantages to prevail decisively in combat. Just as pilots and sailors 
seek supremacy in the air and on the seas, soldiers must dominate their 
enemies on land. Modernizing, especially as end strength is reduced, is 
the key to ensuring that our dominance continues.
    The Army is setting priorities and making prudent choices to 
provide the best possible force for the Nation within the resources 
available. We are developing and fielding a versatile and affordable 
mix of equipment to enable us to succeed in the full range of missions 
and maintain a decisive advantage over our enemies. To meet the 
challenges of an evolving strategic and fiscal environment, our 
strategy is based on three tenets: integrated capability portfolios, 
incremental modernization and leveraging the Army Force Generation 
cycle.

         Integrated capability portfolios align stakeholders to 
        identify capability gaps and eliminate unnecessary 
        redundancies.
         Incremental modernization enables us to deliver new 
        and improved capabilities by leveraging mature technologies, 
        shortening development times, planning growth potential, and 
        acquiring in quantities that give us the greatest advantage 
        while hedging against uncertainty.
         Army Force Generation processes synchronize the 
        distribution of equipment to units providing increased 
        readiness over time and delivering a steady and predictable 
        supply of trained and ready modular forces. The Army has 
        consolidated its materiel management process under a single 
        command and designated U.S. Army Materiel Command as the Army's 
        Lead Materiel Integrator. Additionally, we consolidated all of 
        our materiel data into a single authoritative repository called 
        the Logistics Information Warehouse.

    These emerging systems and processes represent a powerful new 
approach for implementing the Army's equipping priorities, policies and 
programs to the meet new security demands of the 21st century. The 
equipment requested in the President's fiscal year 2013 budget strikes 
a balance between current and future needs, provides the basis for an 
affordable equipping strategy over time, and takes into account Army 
requirements and priorities. In developing this request, the Army made 
difficult decisions to shift funds previously programmed for future 
capabilities to current needs. The decisions came at the expense of 
promising and needed technologies with capabilities that did not fit 
within resource limitations. The Army's top four modernization 
priorities are the Network, Ground Combat Vehicle, Joint Light Tactical 
Vehicle and Soldier Systems.
    Network
    Also known as LandWarNet, the Network remains the Army's top 
investment priority. With expectations of tighter budgets and a still 
very active threat environment, the Army will have to produce a force 
that is smaller yet more capable. The Network is the core of that 
smaller, capable Army.
    The Army is conducting a series of semiannual field exercises known 
as the Network Integration Evaluation to evaluate, integrate and mature 
the Army's tactical network. The exercises will assess network and non-
network capabilities to determine implications across doctrine, 
organization, training, materiel, leadership and education, personnel 
and facilities. The process aligns several key Army network programs 
and advances the fusion of radio waveforms to form an integrated 
network baseline to which industry can build.
    The foundation of the modernized Network is a Joint, secure and 
common architecture that will provide information from the cloud to 
enable leaders, units and the Institutional Army to function more 
effectively. The Army will extend this critical capability to its 
installations around the world. This capability will increase force 
effectiveness, facilitate transition for units and individuals from one 
phase of the Army Force Generation cycle to another and greatly improve 
network security.
    The major programs that form the backbone of the tactical network 
are:

         the Warfighter Information Network-Tactical, which 
        provides a real-time common operating picture down to the 
        company level by extending satellite and line-of-sight 
        communications, including telephone, data, and video;
         the Joint Tactical Radio System, an advanced software-
        defined family of radios that will carry data and voice for 
        dismounted troops and airborne and maritime platforms;
         the Distributed Common Ground System--Army, which 
        provides intelligence, surveillance and reconnaissance data, as 
        well as access to the entire Defense Intelligence Information 
        Enterprise, to commanders from the company to Army service 
        component command level;
         the Joint Battle Command Platform, which provides 
        situational awareness data enhancing mission command to Army 
        and Marine Corps tactical operations centers and combat 
        vehicles; and
         Nett Warrior, which gives dismounted leaders 
        integrated situational awareness and information sharing, 
        helping them to avoid fratricide and increase combat 
        effectiveness.

    The Army Network must be dynamic to give soldiers, civilians, and 
partners information and services when and where needed. Investment 
must be steady and wisely applied, while maintaining a strong 
partnership with industry.
    Ground Combat Vehicle (GCV)
    The Infantry Fighting Vehicle is reaching the limit of its capacity 
to receive technology upgrades proven critical for soldiers in combat 
operations. The GCV is the Army's replacement program for the Infantry 
Fighting Vehicle and the centerpiece of the Army's overall combat 
vehicle investment strategy. It will be designed to deliver a full 
nine-man squad with improved survivability, mobility and network 
integration, considered crucial to our ability to conduct fire and 
maneuver in close quarters fighting in complex terrain. The vehicle 
will also provide the growth potential necessary to accommodate 
advances in protection, networking and space, weight, power and cooling 
technologies while reducing sustainment demands. No current vehicle can 
sufficiently meet all these requirements.
    The GCV acquisition strategy implements affordability measures 
designed to ensure the long-term success of the program as the Army 
faces constrained resources in the future. To develop this acquisition 
strategy, the Army and the Office of the Secretary of Defense conducted 
a comprehensive review to make sure the program is both achievable and 
affordable within a 7-year timeframe. The model adopted for the GCV 
program incentivizes industry to use the best of mature technologies 
that are both affordable and support the 7-year timeframe. The Army has 
also paid close attention to risk reduction within the program by 
requiring industry to identify potential cost schedule and performance 
tradeoffs; provide cost targets throughout the GCV's life cycle; and 
maximize competition to support innovation, cost containment and 
schedule requirements.
    Joint Light Tactical Vehicle (JLTV)
    As a Joint Service program between the Army and Marine Corps, the 
JLTV will replace approximately one-third of the Army's oldest 
unarmored High Mobility Multipurpose Wheeled Vehicles (HMMWV). The JLTV 
incorporates the strengths of the Mine-Resistant, Ambush Protected 
(MRAP) vehicles that the HMMWV family of vehicles does not provide. The 
HMMWV was not designed to be used as an armored combat vehicle, but it 
was often employed as one during the wars in Afghanistan and Iraq. In 
contrast, the JLTV will be designed for this role from the outset. It 
will be capable of operating across the range of military operations 
and physical environments providing, improved mobility and protection 
for soldiers. The JLTV balances protection, payload, performance and 
improved fuel efficiency in one affordable and sustainable vehicle. It 
will also be fully integrated into the Network to enhance the 
effectiveness of ground forces.
    Soldier Systems
    The squad is the foundation of the decisive force; it is the 
cornerstone of all units. To ensure the success of combat operations in 
the future, the Army will invest in systems that consider the squad as 
a team rather than a collection of individuals. This approach will 
guarantee that the squad will not be in a fair fight but will have 
overmatch. The Army will continue to invest in soldier systems that 
enable the lethality, protection, situational awareness and mobility of 
the individual soldier in his or her squad. These systems include small 
arms, night vision, soldier sensors, body armor, and individual 
clothing and equipment.

                         SUMMARY AND CONCLUSION

    The Army has been, and will continue to be, a critical part of the 
Joint Force because land power remains the politically decisive form of 
warfare and is essential to America's national security strategy. No 
major conflict has ever been won without ``boots-on-the-ground.'' By 
being tasked to seize, occupy, and defend land areas, as well as to 
defeat enemy land forces, the Army is unique because it must not only 
deploy and defeat an adversary, but must be prepared to remain in the 
region until the Nation's long-term strategic objectives are secured. 
Indeed, the insertion of ground troops is the most tangible and durable 
measure of America's commitment to defend our interests, protect our 
friends, and defeat our enemies.
    With global trends pointing to further instability, our Army 
remains a key guardian of our national security. In the wake of the 
Cold War, it was said that we had reached the ``end of history,'' and 
that liberal democracy had won the ideological competition. However, 
events since then make it clear that potential adversaries with 
competing ideologies still exist and are extremely dangerous.
    As a result, we find ourselves in an increasingly uncertain world, 
with threats ranging from terrorist and cyberattacks to regional 
instability to the proliferation of weapons of mass destruction. For 
our Army that means we will likely have to deal with near peer 
competitors in niche areas and hybrid threats that mix regular, 
irregular and criminal activity--all while still facing the possibility 
of a conventional force-on-force conflict.
    The danger extends from the homeland to the theater where combat 
operations might occur. Conflict is the norm; a stable peace the 
exception. In such a world, our adversaries will adapt to gain 
advantage, especially in the land domain. It is on land, that our 
challenges will be the most complex because of dynamic human 
relationships and terrain variables.
    While the Army's new end strength numbers allow it to support 
current defense priorities, it is imperative that the Army draw down 
end strength levels in a smart and responsible manner. We believe that 
our new end strength provides us with the flexibility to retain the 
hard-won expertise it has gained over the last decade. To be sure, the 
Army has faced similar challenges before. After every major conflict 
since the Revolutionary War, the Army has faced pressure to decrease 
its end-strength. As recently as 2001 (pre-September 11), many believed 
a strategic shift was needed and that the future of modern warfare 
would be about missile defense, satellites and high-tech weaponry 
because no adversary would dare challenge America's conventional 
forces. But whenever we have rushed to radically diminish the position 
of the Army, the result has always been the same: an excessive decline 
in effectiveness at a cost of blood and treasure.
    Decreases after World War I directly contributed to failures at 
Kasserine Pass. Decreases after World War II led to Task Force Smith's 
failure in Korea. More recently, the end of the Cold War demonstrated 
our Nation's need for agile, adaptable and decisive ground forces to 
conduct a wide range of operations. These numerous missions include 
Operation Provide Comfort in Iraq, Joint Task Force Andrew in Florida, 
Operation Restore Hope in Somalia, Operation Uphold Democracy in Haiti, 
Operation Joint Endeavor in Bosnia-Herzegovina, and Operation Joint 
Guardian in Kosovo. What they have in common is that they were 
unforeseen, thus emphasizing our need to avoid the historical pattern 
of drawing down too fast.
    America's leaders face difficult choices as they chart the way 
ahead for our Nation. Familiar external threats persist and complex new 
challenges will emerge. Concurrently, fiscal limitations create 
internal challenges for our leaders. America's Army is prepared to 
fulfill its role in keeping the Nation secure. The Army will prevent 
conflict by remaining a credible force with sufficient capacity to 
dissuade adversaries from challenging American interests. The Army will 
shape the environment, building positive relationships and capabilities 
that enable nations to effectively protect and govern their citizenry. 
Finally, when called, the Army will fight for the Nation and win 
decisively. We understand these responsibilities and resolve not to 
reduce the size of the Army in a manner that does not permit us to 
reverse the process should demand for forces increase dramatically.
    As we look ahead, the Army is focusing on three areas. Our first 
priority remains supporting operations in Afghanistan. We will guard 
against becoming distracted by the future at the risk of our men and 
women who remain in harm's way.
    Second, we will be the very best stewards we can, because America's 
resources are too precious to waste. Transforming the Institutional 
Army, reforming our acquisition process and ensuring energy security 
are essential for us to protect the resources provided by Congress and 
the American people.
    Third, we will fight to incorporate principles and processes that 
preserve readiness and capability while reducing the size of the Army. 
We are adjusting our formations to build the right number of units with 
the right capability to meet the needs of the Joint Force. The past 10 
years have taught us that an Operational Reserve Force is essential to 
accomplish our missions and expand rapidly when required. We will 
invest deliberately and wisely in our soldiers, civilians, and families 
to make sure they are prepared and supported. We will treat those who 
have served in our ranks with respect and honor. Our wounded soldiers 
will receive the very best care the Nation can provide, and our 
soldiers who return to civilian life will be well prepared to do so.
    Future threats will demand enhanced capabilities for our soldiers, 
so we will modernize our equipment. The Army has identified four 
programs to highlight. The Network gives sight, sound and awareness to 
our soldiers, civilians, and leaders to defeat our adversaries. The 
Ground Combat Vehicle and Joint Light Tactical Vehicle will incorporate 
hard won lessons in Iraq and Afghanistan to provide the mobility and 
protection our soldiers require. Investments in soldier systems improve 
our soldiers' ability to move, fight, and survive on the battlefield.
    The Army has chosen its focus areas carefully and deliberately 
because they will enable us to provide what the Nation needs. We owe it 
to America and to the American soldier, the Nation's servant and 
warrior--the Strength of the Nation!
      
    
    
      
    
    
      
    
    
      
    
    
      
    
    
      
    
    
      
    
    
      
    
    
      
    
    
      
    
    
      
    
    
      
    
    
      
    
    
      
    
    
      
    
    
      
    
    
      
    
    
      
    
    
      
    
    
      
    
    
      
    
    
      
    
    
      
    
    

    Chairman Levin. General Odierno.

STATEMENT OF GEN RAYMOND T. ODIERNO, USA, CHIEF OF STAFF OF THE 
                              ARMY

    General Odierno. Thank you, Chairman Levin, Ranking Member 
McCain, and other distinguished members of the committee. I 
want to thank you first for your steadfast commitment to all 
our soldiers and their families, especially over the last 10 
years. The partnership that we formed in supporting them and 
ensuring they have what they need has been part of our great 
success and I thank you all for that.
    I appreciate the vote of confidence from Secretary McHugh. 
I believe in the Army today we have a great military-civilian 
team that will help the Army navigate these very difficult 
times that we have in the future, and it's an honor to work 
with Secretary McHugh with his complete sense of support to our 
soldiers and our families, as well as understanding where our 
Army needs to go. I promise you that we'll work very closely as 
we challenge many of these very, very difficult issues.
    Together, it's a true honor to be here today representing 
1.1 million soldiers, 278,000 Army civilians, and 1.4 million 
family members. I'm extremely proud of the commitment, 
professionalism, and resiliency of our soldiers and also their 
sacrifices and accomplishments. Today they're in over 150 
countries around the world. We are truly today, and will 
continue to be, a globally engaged Army, with over 95,000 
soldiers deployed and another 96,000 soldiers forward 
stationed, conducting a broad range of missions and meeting our 
national security requirements.
    But our Army's primary purpose is steadfast and resolution 
to fight and win our Nation's wars. As the Army continues its 
transition, we will ensure the President's 2012 defense 
strategic priorities are implemented, by first meeting our 
current commitments in Afghanistan and elsewhere, by ensuring a 
highly trained, properly equipped, and well manned force.
    Now that operations in Iraq are complete and we continue 
surge recovery in Afghanistan, we will begin to shape the 
regional environments in support of the combatant commanders as 
well as the overall strategic environment. In the Asia Pacific, 
which is home to 7 out of the 10 largest armies in the world, 
we will provide an array of tools through rotational forces, 
multilateral exercises, and other innovative engagements with 
our allies and new partners. We currently have some 66,000 
soldiers and almost 10,000 civilians in this region.
    During a time of great uncertainty in the Middle East, we 
remain committed and prepared to ensuring security and 
stability across the spectrum of conflict through our 
rotational presence and working with our close partners. In 
Europe, as we inactivate two brigade combat teams (BCT), one in 
2013 and one in 2014, we will compensate through a series of 
engagement tools to build and sustain our strong relationships 
with our European and North Atlantic Treaty Organization (NATO) 
allies and partners. I believe that this will serve as a model 
of how I see us doing things in the future, a combination of 
forward stationed and rotational forces, using a tailorable 
approach by regionally aligned forces and prepositioned stocks.
    As we move forward, we will build on the competency and 
experience that has been gained over the past 10 years by our 
National Guard and Army Reserves in Iraq and Afghanistan, 
through the resourcing of a progressive readiness model.
    As we look forward--and the Secretary already touched on 
this a bit--there are several focus areas that will guide us 
for the way ahead. Foremost, we will remain committed to our 
67,000 warfighters currently in Afghanistan and continue to 
provide trained, equipped, and ready soldiers to secure success 
in that fight.
    Next, as the Army becomes leaner we must continue to build 
on the key characteristics of the future force: adaptability, 
innovation, flexibility, agility, versatility, and lethality. 
We have to prioritize our efforts as we integrate and 
synchronize our activities as part of a larger joint 
interagency, intergovernmental, and multinational force effort.
    By the end of fiscal year 2017, we will decrease our end 
strength in the Active component from 570,000 to 490,000, from 
358,000 to 353,500 in the National Guard, and from 206,000 to 
205,000 in the Army Reserves. It is imperative for us to 
sustain a gradual ramp over the next 6 years, to include this 
year. That will allow us to take care of our soldiers and our 
families, continue to provide forces for Afghanistan and 
facilitate reversibility if necessary.
    End strength above 490,000 is funded strictly through the 
Overseas Contingency Operations (OCO) account and must be 
sustained to help mitigate the risk as we continue current 
operations in Afghanistan and simultaneously reset for the 
future. We will reduce our end strength by a minimum of eight 
BCTs. This drawdown, based on the national strategic 
objectives, will be done with deliberate consideration to the 
impacts of combatant commander requirements, as well as 
considerations on local communities and infrastructure.
    We are also looking at reorganizing our BCTs. The Secretary 
and I have not yet made a decision on that, but we are 
reviewing that now to see if we can get more capability out of 
a BCT. That might cause us to reduce some more BCTs, but 
sustain more combat battalions in the force over time.
    Finally, we will be responsible government stewards through 
energy cost savings and institutional and acquisition reform. 
We are now taking a fundamentally different approach to how we 
do business with acquisition reform. I credit Secretary McHugh 
for his diligent efforts with this. We have really made some 
tremendous progress here. Through a new affordable and 
incremental equipping strategy, we are making better business 
deals and better contracts, emphasizing competition and saving 
even more money as governmental stewards. Our expansion of 
multi-year contracts, firm fixed price contracts, and cost-plus 
incentive-fee contracts have proven substantive cost savings 
already.
    By more closely linking the development of requirements 
with the acquisition cycle, we are building the flexibility to 
integrate new technologies incrementally. Additionally, we are 
looking to develop more efficient testing and evaluating 
strategies by eliminating redundancies in our testing programs.
    We will continue our equipment reset program to restore 
unit equipment to a level of capability that's commensurate 
with their future missions. There have been over 1.8 million 
pieces of equipment reset to date, which equates to 
approximately 31 brigade equivalents annually.
    Much of what the Army needs to do and much of what we hope 
to do will be relying upon sustained OCO funding through our 
withdrawal in Afghanistan and for 2 to 3 years afterwards.
    As we continue to transform our modernization practices 
through a holistic, bottom-up approach, we have several 
priorities. First is the network. It's critical to our ability 
to manage information and command our forces at all levels, 
both home and abroad. We have made significant progress on this 
critical program due to the series of network integration 
evaluation exercises that field tested equipment and integrated 
the system using our soldiers.
    Second, the GCV, a replacement for our Infantry Fighting 
Vehicle that can accommodate an infantry squad, balance 
mobility and survivability, and provide unmatched lethality on 
the battlefield against current and future threats. We have 
paid close attention to risk reduction in this developmental 
program by maximizing competition to stimulate innovation, 
support cost containment and schedule requirements, ensuring 
industry identifies potential price and schedule versus 
performance tradeoffs, and requiring industry to provide cost 
targets throughout the GCV's life cycle.
    Our third modernization priority is the more mobile, 
survivable Network-Integrated JLTV, which both myself and 
General Amos agree is necessary given the last 10 years of 
fighting and what future operations may entail. We carefully 
revised our acquisition strategy to reduce the schedule for the 
next developmental phase from 48 to 33 months, while reducing 
the projected cost of the program by $400 million.
    Next is lightening the soldier's load. There must be 
continued efforts to give our squads superiority on the 
battlefield with advanced soldier systems, weapons, 
communications, and protection. There has been tremendous 
progress in the advancements to help lighten the load of our 
individual soldiers. So now we must turn to look at how the 
squad can carry the load smarter. We will continue to look at 
decreasing the weight of our body armor while increasing 
protection. But we can make more progress by studying how to 
better distribute the load across the squad.
    The budget request for aviation modernization will continue 
to ensure our lift and close combat attack capabilities remain 
effective. These aircraft provide critical support to our joint 
ground forces, our special operations community, and our 
international partners.
    Finally, I'd like to point out that in order to achieve 
these priorities within our strategy we will need the help of 
this committee to ensure timely appropriations to reduce 
production scheduling delays.
    The Secretary and I will continue to assess and make 
adjustments to the strategy, while addressing any potential 
risks incurred as we adjust our force posture.
    I'd like to leave you with one last thought. Sequestration 
is not in the best interests of our national security. The 
Army's share of the cut could be almost $134 billion. Actually, 
it's a minimum of $134 billion through 2017. The impact to the 
Army could cause up to 100,000 in cuts to end strength, on top 
of the 87,000 we've already planned to reduce. This would 
result in severe reductions in the National Guard, the Army 
Reserve, and additional reductions in the Active component, and 
will significantly decrease what the Army can do for our Joint 
Force. In my estimation, sequestration would require us to 
fundamentally relook at how we provide national security.
    Mr. Chairman, members of the committee, thank you again for 
the opportunity to speak here today. This committee enables our 
All-Volunteer Army to be the most decisive land force in the 
world, and we could not do it without the support of Congress. 
It's an honor to serve this great Nation and stand beside the 
dedicated professionals of our Army. The strength of our Nation 
is our Army. The strength of our Army is our soldiers, and the 
strength of our soldiers is our families.
    Thank you very much for allowing us to be here and I look 
forward to your questions.
    Chairman Levin. General, thank you so much.
    Let's have a 7-minute first round.
    General, first let me ask you about the 2013 budget. Does 
that budget reflect the administration's recently revised 
strategic guidance for the Army?
    General Odierno. It does, sir.
    Chairman Levin. Does it provide the Army what it needs to 
meet its missions and do you support this budget request?
    General Odierno. It does and I do, sir.
    Chairman Levin. On troop levels in Afghanistan, General, 
let me just quickly ask you a question on a subject you and I 
have talked about many times. Do you continue to support the 
decision relative to the reduction and withdrawal of the surge 
force by the end of September?
    General Odierno. I do.
    Chairman Levin. Does the recent violence relating to the 
Koran-burning incident affect what your recommendation is or 
might be relative to the pace of reductions?
    General Odierno. I would say that we have to consider the 
entire environment. However, I would argue that the overall 
progress in Afghanistan continues along a solid path, and 
putting the ASF out front.
    Chairman Levin. Mr. Secretary, there's recently been a very 
important report about females serving in the Armed Forces and 
the issue of women in combat and being collocated with certain 
ground combat units. According to the report, these changes are 
going to result in over 14,000 positions being opened to women 
that were previously denied. That's a small step in the right 
direction, but there's still a long way to go.
    Mr. Secretary, I think we all want to ensure that women who 
serve in the military have the maximum opportunity to succeed. 
Will you commit to continue to look for more ways to remove the 
barriers to service by women, including an assessment of how 
all the restrictions may some day be removed?
    Secretary McHugh. I certainly do, and in fact that's 
ongoing as we speak. DOD has provided the Army the opportunity 
to run a pilot program that would open additional military 
occupation specialties (MOS) to women in theater, that would 
produce, if totally implemented, more than 60,000 new 
opportunities. So that's something we continue to pursue.
    I might add, based on my conversations with every theater 
commander I've talked to personally, it's something they fully 
support.
    Chairman Levin. Thank you.
    Mr. Secretary, the Seattle Times reported this morning that 
285 soldiers who had been diagnosed as having post-traumatic 
stress disorder (PTSD) by their health care providers had those 
diagnoses reversed by officials at the Madigan Medical Center 
at Fort Lewis, WA, and this has, obviously, some significant 
consequences for these soldiers and their families because they 
would be entitled to a medical retirement based on their PTSD.
    Would you give us a report on this incident, for the record 
if you're not able to report on it right now?
    Secretary McHugh. I'd like to do both. First of all, I 
think the Surgeon General of the Army, General Patty Horoho, 
has really taken this challenge on very aggressively. When the 
first, I believe, 14 soldiers who were found to have those same 
kinds of change of diagnosis came forward, she ordered a 
complete reexamination of all the treatment and diagnostic 
profiles of soldiers treated at Madigan. That's where those 
additional nearly 300 cases came from.
    The article focuses upon those. She went further than that, 
though, and I think appropriately so. She's asked the Army 
Inspector General (IG) to reexamine all similar cases across 
the Army to determine if there is a need to reassess and reopen 
other cases as well. She's also put out an All Army Activities 
message to every soldier who feels that they may have had their 
diagnosis inappropriately changed to come forward, and we'd put 
them into that process as well.
    So this is going to take some time, but it's absolutely 
essential, and I think, at least for the moment, we're getting 
on top of what for us is a very challenging and a very 
troubling situation.
    [The information referred to follows:]

    My understanding is that certain behavioral health diagnoses and 
disability ratings of soldiers processed through the disability 
evaluation system may have been influenced by factors other than the 
considered opinion of medical professionals applying the appropriate 
diagnostic criteria. U.S. Army Medical Command announced it would offer 
face-to-face re-evaluations to individuals it identified as requiring 
re-evaluation.

    Chairman Levin. It is important that you be on top of it. 
This committee's had a very deep interest in this, the issue of 
PTSD and the diagnoses. So if you would keep us informed on a 
regular basis as to what that review shows.
    Now, the two of you and I spoke in my office about the 
energy use by the Army. In the budget request for fiscal year 
2013, you're demonstrating a trend towards increasing the use 
of rechargeable batteries for greater resiliency and lesser 
weight over the nonrechargeable batteries, which not only weigh 
more upfront in many cases, but also, obviously, you need more 
of those.
    You indicated you already are making some really good 
progress in this area and that you were going to bring with you 
some demonstration. I think we all really very much appreciate 
this. We know what the price of energy is. Every American 
family knows the price of energy. But what they're not as 
familiar with is the cost of energy to our military, to our 
budget, and to the safety of our troops that have to carry a 
lot of weight on their backs, but also have to carry a lot of 
energy that needs to be protected. We've had a lot of lost 
service personnel because they're protecting energy sources.
    I see you brought the equipment you thought you might be 
able to bring in time. Do you want to take a minute or 2 and 
tell us about what we're looking at?
    Secretary McHugh. Absolutely. Mr. Chairman, I was struck 
when I found a data point that said for the average platoon to 
go on a 72-hour patrol in Afghanistan they have to take with 
them 400 pounds of batteries, which underscores the very points 
that you made.
    This small black box to my immediate right is called the 
Modular Universal Battery Charger. It weighs six pounds. The 
four larger units you see at the far end of the table weigh 85 
pounds and collectively they do the work of this one 6-pound 
generator.
    The other unique difference is those four combined weight 
85-pound rechargers are really limited in their application. 
Obviously, you wouldn't put those on your back and hump them up 
a mountainside. But they're also limited in their power 
sources. You have to plug them into a wall. Otherwise they 
don't work. This little 6-pound recharger is able to work off 
just about any available source of energy.
    What you see arrayed across the front of the table is a 
solar blanket. It folds up much like a bath towel would, and 
weighs about the same. If you unfurl that and plug this charger 
into it, from the sun it can recharge those batteries. This 
little 6-pound unit can run off vehicle power. It can use other 
batteries' residual power to charge itself so it could charge 
the other batteries. In short, from a battery perspective that 
one 6-pound unit makes patrol limitations unlimited.
    These are the kinds of things that provide operational 
flexibility. But as you noted, Mr. Chairman, more importantly, 
it takes enormous weight off the backs of our soldiers, and 
provides them greater operational flexibility. When we are able 
to reduce such things as convoys bringing in fuel, where every 
44th convoy results in a casualty, these are important things 
for soldier safety as well.
    We're always trying to do better and I have no doubt there 
are other things we can do, but we appreciate the opportunity 
to show you one very important development.
    Chairman Levin. We thank you very much for your initiatives 
in the Army here. It really resonates with all of us. It's kind 
of like a four-point success story. You have the safety of our 
troops, you have the weight off their backs, you have the cost 
issue, and you have the energy security issue as well. There 
are so many plusses in what you're doing. I just want to 
commend the Army for this initiative and for your request in 
the budget to continue it.
    Senator McCain.
    Senator McCain. I thank you, Mr. Chairman, and I'm 
certainly glad to see this success story, Mr. Secretary.
    General Odierno, you spent a significant portion of your 
leadership role in the Army in Iraq and I'd like to get your 
views, because we are hearing disturbing reports of a 
resurgence of al Qaeda, increasing violence, and again 
attempted consolidation or consolidation of power on the part 
of Prime Minister Maliki.
    I'm curious about your assessment of the situation in Iraq. 
I know you still pay very close attention to it.
    General Odierno. Senator, obviously I do watch it closely. 
There is some concern as we watch what's going on in Iraq. The 
key to Iraq will be, as we have said all along, ensuring that 
all of the entities inside of Iraq continue to participate and 
be part of the decision process within the government.
    Senator McCain. Is that happening?
    General Odierno. There's been some challenges to that in 
most people's estimations, based on the prime minister's 
attempt to consolidate a bit more power. I think with the 
uncertainty in Syria, it's adding a difficult piece because of 
al Qaeda and other groups who will try to exploit the room that 
they see in this area. So I think that's some concern in the 
rise in violence.
    Senator McCain. Has there been an increase in al Qaeda 
activity?
    General Odierno. There are reports that there has been some 
increase, especially in Anbar Province, of al Qaeda and also in 
Baghdad. Though, I'm still very confident that the Iraqi 
security forces can handle the violence. The issue becomes that 
we need the people of Iraq to continue to reject al Qaeda and 
not allow them to get back in and form groups. I think that's 
the most important piece now.
    Senator McCain. Isn't a very important piece also the 
polarization and possible view on the part of the Sunni that 
they are excluded from the government? The vice president, who 
is Sunni, is now residing in Irbil, with a warrant out for his 
arrest. It's not exactly, I think, the model that we had in 
mind for the Iraqi democracy.
    General Odierno. Senator, these are the type of seams that 
I'm concerned about, because these are the type of seams that 
other groups will attempt to exploit as we move forward. It's 
important that we continue to work very closely with the Iraqi 
Government, and they understand that, so they can close some of 
these seams that are starting to develop.
    Senator McCain. Thank you, General.
    The Director of the Defense Intelligence Agency, General 
Burgess, testified last month that the Assad regime and its 
military remain ``a viable, cohesive, and effective force.'' In 
the same hearing, James Clapper, Director of National 
Intelligence, testified that, absent some kind of external 
intervention, Assad will ``hang in there and continue to do as 
he's done.'' Of course, a recent news report says that there's 
been ethnic cleansing in Homs, a scene of devastation and 
slaughter.
    Do you agree with General Burgess and Director Clapper's 
assessments?
    General Odierno. I agree that the Syrian Government and 
their military have significant capabilities that could be used 
against the population.
    Senator McCain. Could be or is being?
    General Odierno. We're seeing parts of it used against the 
population.
    Senator McCain. Do you believe that if the current 
conditions persist, Assad can remain in power nearly 
indefinitely?
    General Odierno. It's unclear. You never know how the 
population will ultimately react once a leader uses force on 
the population. But he certainly is attempting to stay in power 
by using force.
    Senator McCain. But you don't have any estimate as to how 
long he could remain in power?
    General Odierno. I think that he could remain in power for 
some time.
    Senator McCain. The Washington Post reported recently 
there's been a ``spike in Iran's support for the Assad 
regime.'' Do you know much about the nature of this support? 
I'm sure that some of this is classified.
    General Odierno. I will say I don't know specifically the 
type of support. But as we have seen in and around the Middle 
East, the use of the Quds Force, whether it be in Iraq, whether 
it be in Lebanon, whether it be in Bahrain, and other places, 
they are very active when they're supporting their own agenda, 
and they clearly have an agenda in Syria. So I know that 
they're active in Syria.
    Senator McCain. Do you agree with General Mattis and 
General Dempsey's assessment that if Assad fell it would be the 
greatest blow to Iran in the last 25 years?
    General Odierno. I think it would have a great impact on 
Iran if Assad fell in Syria.
    Senator McCain. Have you seen any deviation or effect of 
the sanctions on Iranian actions towards developing nuclear 
weapons?
    General Odierno. My personal assessment is that sanctions 
are having an impact inside of Iran.
    Senator McCain. But have they changed any of the 
activities?
    General Odierno. No indications.
    Senator McCain. No indication of that.
    I want to congratulate you and Secretary McHugh on some of 
the acquisition changes that you've made. I noted that there 
was a report that had 70-some recommendations and you have 
implemented a large number of them, 50-some. I think the 
committee would like to hear from you those changes in the 
acquisition process that need to be made by Congress, as a 
result of the recommendations that you're making. Are there any 
of those, Secretary McHugh?
    Secretary McHugh. There certainly are, Senator. When this 
body passed the acquisition reform amendments, the major 
weapons procurement reforms, I was proud to have a little piece 
of that when I was still on this side of the Hill. Frankly, it 
was, I can tell you now from the other side of the Potomac 
River, something that caused the Army to take a cold, hard look 
at itself.
    One of the reasons General Casey and I asked for this top 
to bottom review of our acquisition processes were the 
challenges resulting from the legislation that you and others 
had so much impact upon. It provided us a blueprint that, 
frankly, as you read it, is just common sense. If you had to 
write a primer on what not to do in major acquisition programs, 
you'd probably go to some of the Army initiatives in recent 
years. That's not because people were uncaring or untracked, 
but rather because we didn't know how to contain our 
requirements spirals. We didn't understand that you have to 
have reliance upon mature technologies, that sometimes good 
enough is good enough.
    As we implement those programs, the chief outlined, for 
example, the GCV, that I think is a case study in trying to do 
better, in learning that you need a fixed cost price plus 
incentive program, instead of just tying people to percentage 
increases regardless of what they spend, and in fact the more 
they spend the more they make.
    We retracted the first request for proposal that had over 
900 must-have requirements appended to the GCV and re-issued it 
with about 163, with all of those other nice-to-haves tradable 
against cost.
    The other big lesson we've taken from this is that 
competition is good, and we will have at least two competitive 
prototypes to compare. We're going to look at existing 
nondevelopmental platforms as well.
    We really learned a top-to-bottom lesson. I'm not 
suggesting we don't have some ways to go. We hope to implement 
all of the remaining suggestions of the Decker-Wagner report by 
the end of this summer. But one of the big challenges and 
another thing this Congress has directed us to do is to grow 
the acquisition community within the Army. These are like O5s 
and O6s. They just don't pop up overnight. We are reversing a 
trend of some number of years whereby the acquisition workforce 
was diminished, and now we want to bring those professionals in 
so we don't go back to our bad habits.
    Senator McCain. Thank you.
    Very briefly, General Odierno, how important is the 
strategic partnership agreement between the United States and 
Afghanistan in the grand scheme of things?
    General Odierno. I think as we look to the future and what 
we're trying to accomplish, it's key that we have a strategic 
partnership agreement, I think similar to the one we developed 
in Iraq. I think it's important for us to understand our 
bilateral agreement and how we will continue to work with each 
other as we move forward, in order to build on the success that 
I expect to happen here and continue over the next 2 years in 
Afghanistan.
    Senator McCain. Thank you.
    I thank you, Mr. Chairman.
    Chairman Levin. Thank you very much, Senator McCain.
    Senator Lieberman.
    Senator Lieberman. Thanks, Mr. Chairman.
    Thanks to both of you for your service and your leadership.
    General Odierno, let me just ask you a few questions about 
Iraq following on Senator McCain's questions. Just for the 
record, at this point how many U.S. Army personnel are there in 
Iraq?
    General Odierno. We're changing it every day because we're 
increasing, it's about 180 to 250 that are working in the 
embassy in support of our actions.
    Senator Lieberman. Right. Really, it's down that low now. 
Am I right that a certain number of the troops that were in 
Iraq have been repositioned to neighboring countries, 
particularly Kuwait, and the numbers there?
    General Odierno. We have a BCT that came out of Iraq and is 
now inside of Kuwait. We have some aviation elements that are 
also inside of Kuwait. We have people in Kuwait that also 
support Afghanistan.
    Senator Lieberman. Right.
    General Odierno. The current number is somewhere between 
12,000 and 15,000. It will come down over time, probably to 
something less than 10,000 in Kuwait.
    Senator Lieberman. Was one of the understandings or 
foundations of that decision to leave some number of our troops 
nearby Iraq in case of a crisis to go back in?
    General Odierno. I think I would say it's first to sustain 
some capability close by in the region. I would suggest General 
Mattis could probably answer that question better than I, but I 
think it's for us to sustain capacity in the region that allows 
us to react with ground forces if necessary and if it was in 
our best national interests.
    Senator Lieberman. Right. Let me ask you to step back, 
because of all you contributed to our effort in Iraq, and ask 
you the question people ask me. Looking back, was it worth it?
    General Odierno. First off, I always start out that there's 
no longer a brutal dictator overseeing the Government of Iraq. 
I think we forget about that sometimes, as we continue to 
uncover the atrocities that were conducted under that regime. I 
don't think we should ever, ever forget that.
    We have bought them the time and space to work through a 
democracy, to improve an economy that I believe in the long 
term could add stability to the region. I still believe that. 
We're going through a rough time now, as Senator McCain pointed 
out, inside the Iraqi Government. But I still have confidence 
that we can work our way through this.
    What gives me confidence is we still have the parliament 
working together, represented by Kurds, Sunni, Shia, trying to 
solve problems inside Iraq. I think that's a positive 
development and will continue to be. I think there's a lot of 
opportunity for them to continue to develop economically as 
they continue to increase their oil exports. So I think they 
can have an impact on the region. I think they can be a 
stabilizing factor in the long term. But we have to continue to 
work very closely with them, treat them as a partner, continue 
to help them, and help them understand the importance their 
role can play in the region.
    Senator Lieberman. Thank you. I agree with that.
    That's a transition, if I can, to the budget. I do want to 
say first that when you think about what's happening in the 
Middle East just in the last couple of weeks and the 
possibilities we're looking forward to, I question the notion 
of the rebalancing of our forces from the Middle East to Asia 
Pacific. I understand why we'd want to focus on the Asia 
Pacific because it's critically important, but I think we're 
going to be engaged really in ways that we can't exactly 
foresee in the Middle East.
    Of course, we still have a presence there. Maybe I'll first 
ask you to comment on that, and then I'll transition to my 
concerns about the reductions in end strength as it affects our 
ability to be involved in both theaters.
    General Odierno. I don't see us necessarily rebalancing 
from the Middle East to Asia Pacific. Based on the priorities 
we have established, Asia Pacific is first, closely followed 
behind by the Middle East. But I don't think that is causing us 
to have less attention and capability available to use in the 
Middle East.
    I do think in some other parts of the world we are 
diminishing our potential to influence, but it is not in the 
Middle East. I have confidence that we will be able to do what 
we need to do if necessary in the Middle East even though we 
have now provided some focus into the Pacific region.
    Senator Lieberman. Are those other parts of the world where 
you think we may be diminishing our influence too much?
    General Odierno. No, I think it's right on target, in 
Europe and other places.
    Senator Lieberman. Yes, I agree.
    On the budget, I'm concerned, as I said when Secretary 
Panetta and General Dempsey were here, that this budget takes 
on an unacceptable degree of risk for our national security. I 
say quickly that I understand that this is the budget that we 
forced you, the Pentagon, to give to us through the Budget 
Control Act.
    But I hope that in this authorization process that our 
committee is going through now and in the appropriations 
process that we will take a second look at the implications of 
the cuts that we are forcing on you, including the cut over the 
next 5 years of 80,000 personnel in the Army.
    Let me ask you first, because I don't believe we've heard 
any details about the speed and depth of the reductions in the 
ground force end strength that you're going to be compelled to 
carry out, can you provide any further details on the expected 
drawdown ramp?
    General Odierno. Yes, I can. First, we're actually starting 
in 2012. We started to reduce in 2012, so it's actually over a 
6-year period. We have developed this ramp, which we believe 
can be accomplished mostly through attrition. With the rate 
that we're reducing the ramp, we believe that we can continue 
to meet our commitments in Afghanistan and our other deployable 
commitments with rotational forces.
    So we feel confident that if it remains over a 5- or 6-year 
period it will mitigate the risk associated with the downsizing 
of our force. If we are forced to do it much quicker than that, 
then the risk goes up exponentially in my mind, because first 
of all it could have an impact on the soldiers and families of 
our Army and also an impact on our ability to respond with 
rotational forces if needed over the next several years, 
specifically since we still have a large commitment in 
Afghanistan.
    If I could just talk, Senator, a little bit about the risk. 
The risk that we're accepting is that we will not get into 
long-term simultaneous operations again.
    Senator Lieberman. As in Iraq and Afghanistan.
    General Odierno. As in Iraq and Afghanistan; over a 10-year 
period.
    Senator Lieberman. Right.
    General Odierno. Or a 7-year period, or a 6-year period, 
with forces of 100,000 in one theater, and 150,000 in another. 
That's where we are taking risk.
    But we believe we mitigated that risk with our ability over 
the next few years because of the ramp to reverse Active 
component reductions if necessary, but also by utilizing our 
Reserve component, which has gained, as everyone knows here, 
great experience and capability. So we'd have to rely on them 
in order to buy us time then to reverse the Active component. 
We think that's how we mitigate that risk.
    I would also say that we do have the capability to conduct 
2 operations simultaneously at 490,000. Again, where the risk 
comes in is if they get extended over a very long period of 
time.
    Senator Lieberman. Okay, my time is up. I would like to 
talk to you at some point about the reversibility, because 
obviously we just went through a period of time where we had to 
reverse previous end strength reductions that left us, I think, 
unprepared for what we had to face. But really, we got prepared 
by putting tremendous stress on our forces, with a very high 
boots-on-the-ground to dwell-time ratio. That's something I 
know you want to avoid ever again having to put our people 
through.
    Thank you.
    Chairman Levin. Thank you, Senator Lieberman.
    Senator Inhofe.
    Senator Inhofe. Thank you, Mr. Chairman.
    First of all, I have the highest respect for both of you. I 
consider you to be personal friends, as well as certainly great 
career guys in carrying out your mission. But I think it's 
important to approach this budget thing a little bit 
differently. We all know that you guys receive a budget and the 
budget comes from the Commander in Chief, and you're going to 
have to carry it out; you're both very, very competent to do 
that.
    However, the variable, as Senator Lieberman says, in this 
is risk. I look at what's happening now. In this 
administration's four budgets, we have a $5.3 trillion deficit, 
more than all the deficits of every President in history. In 
the fiscal year we're talking about now, it's $1.3 trillion. 
The only real hits are defense. You could zero out the defense 
budget and the OCO and that adds up to about $614 billion, and 
still have a half trillion dollar deficit.
    I look at that and I think, where is the money going? 
Because it's not going to defense. Let me just put this into a 
perspective that I think is significant. At our peak--that 
would have been 2008 and 2009--we had approximately 188,000 
troops deployed in Iraq and Afghanistan. There also were over 
100,000 servicemembers deployed within the U.S. Central Command 
(CENTCOM) area of responsibility (AOR) in a supporting role.
    During those years, the Secretary and the Chief of the Army 
repeatedly briefed Army, us, right here in this room, about an 
Army out of balance, that the demand for ground forces exceeded 
the supply, that we needed to continue with the 15-month 
rotations, and that constant conflict since September 11 had 
stretched and stressed all of our volunteer force.
    The 2010 Quadrennial Defense Review, which was the 
timeframe that we're talking about said, ``In the mid- to long-
range term, U.S. military forces must plan to prepare and 
prevail in a broad range of operations that may occur in 
multiple theaters, in overlapping timeframes. This includes 
maintaining the ability to prevail against two capable nation-
state aggressors.''
    The new strategic policy, which I can actually read out of 
here, talks about the objectives in one region by conducting a 
combined arms campaign.
    The first thing before I ask you were they wrong is to go 
back and remember when you and I, Mr. Secretary, sat next to 
each other in the House Armed Services Committee, and I 
remember so well the last year before I came to the Senate we 
had someone testifying that in 10 years we'd no longer need 
ground forces. You remember that, too. We talked about it at 
the time.
    What I'm saying is we don't know how what we do today is 
going to reflect where we're going to be in the future. So the 
two statements that I read, do you think that Casey and Geren 
were wrong at that time? Has something changed to change the 
level of hostility out there?
    Secretary McHugh. I don't think they were wrong. But things 
have changed. First of all, when they appeared before both 
Houses of Congress they were in two simultaneous wars. I don't 
think they, on the ground, had the opportunity to totally get 
the upper hand, and the pace of deployments was such growing to 
try to sustain those two theaters.
    Today, Senator, we're out of Iraq. We've already begun to 
draw down forces in Afghanistan. As I understand the agreement 
amongst the allied nations' coalition in Afghanistan, the plan 
is to transition all control of combat operations to the 
Afghanis by the end of 2014, which presumably will allow us to 
draw down even more.
    We've restored our boots-on-the-ground dwell times to 1 to 
2 years.
    I can tell you, if the Military Services had to write their 
own budgets, I'm not sure any of us would have picked these 
particular figures. But as you noted, that's not how it works. 
We had the Budget Control Act, passed by both houses and signed 
by the President, within which we had to do the best we could.
    Senator Inhofe. Exactly, and I understand that. I know that 
the situation has changed since that time. I still look at this 
and look at the stress. We're the ones up here, and you used to 
be in this position, where you'd be talking to your Reserve 
components back home and you saw as their operational tempo 
(OPTEMPO) went up. I would probably have a hard time, even 
though we are drawing down right now, not knowing what's in the 
future, that we can't consider the OPTEMPO for our Guard and 
our Reserve to maintain the same thing.
    My time's getting low here, so I want to cover two other 
things quickly. First of all, on the adjustments in TRICARE, 
the Obama budget calls for military families and retirees to 
pay sharply more in their health care. Over 5 years, compared 
to current fees, the fiscal year budget proposed would increase 
the enrollment fees by 94 percent and up to 345 percent for 
some retirees.
    There's an article that you probably read by Bill Gertz 
that was in just last week. He said, ``The administration 
officials told Congress that one goal of the increased fees is 
to force military retirees to reduce their involvement in 
TRICARE and eventually opt out of the program in favor of 
alternatives established by the 2010 Patient Protection,'' or 
in other words, Obamacare.
    Got any thoughts about that? Do you think it's an issue of 
fairness in terms of the increase in the copays that are in 
this budget?
    Secretary McHugh. We think it's an action of necessity. The 
facts are irrefutable. Over the last 10 years the cost of the 
defense health programs has doubled and, like in the civilian 
sector, painfully but undeniably, if we don't do something to 
get that cost growth under control we're going to be in 
jeopardy of losing the entire program.
    We worked on this very meticulously. It was not something 
we enjoyed doing, not something we wanted to do. But if you 
look at the increases as proposed, I think at the end of the 5-
year period you'll still have an enormously generous benefit 
that these men and women who served in uniform not only 
deserve, but in our minds earned.
    Senator Inhofe. I think I'm just out of time almost here, 
Mr. Secretary. I agree with what you're saying, I agree.
    General Odierno, I was one of them back when we were seated 
next to each other in the House Armed Services Committee when 
then-President Bush cancelled the Crusader program. We were 
very distressed. In fact, one member actually retired--
Secretary McHugh, you remember our good friend from Oklahoma--
because of the way that happened. So I'm critical there of a 
certain Republican administration.
    Then we went through the non-line-of-sight (NLOS) cannon. 
We went through the cancellation of the Future Combat Systems 
(FCS). Now we're kind of left with the latest version of the 
old Paladin technology. My concern is the Paladin Integrated 
Management (PIM) program, I'm very much for it, and we have to 
have that capability. I know that both of you understand and 
appreciate that.
    Is there any way to accelerate that? Right now you're 
looking at 4 years out and it would seem to me we ought to be 
able to get that capability prior to it, maybe in a 2-year 
period of time. Have you thought about that?
    Secretary McHugh. We have looked at all different courses 
of action, Senator. We're trying to balance across the entire 
modernization program how we do this. We believe in the PIM 
program. It actually takes some of the technologies out of NLOS 
and integrates it into the Paladin. So we're very excited about 
that. We think it's something that we have to continue to 
build.
    But as we look at the adjustments we've made, it's 
difficult for us to speed up programs right now as we try to 
sustain a balanced modernization program across all of our 
systems.
    Senator Inhofe. With the limited resources. I agree with 
that, and you have the GCV to consider and all of that. Well, 
you're doing the very best you can with what you have, with the 
hand that you're dealt, and we need to deal you a better hand.
    Thank you, Mr. Chairman.
    Chairman Levin. Thank you, Senator Inhofe.
    Senator Reed.
    Senator Reed. Thank you very much, Mr. Chairman.
    Thank you, gentlemen, for your service to the Army and to 
the Nation.
    General Odierno and Secretary McHugh, you have a major 
challenge in reshaping the force structure of the Army. You've 
talked about eliminating brigades, reorienting the Army for 
what might be termed more conventional type or a broader 
spectrum of missions than you've seen. But you also have going 
forward the responsibility to generate a cadre of advisers who 
will be embedded, presumably, with Afghani forces going 
forward, and even in a broader sense a cadre of mid-rank 
professionals who can deploy to other forces around the world 
and provide training, assistance, etcetera, which seems to be 
something you have to do to complement the downsizing of our, 
for want of a better term, conventional force.
    Can you talk a moment about that challenge and how you 
propose to meet it, General Odierno?
    General Odierno. Senator, we just finished a training 
exercise out at the Joint Readiness Training Center on a 
brigade that's getting ready to send advisers over to 
Afghanistan as we continue to shift our strategy in 
Afghanistan. We've made the decision to center it around a BCT 
because they're the ones who have the expertise that we need in 
order to continue to exponentially improve the capability of 
the Afghan forces.
    So we'll take a brigade, we'll take the leaders out of it, 
the noncommissioned officers, and then we will redistribute the 
people of the brigades to other units so we can meet that 
requirement. Then when they come back we will then regenerate 
the BCT.
    The reason we've done this is because it's about the 
expertise. It's about having the right officers doing adviser 
programs. I think we made some mistakes early on in Iraq in our 
adviser programs because we had people that, frankly, weren't 
qualified to be advisers, and we don't want to do that again. 
We think the flexibility of our formations allows us to do 
this, so we're very focused on doing this. I'm pleased so far 
with the results. We'll see what happens when they deploy here 
very shortly.
    Senator Reed. I want to be sure I understand this. You take 
out from that brigade the advisory element you need and send it 
into Afghanistan. The remaining brigade, presumably the 
soldiers and the personnel, the non-advisory personnel, are 
then----
    General Odierno. What happens is you have security elements 
that go with them as well, which takes some soldiers, and other 
things that will go in with them. It's a package that is built 
out of the brigade. Then of course, on installations we have 
more than one brigade. What we've done is we take those 
soldiers, so they can continue to move forward and train on 
other missions, into another brigade, and that's how we've 
decided to do this.
    That allows us to not only have the best expertise moving 
forward, but what we were doing before is robbing other 
institutions. That causes us to have weaknesses in other 
institutions. We are now able to do this because of our reduced 
commitments, for example not having brigades in Iraq now.
    Senator Reed. One of the points you mentioned was the 
security of these advisers. Given what's happened over the last 
several weeks, how are you planning for, training for, or 
what's your general reaction, to the ability to operate as we 
thought we could do without some of the frictions we've seen 
lately?
    General Odierno. It's interesting, as we were out at the 
training center we got some feedback from the brigade commander 
getting ready to go. His assessment is the thing that we have 
to do is, it's about being even closer, having the ability to 
really be as close as you can to our allies, build a 
relationship, so you completely understand the environment 
you're operating in and you're able to identify the risks 
associated with it.
    That's one of the things we're concentrating on, that you 
have to be aware, you have to identify the risks associated 
with being advisers and understand, more importantly, the 
personalities that you're working with. So we're focused on 
that.
    We're also focused on developing techniques to recognize 
potential problems. I feel comfortable that we are addressing 
this. It is still a very difficult threat to combat against. 
But I would just say, Senator, to expand a little bit, we 
cannot allow a few to derail what we're doing in Afghanistan; 
99.9 percent of the ASF are working very hard, sacrificing 
every day to move their country forward, and we have to 
continue to support them. Even though we have a few who are 
trying to take this mission down, we can't allow that to 
happen. It's important we remain steadfast in this mission, 
sir.
    Senator Reed. Let me ask a final question on this line, as 
we come out of Afghanistan, as you reconstitute the force for a 
broader spectrum of missions, you'll still have this legacy 
task. There has to be, and we've seen in the past, where the 
proper recognition for service there in an advisory capacity is 
not appreciated, that the incentive structure now is, that's in 
the rear-view mirror, now you have to command a brigade, not an 
advisory brigade but Active brigade under division format in 
the United States, et cetera.
    How are you going to ensure that these individuals are 
given the kind of recognition they need in terms of promotions, 
in terms of consideration, et cetera?
    General Odierno. The Secretary and I get to write advice to 
the board. We certainly will make sure we continue to give that 
direction to the board.
    I would argue it's another reason why we're centering it 
around the BCT, because in reality they will still be brigade 
commanders who are doing all of these missions. I think it's 
not only about the quality, but it's also about the recognition 
of what they're doing.
    Senator Reed. Secretary McHugh, when last you were here we 
talked about the study of the profession of arms, which you 
initiated, which is a way to develop discussion on the spectrum 
of the Army, including Army families--we talked about that--and 
about the future of the Army. Can you just comment on the 
perspectives that you've learned and how it's influenced you in 
terms of these, not just budget deliberations, but all the 
questions that we've spoken of today?
    Secretary McHugh. Thank you very much. We're still engaged 
in that discussion and, frankly, if one thinks about it, you 
probably should be each and every day maintaining an Army. What 
we have done upon that realization now is tried to embed into 
U.S. Army Training and Doctrine Command (TRADOC), into our 
schools and classrooms, that kind of discussion, so we have a 
continuous flow of information and try to keep those lessons 
learned.
    The thing that concerns me is the issue that we're hearing 
more and more about the lack of discipline within the force. 
This is particularly true amongst younger officers. They feel 
as though the professional arms to them means more than just 
going to combat; it means that you have to have discipline in 
garrison, you have to have standards, both height and weight, 
physical standards.
    Amongst the cadres that I would have felt were the less 
interested in those age-old kinds of things that made the Army 
different, we find the most adherence. What we have to do, it 
seems to me, is take those messages and broaden our definition 
of what the profession of arms means. I don't think that's 
going to happen overnight, and I think particularly as we 
transition out of combat and come back, once more we're going 
to have to take another look at that.
    It's been an exciting intellectual experience, but I can't 
tell you we're ready to write the book as yet. I know the Chief 
has been very involved in this as well.
    Senator Reed. There are standards, height, weight, and 
physical fitness. Fortunately, there are waivers for height 
standards. For both of us, I think.
    General Odierno. For both of us, that's right, Senator. 
[Laughter.]
    Exactly what the Secretary said. As we grew in the 2000s, 
there's a thought in the force that we've lowered our standards 
as we were growing. It's very interesting. They want 
competition, they want high standards. The profession also in 
my mind moves towards sexual harassment and drug abuse. It's 
all of these things; in our profession they are unacceptable. 
Our moral and ethical values and our standards do not accept 
things like this.
    Bob Cone in TRADOC is institutionalizing a professional 
program that will start when you're a Reserve Officer Training 
Corps (ROTC) cadet or a West Point cadet and will take us all 
the way through our institutional training. We're also now 
developing training in the operational force to get at this. 
It's absolutely essential to us as we move forward as an Army 
and as we reduce the size of our Army, because the development 
of our leaders will be what causes us to be successful, and 
that our soldiers understand what they're doing and the 
profession that they are in is special and requires special 
traits and characteristics that we expect.
    Senator Reed. Thank you very much, gentlemen.
    Thank you, Mr. Chairman.
    Chairman Levin. Thank you, Senator Reed.
    Senator Wicker.
    Senator Wicker. Thank you very much, and I want to thank 
both of you for your service. I have a great deal of confidence 
in both of you. I think our committee is well served, our 
country is well served, and our national security interests are 
well served by both of you. So thank you very, very much.
    I want to talk about helicopters and cargo and then if we 
have a moment maybe get back to the general budget questions. 
General Odierno, there is an analysis being performed out there 
on the options for the Armed Scout Helicopter, options ranging 
from a new high-speed helicopter to a conventional helicopter 
to modernization of the existing airframes. We submitted some 
advance policy questions to you before your confirmation last 
year and you stated that you agree the Army has an enduring 
requirement for an armed aerial scout (AAS), that this was 
reaffirmed after the termination of the Armed Reconnaissance 
Helicopter (ARH) program; and that requirement will be 
validated by an ongoing AAS analysis of alternatives (AOA), 
whose findings at that time were scheduled for release in the 
third quarter of fiscal year 2011.
    Has that slipped? I understand this analysis may have been 
delivered to the Army leadership, but that no decision has been 
reached. I also understand that the acting Under Secretary of 
Defense for Acquisition has not yet been briefed on this 
recommendation.
    So tell us about this. When will this analysis be briefed 
to the DOD Under Secretary and will this analysis be briefed to 
us prior to a decision being made on which course of action is 
taken?
    General Odierno. Senator, first, we have not yet seen the 
analysis. It's now due in second quarter of fiscal year 2012.
    Senator Wicker. Why has it slipped?
    General Odierno. I don't know. I'll get back to you on 
that. I can't answer that question. I think probably some of 
the companies involved asked us to slip that so they could get 
a better analysis back to us. But I'll get you a more thorough 
answer on that.
    [The information referred to follows:]

    The Armed Aerial Scout (AAS) Analysis of Alternatives (AoA) is 
expected to be completed in the near future. The Army and the Office of 
the Secretary of Defense are collaborating on the validation of the 
sufficiency of the AAS AoA to determine whether additional market 
research from a Request for Information (RFI) and results from 
voluntary flight demonstrations will be required to complete the AoA. 
The purpose of the RFI and voluntary flight demonstrations will be to 
assess the current state of technology within industry. The Army will 
not compare individual results, but rather assess their capability 
against the gaps identified in the initial capabilities document.
    The end state is to identify an affordable, achievable, moderate 
risk materiel solution option based on the current state of technology 
in the market. It is anticipated that the AAS decision and briefing to 
Congress will occur during the second quarter of fiscal year 2013.

    General Odierno. But we expect to have an answer back on 
this AOA. We will take that analysis, we'll take a look at it, 
and then we'll decide, is that better than modernizing Kiowa 
Warriors or going with a new system? When we get that 
information the Secretary and I will be more than happy to 
provide that to the committee.
    Senator Wicker. Do you have any estimate of when we might 
see that?
    General Odierno. Our determination will probably be made 
either by the end of fiscal year 2012 or the beginning of 
fiscal year 2013, when we finally make a decision on that. As 
we move towards that decision we would bring it to you. It 
would probably be somewhere in the beginning of fiscal year 
2013 or the end of fiscal year 2012.
    Senator Wicker. So it could be as early as October or 
November of this year. Okay, thank you very much.
    Let's move to cargo then, General. The Air Force has 
decided to pursue the divestment of all C-27 aircraft in our 
inventory. C-27s, a twin-engine turboprop, can carry up to 44 
passengers, more than 23,000 pounds of cargo and fuel, and can 
land on unimproved fields as short as 3,000 feet in areas such 
as Afghanistan.
    Were you consulted prior to this Air Force decision to 
divest us of all C-27s?
    General Odierno. I would say we had a discussion about it 
as a joint group together once the decision was made, as we 
looked at the budget and what the results of the cuts would be, 
the Air Force recommended the reduction of the C-27.
    Senator Wicker. So the decision had already been made 
before you were brought in?
    General Odierno. The Air Force made the decision.
    Senator Wicker. Just tell us. You're part of the team, but, 
all things being equal, are you disappointed that you're not 
going to be able to have the benefit of these C-27s?
    General Odierno. We need a capability that enables us to 
provide intratheater lift, to provide support to our ground 
forces, as we've seen in Afghanistan. The Air Force has assured 
us that they will be able to do that with the current C-130 
fleet, and we've developed a memorandum of understanding that 
would tell us that they will provide that support to our units. 
It's their responsibility to provide that intratheater airlift 
to us. We need it because I think, Senator, the CH-47 fleet has 
been used quite heavily there and they cannot bear the whole 
load. We need help with fixed wing resupply.
    Secretary McHugh. Senator, may I just?
    Senator Wicker. Yes, sir.
    Secretary McHugh. The Chief is absolutely right. Each of 
the Services, as we went through our budgets, made their own 
decisions. However, on this issue the Chief and I along with 
the Air Force were provided an opportunity to discuss it, and 
one of the outcomes of that was the agreement that the Chief 
just mentioned.
    I didn't want to make it sound as though we weren't given 
some opportunity to discuss it with them, because that wouldn't 
be totally accurate.
    Senator Wicker. Let me just observe that this aircraft has, 
it seems to me, the capability that we need in Afghanistan; 
with the mountainous terrain we have there, the limited road 
network, which is further constrained by the threat of roadside 
bombs. It just seems to me the C-27 is equipped to help us, and 
it makes no sense to me that we have this new aircraft and 
we're going to get rid of a brand-new aircraft that provides 
the capability.
    Quickly, Mr. Secretary, you mentioned the Budget Control 
Act is the law. You might not have put it in place, but you're 
constrained by it. It's also a fact that sequestration right 
now is the law and may in fact kick in. There's a discussion 
around here of trying to handle this during the lame duck. But 
let me just ask you, Mr. Secretary, what contingency plans do 
you have for dealing with sequestration? I hope it can be 
avoided. I desperately hope it can be avoided and believe we 
should have made the tough decisions with regard to the 
explosion of entitlement spending. We've collectively been 
unable to do that and now we're faced with the prospect of this 
being taken out of the hides of the people that provide 
national defense to us.
    What do you think of the prospect of waiting until the lame 
duck to answer the sequestration, and what would be the 
consequences if we don't address it sooner?
    Secretary McHugh. For the Army and all the Military 
Services, in fact DOD writ large, the irony is we don't really 
have to plan a lot because under the law we're not allowed to 
make certain cuts in some areas and ameliorate cuts in others. 
Rather, every appropriation line must be cut by an equal 
amount.
    Now, that makes our mathematical challenge pretty easy, but 
it really highlights the incredibly difficult nature should 
sequestration go forward. You can't buy 92 percent of a GCV or 
an aircraft carrier. We would have to, I would imagine, declare 
Nunn-McCurdy breaches on hundreds, if not thousands, of 
contracts, for example.
    But the real challenge, I think, is that the aura of 
uncertainty probably focuses upon those with whom we do 
business--our manufacturers, our suppliers--that have 
stockholders, that have to answer to other authorities.
    Senator Wicker. That have employees.
    Secretary McHugh. Employees, exactly.
    They have to begin to plan, it seems to me, and that's the 
discussions we've heard from them, about acting sooner rather 
than later. We worry about the industrial base. We worry about 
those kinds of effects that sometimes we don't think a lot 
about in government, but would be very real in terms of running 
DOD.
    Senator Wicker. My time is up, but my hat is off to you for 
having to deal with a real tough budget in addition to 
defending our country. I want to work on both sides of the 
aisle to make your situation a little more doable.
    Thank you very much to both of you.
    Chairman Levin. Thank you, Senator Wicker.
    Senator Nelson.
    Senator Nelson. Thank you, Mr. Chairman.
    Let me add my appreciation for your service as well, and to 
the men and women who serve under you in our military.
    The new U.S. national strategy, as has been indicated, 
calls for the increase in our presence and involvement, more 
involvement in the Asia-Pacific region. Of course, the threat 
there, among others, is an unpredictable nuclear North Korea 
and China using its military capability to reduce the freedom 
of action of its neighbors. Now, a larger presence is necessary 
to deter or repel aggression from these threats.
    The three large developed democracies in the region--Japan, 
South Korea, and Australia--collectively have an economy that 
is 25 percent larger than China's and, of course, incalculably 
larger than North Korea's. But as a percentage of the gross 
domestic product, they spend less than half what the United 
States does on defense.
    I think all of us are getting concerned about 
relationships, partnerships and associations with allies and 
friends, but that our partnership is disproportionately more 
expensive than theirs. We ought not to be looking at senior 
partners-junior partners when it comes to the expenditures or 
the requirements.
    We've always had a large presence in South Korea since the 
Korean conflict. What can we do to make certain that South 
Korea, Japan, and others pay a larger proportion of the shared 
expense because we share the threat? Mr. Secretary?
    Secretary McHugh. It's something we're always discussing 
with our allies, and there's no question some are more 
forthcoming than others. As for the Australians, I have to tell 
you--and the Chief could speak more directly to this than I 
could--operationally it's hard to find a better ally.
    Senator Nelson. I understand.
    Secretary McHugh. They are on the front lines with us, and 
on a population per capita basis have taken tremendous losses. 
The Marine Corps is entering into a cooperative agreement where 
we will have marines stationed around Darwin, Australia. So 
they continue to participate.
    The Koreans and the Japanese, particularly the Japanese, 
are somewhat limited in what they can do militarily because of 
their constitution arising out of World War II, but in terms of 
financial support are very, very supportive. There are ongoing 
discussions on Japan with respect to relocation on Okinawa and 
such-and-such, but if all of our allies were as financially 
supportive as those two nations I think we'd be in a much, much 
different situation.
    That does not mean we don't always ask them for more. We 
do. We're engaged in discussions right now. J.D. Thurman, the 
combatant commander in Korea, is talking about Yongson 
relocation and tour normalization and all those things, and 
we're trying to see what kind of support will be afforded 
there. But it's always something we ask for.
    Senator Nelson. Well, I hope we ask very aggressively and 
assertively, because of the importance of appropriate 
partnerships in terms of who contributes to the partnership.
    The discussion earlier was interesting about trying to 
compare deficits. The best way to avoid having a large deficit 
is to have supplementals. We went through a significant period 
of time where the wars were supported by supplementals as 
opposed to by the budgeting process. I think it's always 
interesting. Sometimes it's not comparing apples and apples, 
but apples and watermelons, the difference in how the budgets 
have occurred over the last 10 to 11 years for comparison 
purposes.
    We've been at war for over a decade. We've learned a lot 
about the missions for our military and we've learned a lot 
more about the relationship between the Active Duty, Guard, and 
Reserve units for the future. Part of DOD's budget plan is to 
leverage the operational experience of the National Guard and 
Reserves and looking at a more agile and smaller force.
    General Odierno, can you give us some idea of how you're 
looking at the Operational Reserve in connection with the 
future plans as it relates to the budget?
    General Odierno. Thank you, Senator. I sure can. It is a 
key part of our strategy as we move forward. A couple things I 
just remind everybody of is, with the National Guard and 
Reserve component the limiting factor is not necessarily money; 
it's time. It's the time that they have available to train and 
how we trade that time off with them with their employers and 
other things as we go back to a more steady state. So we're 
working very closely with the Reserve component to find that 
sweet spot of the time available.
    There are two things that we're doing. We've moved $400 
million from the equipping accounts to the training program. 
The reason we've done that is because the National Guard 
equipment and Reserve component equipment is 87 percent, the 
Active is at 86 percent right now. At the end of this year 
they'll both be around 92 percent, and as equipment continues 
to come out of Iraq and Afghanistan in reset we believe we will 
solve almost all of our equipping problems in both the Guard 
and the Active component.
    What we're trying to do is increase the amount of money 
spent in training in order to sustain a higher level of 
readiness. We are going to develop a progressive readiness 
model for both the Active and Reserve component that we can 
use. It's a model we have used for Iraq and Afghanistan, but as 
we come out of Iraq and Afghanistan we will adjust that model 
in order to sustain a level of readiness in the Guard and 
Reserve as they rotate through this progressive readiness 
model. We'll do the same thing for the Active component.
    We're working very closely with the other components to 
develop this, so we can take advantage and not lose the 
experiences that have been gained over the last several years.
    Senator Nelson. I think that's obviously what you need to 
do, and I appreciate the fact that you're focused on it.
    Mr. Secretary, anything you would like to add?
    Secretary McHugh. I think actually the Chief said that very 
well. The challenge at the moment is we've used for the last 10 
years the phrase ``Operationalized Reserve'' and when you're in 
full combat in two theaters, it's pretty easy to know how that 
works and what it means. The challenge for us now is to retain 
the incredible skill that both the Guard and the Reserve have 
accrued over the last 10 years and not squander it, and do it 
in a way that makes them feel a part of the process as well.
    We're all working, and I tip my hat to the Chief because 
he's been very engaged with the Guard and Reserve leadership to 
make sure we agree on the way forward.
    Senator Nelson. Thank you.
    The Government Accountability Office noted that there has 
been a lack of collaboration and commonality among the Services 
that has led to some duplicate costs for designing and 
manufacturing intelligence, surveillance, and reconnaissance 
(ISR) systems. Obviously, some level of competition is 
important, but when it comes to this I think collaboration 
probably is even more important than competition.
    Can you give us some idea of how you might be moving toward 
more cooperation on the development of ISR capabilities and 
needs?
    General Odierno. We work very closely within DOD and 
through the Joint Requirements Oversight Council process, also 
through the requirements development process, and also with the 
Under Secretary of Defense for Intelligence, who plays a large 
role in ISR. All the Services are working very closely in these 
processes. First, the most important thing is to ensure we can 
all download unmanned aerial vehicle (UAV) capabilities to a 
ground station that everyone can see, so we get maximum use out 
of it. We've done that over the years, and we've gotten better.
    We're now working through the capabilities that we need in 
the future for intel, what do we need for our ground maneuver 
components, and we're working our way through that.
    One of the things that we are doing is we have put our UAVs 
in the Army now in our aviation brigades. We just ran our first 
training rotation at one of our training centers where we 
actually teamed unmanned and manned aircraft together, and it 
was incredibly successful. This is the future for the Army, so 
we're making sure that people understand why we need this 
capability and get it integrated into the DOD ISR process.
    We're very aware of this and we're working very hard to 
ensure we make the best use of the money available in this 
area.
    Senator Nelson. With tight budget times, it's obviously 
more important. It's always important to do it, but it's even 
more important right now.
    Thank you both. I appreciate it very much.
    Thank you, Mr. Chairman.
    Chairman Levin. Thank you, Senator Nelson.
    Senator Brown.
    Senator Brown. Thank you, Mr. Chairman.
    Thank you both. It's good to see you again.
    General, I appreciated your comments on the Guard and 
Reserve and the role that they play. I have recognized it as 
someone who's serving. I see it. I know the commitment for and 
from the Guard and Reserve units. So I know the Army guy gets 
it, but I'm a little concerned that the Air Force isn't getting 
it because of the devastating cuts to the Air Guard. Whereas we 
get a good value for the dollar with our Guard and Reserve 
members, I'm hopeful that we can convince the Air Force to 
reevaluate the draconian cuts they have made to the Air Guard 
in particular.
    That being said, Mr. Secretary, I want to thank you for 
your comments on the role of women in combat. It's something I 
have been very keen on for quite some time. Having served for 
32 years, I have served with many women; the military fellow 
that we had was a Kiowa pilot and commander. Both of you know 
who she is, and she was in Afghanistan and Iraq, leading men in 
battle.
    That line, as far as I'm concerned, is really nonexistent, 
and just escorting a lot of the convoys, delivering fuel and 
supplies, that is the front line. If that isn't, I don't know 
what is.
    I wrote a letter to the chairman. I asked for a hearing on 
that very issue. But I'm glad that you're moving along.
    You mentioned the pilot program that would open up another 
60,000 positions. Would that be in addition to the positions 
that Secretary Panetta asked all the Services to look at?
    Secretary McHugh. If I believe we're talking about the same 
thing, we have taken two steps. The first is what you've said. 
The Secretary has guided all the Services, in the Army's case, 
to open up 6 more MOSs, which produced 13,000 openings. That's 
done.
    The pilot program which we intend to run approximately from 
April to August will look at those other MOSs, which produce 
closer to 66,000 new positions should they all be opened and 
approved. We have to get that approval.
    Senator Brown. Right, and subject to the qualifications of 
the individual female soldier.
    I spoke with Admiral McRaven about this and it's very 
interesting as to the role they play in special operations and 
what they're trying to do, and very, very instructive, and I 
appreciated that frank conversation.
    I also have the same concerns as Senator Inhofe regarding 
TRICARE. As a Senator, my staff and others we're not affected. 
But here we are, the military men and women that have served 
and are getting that benefit are going to be cut or asked to 
pay more of a burden. I feel it's a breach of the contract 
between the soldiers and us, and it's something I know that 
you're aware of and are going to try to work through. I'd be 
happy to share my thoughts with you at another time on this.
    On end strength, I guess I'll be blunt. Can the Army come 
down by 80,000 soldiers in 5 or 6 years without telling some of 
the folks, the 15-year sergeant, E7s, that have done three or 
four tours and were begged to come back, and all of a sudden 
say, ``we're done, we have to do a drawdown, and you're out''?
    How do we handle that? Is that something you think we can 
actually do?
    Secretary McHugh. We're working as hard as we can to try to 
manage both our discharges and our accessions in a way so that 
we don't have to have forced outs. As you noted, they're not 
something anyone likes to go through. But the reality is at the 
end of the day we're probably going to have to ask some 
soldiers who have served honorably and who meet at least 
minimum criteria to perhaps think about a next challenge in 
their lives.
    We in the Army are faced with an inescapable reality that 
48 cents currently of every dollar we spend has to go to 
personnel. So when we have a budget that is reduced as dictated 
under the Budget Control Act, one of the first places we have 
to look is our end strength. We had to balance end strength 
against all of those other needs; the modernization, the 
equipping, the family programs, the things that if you don't 
support them you're on a quick path to a hollow Army.
    We were confined in some ways, but we're trying to manage 
this as reasonably and as humanely as we can so we avoid the 
circumstances you spoke of.
    Senator Brown. Sure. I know that you're both on it. I know 
General Odierno is on it as well, and I appreciate that. I 
would suggest before we look at personnel we look at all the 
fraud, waste, and abuse in contracting, procurement, and 
obviously programs, and try to fix that first, instead of 
looking at the soldiers and their livelihoods first.
    General, the new post-September 11 Army total force policy 
reinforces the need for the Operational Reserve that is fully 
integrated in the Active component. I know we've talked about 
this. Can you comment on the planning your staff is doing to 
make this policy a reality when it comes to putting OCO funding 
back in the base budget for Guard and Reserve operations?
    General Odierno. What we are trying to do, first it's 
putting funding in the base budget to conduct operations as a 
whole, and then we choose whether it's Active, Reserve, or 
National Guard who would accomplish that mission. It's 
important about identifying steady-state missions that we might 
have to accomplish, whether it be Bosnia or Kosovo, or whether 
it be the Sinai. There are certain missions that we do think 
fit the Reserve component better, such as the three I just 
mentioned. If we believe they will be steady-state operations, 
we will attempt to get those into the base budget and out of 
OCO over time, and we'll work with the Office of the Secretary 
of Defense to do that.
    Senator Brown. I know the State partnership, I'm presuming 
you're supportive of it?
    General Odierno. Very supportive of it.
    Senator Brown. It's another way to get boots-on-the-ground 
at a very, very low cost, and obviously provide valuable 
training.
    General Odierno. We'd like to expand that to the Pacific 
and we're working very closely with the National Guard to do 
that.
    Senator Brown. I spoke to the head of that entity to make 
sure that happens. I'm certainly supportive of it. The value 
for the dollar is really amazing, especially trying to counter 
a lot of what's happening with the Chinese and other entities 
coming into those countries. It's a good buffer for short 
money.
    General, as part of the President's strategic guidance the 
Army plans to enhance its activities in Asia, specifically the 
Asia-Pacific region. What does that mean? Given that 7 of the 
world's 10 largest armies are located in that region, what 
level of ground forces do you anticipate will be necessary 
throughout the U.S. Pacific Command (PACOM) AOR to implement 
this new strategic guidance? Have you and your Marine 
counterparts worked through this?
    General Odierno. We are currently working very closely with 
U.S. Army Pacific and PACOM to identify their long-term 
requirements in the Pacific. We've had several meetings. In 
fact, in about a week or so the U.S. Army PACOM will be coming 
back here to talk to us about their future requirements.
    So the way we see this happening is we have 66,000 soldiers 
currently assigned in the Pacific region, and we'll then go 
through this progressive readiness model of both Active and 
Reserve components. When they become available, we'll then 
assign them specific missions. Some will be rotational training 
missions, some will be exercises, and some will be other things 
where we continue to shape and influence these key countries.
    One of the things I talk about all the time is 22 out of 
the 27 countries in the Pacific have chiefs of defense that are 
army, and the army tends to dominate the political influence in 
many of these nations. So the more that we can engage and gain 
access, the more we'll be successful. We're working with PACOM 
in order to provide us the opportunities where we will rotate 
forces, both Active and Reserve components, to gain access and 
build relationships that we will need later on if necessary.
    Senator Brown. I think we saw that relationship in Egypt, 
when we were able to pick up the phone and say, ``stand down 
and let things develop a little bit.'' Otherwise it could have 
been a lot different.
    Thank you, sirs.
    Chairman Levin. Thank you, Senator Brown.
    Senator Akaka.
    Senator Akaka. Thank you very much, Mr. Chairman. I want to 
thank you for having this hearing.
    I want to welcome Secretary McHugh and General Odierno. 
Thank you both for your outstanding leadership you provide for 
our Army. I also want to thank the men and women of the Army, 
Active, Guard, Reserve, and civilians, as well as their 
families, for their service and sacrifice.
    General, I understand you had the opportunity to visit some 
of our troops in Hawaii in January. I know these agendas are 
packed, but I hope you found some time to enjoy our beautiful 
State. I'm certain you also got a chance to experience 
firsthand the wonderful bond between the local community and 
the Army that we have there.
    Mr. Secretary, the issue of sexual harassment and assaults 
in the military is a very important topic and we must do all we 
can to prevent it. Can you discuss what the Army is doing at 
the entry level--that's Officer Candidate School, basic 
training, and West Point--to educate soldiers on this very 
important topic at the beginning of their service, to lay the 
foundation that the Army has zero tolerance for this?
    Secretary McHugh. Thank you very much, Senator. It is a 
highly critical problem and one that, as I've said in the past, 
could not be more contrary to what the Army values are and what 
I think every man and woman in this country who puts on any of 
the Service uniforms comes to serve for.
    As you noted, we are trying to take a very holistic 
approach to this, as is required in virtually any program. 
We've tried to put sufficient funding against it. We've 
increased in the last 5 years the budget allocated for the 
entire sexual harassment and assault response program by 500 
percent.
    One of the key ways in which, as is true in any values 
program in the military, we have to tackle this is ensure that 
our emerging leaders understand both what the rules are and 
what is expected of them to serve as leaders and imbuing those 
kinds of values and those kinds of understandings into those 
who serve under them. So whether it's West Point, where I had a 
chance to talk to the Superintendent just a few weeks ago about 
some of the things they're doing to change and to update some 
of their programs, or into our basic officer leader courses, or 
into our drill sergeant courses, into virtually every level and 
unit of training, we're adding a component that teaches exactly 
the expectations for sexual assault and how we will hold 
soldiers accountable.
    In our view this is not something you can just teach in a 
day or 2. It is a day-by-day component of all of our 
instructional activities, and we expect soldiers when they get 
out of those classrooms to go back and to live the values that 
we hope we're conveying upon them. Education is important, but 
we're doing a lot of other things in terms of prosecution, 
analysis, et cetera.
    Senator Akaka. Thank you very much, Mr. Secretary.
    General Odierno. Senator, would you mind if I added just a 
little bit to that? I talk a lot about that. First of all, 
sexual harassment is inconsistent with our values. This is 
about our profession. It's important we foster a climate of 
trust and respect among all soldiers, because when we go into 
combat, we must have complete trust in each other, no matter 
race, color, creed, or sex. It doesn't make a difference.
    Sexual harassment in my mind challenges this, and that's 
why we cannot put up with it within our Army. We are doing 
everything we can to change the culture. We have leaders 
involved in the institution, as the Secretary just walked you 
through, at every level of training, and we are now increasing 
our training in our operational force, that this simply cannot 
be tolerated and that to be part of the Army you have to be 
part of the Army culture, and being part of the Army culture 
you must have the right values, and one of the most important 
values is trust and respect for your fellow soldiers.
    One of the things we're focusing on are the bystanders. 
It's intolerable to me that there's people that see sexual 
harassment and don't assist a soldier, don't report it, or 
don't try to help a soldier as they are seeing sexual 
harassment occur.
    We're focused on this. We are spending a lot of time to 
ensure everybody understands the importance of this, to include 
our ability to investigate and prosecute as well.
    Thank you, Senator.
    Senator Akaka. Thank you so much for that response.
    I want to applaud you for your efforts to give our 
soldiers, and their families for that matter, a new deployment 
model where they have more stability and predictability. Your 
new model should increase dwell time in the Army deployment 
structure.
    General, can you discuss how this new model will impact our 
troops, including the Guard and Reserve?
    General Odierno. First of all, we've moved to 9-month 
rotations, and we will continue that as we develop this new 
model. You'll be through a reset phase, you'll go through a 
training phase, you'll go through an available phase, and then 
you'll be able to go back again and start and reset.
    It's very predictable. People will understand when they're 
gone and when they're not. In the Reserve component it'll be 
done over a longer period of time. We're still negotiating over 
that. I think it'll probably be a 60-month period, which is 
more consistent with our deployment rates we expect out of the 
Reserve component. But they would still have a reset phase, a 
training phase, and an available phase. It would become very 
predictable for our Reserve component soldiers and, just as 
important, their employers as they continue to become our great 
citizen soldiers.
    We are designing that now. We're really studying this. I've 
given our Forces Command the lead in developing this 
capability, and we expect to have some solution here in the 
next several months that we'll be able to bring forward in 
detail.
    Senator Akaka. Thank you. Thank you very much for your 
responses.
    Thank you, Mr. Chairman.
    Chairman Levin. Thank you, Senator Akaka.
    Senator Portman.
    Senator Portman. Thank you, Mr. Chairman.
    I think we're very fortunate to have you two leaders at a 
challenging time for our Army. General Odierno, through your 
distinction in combat you have a special connection with our 
troops at a time we need that. To my former colleague and top 
Republican on the House Armed Services Committee, whose got a 
lot of respect on Capitol Hill, we're going to need that as we 
work through some of these challenges, the biggest one being 
sequestration.
    It's been talked about a little bit this morning. I think 
sometimes we don't focus enough on the big changes you're going 
to have to make even prior to year end, when the sequestration 
actually hits. Could you give me a better sense of the date 
upon which the U.S. Army would have to make some of these 
painful adjustments between now and the end of the year?
    Secretary McHugh. We would have to take guidance from the 
Office of Management and Budget (OMB). As a former budget 
chair, you know about those kinds of things. But clearly by the 
end of the summer, according to what I've heard from the 
Secretary of Defense and others, we're going to have to start 
putting pencil to paper. There are some things that just 
normally in a time of difficult challenges we would probably 
look toward. But in reality I can't imagine what we would do in 
any way that could adequately prepare us to deal with this.
    If it were to come to pass, it would require an entire 
reworking of our national defense strategy. For us to go in 
prior to having the time to do that and to make substantial 
changes I think would jeopardize any of the decision choices we 
might be able to forge from that.
    I think the core of your question, Senator, is a critical 
one. This would touch virtually every aspect of our Army. We 
would probably have to reduce the Army by another 100,000 
personnel, probably 50-50 between the Active and the Reserve 
component. We would probably have to come down an additional 
four to six brigades. Whether you're talking about contracting, 
whether you're talking about pays, or whether you're talking 
about incentives, under the Budget Control Act we're not given 
authority to control those. We have to take across-the-board 
cuts, which makes it a relatively easy mathematical change, but 
it makes it an administrative nightmare.
    I would imagine as well we'd have several hundred, if not 
several thousand, Nunn-McCurdy breaches simply because of our 
inability to meet contract requirements. It would be 
devastating.
    Senator Portman. You just laid out some of the enormous 
changes that would have to be made. They would be painful to 
our personnel and to procurement and would be across the board, 
they would affect all aspects of your budget. When do you 
actually have to start making changes? In other words, when do 
you have to start notifying some of our personnel, given that 
under law this is scheduled to occur on January 1, 2013? Do you 
have to start making those changes in the summer, when you said 
you were going to put pencil to paper? Do you have to start 
making them in September? How much time do we have here in 
Congress to adjust this and to come up with a common sense 
approach?
    Secretary McHugh. I would have to defer to the guidance 
from the Office of Personnel and Management and also OMB, but 
clearly we are bound by law for certain notifications. We can't 
just slam people out on day 1. It would take some time to bring 
us to those particular levels.
    As I mentioned, the current plan as I understand it from 
OMB is to, if required, start to make those decisions probably 
by the end of the summer, some time mid to late August.
    Senator Portman. I think it would be helpful for the 
committee to know even with more specificity. I've heard 
September as a deadline. I think there needs to be a wakeup 
call here that we need to act and act soon in order to avoid 
that.
    Both Senators Wicker and Brown talked about the next issue 
I wanted to touch on and, General Odierno, I'd like to get your 
thoughts on it. Senator Wicker talked about the C-27 and 
Senator Brown talked about the Air Guard. I know the Air Force 
has made a decision here to cancel the C-27 and divest of this 
aircraft, including ones that are already deployed in 
Afghanistan.
    I had the opportunity yesterday to meet with the commander, 
who was just back from Afghanistan, of the C-27 crews. My 
understanding is you met with him in Afghanistan and thank you 
for doing that. Our Ohio National Guard is there. We're really 
proud of them.
    Your soldiers are the ones that get impacted by this Air 
Force decision. My understanding is the relationship between 
your soldiers on the ground in Afghanistan and the Air National 
Guard is terrific and that they are providing a necessary 
service for you. Can you talk a little about that? What are 
your thoughts about the performance of the C-27 and about this 
very special relationship, not unique but special relationship, 
between the Air National Guard and your soldiers on the ground 
in Afghanistan?
    General Odierno. Senator, as you said I went to see them in 
December. I had a chance to spend some time with the crews and 
the supporting elements. Also, I was with the 82nd Airborne 
Division, who were providing the majority of the support to the 
Regional Command-South and the 82nd Airborne Division. The 
relationship that was built and the delivery of capability has 
made a difference. The OR rates were extremely high. The 
relationships built were very, very good, and it impacted very 
positively on their ability to accomplish their mission.
    So that's very clear. That's why I would say it's important 
for us to sustain the capability to be able to have air assets 
dedicated to ground forces. That's the most important point I 
make.
    The Air Force has made the decision that they think they 
can do that with C-130s. If we get that same support, that's 
what we need, that support. Though, I would say that it has 
been provided very successfully by the C-27 over this last 
deployment. I think they have just gone through a change and 
now there's a new group on the ground as well now providing 
that same support with C-27s.
    Senator Portman. Yes, 179th Airlift Wing is very proud to 
provide that support. As you say, the ratings have been very 
impressive and the relationship seems to be working, that 
you're getting what you need and you're getting it in a timely 
fashion.
    I would just ask, since your Service originated the 
requirement that led to the procurement of the C-27, which is a 
new plane, do you feel that that requirement is still valid? Do 
you think the requirement still exists?
    General Odierno. I do, Senator. We need it because we 
cannot conduct all of those type of missions with rotary wing 
aircraft. We do have that mission and the Air Force has decided 
they can deliver that mission with the C-130.
    Senator Portman. The C-27 does it for $2,100 an hour. The 
CH-47 you talked about earlier does it at $11,000 an hour; the 
C-130 between does it, for $100 and $7,100 an hour. So from a 
taxpayer perspective, the C-27 is not only able to land on 
small airstrips and provide unique performance, but it's saving 
the taxpayer money.
    I would hope that you would continue to make your points 
internally, General and Mr. Secretary, to be sure that we're 
not pulling a capacity out of theater that meets an urgent 
requirement. I've never seen the military do this before, and I 
look forward to working with you with regard to the need that 
currently exists and to be sure that, if the memorandum of 
agreement is something that we're going to have to live with, 
that it does include the ability to provide that important 
capability.
    Thank you, gentlemen.
    Thank you, Mr. Chairman.
    Chairman Levin. Thank you, Senator Portman.
    Senator Webb.
    Senator Webb. Thank you, Mr. Chairman.
    General, Mr. Secretary, welcome. Obviously, we have a lot 
of work to do on this committee with you and the other Services 
in terms of having to shape the authorization bill this year.
    I'd like to spend a little bit of time today talking about 
TRICARE. I chair the subcommittee where we're going to have 
pretty extensive hearings on the proposal to increase the 
payments. I just want to make sure that we're all proceeding 
from the right premises here. The proposal is a difficult 
tradeoff. I've heard questions asked of other witnesses as to 
whether TRICARE fees are in fact eating away from hard programs 
that are needed in the operational environment.
    I say this as someone who grew up in a military family and 
spent 5 years in the Pentagon, in addition to the time I was 
privileged to serve as a marine; all of us have a lifetime of 
stewardship. We owe people who have served in the military a 
lifetime of stewardship in exchange for their decades of 
service. General, I assume you would not disagree with that?
    General Odierno. I do not disagree with that, Senator.
    Senator Webb. I think when you were talking in your opening 
statement how the Army boils down to the soldier, the soldier 
boils down to the family, and all of this boils down to what a 
soldier, marine, sailor, or airman can see happened to the 
people who went before them, how they were treated after they 
left the uniform.
    I grew up in the Marine Corps tradition and no marine is 
ever left behind. A great model of that was at Chosin 
Reservoir, when the 1st Marine Division brought out not only 
its wounded, but it strapped its dead onto the trucks. We will 
not leave a marine behind.
    I feel just as strongly about the commitment that we have 
made to lifetime medical care to the people who have served. 
They have relied on this. I know there's no written contract, 
but they have relied on it as a moral contract. I have lived 
that, I have observed it.
    We know we have a problem with medical care. It's a 
national problem. It's a huge challenge. We've been trying 
different ways to get our arms around it. It's not simply a DOD 
problem. I'm going to be very specific about this, I do not 
believe that we should allow ourselves to characterize the 
commitment that we have made as something that's a throw-away 
matter as we try to balance out these other issues. How we take 
care of these people is one of the great litmus tests that 
people who are serving right now are going to be looking at.
    We're going to have more time to discuss this in the 
subcommittee hearings. But as a starting point, I think people 
need to understand, I think my colleagues need to understand, I 
think the American people need to understand, what this looks 
like from the experiences of someone who has spent a career in 
the military. I have a chart that I asked my staff to put 
together. This is notional, but I think it's important.
    [The chart referred to follows:]
      
    
    
      
    Senator Webb. We're talking about these proposed fees on 
TRICARE as just a little bump from people who don't have to pay 
that much. Obviously people know there are different kinds of 
TRICARE: TRICARE Prime; TRICARE Standard; TRICARE Extra; and 
TRICARE For Life once you hit age 65. But let's just say you 
are a servicemember and a spouse. This is the line that you are 
seeing right now before we make any changes.
    When you're on Active Duty, your medical care is completely 
taken care of. When you retire and up to the age of 65--and we 
just picked TRICARE Standard here; there are other options--
it's about $300 a year. When you hit 65, you go on Medicare B. 
You have no choice. If you want TRICARE for Life, you go on 
Medicare B and we're going to put a fee on top of that. 
Medicare B is something everybody in this country gets. If 
they're going to pay into it, it's something you have to get if 
you want to keep your TRICARE. It's not simply something that 
was given to you because of your service.
    What is Medicare B? It's broken down in fees based on your 
income, but let's say if you're a retired E7 with a spouse, 
you're going to go to almost $2,400 a year before we even start 
talking about these other TRICARE fees. If you are someone who 
is in the income level of people who are up here or 
considerably less, you're going to go to $7,600 a year in your 
Medicare B fees before we even start talking about TRICARE 
fees.
    Let's understand what's really happening. I think there's a 
great misperception up here about what happens to people at the 
time when their income is probably at the lowest in their 
career, in the retirement years, and when their physical 
medical vulnerabilities are probably at the highest.
    We'll have more discussions on that as we move forward, but 
let's all make sure we're talking off the same data.
    General, I have one other question that I would like to 
raise with you, and it goes to a number of incidents--and 
Secretary McHugh is aware of these incidents--the Wynott 
incident, another incident with a family, the Sharrot family, 
they are constituents of ours, but also to the aftermath of the 
Pat Tillman situation, where the command accountability in the 
Army came under question.
    I'm not going to go through and nitpick these three 
incidents. But in all three cases there were people, sometimes 
family members, in one case, a loyal career Army O6 whose son 
had been killed--who became so frustrated with an inability to 
get answers that they had to come over to us. Obviously I'm 
going to help anybody who comes over here, but I don't think we 
should be doing that. I think the Army should be doing that.
    The question in all three of these, in many cases, boiled 
around whether proper accountability was being put into place 
for people who had taken certain actions during the incidents. 
Do you think those incidents are unusual? Do you think there's 
something you need to be doing? What's going on here?
    General Odierno. First of all, Senator, I'm in agreement 
with you that accountability is critical. One of the things 
that I profess is empowering our subordinates, and as you 
empower your subordinates to conduct actions, part of that is 
also being accountable for the actions that we provide you in 
terms of the command authority or other authorities we give 
you. It's absolutely critical to have accountability for 
actions.
    What makes it difficult, and I know you're aware of this as 
a marine or ex-marine, or marine rather; always a marine--is 
that the motto.
    Senator Webb. Lee Harvey Oswald is the only ex-marine.
    General Odierno. What makes it difficult for us is in a 
very complex tactical environment sometimes it takes time to 
figure out exactly what did happen. Not all the time, but 
sometimes. What we want to make sure is we do it right and we 
find out what happened, and then once we do that it's 
imperative that we hold those accountable.
    One of the things I talk about all the time is ensuring 
that we do this. We are having leadership discussions on the 
importance of this as we continue to change our leader 
development programs. I agonize with the families, I agonize 
with anyone who's involved with this.
    But as I've experienced personally the chaos that sometimes 
characterizes the very tactical level when you're in the middle 
of a significant fire fight or combat, it's very hard to figure 
out exactly what happened. We just need the time to do that. I 
know it's very, very frustrating for families who've lost a 
loved one. We owe it to ourselves to do a detailed 
investigation and provide them the right answers. If there is 
misconduct or negligence, then we hold those people accountable 
who've done that, and that's key for us as we move forward, 
sir.
    Senator Webb. I appreciate you saying that. Clearly, my 
starting point on these types of situations is the experience 
that I had as a rifle platoon company commander, and the first 
question that I always raise is follow the war. I am very 
reluctant to second-guess a lot of these findings, but when 
they conflict or when you have revelations later, for instance 
with the Pat Tillman situation, that people knew that this was 
an accidental, friendly fire incident, and the family wasn't 
notified, and there was considerable embarrassment. In the 
Wynott situation, you had what we believe was a thorough 
investigation by CENTCOM, signed off on by General Petraeus, 
that when it came back into the Army was countermanded.
    Those send very confusing signals out to people who have 
suffered a lot with individual losses. At the same time, I want 
to be very clear that when somebody steps forward to serve and 
they are put in this type of situation, that any judgments that 
are placed on them should be very carefully done.
    It's something that's out there, and if nothing else I'm 
glad to hear that you're putting this into your training 
packages, the lessons learned and the discussions.
    Thank you, Mr. Chairman.
    Chairman Levin. Thank you, Senator Webb.
    Senator Ayotte.
    Senator Ayotte. Thank you, Mr. Chairman.
    I want to thank Secretary McHugh and General Odierno for 
being before the committee and for your distinguished service.
    General Odierno, you made a statement about Afghanistan and 
how we can't allow the actions of a few to derail what we are 
doing in Afghanistan, and that we still had to make sure that 
we were committed there. Can you just help everyone understand 
why that's so important and what our interests are there, and 
why it's so important that we follow through and have success 
and stability there?
    General Odierno. Senator, for a long time Afghanistan has 
been a place of uncertainty. It has lacked leadership, where 
many elements have tried to take over and use that as a 
launching pad to conduct terrorist operations around the world. 
We want to make sure Afghanistan never goes back that way 
again.
    The way to do that is to ensure that we have a viable 
government and military that's able to protect the people of 
Afghanistan. What I've seen in my most recent visits and as I 
talk to others as they come back, there is true progress being 
made in Afghanistan. There are noticeable differences on the 
street, and noticeable differences in the capabilities of the 
security forces. What's important to us is to have a government 
in place and a governmental capability that will allow the 
Afghan people to live, without allowing others to come in and 
use Afghanistan as a point to conduct terrorist operations 
around the world.
    I think we're all committed to that, and it's important 
that we continue on this path.
    Senator Ayotte. Is it as important as you described in 
terms of our own national security interests?
    General Odierno. I absolutely believe it is.
    Senator Ayotte. Let me ask you, with the strategic 
partnership agreement in Afghanistan, one of the issues that 
President Karzai has raised, which in my view is an issue 
that's not a reasonable request of us, given what we need to 
accomplish in Afghanistan, is to stop night raids. I know 
that's one of the issues that need to be resolved with us and 
the Afghan Government.
    Can you tell us why it's important that we certainly not 
concede this issue of night raids and why night raids are so 
important to our operations there?
    General Odierno. First off, it's about being able to go 
after those who are attempting to derail the progress that's 
been made in Afghanistan. It's almost like having a different 
type of safe haven if you're not able to do night operations. 
You want to be able to ensure that people understand that, no 
matter what time of day it is or what day it is----
    Senator Ayotte. Right, so we'd be basically saying that at 
night you're completely free, no matter what type of nefarious 
activities you engage in and how harmful your actions are. So 
if people think about it that way, it's like half the day is 
off limits, and at a time when we can conduct much more stealth 
operations.
    General Odierno. That's correct.
    Senator Ayotte. I appreciate that. I think that's an 
incredibly important issue to us. I hope that President Karzai 
understands that's not an issue that we will waver on, nor can 
we afford to waver on, if we're going to succeed there. Would 
you agree with that?
    General Odierno. I think it's an important issue for us to 
work with him. There are many ways to do night raids, Afghans 
conducting them and us assisting them, and I think there are 
many ways for us. I think that's the way we're moving forward. 
So I think there's lots of room to talk about this with them, 
to ensure we can continue to do these types of operations.
    Senator Ayotte. Thank you.
    I want to ascribe myself to the comments of Senator Webb. I 
am concerned about what we're saying to our Active Duty 
servicemembers and veterans in the proposed increases in health 
care, particularly when you look at the President's budget and 
there's no concurrent increases in those who are Federal 
civilian employees, including Members of Congress. It's a 
difficult message to send, and I think it's something we have 
to have some very hard hearings on, given that we owe it to our 
Active Duty servicemembers and to our veterans in my view. I 
look forward to those hearings.
    I also wanted to ask about end strength reductions. I share 
Senator Lieberman's concerns about where we are, and I wanted 
to ask General Odierno about a comment that you had made, just 
so people understand how important it is in terms of our 
strength. You were asked a question last month about Iran and 
you said: What I'm worried about is if we get too small; it's a 
very uncertain area and that concerns me.
    Given your years of extraordinary service in Iraq, few if 
any military leaders know more about the Middle East than you 
do. Can you please tell me, how does the strength of our force 
relate to how we are perceived, and how does it affect our 
ability to carry out operations?
    General Odierno. I was talking about preventing conflict, 
and the way we prevent conflict is through a series of three 
things. One is capacity, one is capabilities and readiness, and 
the other is our modernization, so we sustain our overmatch.
    It's important for us to make sure that we understand where 
that fine line is between having the capacity, the 
modernization, and readiness, so people do not miscalculate. 
What I worry about is miscalculations by others that we do not 
have the capability to respond.
    I will say that I believe at the 490,000 level, I still 
think we have the right capacity in order to respond to those 
who might miscalculate.
    Senator Ayotte. But let's not mistake this, it's still 
going to be very difficult with the reductions you're 
undertaking, is it not?
    General Odierno. It is. Thank you for saying that. This is 
not easy. These are very difficult choices that we have to 
make.
    Senator Ayotte. These are choices that we are certainly, we 
know from even Secretary Panetta's testimony, taking on some 
risk with. Thank you.
    Let's talk briefly about sequestration. Senator Portman 
asked you about sequestration. Secretary Panetta and Chairman 
Dempsey have said that sequestration will hollow out our force. 
General Odierno, what does it mean? Help people understand what 
it means when we have a hollowed-out force, and what are the 
risks? What risks are we asking our men and women to take if we 
send them with a hollow force to battle?
    General Odierno. We just talked about one of them, and it 
has to do with our ability to prevent and deter. If we have to 
go through sequestration, the reduction that we'd have to 
further take in the Army specifically I think could give the 
impression to some that maybe we no longer have the capacity to 
respond if necessary.
    It's also the fact that there's a potential that our 
readiness levels will not be funded appropriately, so the 
forces we have will not be able to be trained properly, and 
that we would take more risk in their capabilities. We would 
not be able to continue to provide enough money to modernize, 
and in such a way it would have to either be extended or 
eliminated in some cases, so we now lose our ability to sustain 
overmatch in some of our key capabilities.
    It's a combination of all three of those that cause great 
concern.
    Senator Ayotte. My time is up, but I do want to make one 
point. One thing you didn't touch upon, but when we think about 
a hollowed-out force don't we also put our soldiers at more 
risk when we send them into conflict?
    General Odierno. Thank you, Senator. Ultimately, when we 
have to deploy them--and we've seen this in the Korean War and 
with other examples--what it costs is American lives.
    Senator Ayotte. Lives, people's lives.
    I would add this. Secretary McHugh, you were asked 
difficult questions in terms of planning for sequestration. I 
would hope that on a bipartisan basis we would take actions 
right away in this Congress so that you don't have to have this 
hanging over your head all year. I don't think we can afford to 
wait until December to put DOD and our men and women who have 
served in uniform and continue to serve in uniform in this 
position, because think about it. I can't imagine anyone on 
this committee would ever stand for hollowing out our force. So 
why put you in that position, because planning for this will 
cause you to have to tell people, and I can't imagine what that 
also does for morale in our military.
    I hope that we act immediately on this on a bipartisan 
basis. I'm sure you share those concerns.
    Secretary McHugh. Absolutely, Senator. Thank you.
    Senator Ayotte. Thank you.
    Chairman Levin. Thank you, Senator Ayotte.
    Senator Manchin.
    Senator Manchin. Thank you, Mr. Chairman.
    Thanks, both of you for your service.
    I know there have been a lot of questions asked today. I 
wanted to direct my questions towards contracting. Over the 
next 5 years, I think they're talking about cutting 80,000 
soldiers out of our Army. With that being said, I know right 
now we have about 130,000 contractors in Afghanistan and Iraq, 
compared to about 90,000 men and women in uniform.
    I have a hard time, especially in West Virginia we have a 
hard time, understanding why we would be cutting back the 
military men and women in uniform and not cutting back the 
contractors, and why we would be in a position to where we're 
attracting some of our best out of the military because of the 
higher pay, let's say three times the military pay, and attract 
them over and hire them right back to do the same job.
    Then they still use the same services. They get the eating 
and the medical. Everything's the same. I can't figure that 
out. Senator Ayotte just talked about none of us want to hollow 
out. But I believe that we could cut back drastically, even if 
sequestration kicked in, from the contracting services and 
still strengthen our military and give it the support it needs.
    I'd like to hear your rationale on that.
    Secretary McHugh. Contracting in theater is by and large 
under CENTCOM, so it's not something the Army directly 
controls. But I can tell you the intent in contracting in 
combat theaters is to free up soldiers so that they can be in 
the fight. For all of us that have been to either Iraq or 
Afghanistan, you can see contracting in security, but by and 
large you have contracting in support of logistics, contracting 
in support of dining halls, et cetera, et cetera.
    Senator Manchin. If I may interrupt you. I see them in the 
airports, the contractors, and they're going to fight on the 
front line. I ask each one of them when I see them: Have you 
been in the military? Yes, we're military. If it had not been 
for the large pay that attracted you to leave the military, 
would you still be in the military? Unequivocally, yes.
    So something's not jibing here with me.
    Secretary McHugh. Again, I have no authority as to who is 
sent to the front line in combatant command areas. But let me 
speak to contracting with respect to the Army and the Army 
budget. I fully agree with you. In fact, I think Secretary 
Panetta were he here would fully agree as well. One of the 
major initiatives we have is to diminish significantly the 
number of contractors that we employ and bring, where it's 
absolutely essential, those kinds of positions into Army 
payrolls and into the Army personnel lines.
    I don't think we'll ever be able to totally rid ourselves 
of contractors. They provide a useful service and, where 
required, it probably wouldn't make a lot of financial sense 
for us to do that. But in terms of our taking essential 
military activities and contracting out for them, I don't 
support that. We're trying to work on that, and this budget is 
a big step in ensuring our in-sourcing of those continue.
    Senator Manchin. I just know that you have a pretty strong 
voice and you could be a stronger voice as far as the direction 
we may be going. I'm just concerned about people talking about 
weakening the defense of this Nation when we could be 
strengthening the men and women in uniform and taking a 
different mission that I think is much more costly. I just have 
a very, very tough position on that, and I'm having a hard time 
getting a grasp of it.
    No one can really tell me how many contractors we have. 
I've not gotten an answer yet. I've been here a year and a 
half.
    Secretary McHugh. I'll do my best to get you an answer, 
although it's not an Army----
    Senator Manchin. I've asked everybody, so I'm down to you 
now, sir.
    Secretary McHugh. You've come a long way down. I'll do my 
best.
    [The information referred to follows:]

    In fiscal year 2011, there were 247,000 contractor full-time 
positions, of which 135,000 were in the generating force and the other 
112,000 in the U.S. Central Command Theater of operations.

    Senator Manchin. General, we have 80,000 personnel that 
will be leaving and we have many of our veterans that are 
unemployed right now. Senator Kirk and I put a bipartisan 
caucus together, which is Hire a Vet. We wanted to practice 
that and we want to practice what we preach in our own offices, 
and I'm pleased to have veterans in my office.
    But with that being said, is there any way we can tie up 
with you through this caucus that will help, in a simplistic 
way, knowing when people are getting out or are going to be 
leaving, that we can start matching them up with the private 
sector and have a web site or portal that we could use to start 
networking?
    General Odierno. There are several things we're trying to 
do, and certainly we're more than willing to work with you on 
this, Senator. It's a very important topic to us, as I know it 
is to you.
    We are in fact trying to establish a single portal that 
links up jobs. I meet with Chief Executive Officers (CEO) and 
others who are trying to develop thousands and thousands of 
jobs for our veterans, that will link up those jobs with our 
soldiers who are getting ready to leave the Army or have 
already left the Army. So we're working that right now, to set 
up this portal.
    We are also increasing our emphasis on how we prepare 
soldiers to leave the Army. One of the major things is how do 
you translate what you do into a resume that civilians can 
understand? Do you understand the benefits that are available 
to you? Do you understand all of the outlets you can go to to 
find jobs?
    We're working this very hard at every one of our 
installations. I'd be happy to work with you very closely on 
this, because it's a very important issue to us.
    Senator Manchin. We really want to, because what we're 
doing is we're getting all of these different private citizens 
and private companies from around the country, and they're 
always saying, we're having a hard time finding qualified 
people and the best people. You have the best people, I 
believe. They're trained properly, they're disciplined, they 
have good skill sets. Some of them want to go to the Midwest, 
some of them want to come back to West Virginia hopefully or 
wherever. We want to make sure they can go one-stop shopping. 
You want to go back into the work force in the private sector? 
We have a place for you. That's what we're trying to do.
    If we can work with you to develop it, we'll tie in the 
private sector, I think.
    General Odierno. Will do.
    Senator Manchin. Okay.
    Mr. Secretary, I hear from my constituents about the slow 
disability rating system. That's in both DOD and the Department 
of Veterans' Affairs (VA). I'm sure you've heard this. The 
system puts the future plans on hold, creates unnecessary 
stress, and most likely contributes to the high unemployment 
rates that we're talking about.
    We've been told that there are almost 20,000 soldiers in 
the system and it takes an average of 400 days to get 1 through 
the system to be evaluated.
    Secretary McHugh. That's correct.
    Senator Manchin. What can we do?
    Secretary McHugh. It's one of the most frustrating things I 
have experienced since I walked into the Pentagon about 2\1/2\ 
years ago. I can only imagine what the soldiers and their 
families experience as well.
    I want to give credit to both Secretary Shinseki at VA and 
Secretary Panetta, who have really moved this to the top of 
both Departments' priorities. We have a pilot program called 
the Integrated Disability Evaluation System, which is an effort 
to try to get the two disability systems more in sync, to make 
sure that we're using where at all possible common systems of 
evaluation, so a soldier doesn't have to go through 27 
different physical exams.
    Trying to do that sounds relatively easy. It certainly does 
to me. But actually getting those two disparate systems to come 
together in a rational way has been more difficult than I think 
any of us would have imagined. The fact that, as you noted, 
Senator, it's still 400-plus average days to get through pretty 
well underscores the fact that we have a long ways to go.
    Where we do have the pilots, we do see in most cases the 
numbers starting to come down. But it's been a very slow 
process.
    Senator Manchin. Is this a concerted effort throughout all 
of the military?
    Secretary McHugh. Absolutely.
    Senator Manchin. Because it's going to get worse, I 
believe. General, I don't know. Now as we're winding down in 
certain theaters, it has to get a lot worse than what we have.
    General Odierno. It is. All the Services have the problem. 
Of course, we have the biggest problem.
    Senator Manchin. Right.
    General Odierno. Because we have more people involved in 
this, and we're going to continue to get people throughout this 
system for years to come. With both traumatic brain injury and 
other things, they're going to continue to be identified as we 
go forward. So there's going to be more people coming into the 
system.
    We are working very hard. The problem we have is the 
balance of making sure that they are getting the right 
evaluations at the right times so they get the right benefits, 
with rushing them through a system, although you would argue 
400 days isn't rushing anybody through anything. That's why it 
causes us to take that much time. We're trying to balance to 
make sure they get taken care of versus trying to speed it up 
as quickly as possible.
    That's what we're trying to work our way through, and we're 
working very closely with VA on this and trying to really match 
up.
    Senator Manchin. Just keep us informed on that.
    Thank you so much, Mr. Chairman.
    Chairman Levin. Thank you.
    My understanding is, Mr. Secretary, that that is no longer 
just a pilot program; it's now a permanent program and is DOD-
wide.
    Secretary McHugh. If I used the word pilot, you're 
absolutely right. It is not.
    Chairman Levin. Senator Manchin should hear that as well, 
that it's no longer a pilot program.
    Secretary McHugh. It's moved to the full DOD, you're 
absolutely right.
    Chairman Levin. It's full DOD. One other point on this, we 
made a change in the Wounded Warrior legislation, which also 
integrated these two systems, so that during that 400-day 
period, VA criteria of disability are the ones that are being 
followed because they are the more generous historically to the 
veteran or to the soldier.
    Secretary McHugh. That's correct. We rate disability based 
on military occurrences only. VA takes lifetime occurrences.
    Chairman Levin. So that more generous approach is what is 
in place now during that period. We've made some real progress 
during that Wounded Warrior legislation. Senator Manchin is 
right, though, in terms of the oversight which we need to do. 
We very much would welcome your keeping us informed, as Senator 
Manchin has suggested.
    Thank you.
    Senator Cornyn.
    Senator Cornyn. Thank you, Mr. Chairman.
    Secretary McHugh, General Odierno, thank you for your 
service. It's good to see you. I just have a couple of areas I 
want to ask you about.
    The OH-58D Kiowa Warrior helicopter is combat-proven and 
has flown the highest OPTEMPO of any rotary-wing platform in 
the Army. Previously the Army, back in 2004 and then in 2008, 
looked at replacing the Kiowa helicopter. Both of those, I 
might add not on your watch, failed dramatically. The Comanche 
program was terminated in 2004 at a cost of nearly $7 billion 
spent on the program, and then the ARH-70 Arapaho program was 
terminated in 2008.
    Referring to the anticipated AAS contract to look at 
purchasing a new helicopter and the costs associated with that 
and the uncertainties associated with that, why wouldn't the 
Army want to utilize a successful modernization model to update 
and modernize the Kiowa Warrior, as opposed to replacing it 
with a new one, in light of this, I think we would all have to 
agree, disturbing and unsatisfactory history with the Comanche 
and the Arapaho?
    General Odierno. Senator, we have not made any decision. In 
fact, one of the alternatives on the table is to do exactly 
what you said, to modernize Kiowa Warrior. What we're doing is 
we're going through an AOA that will be delivered somewhere on 
a new AAS, which will be delivered in fiscal year 2012. We'll 
then do an assessment and then decide whether we can get there 
and how long will it take, and how expensive it would be 
compared to the capability we can add to the Kiowa Warrior. 
Then that will be a decision that we make.
    As you've pointed out, the Kiowa Warrior has been an 
incredible, valuable capability. But there are ways for us to 
improve it. They can gain more standoff, a bit more power, and 
improve the cockpit. So there are things we can do.
    That's a decision that the Secretary and I will make 
probably some time in the next year, year and a half or so.
    Secretary McHugh. I should note as well, Senator, the 
upgrade program that you mention, the Cockpit and Sensor 
Upgrade program, is funded in the President's budget for fiscal 
year 2013. Should we make a decision to go to a different 
platform, we'd ask that that money be switched over.
    But the modernization program as we have been pursuing it 
for the Kiowa, if brought to completion, would keep that 
platform in the Army until 2025 under current estimates.
    Senator Cornyn. I'm sure, and I'll just ask you for 
confirmation, that as you reach a decision point you would 
share with us not only your conclusion, but also the reasons 
for your conclusion. It strikes me, at a time during budget 
constraints, that the modernization program needs to be vetted 
thoroughly, and I'm sure you'll do that.
    Yesterday we had the Chief of Staff and Secretary Panetta 
here and we talked about Syria. I don't know if you are aware 
of the discussion we had, but let me be specific about it. This 
has to do with Russia's role through its basically official 
arms-dealing entity known as Rosoboronexport, that is selling 
nearly $1 billion worth of arms to Syria, which Assad is using 
to kill innocent Syrians during the uprising going on now, 
reportedly as many as 750 people.
    So it strikes me that it's pretty clear that Russia has 
Syrian blood on its hands and is complicit in that effort. With 
that predicate, you could understand why I was troubled to read 
and learn that Rosoboronexport's customer list also included 
the U.S. Army. It's my understanding the Army's Non-standard 
Rotary Wing Aircraft Office out of Huntsville, Alabama, is 
currently buying at least 21 dual-use Mi-17 helicopters for the 
Afghan military from this same company.
    I note that media reports from last year indicate the 
contract for $375 million comes with an option which could 
actually raise the size of that total value of the contract to 
nearly $1 billion.
    With so many alternatives here in the United States that 
could satisfy this requirement for the Afghan army, that would 
actually create jobs here and not in Russia, and which also 
would not reward or certainly facilitate Russia's actions in 
Syria, can you first of all tell me, are you aware of that 
contract, Mr. Secretary, General Odierno? If you're not, I'm 
not here to blind-side you. I would like to get any 
observations you'd care to make and hear your commitment to get 
to the bottom of this.
    Secretary McHugh. I am aware of it. The newer development, 
of course, is the alleged activity of Russian arms 
manufacturers in Syria, and the clarity on that is not what I 
think most of us would like at this point.
    You mention options. I should note, the Army is blessed. It 
has the opportunity time and time again to act as executive 
agent on any number of programs. This is one of those. The 
money is passed through. These are dollars that are given to 
Army accounts so we can execute contracts, and in this case 
follow the wishes and the requirements placed out of theater in 
CENTCOM. The options are, frankly, in CENTCOM's estimation, 
nonexistent. These are the platforms, apparently, that the 
Afghans are familiar with. They're Russian platforms. Many of 
the pilots that will be flying them were flying Russian 
aircraft in their previous professional iterations, and we're 
told they're absolutely essential to maintain the viability of 
a still-emergent Afghan force.
    I mentioned to another panel about 2 years ago that in my 
mind I'm a buy-American kind of guy. As you noted, we certainly 
could use all the business we can get. But the first need is 
the operational requirement and we're told it's the Mi-17, and 
as the executive agent we duly execute it.
    Rosoboron under Federal law in Russia is the only one who 
controls the export of those platforms. So we didn't have 
options there, either, as I understand it.
    General Odierno. I agree with what the Secretary said. We 
did the same thing in Iraq, frankly. This is part of our 
Foreign Military Sales program, and when they wanted to buy 
rotary wing aircraft we offered at the time UH-60s and other 
U.S.-made rotary wing aircraft. But because it was cheaper, 
since it's easier to train their pilots, they chose to go with 
an Mi-17 product.
    We have been given the executive task to do the non-
standard helicopter capability. Of course, this is about trying 
to get capability to the Iraqis at the time and now the Afghans 
as quickly as possible. If they had bought an American 
aircraft, it would have been much more expensive and it would 
have taken much longer because of the training time for the 
pilots necessary.
    I'm not saying it's an excuse. I'm saying that's the 
rationale for the decisions that were made at the time.
    Senator Cornyn. My time is limited, but I would just note 
and ask you to look at this, Mr. Secretary and General Odierno. 
Apparently, in 2009 the Navy was able to use an alternative 
acquisition route through a private broker, and so at least 
back in 2009 there appeared to be an alternative source for the 
Mi-17 variant helicopters and related toolkits for the Afghan 
army.
    I would conclude on this note. Previously, Rosoboronexport 
has been sanctioned by the U.S. Government, and I would just 
ask you, in the event that there was a sanction is there a plan 
B for supplying the need for the Afghan army?
    Secretary McHugh. Again, we don't decide suppliers. We 
execute contracts. I would have to defer that question to 
CENTCOM and to the State Department.
    Senator Cornyn. I respect your answer and I just wanted to 
highlight my concern, and I know I'm not the only one concerned 
about this. Using U.S. taxpayers' dollars to supply the Afghan 
military with these Russian helicopters through an arms dealer 
which is an agent of the Russian Government, which is also 
selling weapons to President Assad to kill innocent Syrians, is 
a serious concern I know you share with me.
    I hope that, working together, we can get to the bottom of 
this and see if there are any other alternatives. It strikes me 
that the 2009 alternative where the same helicopters were 
purchased through a private broker by the Navy may provide an 
option. But certainly I know you share my concerns, and I look 
forward to working with you to get to the bottom of it and to 
find out what alternatives might exist.
    Thank you again.
    Chairman Levin. Thank you, Senator Cornyn.
    Senator Blumenthal.
    Senator Blumenthal. Thank you, Mr. Chairman.
    Thank you both for your service and for your extraordinary 
contribution to the defense of this country in the two wars 
that we have fought.
    I want to add my concerns that Senator Cornyn just 
expressed, which both of us raised yesterday in the hearing 
with Secretary Panetta and the Chairman of the Joint Chiefs of 
Staff, General Dempsey, as to the use of the Mi-17 and the 
resort to Russian arms instead of our own. I respect that you 
are a buy-American guy, as we all are, I think, in general, and 
I would hope that we could pursue the possibility of using 
American helicopters, rather than the Mi-17. For all the 
reasons that we articulated yesterday and Senator Cornyn did 
today, I have very strong concerns, and that is an 
understatement, about the use of these Russian arms, sold by 
the same company that's selling arms to Syria. So I would like 
to explore that.
    Speaking of helicopters, I would like to ask whether you 
have a need for a greater quantity than is currently in the 
budget for 2013?
    Secretary McHugh. As we went across our entire fleet of 
both fixed and rotary aircraft, we've tried to disperse our 
buys, and for the Blackhawk the modernization is the Mike 
model, in a way that sustains each to their needs as 
effectively as we can. We are going to continuously reevaluate 
the decisions we've made in this budget, particularly in 
procurement, as we go forward.
    Chairman Dempsey has repeatedly explained that the 
President's budget for fiscal year 2013 is not the only step, 
but the first step. I don't want to tell you that no 
adjustments will ever come, but in terms of the budget as it 
sits before you we think we made the best decisions we could.
    Senator Blumenthal. I respect that decision. I'm concerned, 
and my guess is you share that concern, about the reduction 
from 72 to 59 in fiscal year 2012 going to 2013. I'm glad that 
you are continuing to evaluate, if I can paraphrase what you 
just said, that decision.
    Secretary McHugh. We have shifted some of the procurement 
lines to the right, but we think it's prudent, and we've used 
the word risk rather frequently here today. It is an acceptable 
risk.
    Senator Blumenthal. I want to focus, if I may, on an area 
that has greatly concerned me, the Improvised Explosive Devices 
(IED) and the flow of material from Pakistan to Afghanistan in 
ingredients that go into these bombs. The Pakistanis have been 
asked to do more and we've had various witnesses testify to us 
that they see no significant action on the part of the Pakistan 
Government to stop the flow of bombmaking materials from their 
country to sites where they are principally manufactured, to 
Afghanistan, where they obviously do grave harm to our troops.
    Do you differ with the assessment that the Pakistanis are 
making no significant effort?
    General Odierno. We have seen no significant change in the 
ability to move this material across the border.
    Senator Blumenthal. Thank you, General.
    In the Joint Improvised Explosive Device Defeat 
Organization (JIEDDO) budget, I am delighted to see that the 
JIEDDO fund was placed in the base budget, which I think is a 
very good step forward. The IED usage by the enemy has 
increased by 15 percent, I'm told. Do you have information 
contrary to that number?
    General Odierno. I don't, and I would just add that I 
believe that in the future we will continue to face IED threats 
as we conduct operations. So it's critical that we recognize 
that and keep it as part of our sustainment programs over time.
    Senator Blumenthal. From what I was told on my most recent 
trip to Afghanistan by General Allen, it seems to be 
increasingly the weapon of first resort by an enemy that is 
degraded and finds that the principal way to do damage to us, 
rather than any direct frontal assault; is that correct?
    General Odierno. We've seen that both as we've had success 
in Iraq and now that we have success in Afghanistan, they 
resort to IEDs and then suicide bombs and things like that as 
their capability gets diminished.
    Senator Blumenthal. Overall, I see the funding request for 
fiscal year 2013 for JIEDDO has been decreased by $540 million. 
Would you agree with that cut based on the increase in attacks?
    General Odierno. We've transferred some of the JIEDDO 
programs to the Services. So I think we'd have to do a complete 
assessment of what was transferred to the Services and what 
remains in JIEDDO. I know that we had several hundred million 
dollars worth of programs that were transitioned from JIEDDO to 
the Army, that we've put in the base budget. I would have to do 
a full analysis of that to understand if we've really had a 
degradation of capability or if we've just adjusted the 
responsibility in some areas, sir.
    Secretary McHugh. The other thing I think is afoot, 
Senator, is the judgment that you're out of Iraq, which the 
gentlemen on my left knows more about than most people who walk 
this planet, so that active IED threat is gone, but also we are 
on a path to come down in Afghanistan, and so you can logically 
assume the level of threat there.
    The judgment is the sustained funds would be sufficient to 
keep them a viable organization.
    Senator Blumenthal. Overall, you're satisfied that there 
are sufficient resources, even though they're not going 
directly through JIEDDO, to confront this threat?
    General Odierno. I think that the investment we continue to 
make is quite significant and I think we continue to develop 
what's necessary to ensure the safety of our soldiers, sailors, 
airmen, and marines forward.
    Senator Blumenthal. Thank you.
    Finally, I know questions have been asked about the C-27J. 
I am concerned about the increased cost resulting from the 
potential sacrifice or planned sacrifice of this valuable 
asset. I think it's been called a valuable asset in 
Afghanistan. Is there any possibility that this funding could 
be restored?
    General Odierno. Based on the discussions we've had, I 
believe that the decision has been made that the funding will 
not be restored.
    Senator Blumenthal. Were you involved in that decision?
    General Odierno. We were involved in the decision. We were 
involved in the discussion. We were able to make the points we 
thought were appropriate, and the decision was made to reduce 
the program.
    Senator Blumenthal. Without putting you on the spot, could 
you express to us your view?
    General Odierno. There's a requirement that we have a 
ground force. The requirement of the ground force is that we 
need intratheater lift in order to help support our soldiers. 
That requirement has not changed. We need that. Whether you 
choose to do it by an agreement to ensure we have C-130s or we 
do it by the C-27, I will leave that decision up to the Air 
Force.
    Senator Blumenthal. Thank you. Thank you very much for your 
testimony here today. My time has expired. Thank you very much 
for being so helpful and informative.
    Thank you, Mr. Chairman.
    Chairman Levin. Thank you, Senator Blumenthal.
    Senator Gillibrand.
    Senator Gillibrand. Thank you so much, Mr. Chairman.
    Thank you to both of you for your testimony and your 
service. It's an honor to be here today.
    New York represents many important Army installations. We 
have Fort Drum, we have West Point. I am also pleased to let 
you know that I have an Army fellow serving in my office this 
year, Captain Aaron Schwengler has been doing extraordinary 
work. I want to thank you for supporting that program.
    First I want to talk about Fort Drum, then West Point, and 
then some women in combat issues and some hazing issues. So I 
have a big agenda, and short time.
    Secretary McHugh, you and I have talked about how to 
strengthen Fort Drum. Obviously, as we have Base Realignment 
and Closure (BRAC) coming up and we have various decisions that 
have to be made in the budget, I want to make sure that the 
missions that we do do there continue and that if we can add to 
those missions that would be very important. I think Fort Drum 
is known to do extraordinary training in terms of terrain and 
climate. We also have significant restricted air space, which 
helps us often in training.
    One mission that I thought might be worth considering is 
allowing Fort Drum to be an unmanned aerial systems (UAS) test 
range, and we could increase the unmanned aerial vehicle (UAV) 
training mission there. I just wanted to get your thoughts if 
that might be something that's interesting, or just increasing 
the amount of troops we train there?
    Secretary McHugh. Anywhere we train troops we like to be 
able to train more platforms rather than fewer. The National 
Guard units down in Syracuse as a result of a previous BRAC 
were scheduled at one point to receive some UAV platforms, and 
the thoughts were to utilize training ranges at Fort Drum. So I 
would say to any maneuver base when asked, if you can expand 
your opportunities for training across the broad spectrum of 
our operational activities, that's a plus.
    As to the actual capability of Fort Drum, that's way above 
my rung on the ladder.
    Senator Gillibrand. Thank you for considering it.
    In terms of West Point, I just had a wonderful visit to 
West Point with Holly Petraeus. Holly is working for the 
Consumer Protection Agency to make sure our troops aren't 
targeted by fraud and other criminals trying to harm them. I 
was very impressed by the cadets. They were extraordinarily 
articulate and had perfectly on-point questions for our forum.
    One of the things that I am most excited about is the 
possibility of increased training in cyber for the cadets at 
West Point. I know that they've begun some. I wanted to know 
your impressions if that is on track, and if that's something 
we can continue to amplify. I think that would be a fantastic 
opportunity for the military.
    Secretary McHugh. I'm going to pass to the old West Point 
grad because he's been there.
    Senator Gillibrand. He knows.
    General Odierno. Senator, we want to continue to use West 
Point as our leader development launching point. Part of that 
is to continue to develop the capabilities to train on what we 
believe to be important issues of our future. That includes 
cyber, it includes the Counterterrorism Center we have there, 
and other things. We will continue to do that. It's key for us 
to have that as a center to help our leaders of the future 
learn about what challenges they'll face.
    We are very supportive of keeping them on the leading edge 
of moving forward with whatever it is we're trying to do and 
what is important to our DOD and specifically the Army.
    Senator Gillibrand. Thank you very much.
    I know that we've done some very important work with regard 
to women in combat and women serving in the military. I know 
that DOD reported just recently that it is committed to 
removing all barriers that prevent servicemembers from rising 
to the highest levels of responsibility that their talents and 
capabilities warrant.
    I also know that a similar report from the Military 
Leadership Diversity Commission did conclude that combat 
exclusion policies either prohibit or discourage women from 
serving in the career fields that provide the great 
opportunities to reach leadership ranks in the officer corps. 
You testified earlier today that there's now 6,000 new 
openings, which I think is fantastic; that's a great step in 
the right direction. But I'd like to get your thoughts on what 
is the step to reduce all impediments and actually, similar to 
what we do with the U.S. Coast Guard where all positions are 
available to women there, are there steps that we can take to 
ultimately remove all those barriers?
    General Odierno. Senator, this is a very important issue to 
me personally, but also to the Army. I always qualify it by 
saying it's about managing our best talent and making sure we 
take advantage of the best talent available, which includes 
obviously females, which provide an incredible capability.
    We are doing this pilot, and we suspect by the end of the 
year we will remove any impediments of putting females into 
combat battalion headquarters, which they have not been able to 
go to before, in current MOSs that they operate in. I think 
that's a first step towards then conducting studies and 
continuing to move forward, how we potentially look to 
integrate them into every MOS.
    I think our first thought is let's get them down to 
battalion level in combat infantry and armor units, which 
they're not allowed to go to today. We want to do that very 
quickly, and then we will begin to study how we open up all 
MOSs. I think that will help us to gain data for us to move 
forward with that as we go on.
    Senator Gillibrand. Thank you.
    Obviously, a lot of these women have been attached to 
battalions but not assigned to them. In your consideration 
would there be any way to give some kind of retroactive 
recognition that they performed these missions and were 
subjected to those risks?
    General Odierno. We'll take a look at it.
    Senator Gillibrand. Thank you very much.
    Okay, last question. Do I have time, Mr. Chairman?
    Chairman Levin. You do.
    Senator Gillibrand. Okay.
    Chairman Levin. Just take your time. If you go over, that's 
fine.
    Senator Gillibrand. This is an issue that has really 
affected New York. We had some horrible examples of hazing 
where New Yorkers who were serving committed suicide. It's 
something that obviously we all worry about. We also worry 
about violence against women in the military. We want to 
protect all our troops.
    In both examples, a lot of the personal stories I have 
heard are how there's no way to report something being done to 
you if your command structure is either part of it or ignoring 
it. So whether it's violence against a woman or whether it's a 
hazing operation, I'd like your guidance on how can we make it 
easier in these instances for reporting to take place when your 
command structure does not allow it, for either the reason of 
they're part of it or they have allowed it or ignored it?
    General Odierno. You're right, there's a fundamental 
problem when they believe that the leadership that's above them 
is part of the problem. There's two things that we have. First 
is the Inspector General (IG). Anybody can call the IG at any 
time, especially when there's a problem with their chain of 
command, and then go to the highest level possible to do that.
    Second, they can go to a higher level of chain of command. 
Part of the problem here is us making sure that soldiers 
understand that they can do this, that it's okay, and they know 
how to do this if they're facing some difficult problem, such 
as sexual harassment or hazing of some sort, that they're able 
to report this. It's incumbent on us, to our newer soldiers 
especially, that they understand that there are ways for them 
to raise complaints outside of their own chain of command. 
We'll continue to work very hard to emphasize that.
    Senator Gillibrand. Because especially in the circumstances 
I read, where they're serving in remote areas, they have no one 
to turn to.
    I know that hazing's more difficult because it's not its 
own offense enumerated under the Uniform Code of Military 
Justice (UCMJ). Whether you can change the regulations to make 
it easier for people to understand that it's not acceptable 
might be one route. I don't know if there are similar measures 
that can be made with regard to violence against women. I don't 
know if training is the problem. But I would just urge you to 
look at all courses of action.
    General Odierno. I will just tell you, we get people from a 
lot of different backgrounds. It's first about them 
understanding that it's not part of our culture and we will not 
accept it as part of the Army culture; as part of our ethical, 
moral behavior. It's important for us to emphasize that as soon 
as they come in to the Army, and throughout their time in the 
Army. We will continue to do as much as we can to ensure that 
they are constantly hearing this from their leadership.
    Secretary McHugh. Senator, based on the case of Private 
Danny Chen, a tragic instance, there are things we can do under 
the UCMJ, and we intend to follow those. I think that will 
serve as a very powerful reminder to others that this is 
unacceptable.
    The Sergeant Major of the Army, the Chief, and I not 
shortly after that terrible case wrote to all command levels 
and told them: This is your responsibility. Much like sexual 
abuse, it is so contrary to who we'd like to think we are, and 
we're not going to tolerate those who don't share that value in 
our ranks.
    Senator Gillibrand. Thank you for your leadership. Thank 
you both for your service.
    Thank you, Mr. Chairman.
    Chairman Levin. Thank you, Senator Gillibrand, and we thank 
you both. It's been a very, very helpful hearing and we 
appreciate what you do for our country, for our troops, and 
their families.
    We will stand adjourned.
    [Questions for the record with answers supplied follow:]

               Questions Submitted by Senator Carl Levin

                       COMBAT VEHICLE PRODUCTION

    1. Senator Levin. Secretary McHugh, the Army understands that the 
minimum sustaining M1 Abrams upgrade production rate at the Joint 
Systems Manufacturing Center (JSMC), also known as the Lima (Ohio) Army 
tank plant, is 70 tanks per year. What other tank or armored vehicle 
workload, such as Foreign Military Sales (FMS), is the Army trying to 
direct to the plant and how much has been achieved or is achievable to 
keep the production line open and available for the next series of 
Abrams upgrades planned for fiscal year 2017?
    Secretary McHugh. The Army is not ``shutting down'' the JSMC. 
Rather, the Army is slowing the current production rate in the facility 
by ending the Abrams M1A2SEP v2 production line. In 2011, there 
appeared to be very little opportunity for additional manufacturing 
work for the Anniston Army Depot (ANAD) and the JSMC. However, this has 
changed with recent significant Foreign FMS interest in the Abrams 
tank. As a result, the tank industrial base will benefit by new 
manufacturing work as a result of several pending FMS cases that are 
nearing approval and are likely to impact production beginning in the 
2013 timeframe. This additional production will help mitigate most of 
the vendor risks, and the Army is analyzing other mitigating activities 
for vendor capabilities not addressed by the increased FMS sales.
    The Army is confident current and pending Abrams Tank FMS 
opportunities will help sustain the Abrams tank industrial base and 
bring manufacturing work to ANAD, Anniston, AL, and the JSMC in Lima, 
OH.

    2. Senator Levin. Secretary McHugh, what is the Army's position on 
the planned production breaks for the M1 Abrams tank and M2 Bradley 
upgrade programs?
    Secretary McHugh. The Army's production of the Abrams M1A2 System 
Enhancement Package (SEP) v2 tank will continue until June 2014 and by 
that time, the Army will have produced the entire Abrams tank Modular 
Force requirement. The Active component will be fully equipped with 17 
Heavy Brigades of M1A2 SEPv2 tanks, the most capable and latest digital 
version of the tank. The Army National Guard (ARNG) will be fully 
equipped with one Heavy Brigade of M1A2 SEPv2 tanks and six Heavy 
Brigades and three Combined Arms Battalions of M1A1 Situational 
Awareness tanks, the latest analog version of the tank. The average 
Abrams fleet age for both the Active and Reserve Force will only be 2 
to 3 years old. Consequently, the next major recapitalization of the 
Abrams tank fleet is not necessary until the 2017 timeframe.
    The Army is currently evaluating a few technologies that could be 
at risk when the M1A2SEP v2 production is complete in June 2014. For 
example, the Army identified Frontal Armor production as a critical 
item and has subsequently funded its continued manufacturing at the 
minimum sustaining rate until the next version of the Abrams tank 
enters production in fiscal year 2016 or fiscal year 2017. Pending FMS 
cases may further mitigate this risk.
    The Army completed M2A3 Bradley Fighting Vehicle (BFV) production 
in September 2011. It will complete production of the M2A2 Operation 
Desert Storm-Situational Awareness (ODS-SA) BFV in the fourth quarter 
of fiscal year 2013. This will equip the Active component with 17 Heavy 
Brigades of M2A3 BFVs. The ARNG will be equipped with one Heavy Brigade 
of M2A3s, and six Heavy Brigades and three Combined Arms Battalions of 
M2A2 ODS-SAs. Both A3s and ODS-SAs have a digital framework, and 
provide superior combat capability. There are no plans to produce more 
BRVs after the Active and Reserve component requirements outlined above 
are fulfilled.

    3. Senator Levin. Secretary McHugh, what is your assessment of the 
cost of breaking and then restarting the M1 Abrams and M2 Bradley 
production lines versus continuing production at minimum levels and 
delivering upgraded vehicles to the force?
    Secretary McHugh. The Abrams prime contractor, General Dynamics 
Land Systems (GDLS) estimated cost of shutdown and restart to be $1.64 
billion and stated that it would be less expensive to continue 
producing tanks. The Army analysis in early 2011 determined that it 
would cost more to continue building tanks at minimum sustaining rates 
than it would to shut down and restart tank production during the gap 
period. The Army's initial cost estimate to shut down and restart was 
approximately $822 million. The cost to continue production at minimum 
sustaining rates during that same timeframe was $2.8 billion.
    The RAND Arroyo Center recently completed an independent analysis 
concerning the costs and benefits of the planned Abrams tank production 
slow down at the JSMC, Lima, OH, specifically addressing whether it 
would be more beneficial from a cost perspective to stop or continue 
U.S. Army tank production. RAND Arroyo's independent analysis found the 
shut down/restart to be significantly less than the Army's estimate: 
$342 million. They also estimate the cost of continued production to be 
$1.5 billion to $1.6 billion (fiscal year 2013-2016).
    In regards to the Bradley, British Aerospace Engineering (BAE) 
produces BFVs at York, PA. Army analysis has determined that sustaining 
minimum production at York over the upcoming production break window 
fiscal year 2014-fiscal year 2016 will cost approximately $1.6 billion. 
Stopping and restarting the Bradley line is anticipated to cost 
approximately $500 million. With these two figures in mind, the Army 
will realize approximately $1.1 billion in cost avoidance.

  ARMY ROLE IN THE NEW STRATEGIC GUIDANCE'S SHIFT OF EMPHASIS TO ASIA 
                                PACIFIC

    4. Senator Levin. General Odierno, the new Department of Defense 
(DOD) strategic guidance includes a new emphasis on U.S. security 
interests and challenges in the Asia Pacific. While not neglecting the 
enduring challenges in the Middle-East and South Asia, DOD is taking 
steps to shape U.S. forces relative to the air and maritime demands of 
the Far East. What is your understanding and assessment of the new 
strategic guidance, the shift of emphasis to the Asia Pacific, and the 
increase in dependence on air and sea power to meet the challenges 
there?
    General Odierno. The new strategic guidance essentially shifts 
emphasis to a region where the Army has retained a robust posture since 
World War II. This includes the U.S. Army's longstanding and important 
commitment to the U.S.-Republic of Korea alliance. To the extent that 
the guidance increases attention to the challenges faced by air and sea 
power--not least being the sheer distances involved when operating in 
the region's vast geography--the Army can benefit from other Services' 
increased capabilities to project and support land forces throughout 
the region as a vital part of the Joint Force. Besides land forces' 
ability to dominate and decisively win in combat, the Army plays a 
unique role in gaining and maintaining access during times of conflict 
as well as during peacetime in a region where armies enjoy the greatest 
influence among services in the civil-military relations of most 
countries. Seven out of the 10 largest land armies in the world are in 
the Asia-Pacific region and 22 of 28 Chiefs of Defense in the region 
are Army officers. Currently, there are 66,000 U.S. Army soldiers 
assigned to the U.S. Pacific Command (PACOM) area of responsibility 
(AOR). Due to our longstanding, joint, multinational training events 
with regional allies and partners, the Army's access has been 
exceptional and we will continue to build upon this success. The Army 
will engage, build partner capacity and establish military to military 
relationships to work our issues in Asia and the Pacific region. Our 
Asia-Pacific alliances and partnerships, forged during peace and war to 
form the bedrock of regional security cooperation, provide a means to 
leverage the wellspring of trust, confidence, access, and influence 
accumulated through decades of Army engagement.

    5. Senator Levin. General Odierno, what in your view are the 
greatest risks, if any, relative to the potential need for ground 
forces to meet needs in the Asia Pacific?
    General Odierno. A key risk to meeting land force requirements in 
the Asia Pacific is the Army's lack of permanent support infrastructure 
in South and Southeast Asia. That increases the challenge of sustaining 
land forces across the region's 8,000 mile expanse, as well as the 
challenge of gaining timely access for a temporary footprint in a 
crisis. We mitigate that risk and address both challenges with our 
Security Cooperation programs. In order to be successful, those 
programs must continue to credibly demonstrate the Army's commitment to 
the region. Asia Pacific partners and allies must see an increase in 
those programs commensurate with the increased emphasis of the new 
strategic guidance.

    6. Senator Levin. General Odierno, what, in your view, is the 
Army's role in an Asia-Pacific-oriented strategy?
    General Odierno. The Army's fundamental role in the Asia Pacific is 
providing trained and ready forces to the Commander of PACOM in order 
to ``Shape'' the strategic environment, ``Prevent'' crises, and ``Win'' 
if conflict arises. Most visibly the Army will provide a stabilizing 
presence in peacetime both through forces permanently stationed in the 
region and rotational forces from the global force pool. This will help 
guarantee immediate access during crisis and positional advantage 
during contingencies. These trained and ready forces provide the 
bedrock of decisive action for any contingency and are a stabilizing 
presence for our allies. The Army will provide agile Mission Command, 
responsive and effective to the needs of the PACOM Commander across the 
spectrum of crisis. We will focus on persistent engagement and 
relationship building with the armies of our allies and partners, 
usually the most dominant service within most partner nations, while 
achieving the mutual goals of securing regional peace and prosperity. 
In setting and maintaining the theater, the Army will sustain Joint and 
Multinational partners through our logistics hubs, sustainment 
capabilities, prepositioned stocks, and a variety of functional 
capabilities (engineers, medical, Civil Military, Chemical, Biological 
Radiological, Nuclear and Explosive (CBRNE), as examples) uniquely 
positioned in the Asia Pacific.
    This will require the Army to sustain a progressive force 
generation model to ensure we meet Joint Force Commanders' contingency 
requirements in the Asia Pacific and elsewhere. Doing so requires 
operational agility in Army formations and leaders to transition from 
one mission or geographic focus to another as necessary. Finally, given 
the potential scale of contingencies in the Asia Pacific, the Total 
Army must provide depth to the Joint Force, and must maintain the 
infrastructure in the Continental United States (CONUS) and the Asia 
Pacific to mobilize, deploy, and sustain forces in theater.

    7. Senator Levin. General Odierno, what changes, if any, in the 
Army's manning, training, force structure, and equipment are necessary 
to meet the requirements for general purpose ground forces in an Asia-
Pacific-oriented security strategy? For example, will the Army now 
emphasize Asian culture and language training relative to potential 
increases in demand for training and exercise partnering throughout the 
region?
    General Odierno. The Army is considering adding several 
capabilities to the U.S. Army, Pacific, to better support PACOM, 
including a regionally assigned Joint Task Force/Joint Force Land 
Component Command headquarters, the ability to execute joint/
multinational Humanitarian Assistance/Disaster Relief throughout the 
theater, and an exportable, Combat Training Center-like joint/
multinational training and exercise capability along with pre-
positioned equipment sets in theater. More broadly, the Army continues 
to develop the ability to respond to Geographic Combatant Commanders' 
requirements, including PACOM, by providing Regionally Aligned Forces 
through a rotational, progressive force generation model. Regional 
training and Army exercises continue to evolve in support of PACOM's 
Theater Strategy and Theater Campaign Plan, and seek to more deeply 
engage key partner Armies to pursue mutual interests in preserving 
regional stability. As we develop the force structure for the Army of 
2020, the training requirements (to include language and culture) for 
General Purpose Forces will be further developed to support the combat 
commander's emerging requirements. Over the course of 10 years, the 
Army has developed a core of real experts in the Middle East and South 
Asia region. The Army will develop a similar core of professionals for 
whom Asia-Pacific expertise is a lifelong work.

                             REVERSIBILITY

    8. Senator Levin. Secretary McHugh, the new strategic guidance 
accepts increased risk with the reduction of several military 
capabilities including Army end strength and force structure. This 
increased risk is acceptable when mitigated by building into drawdown 
plans the ability to replace, stop, and, if necessary, reverse the loss 
of these capabilities. This is widely known as reversibility. Your 
joint statement says that the key features of reversibility are 
retention of a strong cadre of mid-career field grade officers and 
noncommissioned officers (NCO), Special Operations Forces (SOF), access 
to a Ready Reserve component, and a rapidly expandable industrial base. 
Reversibility in the industrial base may be the concept's biggest 
challenge. In order to reduce this risk, the Army must accurately, 
reliably, and comprehensively identify those sectors of its industrial 
base that cannot be reconstituted; reconstituted at great cost in money 
or time; or may not need reconstitution at all. This is compounded by 
the Army's budget reductions in fiscal year 2013 and beyond that cuts 
workload and increases risk in the health of the ground combat and 
tactical vehicle industrial base. How does the Army's fiscal year 2013 
budget request ensure reversibility in the ground combat and tactical 
vehicle industrial base?
    Secretary McHugh. The Army's fiscal year 2013 budget request 
ensures reversibility in the ground combat and tactical vehicle 
industrial base as a result of the Army's careful planning in these 
industrial base sectors. To build its fiscal year 2013 budget request, 
the Army anticipated structuring and pacing reductions in its ground 
forces to preserve its ability to make a course change to surge, 
regenerate and mobilize the capabilities needed for any contingency. 
Although the demand for ground combat and tactical vehicles will 
decline, commercial market heavy-duty truck sales are expected to 
continue their recovery from the past recession. The supply chains for 
on-road commercial trucks and off-road equipment are important because 
they provide vehicles and components to the Army as well. The Army's 
fiscal year 2013 budget request anticipates that such supply chains in 
the commercial sector will continue to provide vehicles and components 
to the Army to strengthen the Army's reversibility.
    The Army's fiscal year 2013 budget request supports reversibility 
within its ground combat and tactical vehicles. The Army continues to 
invest in Abrams and Bradley vehicles through Engineering Change 
Proposal programs, and is also investing in the replacement of its 
Bradley vehicles with the Ground Combat Vehicle and the replacement of 
M113 Family of Vehicles with a more protected and capable Armored 
Multi-Purpose Vehicle. The Army also sustains modernization efforts to 
support the Tactical Wheeled Vehicle (TWV) strategic priorities by 
providing protected mobility for our soldiers and maintain an 
appropriately-sized, high-quality TWV fleet. The fiscal year 2013 
budget submission supports Army objectives to fund Joint Light Tactical 
Vehicle RDT&E requirements, completes production of the Family of 
Medium TWV fleet by end of fiscal year 2014, continues to modernize the 
Heavy TWV fleet through the recapitalization program and modernizes the 
Service Life Extension Program (SLEP) for the Logistics Support 
Vessels. The Mine Resistant Armor Protected vehicle will rely on 
Overseas Contingency Operations (OCO) funds to upgrade until the 
program transitions to sustainment.

    9. Senator Levin. Secretary McHugh, how will the Army ensure that 
industrial base reversibility cost and risk are carefully managed in 
fiscal year 2014 and beyond?
    Secretary McHugh. The Army will ensure that industrial base 
reversibility cost and risk are carefully managed in fiscal year 2014 
and beyond by: (1) continuing on-going efforts to determine the health 
of Industrial Base sectors critical to support Army and Joint Services 
programs; (2) identifying and assessing current status of organic and 
commercial critical manufacturing and maintenance capabilities required 
to meet future Army contingency Reversibility & Expansibility 
requirements; (3) identifying supply chain issues in design, 
manufacturing and sustainment that can present significant risk to 
critical Army capabilities; and (4) partnering with the Office of the 
Secretary of Defense (OSD) to implement appropriate mitigation efforts 
to address critical risks.

    10. Senator Levin. Secretary McHugh, what criteria or indications 
in the industrial base will you monitor to alert you to potential loss 
of capability or capacity to meet the needs for reversibility into the 
future?
    Secretary McHugh. The Army is continuously working with suppliers 
in the commercial industrial base to assess and sustain essential 
capabilities and to reduce the chances of single points of failure. 
Related efforts to monitor potential loss of capability or capacity 
include a DOD Sector-by-Sector, Tier-by-Tier (S2T2) effort. The S2T2 
effort seeks: (1) to establish early warning indicators of risk, 
particularly at lower-tiers; (2) to strengthen the supply chain and 
mitigate potential points of failure; and (3) to perform joint agency 
assessments providing the Army the ability to capture impacts on market 
sectors, manufacturers, and the warfighter requirements across the U.S. 
Services. Another effort is the Industrial Base Baseline Assessment 
that seeks: (1) to conduct a sector/sub-sector assessment of programs 
identified as critical by Program Executive Offices and Life Cycle 
Management Commands; (2) to determine the impact of reductions in 
funding to program requirements; and (3) to develop recommendations 
which enable the industrial base to sustain current and future 
warfighter requirements.

    11. Senator Levin. Secretary McHugh, how will you respond to 
evidence of an unacceptable increase in this risk or the imminent loss 
of industrial capability or capacity?
    Secretary McHugh. The Army is participating in the DOD's S2T2 
effort, which seeks to identify critical areas that could constitute 
single points of failure and develop strategies to mitigate the risks 
identified. In addition, the Army is conducting an Industrial Base 
Baseline Assessment that will: (1) conduct a sector/sub-sector 
assessment of programs identified as critical by Program Executive 
Offices and Life Cycle Management Commands; (2) determine the impact of 
reductions in funding to program requirements; and (3) develop 
recommendations which enable the industrial base to sustain current and 
future warfighter requirements.

    12. Senator Levin. General Odierno, how practically would a strong 
cadre of officers and NCOs work?
    General Odierno. By ``cadre,'' we mean those combat veteran 
officers and NCOs who will now be leveraging their significant combat 
and operational experience in the generating force. They will occupy 
positions that already exist in our schoolhouses and support units that 
the Army has been unable to fill for the past decade due to 
exceptionally high OPTEMPO and mission demands. These officers and NCOs 
will be experienced trainers, doctrine writers, platform instructors, 
personnel developers, combat systems subject matter experts, all 
lending their knowledge of emerging threats and operational techniques 
to the institutional systems that will mold and temper our future Army 
units. These officers and NCOs will also circulate into and out of 
operational units as part of normal career assignment patterns. All 
will be able to transition back to operational support of mission units 
with a minimum of preparation.

    13. Senator Levin. General Odierno, how would these leaders be 
assigned and what duties would they perform if they are excess to 
existing Army field unit (Table of Organization and Equipment) and 
institutional (Table of Distribution and Allowances) requirements?
    General Odierno. These military personnel are not excess; they will 
be assigned to the Army's Generating Force (GF), performing necessary 
institutional functions to fill capability gaps, support new and 
emerging capabilities, and to reinvest in necessary unique military 
skills and functions that have been under-manned due to operational 
requirements. Additionally, the Army will reinvest an additional 1,000 
personnel in the GF to rebalance the Active Component Generating Force 
at 92,100 across the program. The Army will then identify up to 5,000 
mid-grade officer and NCO military skill sets that can concomitantly 
support reversibility.

    14. Senator Levin. General Odierno, how will cadre officers and 
NCOs remain competitive with their peers in units for critical 
professional assignments and promotions?
    General Odierno. These officers will pursue their career 
professional development like every other officer or NCO, and will 
compete for assignments on the strength of their demonstrated potential 
and past experiences. The Army will not align our combat experienced 
personnel against hypothetical future requirements. Instead we will 
employ their experience to enhance the Army's processes and systems 
wherever we assign them. The scope of possible assignments for these 
officers and NCOs will support the Army's leader development strategy 
that calls for development of leaders through a variety of broadening 
experiences.

    15. Senator Levin. Secretary McHugh and General Odierno, what is 
your assessment of the Reserve component as an operational Reserve 
today and the future?
    Secretary McHugh and General Odierno. As proven by the past decade, 
the Reserve components function well as part of the Army's operational 
force. Measured access to the Reserve components for future employment 
will allow the Army to hedge against unforeseen changes to the global 
security environment. In the future, our National Guard and Army 
Reserves will be resourced and trained at appropriate levels to build 
on the competencies and experiences that have been gained over the past 
several years. We are committed to maintaining an appropriate balance 
between the Active and Reserve components to meet our future security 
requirements.

    16. Senator Levin. Secretary McHugh and General Odierno, what gaps 
in Reserve component capability, if any, are important to address to 
further reduce strategic risk?
    Secretary McHugh and General Odierno. Within its currently planned 
reduced end strength, the Army continues to assess the best mix, 
quantity, and organizational designs of Brigade Combat Teams (BCT) 
(Armor, Infantry, Stryker, and Airborne) required to provide the 
necessary mix of combat power and capabilities for projected future 
obligations. We are also examining the best balance between Active 
component and Reserve component forces, between combat and support 
forces, and between military, civilian, and contractors. The Army's 
deliberate and responsible draw-down plans will take into consideration 
operational demands and unit readiness, and will proceed at a pace 
necessary to ensure mission success--all while retaining the 
flexibility to respond to unforeseen demands at a tempo that is 
predictable and sustainable for our All-Volunteer Force.

                   COMMISSION ON MILITARY RETIREMENT

    17. Senator Levin. Secretary McHugh and General Odierno, DOD will 
propose that Congress establish a commission with ``Base Realignment 
and Closure Commission (BRAC)-like authority to conduct a comprehensive 
review of the military retirement benefit in the context of total 
military compensation.'' Meanwhile, both Secretary Gates and Secretary 
Panetta have said that everything must be on the table, and Gates noted 
in his final days as Secretary that the current military compensation 
system, which he described as ``one size fits all . . . left over from 
last century,'' may no longer be appropriate today. Finally, we have 
long viewed the military compensation system, to include retirement 
benefits and health care benefits, to be part of a total military 
compensation package that should be assessed as a whole rather than a 
collection of individual parts.
    Shouldn't the commission be empowered to review all elements of 
military compensation to include the system of basic pay, the various 
allowances and special pays, survivor benefits, and the tax status of 
all of these?
    Secretary McHugh and General Odierno. If Congress approves a 
commission, it should holistically look at the entire compensation 
system and understand the implications of any changes to pay and 
benefits. The total military compensation package should be based on 
all aspects of military service, including rigorous training, dangerous 
duty, long work hours, and frequent moves and separations from families 
and loved ones. It is important to have a comprehensive package that is 
commensurate with the sacrifices of our soldiers and families.

                     PROPOSED TRICARE FEE INCREASES

    18. Senator Levin. General Odierno, the administration is proposing 
to substantially increase enrollment fees for military retirees who 
enroll in the TRICARE Prime health care program, and to institute for 
the first time enrollment fees for participation in the TRICARE 
Standard and TRICARE Extra health care programs and for enrollment in 
TRICARE for Life. Do you personally support these proposed increased 
fees?
    General Odierno. I support DOD efforts to mitigate escalating 
healthcare costs in order to sustain the medical benefit. The Army, in 
partnership with DOD, is committed to preserving and enhancing the 
quality and range of care by rebalancing the share of costs incurred by 
the Department and the beneficiary.

    19. Senator Levin. General Odierno, will you express your support 
for these changes to your soldiers, both those now on Active Duty and 
to retirees?
    General Odierno. Yes, I support DOD's efforts to identify solutions 
to mitigate escalating healthcare costs through fiscally responsible 
management for long-term sustainment of the highest quality care and 
service to our current and future retirees.

                        END STRENGTH REDUCTIONS

    20. Senator Levin. General Odierno, the new DOD strategic guidance 
expressly states that the Nation will avoid large-scale stability 
operations requiring large ground forces. Accordingly, DOD has 
determined the Army size and force structure can be reduced and still 
meet acceptable levels of strategic risk and also save money. The 
Active Army will make the largest end strength reductions over the next 
5 years of 72,000 from their fiscal year 2012 authorization level of 
562,000; the first 10,000 reduction is included in the 2013 budget 
request. The end state for the Active Army is 490,000 by the end of 
fiscal year 2017. Will the Army have to involuntarily separate soldiers 
who have been deployed multiple times and who believed they would have 
the opportunity to compete for career service?
    General Odierno. The Army has been looking carefully at our 
inventories and the rates at which we can affect their strength through 
traditional vetting processes such as promotion and assignment, or 
natural losses due to administrative shortcomings, medical 
disqualifications, et cetera. As we reduce end strength, we intend to 
retain personnel best suited for continued service and retain the 
talent and capability required to meet emerging missions and 
challenges. Although the majority of reductions will occur through 
natural attrition, some that want to stay will be involuntarily 
separated.
    The Army is striving to minimize the hardship on the service 
members who want to stay but cannot. To do that, we are evaluating our 
over-strength year groups carefully and may offer Separation Pay 
incentive to members who have been non-selected for promotion, or 
separation under the Temporary Early Retirement Authority to those who 
have between 15 and 20 years of active service and eligible to retire 
under that authority.

    21. Senator Levin. General Odierno, how will the Army minimize 
involuntary separations?
    General Odierno. The Army will conduct end strength reductions 
using a gradual ramp over a 6-year period in order to allow natural 
attrition to absorb a portion of the reductions, while still 
maintaining our commitment to Afghanistan. The gradual reductions will 
also allow the Secretary and I the flexibility to evaluate each year 
whether we are moving at the right pace. This time-phased approach to 
allow us to validate our assumptions regarding the effect of natural 
losses on cohorts and adjust our separations as needed. We will employ 
time tested and respected selection board processes to evaluate 
potential for future service, and retain those best qualified to fill 
the Army's requirements. Soldiers will have the opportunity to 
demonstrate their strengths and potential in competition with their 
peers, but the Army will decide who will stay and who we will help 
transition to other work. The Army is evaluating its over-strength year 
groups carefully and may offer Separation Pay incentive to members who 
have been non-selected for promotion, or separation under the Temporary 
Early Retirement Authority to those who have between 15 and 20 years of 
active service and eligible to retire under that authority.

    22. Senator Levin. Secretary McHugh, do you need any additional 
force shaping tools to enable the Army to achieve these reductions in a 
manner that recognizes the service and commitment we made to these 
soldiers?
    Secretary McHugh. The Army is studying the need for enhanced 
separation authorities to be needed to allow us to bring down our end 
strength in a fair and balanced manner. There are authorities in law 
now for incentives to separate service members, but the Army budget 
reductions leave no room to exercise those authorities without 
seriously jeopardizing other critical capabilities through 
reprogramming. The Army has requested additional funding to avail 
itself of some of the voluntary measures that could soften the 
disappointment of those who will not be selected to continue in 
service.

    23. Senator Levin. Secretary McHugh, what programs are available or 
needed to help soldiers and their families ease the challenges of 
transition from Active Duty to new jobs and civilian life?
    Secretary McHugh. The Army Career and Alumni Program (ACAP) is the 
Transition Program that assists soldiers, family members, and DA 
civilian's transition from their status within the Army back to the 
civilian community. Involuntarily separated soldiers are 
congressionally mandated to receive the same pre-separation counseling 
as voluntarily separating soldiers. Additionally, soldiers, family 
members, and DA civilians (involuntarily or voluntarily separated) are 
entitled to participate in any of the transition assistance classes 
offered by ACAP. All soldiers must begin ACAP not less than 12 months 
prior to separation. However, soldiers may use an ACAP Center, the ACAP 
Call Center, and virtual ACAP at anytime throughout their military 
lifecycle to gather information and take classes. We are adjusting the 
ACAP program to meet the goals of the recently passed VOW to Hire 
Heroes Act and the recommendations of the Presidential Task Force. 
Attendance may take place in person at an ACAP center, live or 
cataloged classes online, or individually through the 24/7 ACAP Call 
Center.
    All classes are taught by Master's Degree Counselors or 
professional-level instructors. These classes include, but are not 
limited to:

         Employment assistance
         Job search skills
         MOS Crosswalk (Military skills to civilian skills comparison)
         Skills assessment
         Professional interest evaluation
         Resume and cover letter development and refinement
         Interview skills
         Dress for success
         Salary negotiation
         Relocation assistance
         Legal referrals (Wills, Power of Attorney, Estate planning, et 
        cetera before separation)
         Contact information for housing counseling assistance
         Education/Training
         Health/Life insurance
         Financial planning/Budget development
         Veteran benefits briefing
         Veterans Administration Disabled Transition Assistance Program 
        (VA DTAP)
         Department of Labor Employment Workshop
         Physical and mental health well being

    The Army is also utilizing the Hero 2 Hired (H2H) as its interim 
employment application/tool www.H2H.jobs to provide one primary 
location where soldiers of all components, veterans, and family members 
can connect with private industry employment opportunities. This 
application is web-based and able to translate military occupational 
skills (MOS), provide career path exploration, upload resumes, allow 
customized job searches, enable employers to also search for Veterans, 
and provide performance metrics. H2H will eventually be included on 
eBenefits, the single portal for transition benefits selected by the 
DOD-VA Veterans Employment Initiative Task Force (www.eBenefits.va.gov)

                            OVERSEAS BASING

    24. Senator Levin. General Odierno, Secretary Panetta announced in 
January that DOD will withdraw two of the four Army BCTs currently 
stationed in Europe. This will reduce the size of the U.S. Army force 
posture in Europe by around 7,000 personnel, down from the current 
level of about 38,000 Army personnel. Given the budget pressures under 
which the Army will be operating for the foreseeable future, what are 
your thoughts on restationing your forces back to the United States?
    General Odierno. The Army, in concert with DOD, conducted a 
reassessment of the U.S. global strategy and posture in the European 
Command (EUCOM) AOR in light of the emerging defense strategy. The Army 
recommended inactivating two of its four BCTs. The reduction of 7,000 
personnel associated with the drawdown of 2 BCTs over the next 2 years, 
and a reduction of approximately 2,500 personnel associated with 
enabler units over the next 5 years, will still allow EUCOM to maintain 
a flexible and easily deployable ground force to meet Article 5 and 
other North Atlantic Treaty Organization (NATO) commitments, to engage 
effectively with allies and partners, and to satisfy other security 
objectives. We believe the proposed posture in the EUCOM AOR is 
adequate. At currently programmed force levels, we do not foresee 
restationing any additional forces from the EUCOM AOR to the United 
States.

    25. Senator Levin. General Odierno, what is your assessment of the 
reduction of Army force structure in Europe?
    General Odierno. The Army, in concert with DOD, is conducting a 
reassessment of the U.S. global strategy and posture in the European 
Area of Operations in line with the current defense strategy. The Army 
recommended inactivating two of its four BCTs. The drawdown to two BCTs 
still allows EUCOM to maintain a flexible and easily deployable ground 
force to meet Article 5 and other NATO commitments, to engage 
effectively with allies and partners and to satisfy other security 
objectives. The Army expects to allocate a BCT to support 
interoperability with NATO and plans to rotate battalions to EUCOM to 
train with our allies. The Army will continue to make adjustments in 
coordination with DOD to ensure our posture remains in line with 
current strategy and supportive of theater commitments.

    26. Senator Levin. General Odierno, is a reduction of 7,000 
personnel associated with the 2 BCTs correct or is it likely to be 
more?
    General Odierno. The reduction of 7,000 personnel is associated 
with the reduction of 2 BCTs over the next 2 years. An additional 
reduction of approximately 2,500 personnel associated with enabler 
units is anticipated over the next 5 years.

    27. Senator Levin. General Odierno, how much of the theater 
supporting forces will also come out of Europe with the reduction of 
two BCTs?
    General Odierno. The Army will reduce approximately 7,000 soldiers 
associated with the reduction of 2 BCTs over the next 2 years. An 
additional reduction of approximately 2,500 soldiers associated with 
enabler units is anticipated over the next 5 years.

    28. Senator Levin. General Odierno, how many facilities does the 
Army occupy in Europe now and how many facilities will close due to the 
two brigade reduction of units and personnel?
    General Odierno. The Army currently occupies 137 sites with a total 
of 12,471 buildings in Europe.
    Due to the reduction of two BCTs (the 170th and 172nd BCTs) in 
Europe, the Army will close 33 sites, return 21,607 acres of land, and 
2,550 buildings.

    29. Senator Levin. General Odierno, what are the estimated savings 
related to the two brigade reduction of personnel and facilities?
    General Odierno. The Army will save approximately $150 million per 
year per brigade by inactivating the brigades in Europe. The Army has 
reallocated these resources to other priorities in the fiscal year 2013 
President's budget and Program Objective Memorandum 13-17.

    30. Senator Levin. General Odierno, is it feasible and do we save 
more if the reduction occurs faster than currently planned? If not, why 
not? If so, how much more can be saved?
    General Odierno. The 172nd Brigade deployed in support of Operation 
Enduring Freedom (OEF) and was not available to inactivate in fiscal 
year 2013. When the unit returns from combat, it will conduct 6 months 
of soldier and family re-integration and begin incremental battalion 
level draw-downs and ultimately leave the force in early fiscal year 
2014. Therefore, the savings from the deactivation of the 172nd Brigade 
cannot be significantly accelerated and no additional savings can be 
realized. The 170th Brigade is drawing down and deactivates in early 
fiscal year 2013.

                       FORCE STRUCTURE REDUCTIONS

    31. Senator Levin. General Odierno, the new strategic guidance 
expressly reduces by eight the number of Army combat brigades. DOD has 
already announced that two of the eight will be deactivated from 
Germany. Additionally, the Army is on the threshold of announcing other 
changes in the structure of armored brigades (formerly called heavy 
combat brigades) and infantry brigades that would add a third maneuver 
battalion to each. These type brigades currently have only two maneuver 
battalions. What is the status of the Army's analysis and 
decisionmaking regarding the identification of the type and location of 
the remaining six of the announced eight brigade reduction?
    General Odierno. The Army announced during the President's 2013 
budget release that a minimum of 8 BCTs and other force structure 
totaling 57,400 would have to be reduced over the course of the 2013-
2017 Future Years Defense Program (FYDP) to achieve the Active 
component (AC) end state of 490,000 by the end of fiscal year 2017. 
Additionally, the Army continues to assess the design and mix of BCTs 
based upon the lessons from the last 10 years of war. This analysis 
could lead to a decision to reorganize BCTs (within the 490,000 AC end 
strength) into more capable and robust formations, requiring further 
BCT reductions in order to increase overall versatility and agility for 
tomorrow's security challenges. An announcement on specific force 
structure actions is expected sometime before, or in conjunction with, 
submission of the President's 2014 fiscal year budget in early February 
2013.

    32. Senator Levin. General Odierno, what criteria will the Army use 
in determining whether and from where to deactivate brigades stationed 
in the United States or overseas?
    General Odierno. The Army considers a broad array of criteria when 
assessing which forces and which installations will be impacted by in-
activations. Criteria will be based on strategic considerations, 
operational effectiveness, geographic distribution, cost and the 
ability to meet statutory requirements.

         Strategic Considerations: Aligns Army Force Structure 
        to the new Defense Strategy and forthcoming Defense Planning 
        Guidance with a priority on the Pacific region.
         Operational Considerations: Seeks to maximize training 
        facilities, deployment infrastructure and facilities to support 
        the well-being of soldiers and their families. Aligns 
        appropriate oversight/leadership by senior Army headquarters 
        for better command and control.
         Geographic Distribution: Seeks to distribute units in 
        the United States to preserve a broad base of support and 
        linkage to the American people.
         Cost: Considers the impacts of military personnel, 
        equipment, military construction, and transportation costs.
         Statutory Requirements: Complies with the provisions 
        of the National Environmental Policy Act (NEPA) as appropriate, 
        including an environmental and socio-economic analysis.

    33. Senator Levin. General Odierno, will you give priority to 
deactivating brigades currently stationed overseas?
    General Odierno. The Army announced during the President's 2013 
budget release that a minimum of 8 BCTs and other force structure 
totaling 57,400 would have to be reduced over the course of the 2013-
2017 FYDP to achieve the Active component end state of 490,000 by the 
end of fiscal year 2017. The first two brigades to be reduced are two 
of the four currently stationed in the EUCOM AOR. The decision to 
reduce these two brigades first was based on a joint Army and DOD 
reassessment of the U.S. global strategy and posture in the EUCOM AOR 
in light of the emerging defense strategy. An announcement on specific 
force structure actions is expected sometime before, or in conjunction 
with, submission of the President's fiscal year 2014 budget in early 
February 2013.

     REGIONAL ALIGNMENT AND ROTATIONAL DEPLOYMENTS OF ARMY BRIGADES

    34. Senator Levin. General Odierno, the Army plans to align general 
purpose combat brigades stationed in the United States with regional 
combatant commands, such as U.S. Africa Command (AFRICOM), to support 
theater engagement and security force assistance missions and to make 
those forces, and other supporting units, available on a rotational 
basis for deployment to those regions for training and exercises. What 
is your understanding and assessment of the Army's capability and 
capacity to align brigades or other units with regional combatant 
commands?
    General Odierno. Because of the reduced commitments in other 
theaters, the Army will have the capacity to align forces with 
geographic combatant commands. This allows units to tailor their 
training to specific areas of responsibility and provides combatant 
commanders with ready forces to support their theater security 
cooperation objectives. In fiscal year 2013, the Army will align a 
brigade to AFRICOM. As our commitments continue to decrease, we will 
align additional forces with geographic combatant commands for fiscal 
years 2014 and 2015.

    35. Senator Levin. General Odierno, how practically will this 
work--for example, how would a unit's regional alignment determine the 
assignment of personnel, selection of unit commanders, priority for 
cultural and language training compared to core combat training, and 
identification, acquisition, and issue of special equipment?
    General Odierno. Headquarters, Brigades, and enabler forces are 
sourced through the Army Force Generation (ARFORGEN) process to meet a 
geographic combatant commander's requirements. Army support to the 
combatant commanders is a Total Army effort, which means it's possible 
for any unit from the Active Army, Army Reserve, or ARNG to potentially 
be selected to support a geographic combatant commander. The Army 
prepares forces for success in their assigned missions through unified 
land operations training. In order to support the regionally aligned 
forces concept, units will receive additional language, regional 
expertise and cultural (LREC) training. LREC training will compliment 
their unified land operations capabilities. Depending on the size, 
length, and location of deployments, units will be provided theater-
specific equipment and training.

    36. Senator Levin. General Odierno, have you done any analysis with 
respect to the incremental increase or decrease in cost associated with 
regional alignment? If so, with what result?
    General Odierno. The initial unit that will be aligned with U.S. 
Africa Command (AFRICOM) is the primary focus of current cost analysis 
efforts. As with all units that complete the ARFORGEN cycle, this unit 
will attain decisive action skills. Costs for this training will not 
differ from that of other Army units. Costs specifically associated 
with regional alignment will include basic language, regional 
orientation, and cultural training; train, advise, and assist training; 
and theater specific training.
    These requirements will be determined in conjunction with Army 
Service Component Commands, and the Geographic Combatant Commands on a 
case-by-case basis and integrated into the ARFORGEN training process as 
we have done with units deploying to Afghanistan.
    No final costs have yet been associated with this additional 
training. The Army is working with its Service Component Commands and 
the Geographic Combatant Commands to develop specific language 
requirements and desired proficiency levels.

    37. Senator Levin. General Odierno, what benefit, cost, and risk 
analysis have you done, if any, that compares regionally based with 
rotational forces in terms of their efficiency and effectiveness in 
meeting combatant command engagement and security force assistance 
requirements?
    General Odierno. Our significantly sized, regionally-based Army 
forces exist primarily in the European and the Pacific Theaters. The 
Army recently began the process of flowing Europe-based soldiers back 
to U.S. installations. Additional data will need to be captured 
regarding the incremental increased costs of basing in Europe versus 
the similar category of costs for U.S. basing. Interaction with our 
foreign partners at U.S. administered facilities like Joint 
Multinational Training Command in Germany become more expensive if we 
use U.S.-based rotational forces, but we achieve savings by not having 
permanently stationed forces that require costly Permanent Change of 
Station moves, housing and schools for dependents and other additional 
quality of life facilities. We now have an opportunity to collect 
comparative costs against associated risks from the standpoint of 
United States versus European basing, and by this time next year we 
should have more well-developed information.

    38. Senator Levin. General Odierno, in your view, is it feasible 
and suitable to satisfy theater engagement and assistance strategies 
completely with U.S.-based rotational forces? If not, why not?
    General Odierno. Theater engagement becomes more expensive under a 
system using only U.S.-based rotational forces because of the 
incremental travel costs associated with sending U.S. forces overseas 
to fulfill substantial commitments. Consider the size of our engagement 
and assistance to our partners in South Korea; trying to fulfill such 
commitments using purely rotational U.S. forces would be more 
expensive, and may carry negative consequences for a very important 
economic and military partner of our country. For engagements and 
assistance of shorter duration and smaller scope, rotational forces may 
be an efficient answer; but I think we should avoid a one-size-fits-all 
approach to such a complicated issue.

    39. Senator Levin. General Odierno, what is your understanding and 
assessment of the performance criteria and metrics that are used to 
evaluate the effectiveness and efficiency of combatant command theater 
engagement strategies and how will you integrate the use of regionally 
aligned Army brigades into the evaluation system?
    General Odierno. Each combatant command evaluates their theater 
engagement strategies according to criteria specific to their command 
and areas of responsibility. In broad terms, the combatant commands 
design measures of performance and measures of effectiveness that they 
use to evaluate security cooperation activities aimed at meeting their 
theater engagement strategies. They then evaluate the activities over 
time and assess whether they are meeting their strategies across the 
region, or with a specific partner nation. Each command uses some form 
of the Theater Security Cooperation Management System for capturing of 
this engagement data. The Army will continue to seek improvement at 
meeting its Title 10 responsibilities to provide the most appropriately 
trained and equipped Forces to meet the combatant commands needs 
according to the specified requirements and requests of the commands we 
support. The regionally aligned forces we provide to the combatant 
commands have provided appropriate levels of military task, language 
and culture training that will enhance their efficiency and 
effectiveness at pursuing theater engagement strategies.

    40. Senator Levin. General Odierno, how will the Army use these 
evaluations over time to determine the alignment of brigades to 
combatant commands?
    General Odierno. Theater Engagement Strategy evaluations are a 
critical demand signal for combatant commands that will guide the 
planning of Army regional force alignment indirectly. The evaluations 
will be used by the combatant command as it decides what forces it 
requires to meet its objectives or conduct activities, and is not a 
criteria used by the Army to determine alignment. The Army will provide 
trained and equipped Forces that have been aligned based on 
requirements provided to the Army in a Concept of Operations document 
staffed through Forces Command and sourced through the global force 
management process. This process prioritizes requests and directs the 
sourcing of the aligned forces based on guidance from The Secretary of 
Defense and the Chairman of the Joint Chiefs of Staff, and is the 
primary factor in determining the alignment of brigades to combatant 
commands.

                            EQUIPMENT RESET

    41. Senator Levin. Secretary McHugh, Congress has aggressively 
supported DOD's equipment reset funding requests throughout our 
operations in Iraq and Afghanistan. DOD has recently announced plans to 
reduce the Army and Marine Corps' force structure by 100,000 troops. 
While the proposed budget does not specifically call for any offsetting 
reduction in equipment reset funding, it would seem logical that with a 
smaller force we might not have as large a requirement to reset 
equipment. To what extent is it important to maintain current funding 
level for the reset of equipment, despite the planned reduction of Army 
end strength?
    Secretary McHugh. The current level of funding must be maintained 
to ensure the reset of equipment for 2-3 years after completing 
operations in Afghanistan. With the closed ground LOC (Lines of 
Communication) in Pakistan, the retrograde of equipment from 
Afghanistan will be done in phases, taking years not months to 
accomplish. Therefore, reset requirements will be impacted by equipment 
returning from theater later than forecasted. As a result, Afghanistan 
drawdown will require continued Congressional resourcing to retrograde 
and reset equipment returning from Afghanistan.
    We continue to provide the best and most capable equipment to our 
deployed forces. Consequently, most of the deployed equipment will 
require reset to support future contingencies. Equipment no longer 
required, as a result of force structure reductions, will be disposed 
of as needed. If there are opportunities to reduce reset requirements 
as a result of these force reductions, we will leverage those 
opportunities as appropriate.
    Loss of a reset buffer for 2 to 3 years beyond the end of 
hostilities would result in difficult choices. The Army would be forced 
to reduce funding of essential equipment repair, training, soldier 
services, and other Army readiness programs.

    42. Senator Levin. Secretary McHugh, if continued levels of funding 
are necessary, what is the detailed justification?
    Secretary McHugh. In addition to the details in the Presidential 
budget, the Army fiscal year 2013 reset OCO request is $5.4 billion, 
which represents an increase of $1.1 billion over our fiscal year 2012 
OCO funded levels. The increase is a result of a greater procurement 
requirement to replace combat losses and recapitalize uparmored HMMWVs 
and mine resistant ambush-protected (MRAP) vehicles. Our fiscal year 
2013 OMA funded reset requirement to repair equipment returning from 
theater has declined by $655 million commensurate with the withdrawal 
from Iraq and the transition from Heavy Brigade Combat Teams (HBCTs) 
that we employed in Iraq to predominately Infantry Brigade Combat Teams 
(IBCTs) required in Afghanistan. In other words, we will be shifting 
our efforts from heavy combat equipment, such as the Abrams Main Battle 
Tank that is expensive to reset, to repair of equipment supporting of 
lighter forces, such as TWVs, Strykers, and Individual Soldier 
Equipment.

    43. Senator Levin. Secretary McHugh, the Government Accountability 
Office has previously reported that the Military Services tend to build 
their reset budget requirements simply on the basis of the equipment it 
anticipates will actually return to the United States in the next year, 
rather than prioritizing or targeting its reset requirements to address 
equipment shortages or other needs. To what extent do you believe 
opportunities exist to better focus the requirements for equipment 
reset, so that reset dollars go farther to meet equipment shortages, 
and better address our home stationed unit readiness rates?
    Secretary McHugh. The Army established a very deliberate 
Retrograde, Reset, and Redistribution (R3) process for equipment that 
is focused on transitioning from the needs of the current conflict to 
full spectrum operations and training to better manage the entire reset 
process, reduce costs and improve readiness. The R3 process 
synchronizes retrograde, reset, and redistribution efforts across the 
Army to restore readiness. The process identifies retrograde priorities 
to assist Army Central (ARCENT) in retrograde planning, synchronizes 
retrograde of equipment out of theater with its repair, and subsequent 
redistribution to support training and equipment readiness (ARFORGEN) 
requirements.
    So I would say that our efforts are accomplishing exactly what we 
need them to do--sustain our equipment operational readiness through 
reset and improve our equipment on hand readiness.

    44. Senator Levin. General Odierno, the administration has called 
for renewed attention on the Pacific region and the emerging threats 
that may arise. To what extent do the reset requirements in this budget 
recognize and take into account this shift and perhaps the different 
numbers and types of equipment and prepositioned stock we should be 
resetting to improve our readiness to address conflicts in that region?
    General Odierno. Army Prepositioned Stock (APS)-3 afloat (located 
in Diego Garcia and Pusan) and APS-4 (located in Korea and Japan) 
support the PACOM AOR and are at full operational capability. APS sets 
located in PACOM consist of a HBCT, IBCT, two Sustainment Brigades, 
Theater Opening/Port Opening Package, multiple Operational Projects, 
Theater Sustainment Stocks (Major End Items), War Reserve Secondary 
Items (Consumable and reparable items), and Munition Sustainment. Based 
on current DOD/Department of the Army leadership focus, the Army will 
assess APS Strategy in the context of Joint and Interagency cooperation 
based on COCOM operation plan needs and key mission areas. A revised 
APS Strategy 2020 will enable support to Theater Campaign Plans through 
the re-validation of our forward positioned unit equipment sets, as 
well as utilization of rotational training and small unit mobility sets 
positioned in PACOM to support training, exercises, Humanitarian 
Assistance, Noncombatant Evacuation Operations, Security Cooperation, 
and Small Scale Stability Operations. Reset requirements in fiscal year 
2013/fiscal year 2014 will be adjusted as we respond to the revised APS 
2020 Strategy requirements.
                                 ______
                                 
           Questions Submitted by Senator Joseph I. Lieberman

                     ARMY GROUND FORCE END STRENGTH

    45. Senator Lieberman. General Odierno, while the Defense Strategic 
Guidance states that ground forces ``will no longer be sized to conduct 
large-scale, prolonged stability operations,'' it also describes 
stability and counterinsurgency operations as one of the primary 
missions of the U.S. military. Why won't the ground force be sized to 
conduct one of its primary missions?
    General Odierno. The Army has conducted extensive analysis and 
concluded that the Army will maintain sufficient end strength at 
490,000 to meet the potential future missions envisioned in the new 
Defense Strategic Guidance, including the ability to conduct stability 
operations on a modest scale for a short duration. If the scale of the 
operation should increase, the Army will be prepared to expand and 
regenerate end strength over the course of a number of years in 
response to the crisis.

    46. Senator Lieberman. General Odierno, how can the force be 
prepared to conduct this particular primary mission without the 
necessary manpower?
    General Odierno. The new strategic guidance directs the Army to 
maintain its ability to conduct stability and counter-insurgency 
operations, but does not envision large-scale, prolonged operations. 
The 2012 National Defense Authorization Act (NDAA) provides access to 
Reserve component (RC) forces to augment the Army's ability to conduct 
stability operations. The Army's investment and regeneration concepts 
ensure additional strategic depth within the Active component. The Army 
is focused on providing trained forces in support of the Combatant 
Commanders' Theater Security Cooperation strategies as a hedge against 
the need for protracted stability or counter-insurgency operations. 
These elements of the Army's current strategy mitigate the risk and 
ensure strategic flexibility against the unforeseen.

    47. Senator Lieberman. General Odierno, I am concerned about the 
speed and depth of the reductions in ground force end strength 
envisioned in the fiscal year 2013 budget request. What are the Army's 
annual end strength targets over fiscal year 2013 to fiscal year 2017?
    General Odierno. The overall strength reduction from fiscal year 
2013 to fiscal year 2017 is 9.7 percent.
    The end strength targets at the end of each fiscal year are 
projected to be:

         Fiscal Year 2013: 542,700
         Fiscal Year 2014: 527,100
         Fiscal Year 2015: 512,800
         Fiscal Year 2016: 502,100
         Fiscal Year 2017: 490,000

    48. Senator Lieberman. General Odierno, approximately what 
proportion of the end strength reduction will come from reduced 
accessions into the Army and natural attrition versus involuntary 
downsizing of currently-serving soldiers?
    General Odierno. If we are provided the flexibility to conduct a 
gradual ramp in end strength reductions, we project, at a minimum, that 
over 6 years a little over 60 percent, or 48,000, of the end-strength 
reductions (from TESI end strength of 569.4K) can be achieved through 
reduced accessions and natural attrition. This leaves about 30 percent, 
or about 24,000, of the reductions that must come from involuntary 
quality driven force shaping tools. Our intent is to complete our 
drawdown to 490,000 with the highest quality force possible.

    49. Senator Lieberman. General Odierno, what types of BCTs or other 
force structure elements will be targeted for reductions?
    General Odierno. As part of the new DOD Strategic Guidance, the 
Army will downsize approximately 79,000 soldiers to 490,000 in the 
Active component, and will reduce its Reserve components by 9,000 from 
358,200 to 350,200 in the ARNG, and from 206,000 to 205,000 in the U.S. 
Army Reserve by the end of the FYDP. The Army's deliberate and 
responsible draw-down plans will take into consideration operational 
demands, unit readiness, and will proceed at a pace necessary to ensure 
mission success and retain flexibility to respond to unforeseen demands 
at a tempo that is predictable and sustainable for our All-Volunteer 
Force. The Army announced the reduction of two BCTs in Europe as part 
of the President's 2013 budget release. Currently, the Army is 
conducting analysis on several options for reorganizing BCTs and 
enablers to ensure the force contains the required capability, 
capacity, and mix of skills to meet current and future operational 
requirements within authorized end strength. This will require a range 
of BCT reductions over the course of the FYDP. Currently, there are no 
structure reductions being considered for the National Guard.

    50. Senator Lieberman. General Odierno, what bases or overseas 
locations will be targeted for reductions?
    General Odierno. Posturing overseas allows the United States to 
maintain its strong leadership role throughout the world, secures our 
vital national interests overseas, and is also the clearest and most 
visible signal of our commitment to global security and peace to both 
our allies and potential adversaries. We have targeted 2 heavy brigades 
and approximately 2,500 additional personnel associated with enabler 
forces in the EUCOM AOR for reduction. We continue to study if any 
additional forces will be restationed to the United States. It will be 
very minimal if it does occur.

                             REVERSIBILITY

    51. Senator Lieberman. General Odierno, the Army is emphasizing 
that it is undertaking precautions to ensure that the reductions in end 
strength are reversible. If the Army is to pursue the concept of 
reversibility, it should establish some clear goals for what it must be 
able to do. What are the Army's specific objectives with regard to 
reversibility?
    General Odierno. The Army is structuring and pacing reductions in a 
way that preserves the ability to make a course change to surge, 
regenerate, and mobilize the capabilities needed for any future 
contingency. During and at the end of downsizing, the Army is postured 
to: (1) Rapidly reorganize and mobilize; (2) Regenerate additional 
required end strength and formations (as may be authorized and funded 
by OCO funding); (3) Develop new capabilities required by unforeseen 
threats and not present in the current force; (4) Maintain Combat 
experienced officers and NCOs in the Generating Force; and (5) Review 
the Army Prepositioned Equipment Sets.

    52. Senator Lieberman. General Odierno, how much of the force would 
the Army be able to reconstitute, and in what amount of time?
    General Odierno. The Army is assessing the ability to regenerate 
three Active component BCTs at the rate of one per year and additional 
AC enablers to support reversibility. This is consistent with the pace 
used during the Grow the Army effort in the 2007-2010 timeframe. To 
further support this effort, the Army will identify mid-grade officer 
and noncommissioned officer (NCO) military skill sets that can 
concomitantly support reversibility by providing experienced cadre to 
man the new units.

    53. Senator Lieberman. General Odierno, I understand that the Army 
hopes to facilitate reversibility by retaining more field-grade 
officers and mid-grade NCOs than it would otherwise need. How will 
these crucial leaders be occupied when they are not needed in command 
positions?
    General Odierno. The additional numbers of experienced officers and 
NCOs we will retain in our personnel inventories will be assigned to 
existing positions in the generating force. These additional personnel 
will be combat veteran officers and NCOs who will leverage their 
significant combat and operational experience in generating force 
organizations. They will occupy positions that already exist in our 
schoolhouses and support units that the Army has been unable to fill 
for the past decade due to exceptionally high OPTEMPO and mission 
demand. These officers and NCOs will be experienced trainers, doctrine 
writers, platform instructors, personnel developers, combat systems 
subject matter experts, all lending their hard earned knowledge of 
emerging threats and operational techniques to the institutional 
systems that will mold and temper our future Army units. These officers 
and NCOs will also circulate into and out of operational units as part 
of normal career assignment patterns.

    54. Senator Lieberman. General Odierno, where might they be 
assigned and what would they be doing?
    General Odierno. The additional numbers of experienced officers and 
NCOs we will retain in our personnel inventories will be assigned to 
existing positions in the generating force. These additional personnel 
will be combat veteran officers and NCOs who will leverage their 
significant combat and operational experience in generating force 
organizations. They will occupy positions that already exist in our 
schoolhouses and support units that the Army has been unable to fill 
for the past decade due to exceptionally high OPTEMPO and mission 
demand. These officers and NCOs will be experienced trainers, doctrine 
writers, platform instructors, personnel developers, combat systems 
subject matter experts, all lending their hard earned knowledge of 
emerging threats and operational techniques to the institutional 
systems that will mold and temper our future Army units. These officers 
and NCOs will also circulate into and out of operational units as part 
of normal career assignment patterns.

                           DWELL TIME RATIOS

    55. Senator Lieberman. General Odierno, General George Casey, the 
former Chief of Staff of the Army, regularly testified to the 
importance of attaining a predictable ratio of dwell time to deployment 
time of 2-to-1 for the Active component and 5-to-1 for the Reserve 
component. Do you believe attaining this ratio of dwell time to 
deployment time is still important?
    General Odierno. Yes, attaining consistent and sufficient dwell 
time is critical to ensure the progressive readiness of a unit before 
it is prepared to deploy again. To sustain the Army for a long period 
of 10-12 months requires us to achieve BOG of 1:2 for active units and 
1:4 for Reserve units by 2015. This is predicated upon a balanced 
requirement to reduce the force while simultaneously withdrawing from 
Afghanistan. Dwell time may increase, but readiness must remain a 
constant. Army reductions beyond 490,000 would challenge the Army's 
ability to meet timelines for current identified requirements and to 
maintain necessary dwell for units and soldiers, thereby imposing a 
significant readiness risk to the force and a strategic risk to the 
Nation. The Army has recently achieved 1:2 across the Active Force, but 
still lags in certain specialties such as aviation and Special 
Operations Forces.

    56. Senator Lieberman. General Odierno, has the Army achieved this 
ratio for both units and individual soldiers? If not, what types of 
units or individual occupational specialties are still not getting 
adequate dwell time?
    General Odierno. The Army has achieved the 1:2 Boots-on-the-Ground 
(BOG):Dwell ratio for active individual soldiers and we expect to reach 
that same goal for units in fiscal year 2015. Low density, high demand 
units and occupational specialties such as aviation, civil affairs, 
intelligence, military police, psychological operations, engineers and 
Special Forces remain just above the mandated 1:1 BOG:Dwell ratio. In 
an attempt to relieve pressure on the inventory of low density, high 
demand capabilities, the Army grew additional capabilities in the last 
decade and mitigated shortages with in lieu of sourcing and 
remissioning of units. However, the demand for these capabilities 
remains too high to realize a 1:2 BOG:Dwell rotation prior to changes 
in the operational climate.

    57. Senator Lieberman. General Odierno, will the planned end 
strength reductions cause any difficulty in sustaining necessary dwell 
time ratios?
    General Odierno. Reduced commitments will allow the Army to achieve 
a 1:2 BOG:Dwell ratio for Active units, and 1:4 BOG:Dwell ratio for 
Reserve units. If force size and structure reduces in proportion with 
reduction in demand for Army capabilities, increased dwell time should 
be the result. However, as we transition to an Active Army of 490,000, 
continued investment in readiness activities is required for this 
leaner stance, given the strategic environment of uncertainty and 
threat. Dwell time may increase, but readiness must remain a constant. 
Reductions beyond 490,000 would challenge the Army's ability to meet 
timelines for all currently identified requirements and its ability to 
maintain necessary dwell for units and soldiers, thereby imposing a 
significant readiness risk to the force and strategic risk to the 
Nation.

                  ARMY IMPROVED TURBINE ENGINE PROGRAM

    58. Senator Lieberman. General Odierno, the Army Improved Turbine 
Engine Program (ITEP) envisions a significantly more fuel efficient and 
powerful engine for the UH-60 Black Hawk and AH-64 Apache helicopter 
fleet. It is important that the Army manages the ITEP program carefully 
to ensure technical maturity and operational capability are proven 
before making a final decision that will have a dramatic impact on the 
current and future helicopter fleet. Please describe the Army's 
acquisition strategy for ITEP. In particular, will there be sustained 
competition for this program through the science and technology (S&T) 
phase and into the engineering, manufacturing, and development (EMD) 
phase?
    General Odierno. The Army agrees that facilitating competition into 
EMD will incentivize industry and provide the lowest cost and best 
product to the warfighter in the timeliest manner. Therefore, the Army 
ITEP acquisition strategy includes promoting competition throughout the 
EMD. The acquisition strategy also includes a full and open competition 
approach with the intent of selecting two vendors for initial engine 
design and development, to include ground runs in engine test stands 
and flight tests in Black Hawk and Apache aircraft. A final down select 
is planned for Milestone C, Low Rate Initial Production. Provisions 
will exist in the contract for a potential earlier down selection to 
one vendor.
                                 ______
                                 
            Questions Submitted by Senator Claire McCaskill

                          NEW DEFENSE STRATEGY

    59. Senator McCaskill. Secretary McHugh and General Odierno, 
according to testimony, as our new national defense priorities drive us 
to a smaller Army, we must avoid the historical pattern of drawing down 
too fast or risk losing leadership and capabilities, making it much 
harder to expand again when needed. It is critical that the Army be 
able to rapidly expand to meet large unexpected contingencies. One of 
the key components to retaining that ability is maintaining a strong 
cadre of NCOs and mid-grade officers to form the core of new formations 
when needed. How will sufficient NCOs and mid-grade officers be 
retained in the rank structure as the Army draws down?
    Secretary McHugh and General Odierno. For the past decade, the Army 
has intentionally manned its warfighting units and support structures 
at the expense of its generating forces to ensure success in our 
operational missions. This was necessary to sustain the level of 
commitment in two theaters of war as we grew into a more capable, 
modular, flexible combat structure. As operational demand lessens, more 
of our experienced and capable combat forces can be redirected to fill 
the important positions as trainers, doctrine writers, platform 
instructors, personnel developers, combat systems subject matter 
experts across our generating force units and installations.

    60. Senator McCaskill. Secretary McHugh and General Odierno, what 
are the risks associated with this strategy in terms of managing 
personnel, providing forces for ongoing missions such as Afghanistan, 
and responding to possible future threats quickly and decisively?
    Secretary McHugh and General Odierno. To manage risk, the Army must 
constantly balance three rheostats: End Strength, Readiness and 
Modernization. If readiness and modernization are sacrificed to 
maintain end strength levels, then the Army risks becoming a hollow 
force with soldiers not properly trained and equipped for emergent 
missions.
    To manage the risk of drawing down end strength too quickly, the 
Army designed a ramp to gradually reduce end strength over a 6 year 
period. This will allow for the Army to take care of its soldiers, 
maintain its commitment to Afghanistan and facilitate reversibility 
over the next several years, if required. The ramp will also allow for 
normal attrition to absorb a significant portion of the reductions.
    To mitigate risk, the Army is relying on OCO funding. All end 
strength over 490,000 is funded strictly through OCO. Additionally, the 
Army will continue to rely on OCO funding years after units depart 
Afghanistan to simultaneously reset forces and equipment for the 
future.
    The Army will continue to be agile and stands ready to respond to a 
range of threats. We will respond, as part of the joint force, to any 
contingency that threatens our Nation and our way of life. Under the 
new defense strategy, the Army will be able to quickly and decisively 
respond to any future threats. Where there is risk in the new strategy 
is with our ability to sustain multiple long-term simultaneous 
conflicts like those of the past decade.

    61. Senator McCaskill. Secretary McHugh, another critical component 
of the Army's ability to expand is the Nation's industrial base. We 
rely on the industrial base to perform research and development and to 
design, produce, and maintain our weapons systems, components, and 
parts. It must be capable of rapidly expanding to meet a large demand. 
Has the Army considered how reversibility will affect the defense 
industrial base?
    Secretary McHugh. The Army is considering how reversibility will 
affect the defense industrial base and is taking many steps to 
carefully address this issue. Reversibility requires the Army to make 
and sustain selected investments and put policies in place to mitigate 
risk and posture the force to respond quickly to unforeseen 
requirements or changes in the National Defense Strategy. The Army is 
aware that reversibility will require careful attention and focus on 
sustainment of critical skills and manufacturing capabilities in the 
industrial base. The Army is actively engaged in ongoing efforts to 
determine the health of Industrial Base sectors critical to support 
Army and Joint Services programs. The Army is currently identifying and 
assessing status of organic and commercial critical manufacturing and 
maintenance capabilities required to meet future contingency 
reversibility requirements. In addition, the Army is also identifying 
supply chain issues in design, manufacturing and sustainment that can 
present risk to critical Army capabilities.

    62. Senator McCaskill. Secretary McHugh, how will production lines 
for defense items be kept warm as DOD scales back on purchasing over 
the next few years?
    Secretary McHugh. Army procurement decisions will be based on 
warfighter requirements, best value acquisition strategies, and 
affordability within the Army's budget. The health of the defense 
industrial base--organic and commercial--remains a significant 
consideration as these strategies are developed and executed.
    In connection with this effort, the Army will continue to work 
across DOD on the S2T2 effort. This effort aims to identify single 
points of failure, over-reliance on foreign sourcing, and areas of 
limited competition. In doing so, the Army will continue to survey the 
commercial industrial base to obtain data for analysis. This 
information will help the Army determine what essential skill sets and 
production capabilities are needed to serve the needs of the 
warfighter, including what production lines must be kept warm. The Army 
will continue to work its internal efforts as well for the same 
purpose, such as its Industrial Base Baseline Assessments, which 
conduct a sector/sub-sector assessment of programs identified as 
critical by Program Executive Offices and Life Cycle Management 
Commands; determine the impact of reductions in funding to program 
requirements; and develop recommendations which enable the industrial 
base to sustain current and future warfighter needs.

    63. Senator McCaskill. Secretary McHugh, does the Army have a 
strategy for addressing the unique concerns of small businesses that 
make up the defense industrial base supply chain?
    Secretary McHugh. The Army works closely with the commercial 
industrial base, including the small businesses within it, to assess 
capabilities and capacities necessary to meet the needs of the 
warfighter. The Army uses different tools to assess these capabilities 
and capacities, including the DOD-led S2T2 effort. This effort aims to 
identify single points of failure, over-reliance on foreign sourcing, 
and areas of limited competition. In doing so, the Army will continue 
to survey the commercial industrial base to obtain data for analysis. 
This information will help the Army determine what essential skill sets 
and production capabilities are needed to serve the needs of the 
warfighter, including those within the commercial industrial base small 
businesses. The Army will also continue to work its internal efforts as 
well for the same purpose, to include the Industrial Base Baseline 
Assessments, which conduct a sector/sub-sector assessment of programs 
identified as critical by Program Executive Offices and Life Cycle 
Management Commands. This information will help the Army determine the 
impact of reductions in funding to program requirements; and develop 
recommendations which enable the industrial base to sustain current and 
future warfighter needs.

                    PERSONNEL END STRENGTH DECREASE

    64. Senator McCaskill. Secretary McHugh, the Army is planning for 
an aggressive draw down as it decreases end strength from a peak of 
about 570,000 to 490,000 Active Army, 358,000 to 353,500 ARNG, and 
206,000 to 205,000 Army Reserve soldiers over the next 5 years. I agree 
that we must draw down wisely to avoid stifling the health of the force 
or breaking faith with our soldiers, civilians, and families. Excessive 
cuts would create high risk in our ability to sustain readiness. We 
must avoid our historical pattern of drawing down too much or too fast 
and risk losing the leadership, technical skills, and combat experience 
that cannot be easily reclaimed. We must identify and safeguard key 
programs in education, leader development, health care, quality of 
life, and retirement--programs critical to retaining our soldiers. When 
will the Army complete an analysis of how many soldiers will be 
involuntarily separated from the Army?
    Secretary McHugh. The Army analysis of specific inventory cohorts 
is ongoing. We are finalizing near-term structure and will have the 
policy decisions that will determine the target cohorts by this summer. 
We will begin by late summer to frame our expectations for how many 
soldiers by skill, grade and year group will be excess to the Army's 
end strength requirements through fiscal year 2017. Our analysis will 
drive planning for use of various force shaping authorities and that 
plan will be complete in early fiscal year 2013.

    65. Senator McCaskill. Secretary McHugh, when will these reports be 
available to Congress?
    Secretary McHugh. The Army's plan for drawdown execution will be 
available to Congress members early in fiscal year 2013.

    66. Senator McCaskill. Secretary McHugh, what are the specifics on 
how the Army will take care of soldiers, families, and civilians 
involuntarily separated during this aggressive draw down?
    Secretary McHugh. The Army Career and Alumni Program (ACAP) is the 
Transition Program that assists soldiers, family members, and DA 
civilian's transition from their status within the Army back to the 
civilian community. Involuntarily separated soldiers are 
congressionally mandated to receive the same pre-separation counseling 
as voluntarily separating soldiers. Additionally, soldiers, family 
members, and DA civilians (involuntarily or voluntarily) are entitled 
to participate in any of the transition assistance classes offered by 
ACAP. We are adjusting the ACAP program to meet the goals of the 
recently passed VOW to Hire Heroes Act and the recommendations of the 
Presidential Task Force. Attendance may take place in person at an ACAP 
center, live or cataloged classes online, or individually through the 
24/7 ACAP Call Center. ACAP Counselors also refer soldiers and their 
family members to other agencies and organizations that assist with 
Transition: The Department of Labor, The Veterans Affairs, Military 
OneSource, The Small Business Administration, The Helmets to Hardhats, 
and The Student Veterans of America to name a few.
    These classes include, but are not limited to:

         Employment assistance
         Job search skills
         MOS Crosswalk (Military skills to civilian skills comparison)
         Skills assessment
         Professional interest evaluation
         Resume and cover letter development and refinement
         Interview skills
         Dress for success
         Salary negotiation
         Relocation assistance
         Legal referrals (Wills, Power of Attorney, Estate planning, et 
        cetera before (separation)
         Contact information for housing counseling assistance
         Education/Training
         Health/Life insurance
         Financial planning/Budget development
         Veteran benefits briefing
         Veterans Administration Disabled Transition Assistance Program 
        (VA DTAP)
         Department of Labor Employment Workshop
         Physical and mental health well being

    The Army is also, utilizing the H2H as its interim employment 
application/tool www.H2H.jobs to provide one primary location where 
soldiers of all components, veterans, and family members can connect 
with private industry employment opportunities. This application is 
web-based and able to translate military occupational skills (MOS), 
provide career path exploration, upload resumes, allow customized job 
searches, enable employers to also search for veterans, and provide 
performance metrics. H2H will eventually be included on eBenefits, the 
single portal for transition benefits selected by the DOD-VA Veterans 
Employment Initiative Task Force (www.eBenefits.va.gov)

    67. Senator McCaskill. Secretary McHugh, what effect will a smaller 
Army have on training installations, like Fort Leonard Wood?
    Secretary McHugh. Generally speaking, we will see a return to pre-
war training levels at our training installations (which have already 
seen some consolidation as a result of BRAC 2005); a greater 
opportunity for soldiers to attend institutionally-based professional 
military education and training as a result of reduced deployments and 
greater dwell time; and a move away from the temporary facilities we've 
used in recent years to accommodate the training requirements for an 
expanding Army.
    Training soldiers and civilians, developing leaders, and delivering 
the training products and enablers required to support the Army is a 
labor intensive business. Over the past several years, the Army's 
Training and Doctrine Command has maintained a delicate workforce 
balance between military, civilians, and contractors to meet mission 
requirements in an environment where military personnel have been 
transferred out of TRADOC to the operating forces. As the Army begins 
to withdraw from operations in Afghanistan and looks to shape the size 
and structure of the Army of 2020, we see an opportunity to `re-invest' 
military personnel in our training command, with the potential to 
retain high quality civilians and divest some of the currently required 
contractor support to training. The Army is currently conducting a 
study to determine the right mix of military, civilian, and contractor 
manning to train the Army of 2020.

    68. Senator McCaskill. Secretary McHugh, as the Army seeks to 
reduce forces, will reductions be taken evenly across specialties or 
will certain specialties be prioritized and protected?
    Secretary McHugh. The Army's plan will ensure that the force 
contains the required capability, capacity, and mix of skills to meet 
current and future operational requirements within authorized end 
strength. In general, we will see an increase in Army Aviation, Special 
Forces, Military Information Support Operations, Civil Affairs, 
Infantry and Armor skills. We will see a decrease in Field Artillery, 
Chemical and Signal skills. An announcement on specific force structure 
actions is expected sometime before, or in conjunction with, submission 
of the President's 2014 budget in early February 2013.

    69. Senator McCaskill. Secretary McHugh, how will a reduction in 
end strength affect civilian personnel currently working on Army 
installations?
    Secretary McHugh. Garrison Commanders, Senior Commanders and 
partner commands are responsible for shaping their workforce within 
their allocated budgets. Commands will use a variety of available 
options to achieve their reduction objectives in order to mitigate 
negative impacts on their workforce while continuing to focus on our 
mission.
    To minimize the possible negative effects on our civilian personnel 
currently working on our Army installations, we have relied as much as 
possible on voluntary departures of employees to achieve our manpower 
reductions.
    Voluntary Early Retirement Authority and Voluntary Separation 
Incentive Payment are two options commanders have to reduce the number 
of personnel they have in order to meet mission objectives. Some 
commands have established internal placement programs to move 
volunteers between activities across geographic regions to successfully 
rebalance their internal workforce and minimize personnel impact.
    If we do not achieve our directed Civilian personnel Full Time 
Equivalent levels through use of these measures, then commanders may 
recommend a Reduction in Force (RIF). However, I retain the authority 
to approve a RIF within the Army. A RIF will be the last resort to meet 
budgeted levels.

    70. Senator McCaskill. Secretary McHugh, has the Army performed the 
necessary analysis to ensure that bases will not be understaffed as a 
result of personnel reductions?
    Secretary McHugh. The Army's analysis of workload requirements 
begins with the commanders at the installations to determine they have 
the resources to perform their mission and necessary functions. This 
ongoing review progresses through separate commands (Installation 
Management Command, Medical Command, Army Materiel Command, et cetera) 
for adjustments up to Headquarters, Department of the Army (HQDA).
    After DOD resource decisions (as reflected in the fiscal year 2012 
President's budget) were sent down, Army Commanders conducted an 
analysis, assessed their projected future requirements and developed 
plans on how to meet their mission requirements while shaping their 
workforce within their allocated budget.
    In some cases, tough decisions are being made to determine the most 
critical and essential services; find and eliminate redundancies; and 
then rebalance and retrain the workforce in order to accomplish the 
mission.
    At HQDA, we will use the midyear review to refine our plans and 
provide guidance to the commands concerning prioritization of resources 
and efforts to ensure that we do not break the trust and confidence of 
soldiers, families, and civilians that make up our Army.

                MINE RESISTANT AMBUSH-PROTECTED VEHICLES

    71. Senator McCaskill. Secretary McHugh, the Army maintains a large 
number of MRAP vehicles. These vehicles were purchased specifically to 
protect soldiers in Iraq and Afghanistan. As U.S. forces have left Iraq 
and as we continue to draw down in Afghanistan, it is unclear what role 
these vehicles will play in future conflicts. Has the Army completed an 
analysis of how and where these vehicles will be stored?
    Secretary McHugh. The initial task was to build and field MRAPs as 
fast as possible to address the Improvised Explosive Devices (IED) 
threat. Logistics sustainment, while important, was a secondary 
consideration. DOD continues to upgrade MRAP capability by bringing the 
earlier variants to the latest configurations. This strategy will 
reduce the number of variants from 26 to 8, and manufacturers from 6 to 
4. The Army also plans to divest 1,200 MRAP vehicles that cannot be 
economically repaired. As MRAPs are no longer required in theater, they 
will be reset at Red River Army Depot to a 10/20 (fully mission 
capable) Standard +4D (delayed desert damage and degradation). 
Approximately 60 percent will be placed in Army Preposition Stocks 
(APS) sets for use in future contingency operations, significantly 
reducing the sustainment cost associated with parts and fuel. The 
remaining 40 percent of the MRAPs will be included in Pre-deployment 
Training Equipment sets at various Institutional Schools to train 
unique skills and to permanent Army unit's Tables of Equipment.

    72. Senator McCaskill. Secretary McHugh, how much will it cost to 
store and maintain these vehicles?
    Secretary McHugh. The Army continues to refine its long-term 
utilization and sustainment strategy for enduring force MRAPs. Army 
approved MRAP requirements are being reviewed in ongoing studies 
including the Sustainment Readiness Review, Army TWV Strategy 2020, 
relook of MRAP Study II, and Army 2020 Investment and Regeneration. 
Once these reviews are complete, enduring force sustainment costs can 
be accurately forecasted for activities including reset, storage 
facilities, cyclic maintenance, and second-destination transportation.

    73. Senator McCaskill. Secretary McHugh, are there any alternate 
uses for these vehicles?
    Secretary McHugh. The primary purpose of the MRAP is to transport 
soldiers safely in a high threat IED environment. While there are 
alternate uses for these vehicles, their principal use now and for the 
future is to increase soldier survivability. The MRAPs have various 
mission roles such as troop transport, route clearance, explosive 
ordnance disposal, ambulance, and vehicle recovery. Once MRAPs are 
reset they will be reallocated based on the Army's MRAP Distribution 
Plan and used according to those mission roles. Approximately 60 
percent will be placed in APS sets for use in future contingency 
operations. The remaining 40 percent of the MRAPs will be allocated to 
permanent Army unit's Tables of Equipment, and to various installations 
for Predeployment Training Equipment sets.

                             SEXUAL ASSAULT

    74. Senator McCaskill. General Odierno, I know the Army continues 
to work on getting its arms around sexual assault throughout the Army, 
but so much more needs to be done. Sex crimes in the Active Army have 
trended upward with a 28 percent increase in the offense rate and an 
increase of 20 percent in the offender rate from fiscal year 2006 to 
fiscal year 2011. During this period there were a total of 11,774 sex 
offenses committed by 8,215 offenders, which was generally comprised of 
an increasing number of offenses in each year, ending in fiscal year 
2011 with 2,290 sex offenses committed by 1,531 soldiers. Why do you 
believe sexual assault rates in the Army have risen so dramatically 
over the past 5 years?
    General Odierno. The increased number of sexual assaults in the 
Army over the last 6 years is simply unacceptable. Although the certain 
cause is unknown, increased reporting due to awareness may have 
contributed to the risk in the past 5 years.
    Our research and efforts to combat sexual assault, as we have 
communicated in the Army Gold Book and in previous briefings to 
Congress, has identified several key victimization risk factors. For 
example, we know that: (1) the majority of sexual assaults occur on 
weekends in high-density housing and involve alcohol use; (2) most 
victims of sexual assaults are generally younger female soldiers in 
their first 18 months of service; and (3) 97 percent of the victims at 
least casually knew their attackers.
    Many of these risk factors can be mitigated through increased 
command emphasis and a commitment to ensuring disciplinary 
accountability in the barracks environment. For instance, we feel that 
ensuring that young female soldiers are integrated into a formal chain 
of command immediately upon arrival at a new unit will ensure that 
leaders are affirmatively accountable for those soldiers. We also feel 
that strengthening and enforcing barracks alcohol and visitation 
policies will create an environment where these types of crime are less 
likely to occur.
    The Army continues to implement improved training to address sexual 
assault prevention and response in the Army through its Sexual 
Harassment/Assault Response and Prevention (SHARP) Program. SHARP Life-
Cycle (institutional, operational, and self-study) training occurs at 
every level of Professional Military Education (PME), facilitated 
annually in every Army unit, during pre- and post-deployment training, 
and via self-study distance learning. One of the primary goals of SHARP 
training is to facilitate sexual assault prevention through awareness 
and education about situations that may set the conditions for 
incidents of sexual assault--including gender relations and alcohol 
use/abuse.
    In 2011, the Army fully implemented Initial Military Training (IMT) 
revisions which introduced new sexual harassment and sexual assault 
messaging targeted for new recruits in Basic Combat Training and Basic 
Officer Leadership Course (BOLC) using a revised curriculum that 
includes a two-person, audience interactive program that includes skits 
dealing with dating, consent, rape and other associated topics such as 
body language, gender relations, alcohol use and intervention.
    The Army fielded new mandatory operational training in April 2011. 
This facilitated training includes leader and soldier videos. The 
training addresses alcohol risk management, high risk behaviors, and 
models skill-sets to effective intervene to stop potential sexual 
assaults.
    The interactive, critical decisionmaking, self-study distance 
learning training (``Team Bound'') provides scenario based training in 
which soldiers become the lead character, making choices in situations 
(including high risk and alcohol scenarios) dealing with sexual 
harassment and sexual assault.
    Additionally, the Army takes seriously its responsibility to 
appropriately respond to sexual assaults when they do occur. The Army 
continues to execute an 80-hour SHARP training curriculum conducted by 
SHARP Mobile Training Teams (MTT). These MTTs train command-selected 
personnel to execute the SHARP Program at every echelon of the Army 
around the world. To date, MTTs have trained over 11,500 SHARP 
personnel.
    Within the investigative line of effort, all Military Police 
soldiers attending IMT, Professional Military Education and select 
functional courses receive training on sexual assault. Additionally, 
the U.S. Army Criminal Investigation Command (USACIDC) and the U.S. 
Army Military Police School (USAMPS) have developed an 80-hour Special 
Victim Unit (SVU) Course, which DOD recognized as the gold standard/
best practice for sexual assault investigator training. Used to train 
special agents from all Services on the unique considerations and 
techniques of sexual assault investigations, the SVU Course 
incorporates a new technique (Forensic Experiential Trauma Interview, 
or FETI) to more effectively interview sexual assault victims. The FETI 
has proven to be a compelling paradigm shift in obtaining substantially 
more information and forensic physiological evidence from sexual 
assault victims. Further, USACIDC employs highly qualified experts and 
civilian sexual assault investigators to train and mentor CID Special 
Agents on the conduct of sexual assault investigations.
    On the prosecution side, OTJAG has hired seven civilian highly 
qualified experts to assist in the training of counsel and to support 
individual prosecutions and expanded the Special Victim Prosecutor 
program to appoint 23 hand-selected, specially trained counsel to 
oversee the investigation, and if necessary, the prosecution of every 
sexual assault allegation.
    These are only some of the efforts that the Army is taking to 
prevent and respond to sexual assaults. The Army is truly committed to 
a coordinated, aggressive effort to prevent and respond to sexual 
assaults, and will continue to make eliminating sexual assault a high 
priority for the Army.

    75. Senator McCaskill. General Odierno, legislation currently 
before Congress would remove the reporting and investigation of 
allegations of sexual trauma from the chain of command and place them 
within an independent body. Do you believe such an independent body 
would be a more appropriate entity for conducting investigations that, 
at times, include individuals within a servicemember's chain of 
command? If not, why?
    General Odierno. The Army's efforts to prevent, investigate and 
prosecute allegations of sexual assault are unprecedented. Four-plus 
years of consistent focus and resourcing have made an enormous positive 
impact in culture change, in the quality of investigations, and in the 
way in which we hold offenders accountable. By any measure, our system 
of military justice is responsive, responsible and effective in dealing 
with this serious crime. An independent body would not be a more 
appropriate entity for conducting investigations and disposing of 
allegations. Jurisdiction for sexual assault offenses has been withheld 
to Special Court Martial Convening Authority levels. This change 
requires more senior Commanders to review each case. These commanders, 
with the advice of Judge Advocates, are given the authority to dispose 
of allegations against members of their command. Commanders are 
appropriately trained, resourced and committed to reviewing all 
allegations of misconduct and holding offenders appropriately 
accountable. There is no evidence that removing the chain of command 
from the disposition of sexual assault allegations will improve 
decisionmaking or remove discretion from the process.
    A commander is responsible and accountable for all that goes on in 
a formation--health, welfare, safety, morale, discipline, and readiness 
to execute the mission. The adjudication of alleged offenses inside the 
unit must be efficient, visible, and just. Adjudication of sexual 
assault offenses by local commanders promotes these ends. Commanders 
are best-positioned to understand the impact of an offense on readiness 
and morale on his or her unit and the aggravating and mitigating 
factors of each unique offense. Transfer of the Commander's authority 
to an outside, centralized source does not ensure efficiency, reduces 
transparency, and undermines the credibility of dispositions of sexual 
assault cases. The military justice system, which utilizes the chain of 
command to adjudicate offenses, promotes loyalty to both superiors and 
subordinates, and is perceived by commanders, soldiers, and the public 
as a just system.
                                 ______
                                 
              Questions Submitted by Senator Kay R. Hagan

                            BERRY AMENDMENT

    76. Senator Hagan. Secretary McHugh, Senator Graham and I recently 
wrote to you regarding the Army's program to supply uniforms and other 
equipment to Afghan National Security Forces (ANSF).
    This project provides the Afghan National Army and the Afghan 
National Police with uniforms and other individual equipment at U.S. 
taxpayers' expense, and is unique in that it allows for the final 
assembly of the garments to be completed in Afghanistan. However, 
throughout the 3-year history of this program, solicitations have 
stipulated that non-Afghanistan components, such as yarns and fabrics, 
must be made in the United States and comply with standard Berry 
Amendment requirements. The Army has reversed its position, in its 
latest solicitation, by removing the stipulation that non-Afghan 
component materials be made in the United States. These components can 
now be exempt from the Berry Amendment requirements. This reversal 
means that yarns and fabrics that are readily available from U.S. 
manufacturers--including North Carolina--can now come from countries 
like China under this program.
    In a response to our letter, dated January 30, 2012, Deputy 
Assistant Secretary Kim Denver explained that there were special 
provisions that allowed for the final sewing and assembly of these 
garments to take place in Afghanistan. However, she failed to address 
our main question, which is why the various component parts, such as 
yarns and fabrics, that are not available in Afghanistan, could be 
sourced from non-U.S. producers. Waiving the Berry requirements under 
this program will severely impact a number of domestic textile 
producers and would likely result in the loss of critical U.S. 
manufacturing jobs. At a time when the U.S. economy is struggling to 
create and maintain jobs, it would be unwise to undermine U.S. 
manufacturers and workers that are directly involved in this program. 
Do you not agree that if a component textile material under this 
program is not available from an Afghan supplier, that component should 
then fall under the normal Berry Amendment requirements?
    Secretary McHugh. The Berry Amendment states that DOD funds may not 
be used for the procurement of certain items, including certain 
clothing and textile materials, if the item is not grown, reprocessed, 
reused, or produced in the United States. However, one of the 
exceptions to the Berry Amendment allows for procurements outside of 
the United States in support of combat operations.
    Because the procurement of ANSF clothing and equipment was in 
support of combat actions, this procurement was not held to the 
requirements of the Berry Amendment. The decision to limit competition 
to Afghan vendors was consistent with the U.S. strategic objectives in 
Afghanistan: to help Afghans rebuild their country by providing 
legitimate, sustainable business opportunities to Afghan companies and 
jobs for Afghan citizens.
    The Army has not reversed its policy of following the Berry 
Amendment, which emphasizes procurement of DOD items in the United 
States. In deciding from what sources to procure its items, the Army 
closely follows the Berry Amendment for applicable items; however, the 
Army is aware that the Berry Amendment allows for a number of 
exceptions, such as the exception noted above for procurements outside 
of the United States in support of combat operations. The Army will 
continue to comply with the requirements of the Berry Amendment in the 
procurement process and will continue to emphasize the procurement of 
items in the United States.

    77. Senator Hagan. Secretary McHugh, please explain the Army's 
seeming reversal of Berry Amendment policy with respect to this 
program.
    Secretary McHugh. The Army has not reversed its policy of following 
the Berry Amendment, which emphasizes procurement of DOD items in the 
United States. The Berry Amendment states that DOD funds may not be 
used for the procurement of certain items, including certain clothing 
and textile materials, if the item is not grown, reprocessed, reused, 
or produced in the United States. However, one of the exceptions to the 
Berry Amendment allows for procurements outside of the United States in 
support of combat operations.
    Because the procurement of ANSF clothing and equipment was in 
support of combat actions, this procurement was not held to the 
requirements of the Berry Amendment. The decision to limit competition 
to Afghan vendors was consistent with the U.S. strategic objectives in 
Afghanistan: to help Afghans rebuild their country by providing 
legitimate, sustainable business opportunities to Afghan companies and 
jobs for Afghan citizens.
    In deciding from what sources to procure its items, the Army 
closely follows the Berry Amendment for applicable items; however, the 
Army is aware that the Berry Amendment allows for a number of 
exceptions, such as the exception noted above for procurements outside 
of the United States in support of combat operations. The Army will 
continue to follow the requirements of the Berry Amendment in the 
procurement.
                                 ______
                                 
               Questions Submitted by Senator Joe Manchin

                     SHORT-RANGE AIRLIFT CAPABILITY

    78. Senator Manchin. General Odierno, the Army has proposed 
divestiture of the C-23 Sherpa, an aircraft that is used for critical 
missions in combat and for Homeland security missions, especially by 
the National Guard. I have talked with my Adjutant General and his 
colleagues and they believe that the Guard can maintain this mission 
with existing force structure. Does the Army need this short-range 
airlift capability?
    General Odierno. The Army has a capability requirement for intra-
theater lift to be provided to ground forces, as the Army currently has 
in Afghanistan. CH-47s are used heavily and cannot bear the whole load. 
To assist us with our requirement, the Air Force has agreed to provide 
fixed wing aircraft for resupply. A Memorandum of Agreement signed by 
the Air Force and Army on January 27, 2012, states: ``The Combatant 
Commander/Joint Force Commander should TACON (Tactical Control) an 
Expeditionary Airlift Squadron or Detachment to the Commander, Army 
Forces who will exercise Tactical Control through the Senior Army 
Aviation Authority. The dedicated Expeditionary Airlift Squadron may, 
at the discretion of the Combatant Commander/Joint Force Commander, 
collocate with an Army Combat Aviation Brigade or Task Force to provide 
tactical airlift for transport of Army Forces time sensitive/mission 
critical equipment, supplies and personnel.'' The Air Force assures the 
Army it will be able to fulfill this requirement with their current C-
130 fleet. The Air Force commitment to meet the Army's intra-theater 
lift requirement using C-130 aircraft to support Army ground forces 
fulfills this requirement. The Army does not currently have or foresee 
any gaps or shortfalls for intra-theater lift requirements or theater 
logistical supply chain requirements based upon this agreement.

    79. Senator Manchin. General Odierno, would you be willing to work 
with the Guard on a cost-effective solution to maintain this 
capability?
    General Odierno. The current Memorandum of Understanding (MOU) 
signed by the Secretary of the Army and the Chief of Staff of the U.S. 
Air Force (USAF) has shifted the time/sensitive, mission/critical cargo 
mission to the USAF. The divesture of the C-23 has begun and we expect 
to be complete by December 2014. The states where the C-23s are 
currently stationed will be offered first rights of refusal for the 
transfer of the aircraft to their respective fleets.

                               RETIREMENT

    80. Senator Manchin. Secretary McHugh, you recently stated that the 
rise in TRICARE fees, which could climb from $460 a year to $2,048 for 
some working-age retirees, is still very generous compared with 
programs offered by private employers. I know that some veterans are 
starting to see a cost increase in prescription medication--some by as 
much as 33 percent. What is your opinion on this topic?
    Secretary McHugh. I laud the Army's efforts to promote filling 
prescriptions at the military treatment facilities (MTFs). 
Understanding the concern for the rising cost of medications to 
beneficiaries and realizing that a continual rise in medication costs 
to DOD jeopardizes the benefit for all, Army Medicine is developing a 
plan to promote beneficiaries' return to the MTF for prescription fills 
for no or low medication costs. Increasing formularies, improving 
access to pharmacies, and providing pharmacists for medication 
counseling are a few steps towards accomplishing this goal. For 
beneficiaries living near MTFs, this is a no-cost option for 
prescriptions. For beneficiaries living far from an MTF, Home Delivery 
is a great alternative as it costs less than 1/3 of retail network 
pharmacies while also being 25-30 percent less costly than retail to 
the government.

    81. Senator Manchin. Secretary McHugh, do you think our veterans 
who have already sacrificed for the safety of this country should be 
asked to sacrifice more?
    Secretary McHugh. The TRICARE fee increases proposed by DOD sustain 
the medical benefit honorably earned by our veterans and their families 
now and into the future. I support DOD's efforts to rebalance the share 
of costs incurred by the Department and the beneficiary, while 
preserving and enhancing the quality and range of care.

    82. Senator Manchin. Secretary McHugh, what can be done differently 
to prevent this increase in costs or changes to benefits?
    Secretary McHugh. Healthcare System costs have more than doubled 
from fiscal year 2001 to present. However, costs incurred by 
beneficiaries via enrollment fees, deductibles and cost shares have not 
kept pace with these increased costs since the inception of TRICARE in 
1996. The Secretary of Defense has stated that if the proposed TRICARE 
fee increases, which seek to re-balance the share of costs incurred by 
the Department and the beneficiary while preserving and enhancing the 
quality and range of care, are not adopted, the funds to sustain the 
healthcare benefit may be paid out of other areas such as readiness or 
reductions in troop strength.

    83. Senator Manchin. Secretary McHugh, do you anticipate any issues 
with recruiting and retention because of the potential changes to the 
retirement system or cost shares?
    Secretary McHugh. Retirement benefits are an important component in 
motivating applicants to join the Army and to remain for a career. 
However, the Army has no current research on the impact to recruiting 
and retention that would result from a change to the current retirement 
system or cost increases for benefits

               AFGHANISTAN CASUALTY EVACUATION PROCEDURES

    84. Senator Manchin. General Odierno, a constituent has contacted 
me about an issue that I'd like some more information on. He states 
that medical evacuation (MEDEVAC) procedures are causing unnecessary 
casualties in Afghanistan. What are the survivability rates of 
casualties in Afghanistan?
    General Odierno. The survivability rate for our wounded service men 
and women in Afghanistan is 92 percent; the highest in history because 
of the integration of our MEDEVAC capability with the health service 
support network.

    85. Senator Manchin. General Odierno, as I understand it, Army 
MEDEVAC helicopters are not armed, but if a landing zone is designated 
hot, it must wait to fly with an armed escort, and that process causes 
delays. Please describe this process.
    General Odierno. All Army aircraft, regardless of type, require 
escort, i.e., a wingman, chase or armed escort to improve mission 
success and mitigate tactical risk. Aircraft do not fly single ship in 
any circumstance. When the enemy situation dictates, as in the case of 
a hot landing zone, the tactical commander can require the use of an 
armed escort. This is true for troop transport as well as for MEDEVAC. 
Ninety-three percent of the time, MEDEVAC delivers the patient to a 
medical treatment facility within the 1 hour standard. When MEDEVAC 
missions take longer than the 1 hour standard, we track the following 
reasons: mission complexity (22 percent), distance (19 percent), 
environment (17 percent), enemy action (16 percent), command and 
control (10 percent), escort (9 percent), and other considerations (6 
percent). MEDEVAC delays attributed to ``waiting for escort'' equate to 
0.6 percent of all urgent point of injury missions, or six times out of 
1,000 is a MEDEVAC mission delayed outside of the standard due to 
escort related issues. Ninety-three percent of the time, the mission is 
accomplished in less than an hour in the following manner. The decision 
to launch MEDEVAC aircraft rests solely with the tactical Commander. 
Missions accomplished within the 1 hour standard follow the following 
general process: (1) receipt of air MEDEVAC mission request; (2) 
commander makes an assessment, and balances the clinical risk to 
patients against the tactical risk to aircrews; (3) commander decides 
to launch MEDEVAC aircraft with a wingman, with a chase aircraft, or 
with an armed escort. Commanders employ the escort aircraft to improve 
mission success and mitigate tactical risk. If necessary, the Commander 
may re-task airborne aircraft or launch additional aircraft to perform 
escort for MEDEVAC aircraft. Armed escort and/or chase aircraft provide 
a multitude of security related tasks to include identification of 
optimal ingress and egress routes, coordination of ground and air 
support, and engagement of the enemy from greater distances with 
stronger firepower. The Army has employed tactics successfully in 
support of air missions in both Iraq and Afghanistan. In February 2012, 
the Chairman of the Joint Chiefs of Staff directed that Central Command 
(CENTCOM) conduct a review of its air MEDEVAC escort procedures. We 
expect this report to be available in July 2012.

    86. Senator Manchin. General Odierno, what are the differences 
between Army MEDEVAC procedures and the procedures of the other 
Services?
    General Odierno. The Army is the only Service that provides 
dedicated MEDEVAC support to the Joint Force for DOD. These units are 
trained, manned, and equipped to exclusively perform that medical 
mission. This enables a higher level of evacuation and enroute care 
capability for the Joint Force commanders. The U.S. Air Force (USAF) 
and the U.S. Navy (USN) have employed aircraft and crews, originally 
organized, manned, trained, and equipped for other combat support 
roles, such as personnel recovery, to augment the MEDEVAC mission.

    87. Senator Manchin. General Odierno, are there any other alternate 
configurations among the Services for MEDEVAC procedures?
    General Odierno. The Army is the only Service that provides 
dedicated MEDEVAC that are trained, manned, and equipped to exclusively 
perform that medical mission. The U.S. Air Force (USAF) and the U.S. 
Navy (USN) have employed aircraft and crews, originally organized, 
manned, trained, and equipped for other combat support roles, such as 
personnel recovery, to augment the MEDEVAC mission.

    88. Senator Manchin. General Odierno, why are Army MEDEVAC 
helicopters unarmed?
    General Odierno. The Army does not arm MEDEVAC aircraft with crew-
served weapons because doing so would negatively impact their mission 
focus. Army air ambulances must be unequivocally dedicated to the 
mission of MEDEVAC in order to ensure the wounded are evacuated to the 
nearest medical treatment facility within the ``golden hour''. To best 
fulfill its Title X requirement to train and equip forces, the Army has 
organized, manned, equipped and trained MEDEVAC units to perform only 
this mission. This approach has resulted in a 92 percent survival rate 
for those wounded in Afghanistan, which is the highest in history. Army 
air ambulances also operate in compliance with the Law of War. Because 
of the mission they perform, Army air ambulances are marked with the 
internationally recognized Red Cross symbol. This identifies MEDEVAC 
aircraft as a non-combatant asset performing a humanitarian mission; 
therefore they are not armed with crew-served weapons. Arming MEDEVAC 
aircraft and removing the Red Cross markings would significantly impact 
their operational capability and jeopardize their mission of evacuating 
the wounded from the battlefield.

    89. Senator Manchin. General Odierno, what are the effects of 
arming a MEDEVAC helicopter?
    General Odierno. Arming MEDEVAC aircraft would impact the 
capability of the aircraft. Crew-served weapons, related mounting 
equipment, structural modifications, ammunition and gunners all add 
weight to the aircraft. The added weight would hinder the aircraft's 
ability to work at higher altitudes because of reduced lift capacity, 
speed and range--all of which are critically important in OEF. More 
importantly, arming MEDEVAC aircraft would not eliminate the need for 
armed escort on missions to high risk landing zones. An armed attack 
aircraft enables the MEDEVAC crew to focus on rapidly evacuating a 
patient. The escort aircraft provides a multitude of security related 
tasks to include identification of optimal ingress and egress routes, 
coordination of ground and air support, and engagement of the enemy 
from greater distances and with stronger firepower.

    90. Senator Manchin. General Odierno, please describe why there is 
a Red Cross on Army MEDEVAC helicopters.
    General Odierno. The Army policy is to mark MEDEVAC aircraft with 
red crosses, just as all the Services do with ground ambulances. This 
policy affords protections and obligations under the Geneva 
Conventions. It also sends a strategic message that these U.S. Military 
assets are engaged in a humanitarian operation in accordance with 
international law principles. The marking of Army MEDEVAC designates 
these aircraft as non-combatants dedicated to the sole mission of 
MEDEVAC. Marking the aircraft also contributes to the Army's ability to 
provide this capability and assists the Joint Force commanders to 
manage them as a dedicated medical capability, preserving them from 
being expended for other non-medical missions.
                                 ______
                                 
             Questions Submitted by Senator Saxby Chambliss

                             REVERSIBILITY

    91. Senator Chambliss. Secretary McHugh and General Odierno, in the 
midst of the Army's downsizing, you make the point that the Army will 
be smaller but reversible. I think this is a good objective and believe 
that, at some level, the Army will be able to expand to meet future 
challenges, in the event they arise. However, downsizing carries a risk 
and I think it is a mistake to expect that the Army--or any branch of 
Service--will be able to expand in time and in the way necessary to 
effectively address the full scope of future challenges. The fact is, 
we will expand as best as we can and as fast as we can, but I don't 
think there is any guarantee that will be fast enough. Do you agree 
that downsizing carries risks, and do you agree that, although 
reversibility is an important objective, it may still require a good 
deal of time and resources and that, for that reason, we need to be 
very careful about how we downsize the Army?
    Secretary McHugh and General Odierno. The Army cannot foresee every 
future challenge, so we must carefully balance capability and risk as 
we size the force to ensure that we are able to take whatever initial 
steps are required to ensure national security when challenges arise. 
The Army's most valued and valuable asset is its people. If we make the 
right choices on those we retain in service, based on experience, 
talent and potential, and rely on our exceptional training systems and 
technological base, we will be positioned to meet any emerging threat.

                           ARMY CYBER COMMAND

    92. Senator Chambliss. Secretary McHugh and General Odierno, Army 
Cyber Command's mission today is more critical than ever. As China and 
Russia continue to conduct cyber espionage against the United States, 
Army Cyber Command's role is important in providing robust cyber 
defense and offense capabilities for the United States. Can you comment 
on what you believe needs to be done by the Army in fiscal year 2013 
and across the FYDP to mitigate the risks and vulnerabilities to our 
systems both inside and outside the CONUS?
    Secretary McHugh and General Odierno. Operationalizing the 
Cyberspace domain remains a priority effort for the Army in fiscal year 
2013 and over the next FYDP. While our cyber warriors have done a 
valiant job defending our Army and DOD networks, the speed at which the 
threat evolves requires us to continually adapt our defenses through 
workforce development and technological advances. Our first line of 
defense begins with a trained workforce of cyber professionals. Our 
workforce must understand how our adversary operates, the technical 
methods by which they compromise our systems and networks, as well as 
how to counter those threats. As you can see, this requires our cyber 
warriors to have a keen understanding of threat tactics and methods to 
inform our cyber defense strategy. We also continue to develop 
efficient partnerships with the Intelligence, Law Enforcement, 
Counterintelligence and Signal Communities as cyberspace defense spans 
multiple jurisdictions. As we work to transform the cyber workforce, to 
defend our systems across the globe against a highly fluid threat we 
must also have the ability and flexibility to rapidly develop and field 
advanced cyberspace capabilities. The Army, led by the Assistant 
Secretary of the Army (Acquisitions, Logistics, and Technology) 
(ASA(ALT)), is working in parallel with the DOD CIO, as directed in the 
NDAA for Fiscal Year 2011, section 933, to define a process 
facilitating the rapid acquisition of capabilities that will allow us 
to better defend our networks and conduct full spectrum operations when 
directed. We are confident that in fiscal year 2013 and the FYDP, given 
the priority you have placed on cyberspace defense, we will be much 
better prepared to meet the challenges of training and equipping our 
cyber workforce to protect our networks and systems inside and outside 
of CONUS.

    93. Senator Chambliss. Secretary McHugh and General Odierno, what, 
if any, additional programs need to be set up within the Army or 
jointly across DOD to increase U.S. cyber security and prevent nations 
such as Russia and China from cyber espionage?
    Secretary McHugh and General Odierno. The Department of the Army 
recognizes the immediate and far-reaching impact of cyber espionage as 
it represents the most significant threat to our longstanding 
technological advantage. Our approach is coordinated among all relevant 
entities to include the Cyber, Law Enforcement, Counterintelligence, 
and Intelligence Communities. Investigations and responses to 
espionage, including cyber espionage, fall under the purview of the 
Deputy Chief of Staff for Intelligence and its Counterintelligence 
program; however, comprehensive response and prevention of cyber 
espionage requires close coordination across many functional areas. We 
have truly begun to shift focus from traditional cyber defense 
methodologies to an approach commensurate with expanding threats. 
Through continuous collaboration with U.S. Cyber Command (CYBERCOM) and 
the intelligence community, the Army is proactively pursuing advanced 
defense concepts and capability focused specifically on finding and 
mitigating cyber espionage activities. Continued investment into 
ground-breaking concepts and technologies will ensure we retain the 
technological edge critical to our national security. Additionally, the 
Army remains committed to realizing the goals set forth in the NDAA for 
Fiscal Year 2011, section 933. Through partnerships across government, 
we are developing efficient processes to facilitate the rapid 
acquisition of capabilities needed to counter evolving threats. We are 
confident that our coordinated approaches across the Army, DOD, and 
government will continue to improve in an effort to mitigate the 
impacts of cyber espionage.

    94. Senator Chambliss. Secretary McHugh and General Odierno, what 
are your thoughts on the ultimate, permanent location for the Army 
Cyber Command headquarters?
    Secretary McHugh and General Odierno. The Army reviewed a wide 
range of options for the final location of Army Cyber. Our analysis 
included costing, synergies with NSA and DOD's CYBERCOM, environmental 
requirements, military construction, facilities and stationing criteria 
that would best support the Army Cyber organization. At the top of our 
list are two installations--Fort Gordon and Fort Meade. We are 
preparing an Environmental Assessment to evaluate potential 
environmental, cultural, transportation, and socioeconomic impacts 
should the Command reside at Fort Gordon, GA or Fort Meade, MD. The 
Army is working with OSD in finalizing the exact organizational 
missions, subordinate commands, size and requirements through a 
detailed and documented analysis (concept plan). The final stationing 
decision and announcement remain pending until after approval of this 
concept plan.

                     LOSS OF TWO BRIGADES IN EUROPE

    95. Senator Chambliss. Secretary McHugh and General Odierno, DOD 
has announced that the Army will remove two brigades from Europe. 
Please comment on how this will affect our training, exercises, and 
potential operations with the NATO and European countries in general.
    Secretary McHugh and General Odierno. Forward-stationed forces in 
Europe are a visible symbol of the U.S. commitment to European security 
and the NATO Alliance, and enable the United States to maintain a 
strong leadership role in NATO and provide assurances to our allies and 
partners. The mix of capabilities offered by the two distinct types of 
BCTs remaining in Europe (Stryker, and Airborne) enables EUCOM to meet 
a wide array of engagement, building partner capacity, and 
interoperability objectives while supporting the full range of military 
operations needed for plausible European contingencies. The Army 
expects to allocate a BCT to the NATO Response Force (NRF) to support 
interoperability with NATO and plans to support two battalion task 
force-sized rotations annually to EUCOM to train with our allies for up 
to 2 months per rotation.

    96. Senator Chambliss. Secretary McHugh and General Odierno, in 
your view, will the Army's commitment to rotating a brigade from CONUS 
to Europe ameliorate the negative effects of losing these two brigades?
    Secretary McHugh and General Odierno. Yes, it will provide a 
broader opportunity for a number of units to work with NATO in a more 
targeted and beneficial way. The United States is rebalancing 
priorities and is seeking ways to improve U.S. presence in key regions 
to both ensure access and assure our allies. The drawdown to two BCTs 
will still allow EUCOM to maintain a flexible and easily deployable 
ground force to meet Article 5 and other NATO commitments, to engage 
effectively with allies and partners and to satisfy other security 
objectives. To demonstrate our commitment, the Army expects to allocate 
a BCT to the NATO Response Force (NRF) to support interoperability with 
NATO and plans to support two battalion task force-sized rotations 
annually to EUCOM to train with our allies for up to 2 months per 
rotation.
                                 ______
                                 
             Questions Submitted by Senator Roger F. Wicker

                   TROOP WITHDRAWAL FROM AFGHANISTAN

    97. Senator Wicker. Secretary McHugh and General Odierno, I do not 
see any tactical or diplomatic sense in your recent announcement about 
telling the enemy the date we are going to pull out troops. This gives 
the enemy an advantage on the ground and also eliminates any incentive 
for the Taliban to engage in substantive political negotiations with 
the Afghan Government. Our strategy in Afghanistan must be based solely 
on the conditions on the ground and not on the politics of the 2012 
election. How does DOD plan to execute this announced withdrawal while 
not further endangering the lives of our troops and while still meeting 
operational demands?
    Secretary McHugh and General Odierno. The Administration has 
announced that the U.S. forces surge recovery will be completed by 
October 2012. We are currently working with commanders in the field to 
determine additional force reductions thereafter. Plans for further 
reductions are being developed. However, future reductions will be tied 
to conditions on the ground and the ability of the ANSF to provide 
security as they assume the lead for security.
    After 2014, when the Afghans have assumed security lead across the 
country, the United States will continue to support the ANSF.

    98. Senator Wicker. Secretary McHugh and General Odierno, 
understanding that our force reduction in Afghanistan is conditions-
based, do you believe our reduction of 27,000 troops can be implemented 
smoothly?
    Secretary McHugh and General Odierno. Yes, it can be done. However, 
transitioning equipment will be difficult due to the recent closure of 
the Pakistan Ground Lines of Communication (PAKGLOC). The closure of 
the PAKGLOC caused challenges in moving equipment and incurred 
significant additional costs. Although the PAKGLOC recently reopened, 
it will be several months before those lines return to pre-closed 
levels.

    99. Senator Wicker. Secretary McHugh and General Odierno, 
understanding that transitioning from war and resetting the force takes 
time and money, what is your estimate of the length and cost for the 
Army to reset equipment and personnel?
    Secretary McHugh and General Odierno. Funding would be spread 
proportionally over a period of 2-3 years after all equipment is 
returned from Afghanistan as dictated by the volume of equipment 
currently undergoing reset, the pace of retrograde from theater, 
available capacity within the industrial base and the repair cycle 
times of major systems.
    There are many factors and assumptions affecting the total reset 
liability; at the end of fiscal year 2013 our remaining reset liability 
is approximately $10-$15 billion. There are three areas funded by this 
reset liability: $6-$8 billion for Depot Level repairs within the 
industrial base, $2-4 billion for field level repairs at units' home 
stations, and $2-$3 billion for procurement of battle losses and 
modification of select equipment in the course of reset.
    The Army conducts annual assessments of reset liability in 
coordination with the Office of the Secretary of Defense for Cost 
Assessment and Program Evaluation (OSD CAPE). The uncertainty in the 
reset liability calculation results from the equipment in theater 
today, retrograde to the CONUS and condition it will be in at the time 
of retrograde. An example from Operation New Dawn in Iraq is the Army 
transfer of a large quantity of M1114 HMMWVs to the Government of Iraq 
(GOI) that were surplus to Army requirements. These HMMWVs were 
refurbished in theater (not reset at CONUS facilities) and transferred 
to the GOI. However in Afghanistan, the local government cannot absorb 
comparable quantities of equipment, and it is more difficult and 
expensive to retrograde equipment. Also, the wear-and-tear on equipment 
in Afghanistan is greater than during the later years of operations in 
Iraq, which causes a higher percentage of equipment requiring depot-
level reset and a higher wash-out rate.

                            FORCE STRUCTURE

    100. Senator Wicker. Secretary McHugh and General Odierno, I 
continue to be concerned about the vitality of our NCO corps across all 
of our Services. The total of Active component soldiers expected to 
move up in the NCO ranks this year is 6 percent below last year. A 
projected total of 44,141 Active component soldiers are to advance to 
the ranks of sergeant through sergeant major in 2012. That is 6 percent 
below last year's total of 47,129 soldiers. Among the Army's efficiency 
plans is a force reduction of 27,000 troops beginning in 2015. 
Considering the current state of the economy, other Services, such as 
the Navy, have experienced record retention numbers. As a result, the 
Navy has had to implement programs for involuntary separation. While 
the Army currently has several incentive programs for voluntary early 
separation, is the Army also pursuing involuntary separations of 
soldiers to shape the force?
    Secretary McHugh and General Odierno. The Army will conduct end 
strength reductions using a gradual ramp over a 6-year period in order 
to allow natural attrition to absorb a majority of the reductions, 
while still maintaining our commitment to Afghanistan. The gradual 
reductions will also allow the Secretary and me the flexibility to 
evaluate each year whether we are moving at the right pace. Even with 
this gradual ramp, a key planning precept is that the Army will make 
the choices, to the greatest extent possible, on who will remain and 
who will separate. We will not sacrifice our investment in leader 
development and we will continue to shape policies to support the 
Army's leader development strategy. We will promote the best-qualified 
soldiers to meet requirements. Preliminary assessments indicate NCO 
requirements will decrease by 7.5 percent during the drawdown period 
(fiscal year 2014-fiscal year 2017 timeframe). Accordingly, because NCO 
promotions are a direct result of filling valid requirements, selection 
rates are expected to simultaneously decrease; but history tells us 
they will return to historical norms soon thereafter. Our preliminary 
strategy is to meet the fiscal year 2017 enlisted end-strength with 
precision (by grade and skill) while maintaining a high level of 
readiness and capability with an All-Volunteer Force.

    101. Senator Wicker. Secretary McHugh and General Odierno, if such 
involuntary separations are or become necessary, what is the Army doing 
to ease the transition for those soldiers and their families?
    Secretary McHugh and General Odierno. The Army Career and Alumni 
Program (ACAP) is the Transition Program that assists soldiers, family 
members, and DA civilian's transition from their status within the Army 
back to the civilian community. Involuntarily separated soldiers are 
congressionally mandated to receive the same preparation counseling as 
voluntarily separating soldiers. Additionally, soldiers, family 
members, and DA civilians (involuntarily or voluntarily) are entitled 
to participate in any of the transition assistance classes offered by 
ACAP. We are adjusting the ACAP program to meet the goals of the 
recently passed VOW to Hire Heroes Act and the recommendations of the 
Presidential Task Force. Attendance may take place in person at an ACAP 
center, live or cataloged classes online, or individually through the 
24/7 ACAP Call Center. ACAP Counselors also refer soldiers and their 
family members to other agencies and organizations that assist with 
Transition: The Department of Labor, Veterans Affairs, Military 
OneSource, The Small Business Administration, Helmets to Hardhats, and 
Student Veterans of America to name a few.
    These classes include, but are not limited to:

         Employment assistance/Job search skills
         MOS Crosswalk (Military skills to civilian skills comparison)
         Skills assessment
         Professional interest evaluation
         Resume and cover letter development and refinement
         Interview skills / Dress for success / Salary negotiation
         Relocation assistance
         Legal referrals (Wills, Power of Attorney, Estate planning, et 
        cetera before separation)
         Contact information for housing counseling assistance
         Education/Training
         Health/Life insurance
         Financial planning/Budget development
         Veteran benefits briefing
         Veterans Administration Disabled Transition Assistance Program 
        (VA DTAP)
         Department of Labor Employment Workshop
         Physical and mental health well being

    The Army is also, utilizing the H2H as its interim employment 
application/tool www.H2H.jobs to provide one primary location where 
soldiers of all components, veterans, and family members can connect 
with private industry employment opportunities. This application is 
web-based and able to translate military occupational skills (MOS), 
provide career path exploration, upload resumes, allow customized job 
searches, enable employers to also search for Veterans, and provide 
performance metrics. H2H will eventually be included on eBenefits, the 
single portal for transition benefits selected by the DOD-VA Veterans 
Employment Initiative Task Force (www.eBenefits.va.gov)

                           MILITARY EDUCATION

    102. Senator Wicker. General Odierno, there is a growing trend 
within DOD to conduct joint military education. However each military 
department has its own military academy and own war college. I continue 
to be concerned about the redundancy and lack of efficiency for our 
troops' professional military education. What are the operating costs 
for the Army War College and U.S. Military Academy (USMA)?
    General Odierno. The operating costs for the Army War College were 
$13.7 million for fiscal year 2011. These costs represent faculty and 
staff salaries, student and faculty travel, contractual and supply 
costs for teaching departments, registrar and library, supporting 1,073 
students of the college's resident and distance education programs. The 
operating cost for the USMA was $121 million for fiscal year 2011.

    103. Senator Wicker. General Odierno, what measures are being 
implemented to ensure efficiency and reduce redundancies among the 
Services?
    General Odierno. The overarching responsibility for ensuring 
efficiency and reducing redundancy among the services rests with OSD 
and the Joint Staff. The Army fully participates in a number of 
different bodies that meet to ensure DOD is buying capabilities the 
Joint Force needs to meet current and anticipated threats. Groups such 
as the Deputy's Management Advisory Groups, chaired by the Deputy 
Secretary of Defense, and the Joint Requirements Oversight Council 
(JROC), chaired by the Chairman or the Vice Chairman of the Joint 
Chiefs of Staff, review programs across the Department to ensure that 
we have neither redundancies nor capability gaps. The Army leadership 
is fully vested in these bodies. Within the Army, ongoing comprehensive 
capability portfolio reviews have identified gaps and redundancies and 
the Army has taken action to close the gaps and eliminate the 
redundancies. Additionally, there are a number of groups that meet at 
lower levels to identify and track efficiencies and cost savings 
throughout the Department. For example, the OSD Chief Management 
Officer (CMO) leads semi-annual reviews in January and July, during 
which all Service Deputy CMOs and Assistant Secretaries for Financial 
Management provide updates on the status of their Track 1 efficiencies, 
taken during development of the fiscal year 2012 budget request.

                        POST-MILITARY COMMISSION

    104. Senator Wicker. Secretary McHugh, often the time between 
receiving a commission to when the soldier reports for duty can be a 
lengthy period of time, especially in the aviation community. My staff 
has been working with the OSD staff on determining cost and schedule 
delays for newly commissioned military officers. How much money is 
being spent by the Army on personnel between their post-commission and 
pre-specialty training?
    Secretary McHugh. Little to no money is spent by the Army on 
personnel between post-commission and pre-specialty training (BOLC-B). 
Most officers receive their commissions in the late spring/early summer 
as a result of USMA and/or college graduation. The Army's school houses 
cannot accommodate the entire population at that time, but USMA and 
Officer Candidate School (OCS) officers, who come on active duty orders 
immediately upon commissioning, are given priority for the earliest 
available branch training course. If there are delays, they are often a 
result of school house capacity, and instructor and equipment 
availability; some officers may elect to delay training due to various 
reasons, such as extended leave (up to 90 days).
    Reserve Officer Training Corps (ROTC) graduates typically have the 
longest wait time between commissioning and branch training, but these 
officers are not receiving pay and allowances while they wait, with a 
few exceptions. A select number of ROTC graduates volunteer to come on 
active duty prior to their branch training to serve as Gold Bar 
Recruiters or to support cadet training programs such as the Leader 
Training Course and the Leader Development Assessment Course; these 
officers are filling an Army need. A handful of ROTC graduates qualify 
for immediate accession through the Green-to-Gold Program but, like 
USMA and Officer Candidate School, they are given priority for the 
first available BOLC-B class.
    The aviation community especially is affected by wait times due to 
the complexity and length of the training required for aviation 
officers. Even so, the Army has succeeded in getting the average wait 
time for aviation officers below the Army average. The Army's average 
is 112 days and the Aviation average is 103 days.
    Assessment of a cost of handling the annual accession surge is 
difficult to calculate because of the number of training pipelines, the 
varied number of valid and meaningful assignments during the wait time, 
and the number of personnel within those pipelines who may be delayed 
for personal or Army needs (leave, recruiting and training support, et 
cetera) rather than pipeline inefficiencies. The true ``cost'' of 
lengthy periods of time between commissioning and the start of BOLC-B 
is not money, but unit readiness in that the officer's report date to 
an operational unit where he/she will lead soldiers is delayed by the 
amount of time he/she has to wait for a BOLC-B class to start.

    105. Senator Wicker. Secretary McHugh, what measures has the Army 
implemented to reduce the amount of time and costs associated with this 
down time?
    Secretary McHugh. Headquarters, Department of the Army (HQDA), and 
Headquarters, Training and Doctrine Command (TRADOC), organize class 
schedules to maximize the amount of training during the summer surge 
period and reduce the wait time of newly commissioned officers who are 
commissioned in that time period. All TRADOC schools make every effort 
to schedule as many classes as possible to have these commissioned 
officers report between the third weekend in May and the last day of 
September. As directed by TRADOC, at least one BOLC-B class is 
scheduled to report during the early to mid-July time period to support 
USMA graduates. To accommodate December college graduates, a class in 
January of each year is scheduled.
    The HQDA staff, from the Personnel (G-1) and Training Directorates 
(G-37), directs the allocation of seats during the yearly BOLC-B 
scheduling conference and monthly BOLC-B seat usage teleconferences. In 
fiscal year 2011, HQDA and TRADOC scheduled 48.1 percent (4,930 of 
10,243 officers) of the yearly training load between the mid-May and 
late-September summer surge. For fiscal year 2012, 48.9 percent (4,673 
of 9,558 officers) of the yearly training load was scheduled in the May 
to September window. In fiscal year 2012, the HQDA staff noted that 
funding and/or end strength constraints may cause some BOLC-B seats to 
go unfilled in the fiscal year 2012 summer period.
    Three important notes to consider: one, TRADOC monitors attendance 
at their BOLC-B branch schools and is working aggressively to fill any 
of the unused Reserve component seats with Active Army lieutenants; 
two, HQDA resources the training program to train the BOLC-B 
requirement over 12 months; and three, TRADOC is limited by resources 
in the amount of seats that can be scheduled in the summer surge window 
of May through September.

                               PARACHUTE

    106. Senator Wicker. General Odierno, what is the Army's capacity 
requirement for personnel parachute systems?
    General Odierno. Based on the current 2012 Army force structure, 
the total Army requirement for personnel parachutes consists of 
approximately 40,000 model T-11 static line parachute systems and 
approximately 20,000 model MC-6 maneuverable canopy parachute systems. 
This requirement will provide sufficient personnel parachute systems to 
support airborne training, contingency, and combat operations for up to 
six airborne brigades and appropriate Special Operations Force assets, 
including U.S. Army Rangers and Special Operations Teams. There are 
currently three manufacturers on contract to produce these T-11 
parachutes and four manufacturers of the MC-6 parachutes. These 
manufacturers will fulfill the Army requirements and have the capacity 
to produce additional parachutes if needed.

    107. Senator Wicker. General Odierno, does the FYDP contain any 
specific plan by the Army to pursue competitive or sole-source 
procurement of parachute systems or parachute items?
    General Odierno. Yes, the Army plans to procure parachute systems 
and items on competitive contracts to companies that have been 
certified to manufacture parachutes for the U.S. Government within the 
FYDP.
    The Army will pursue competitive procurement of Joint Precision 
Airdrop Systems 2,000 pound capability; 10,000 pound capability; and 
personnel parachutes in fiscal year 2013 using Other Procurement, Army 
funds. In the next 12 months, we will award several competitive 
contracts for these Aerial Delivery items.
    The Army has no specific plans for sole source contracts for 
parachute systems.

                          EXTERNAL FUEL SYSTEM

    108. Senator Wicker. Secretary McHugh, ground platforms, 
specifically the Army's BFV as part of the Bradley Urban Survivability 
Kit III effort, have implemented enhancements to reduce injuries and 
deaths due to fires. What measures or programs have been implemented to 
improve survivability for other vehicles like MRAP vehicles and 
Strykers?
    Secretary McHugh.
Mine Resistant Ambush Protected Vehicles:
    The MRAP Joint Program Office has continually improved the 
survivability of the MRAP vehicle fleet (to include the MRAP-All 
Terrain Vehicle (M-ATV)) to meet evolving threats. Examples of 
capabilities integrated into MRAPs/M-ATVs to reduce injuries and deaths 
due to fires include:

    (1)  Crew Automatic Fire Extinguisher System (AFES)
    (2)  Engine AFES
    (3)  Tire AFES
    (4)  Fuel Tank

     a.  Fuel Tank AFES - Most variants
     b.  Fuel Tank Fire Suppression Blanket - Some variants
     c.  Self-Sealing Fuel Tank - Some variants
     d.  Manual Fuel Cut-off Switch - Some variants

    (5)  Manual Backup Activation to the AFES
    (6)  Multiple Planes of Egress (Side, Rear, Top, Vehicle Emergency 
Egress Windows)
    (7)  First Responder Universal Combat Lock Tool
    (8)  Egress Illumination Tape

    Additionally, the following capabilities improve both force 
protection and survivability by mitigating the effects of the threats 
they are designed to address:

    (1)  MRAP V-Hull design and crew compartment standoff
    (2)  Rocket Propelled Grenades (RPG) Defeat Systems (Bar Armor or 
RPG Net ``bird cage'' surrounding vehicle)
    (3)  Explosively Formed Penetrator (EFP) Armor Kits
    (4)  Multi-Threat EFP Armor Kits
    (5)  Thrown Object Protection System Kits
    (6)  M-ATV Underbody Improvement Kit-2
    (7)  Self-Protection Adaptive Roller Kit System (SPARKS) Bracket 
that allows for integration of:

     a.  SPARKS/SPARKSII Mine Roller
     b.  Passive Infra-Red Defeat

    (8)  Various Electronic Warfare Components
    (9)  Boomerang Counter Sniper Detection System
    (10)  Various Route Clearance Capabilities (Interrogator Arm, Air 
Digger, et cetera)
Stryker:
    The most significant force protection upgrade for Stryker has been 
the incorporation of the Stryker Double-V Hull. This improvement has 
greatly reduced the vulnerability to soldier injury due to under-body 
blast events. Stryker Reactive Armor II (SRAT II) is another 
improvement intended to reduce vulnerabilities to RPG type threats. 
Testing is projected to be completed, including final modeling and 
simulation pending successful testing, SRAT II will then be available.
    From a fire protection perspective, the initial Stryker design was 
inherently survivable by integrating external fuel tanks, and ensuring 
other flammable fluids were physically separated from the crew 
compartment. Additionally, the following measures were implemented to 
reduce fire hazards in other parts of the vehicle:

    (1)  Tire Fire Suppression Kit
    (2)  Manual Activation to the AFES
    (3)  Manual Fuel Cut-off Switch
    (4)  Internal Fuel Tank Shut-off

    Additionally, the following enhancements improve both force 
protection and survivability by mitigating the effects of the threats 
they are designed to address:

    (1)  SLAT (steel ``bird cage'' surrounding vehicle)
    (2)  Stryker Reactive Armor Tiles
    (3)  Common Ballistic Shield
    (4)  Drivers Enhancement Kit
    (5)  Hull Protection Kit
    (6)  Mine Roller Adapter Kit
    (7)  Blast Mitigation Kit

    109. Senator Wicker. Secretary McHugh, how long before additional 
measures can be implemented to improve the survivability of the 
soldiers?
    Secretary McHugh. The Army continually improves the survivability 
of its vehicle fleet to meet evolving threats. For MRAPs, the Caiman 
Multi-Terrain Vehicle will be fielded with external fuel protection in 
the third quarter of fiscal year 2013. For Stryker's, one measure to 
improve survivability currently in testing is the Stryker Reactive 
Armor II (SRAT II). This improvement is intended to reduce 
vulnerabilities to RPG type threats. The testing, to include live fire 
and modeling and simulation is scheduled to be completed in May 2013. 
Materiel release to support fielding is planned for November 2013, but 
if there is an urgent requirement, SRAT II kits can be fielded as early 
as May 2013 (after completion of testing).

                     SABOTED LIGHT ARMOR PENETRATOR

    110. Senator Wicker. Secretary McHugh, the fiscal year 2013 budget 
request calls for the Army to stop production of 50 caliber Saboted 
Light Armor Penetrator (SLAP) ammunition. Previously, in the late 
1990s, the Army stopped production of SLAP ammunition. In fact, 
production stopped in 1998 and did not begin again until 2002 at low-
rate production and at full-rate production in 2003. With the Army 
heading toward a similar stop and restart situation, please provide the 
details on the costs incurred by the Army during the 1998 shutdown and 
2002 restart.
    Secretary McHugh. The SLAP cartridge is assembled in a linked 
configuration; four M903 SLAP cartridges to one M962 SLAP tracer 
cartridge, for use in the M2 Heavy Barrel machine gun. The Army 
completed adoption of this configuration on November 12, 1996, with the 
Marine Corps' collaboration. The SLAP was procured through a fixed 
price contract with the Olin-Winchester Corporation. When production 
was shutdown in fiscal year 1998, there were no additional costs 
incurred by the Army.
    When production of the SLAP was restarted, the unit cost was 
commensurate with the previous contract, when accounting for inflation. 
The Army incurred $75,000 in costs to recertify the production line 
(first article test) in 2002.

    111. Senator Wicker. Secretary McHugh, what did these costs 
include--for example, did this include rebuilding the production line, 
recertification, and retraining?
    Secretary McHugh. The Army's direct cost for restarting the SLAP 
production in 2002 was $75,000. These funds supported a standard first 
article test, which is used to determine whether the contractor is 
ready to resume production. As part of this procedure the contractor 
has to demonstrate through measurement and testing that their 
production line and operators are ready to resume production.

    112. Senator Wicker. Secretary McHugh, from your experience with 
the 1998 shutdown, how did this affect the second- and third-tier 
subcontractors?
    Secretary McHugh. Olin-Winchester had one key second-tier 
subcontractor in 1998 which produced the SLAP. During that time period 
the vendor was able to switch to other products to maintain their 
viability. There were no third-tier impacts that could be identified.

                           ARMED AERIAL SCOUT

    113. Senator Wicker. Secretary McHugh, the expected requirement for 
the Armed Aerial Scout (AAS) is that the aircraft be capable of 
operating at 6,000 feet and 95 degrees. This performance requirement 
was validated by the August 17, 2011, Army study titled, ``An 
Examination of Temperature and Altitude Design Point Criteria for Army 
Helicopters.'' Do those requirements remain valid? If not, why?
    Secretary McHugh. Yes, the 6,000 feet/95 degrees Fahrenheit (6K/95) 
performance requirement remains valid as a desired capability for the 
AAS. On 28 April 2012 the Army Aviation Program Executive Office 
released an AAS Request for Information (RFI) that will assess 
technology readiness and capabilities available in industry to inform 
an achievable and affordable material solution. The RFI specifically 
highlighted that the Army is seeking an aircraft that can operate at 
6K/95 with a full combat load.

    114. Senator Wicker. Secretary McHugh, can the OH-58D Kiowa Warrior 
meet those requirements today?
    Secretary McHugh. No, the current OH-58D cannot meet the 6,000 
feet/95 degrees Fahrenheit (6K/95) requirement today. A Kiowa with a 
basic combat load is only able to effectively operate with a 4,000 
feet/95 degrees Fahrenheit (4K/95) capability. The ongoing Cockpit and 
Sensor Upgrade Program (CASUP) addresses technological gaps of the 
Kiowa but it does not improve the performance of the Kiowa. To increase 
performance, the Kiowa Warrior will require an extensive upgrade to the 
engine, transmission and rotor systems.

    115. Senator Wicker. Secretary McHugh, will the Kiowa Warrior meet 
those requirements under the upgrade programs currently provided for in 
the President's budget request?
    Secretary McHugh. No, the current programs for the Kiowa Warrior in 
the President's budget will not improve the aircrafts performance to 
achieve 6K/95. The Kiowa Warrior has two initiatives within the current 
budget. The first is an approved program of record known as the CASUP. 
CASUP addresses the technological gaps of the Kiowa Warrior; however it 
does not include upgrades to the engine, transmission or rotor system 
which are required to increase performance. The second initiative is 
funding submitted in the fiscal year 2013-2017 Program Objective 
Memorandum (POM) for a SLEP. The SLEP is designed to replace the 40 
(plus) year old metal structure of the aircraft and replace it with new 
metal to allow the Kiowa to remain in service for another 20-30 years. 
The SLEP will not increase the performance of Kiowa as it also does not 
upgrade the engine, transmission or rotor system.

    116. Senator Wicker. Secretary McHugh, unfortunately, the failures 
of Comanche and ARH-70 Arapaho have forced the OH-58D to remain 
operational far beyond the intended useful life. Concerned about the 
limited capability of the OH-58D, Congress provided the Army with funds 
to conduct an analysis of alternatives (AOA) needed to establish an 
armed scout replacement program. At the Army's request, funds were also 
provided to conduct an additional RFI and voluntary flight 
demonstration (VFD) this year. Industry is making costly preparations 
to participate in these activities with little guidance for how the 
demonstration will be conducted or how aircraft will be objectively 
judged, creating reservations about the fairness and value of this 
evaluation. What are the timeline and schedule of the RFI and VFD?
    Secretary McHugh. The Army released the AAS RFI on April 25, 2012. 
Industry must respond to the RFI by July 2, 2012. The first VFD occurs 
the week of June 25, 2012. The remaining flight demonstrations will 
begin in August 2012 with a completion date of October 19, 2012. The 
purpose of the RFI and VFDs is to assess the current state of 
technology within industry. The Army will not compare individual 
results but rather assess their capability against the capability gaps 
identified in the initial capabilities document.

    117. Senator Wicker. Secretary McHugh, what are the operational 
requirements the test aircraft have to meet?
    Secretary McHugh. There are no operational requirements for the 
VFD. The RFI and VFD will assess technology readiness and capabilities 
available in industry to inform an achievable and affordable materiel 
solution decision.

    118. Senator Wicker. Secretary McHugh, what are the key performance 
parameters of the demonstration, including high/hot hover out-of-ground 
effect, endurance, and payload requirements?
    Secretary McHugh. There are no Key Performance Parameters (KPPs) 
for the demonstration. The VFD and assessment of technology in industry 
will help inform the requirements process. If the Army establishes an 
AAS program of record, the RFI and VFD will inform future KPPs in the 
Capabilities Development Document.

    119. Senator Wicker. Secretary McHugh, how will the test aircraft 
be instrumented in order to measure and capture performance data to 
allow for rigorous comparative analysis?
    Secretary McHugh. The Army will not compare individual results but 
rather assess their capability against the capability gaps identified 
in the initial capabilities document. The purpose of the RFI and VFD is 
to assess the current state of technology within industry. Results will 
be captured according to each individual respondent's level of 
participation and level of instrumentation. The Army will use 
Experimental Test Pilots that are graduates of the Naval Test Pilot 
School. The pilots will execute maneuvers that are voluntarily 
agreeable to the industry participant as outlined in the RFI. These 
maneuvers will be conducted in accordance with standard test techniques 
and normalized to standard atmospheric conditions.

    120. Senator Wicker. Secretary McHugh, how will the results of the 
VFD be captured and normalized so that all entrants are measured by the 
same rules?
    Secretary McHugh. The Army will not compare individual industry 
responses against each other. Individual responses to the RFI and the 
demonstrated capabilities will be analyzed to assess the performance, 
cost and schedule attributes needed to procure an improved capability. 
The methodology used to determine the capability tradeoffs is 
consistent with the approved methodology used during the AAS Analysis 
of Alternatives. The requested maneuvers will be executed in accordance 
with standard test techniques and normalized to standard atmospheric 
conditions. The Army will de-brief industry members at the conclusion 
of their VFD and industry participants will have the opportunity to 
update their RFI response.

    121. Senator Wicker. Secretary McHugh, how will the information 
derived from the RFI and VFD be used to make an acquisition decision?
    Secretary McHugh. The Army is conducting market research by 
releasing a RFI, conducting discussions with industry, and giving 
industry an opportunity to demonstrate potential solutions to help 
determine what technologies are available from industry that may 
contribute to a material solution option. The Army does not intend to 
compare individual results from the VFD against each other, but, rather 
assess their capability against the capability gaps identified in the 
initial capabilities document. The end state is to identify an 
affordable, achievable, moderate risk materiel solution option based on 
the current state of technology in the market.

                             KIOWA WARRIOR

    122. Senator Wicker. General Odierno, the Army states that the 
Kiowa Warrior SLEP is the basis for comparison. However, I am not aware 
that a SLEP has been established or approved and there is no SLEP in 
the fiscal year 2013 budget request. Is a Kiowa Warrior SLEP the 
baseline for comparison? If not, what will be the baseline for 
comparison?
    General Odierno. The Army will not compare individual results but 
rather assess industry capabilities against the capability gaps 
identified in the initial capabilities document. In the conduct of the 
AAS Analysis of Alternatives, the program of record OH-58F CASUP 
aircraft was utilized as the base case.
    The Kiowa Warrior (KW) SLEP is referenced as Recapitalization 
(RECAP) in the budget exhibits. The KW fiscal year 2013 budget request 
contains funding to execute a SLEP/RECAP alternative if the Army 
decides against a new material solution for AAS. The Army has not yet 
approved a KW SLEP/RECAP or a specific detailed plan related to that 
alternative.

    123. Senator Wicker. General Odierno, what is the baseline 
configuration, cost (acquisition and life-cycle), and schedule for a 
Kiowa Warrior SLEP alternative for comparison?
    General Odierno. The Army will not utilize the RFI and VFD to 
conduct a comparison. The release of the RFI is intended to allow the 
Army to conduct market research and assess the state of technology. The 
configuration for a Kiowa Warrior SLEP/RECAP has not been defined, but 
the concept includes recapitalization of the airframe and major 
components. There is currently no formal or approved Army Life Cycle 
Cost Estimate for an OH-58F SLEP/RECAP program. In the conduct of the 
Analysis of Alternatives, the program of record OH-58F CASUP aircraft 
was utilized as the base case. The CASUP program of record completes 
fielding in fiscal year 2022 with an estimated program acquisition cost 
(Research, Development, Test & Evaluation/Army Procurement Agency) of 
$1,915.5 million (Base Year 2010 Dollars) and life-cycle cost of 
$8,776.8 million (Base Year 2010 Dollars). An OH-58F SLEP/RECAP 
alternative would be additive to these costs.

                                 OH-58D

    124. Senator Wicker. Secretary McHugh, Congress continues to 
support the development of necessary upgrades to the OH-58D. These 
upgrades have become more complex and costly with each new budget 
request. It is increasingly important that restraint is exercised to 
prevent unnecessary investments in the legacy platform until the Army 
determines the actual requirements for AAS and identifies the best 
platform available to achieve those requirements. Can Congress expect a 
final acquisition decision on the AAS program prior to any further 
consideration of improvements to the program of record?
    Secretary McHugh. A decision on a course of action for the AAS 
requirement should be made by March 2013. Currently, the Army has a 
defined requirement for the OH-58F CASUP and there are no intentions to 
increase the scope of that program prior to an AAS decision. The OH-58D 
fleet will continue to require sustainment efforts related to 
obsolescence and weight reduction in order to maintain readiness safety 
margins, and operational needs. Even with a decision to pursue an AAS 
solution, the KW is anticipated to remain in the Army fleet for 
approximately 20 more years.

    125. Senator Wicker. Secretary McHugh, will you prioritize the AAS 
evaluation and provide the oversight required to make an acquisition 
decision for AAS that is incorporated in the fiscal year 2014 budget 
plan?
    Secretary McHugh. The AAS RFI and VFDs are an Army priority. To 
ensure proper oversight, the RFI and VFDs will be conducted consistent 
with the DOD Acquisition Process. The data attained from the RFI and 
demonstration will inform future budget decisions to include the fiscal 
year 2014 budget plan.
                                 ______
                                 
             Questions Submitted by Senator Scott P. Brown

                                NETWORK

    126. Senator Brown. Secretary McHugh, in terms of modernization, is 
the network still the Army's top acquisition priority?
    Secretary McHugh. The Network remains the Army's top acquisition 
priority. With expectations of tighter budgets and a still very active 
threat environment, the Army will have to produce a force that is 
smaller yet more capable. The Network is the core of that smaller, more 
capable Army.

    127. Senator Brown. Secretary McHugh, how have the Network 
Integration Evaluations (NIE) informed Army decisionmaking about 
various systems like the Warfighter Information Network-Tactical (WIN-
T) and the Joint Tactical Radio System (JTRS)?
    Secretary McHugh. The NIEs allow the Army to reduce risk associated 
with network programs by presenting a challenging environment that 
provides a means to gain critical operational and technical insights 
regarding the integration of new capabilities into the network. In the 
case of WIN-T and JTRS programs, the NIE allowed the program managers, 
test community, and the operational units to become very familiar with 
operating the equipment or understanding the systems complexity by 
identifying areas requiring emphasis, such as challenging operator-
level individual or collective training tasks. The NIE also provided 
the ability to develop or modify Tactics, Techniques, and Procedures 
(TTP), which enhance the execution of the actual Initial Operational 
Test and Evaluation (IOT&E) event. As a result of NIE 12.1, the unit's 
ability to understand the overall network complexity, with the 
additions of WIN-T and JTRS capabilities, was improved. This also 
enhanced the unit's ability to rapidly install and maintain the 
equipment, thus contributing to a successful IOTE as part of NIE 12.2.

                           STRATEGIC GUIDANCE

    128. Senator Brown. General Odierno, as part of the President's 
strategic guidance, the Army plans to enhance its activities in the 
Asia-Pacific region. What does that mean?
    General Odierno. The United States serves as a critical guarantor 
of stability in the Asia-Pacific region, and a robust joint military 
presence is an important part of the broader regional strategy. The 
Army has a critical role to play in the region not only as an essential 
component of deterrence against aggression, but also in ensuring access 
to, building capacity in, and enhancing our partners' resilience. Army 
engagement enhances partner readiness for the disasters that impact the 
Asia Pacific and plays a critical role in preparing our partners for 
security challenges. Asia's militaries remain dominated by armies, 
making the U.S. Army's relationships with its regional partners a vital 
resource for a range of situations. Army engagement is also the 
foundation of our commitments to our treaty allies in the region, 
Australia, South Korea, Japan, Thailand and the Philippines. As we 
enhance activities in the Asia-Pacific region, the army will build on 
the strong foundation established with these allied partners, but also 
seek opportunities to engage and cooperate our other partners like 
Indonesia, India, and China.
    The most visible change will come as an increase in the quantity 
and quality of bilateral and multilateral Army-to-Army engagements in 
the region. The Army will not only make the most of traditional 
exercises and training to strengthen our partnerships by bringing new 
capabilities and approaches to training, but also focus on enhancing 
the resilience of our allies and partners for them to better respond to 
the regrettably frequent natural disasters.
    We plan to increase exchanges with other forces, better align our 
foreign assistance programs with additional engagement opportunities, 
and explore a range of other changes, from new command-and-control 
structures that would enhance responsiveness to modifications in how 
Army forces in the region are provisioned to increase their readiness. 
The need for U.S. Armed Forces, and the Army in particular, to provide, 
planning, logistical, command-and-control, and equipment support to 
civil authorities in the event of natural disasters continues to be 
demonstrated regularly and is unlikely to diminish. For example, the 
Army Corps of Engineers represents indispensible expertise and an 
invaluable resource relating to disaster response that the region 
desperately needs. Of course, even as the army increases its activities 
in the Asia-Pacific region, it will retain substantial responsibilities 
elsewhere in the world. The posture of the U.S. military in the Middle 
East is critical to maintaining regional stability there. To maintain 
U.S. influence, particularly if additional U.S. naval assets will be 
devoted to the Pacific, the army will continue to need some combination 
of prepositioned equipment and a permanent and rotational presence 
there throughout the next decade.

    129. Senator Brown. General Odierno, given that 7 of the world's 10 
largest armies are located in the region, what level of ground forces 
do you anticipate will be necessary throughout PACOM AOR to implement 
the President's new strategic guidance?
    General Odierno. The Army currently has a robust force posture in 
the PACOM AOR and a Total Army with the adaptability and depth to 
``Prevent, Shape, and Win'' in the Asia Pacific. Our expeditionary Army 
must remain capable of supporting the requirements of Joint Force 
commanders around the globe, and our force generation model ensures 
that capability, and at the same time ensures the Army's ability to 
implement the new strategic guidance. The Army has committed to making 
Mission Command and other capabilities available to PACOM that have for 
nearly the past decade been focused on the Nation's priorities 
elsewhere. These include a regionally assigned and available 
Operational Joint Force Land Component Command headquarters capable of 
meeting major operational plan requirements; assigned and available two 
and three star Joint Task Force capable headquarters providing the 
ability to execute missions from joint/multinational Humanitarian 
Assistance/Disaster Relief through operational requirements; and an 
exportable, Combat Training Center-like joint/multinational training 
and exercise capability along with prepositioned equipment sets in 
theater. The Army is investigating the establishment of an 
expeditionary collective training capability that will enable 
sustainment of a high state of readiness of regionally assigned and 
forward stationed combat formations without enduring the cost of 
sending them to CONUS Combat Training Centers. Such a capability will 
keep Army units training in the Pacific and should significantly 
advance the level of coalition training with key regional partners. The 
Army is also reviewing how best to support PACOM's Integrated Air and 
Missile Defense (IAMD) in protecting U.S. interests and partners. More 
broadly, the Army continues to develop the ability to respond to 
Geographic Combatant Commanders' requirements, including PACOM, by 
providing Regionally Aligned Forces through a rotational, progressive 
force generation model. Regional training and Army exercises continue 
to evolve in support of PACOM's Theater Strategy and Theater Campaign 
Plan, and seek to more deeply engage key partner armies to pursue 
mutual interests in preserving regional stability.

    130. Senator Brown. General Odierno, have you and your Marine Corps 
counterparts worked through this?
    General Odierno. We are in the early planning stages of determining 
how to support the new strategy to enhance activities in the Asia-
Pacific region, home to 7 of the world's 10 largest armies. We are 
working with the U.S. Marine Corps (USMC) and the other Services to 
enhance ground force activities, not only in the Asia-Pacific region, 
but globally. We have several forums to synchronize Army service-
specific and USMC-specific contributions to the Joint Fight. Service 
Vices participate as members of the Joint Requirements Oversight 
Committee. Service Chiefs as members of the Joint Chiefs of Staff 
confer on how to manage defense activities and advise the President. In 
addition, the Army and the USMC meet regularly in two other forums--an 
Army-USMC Warfighter Talks program and an Army/USMC Board process--that 
enable us to synchronize employment of Service/Corps specific 
contributions to the Joint Fight.

                             RIFLEMAN RADIO

    131. Senator Brown. General Odierno, can you explain the importance 
of the Rifleman Radio and what drives its key requirements?
    General Odierno. The Rifleman Radio enhances the ability of 
dismounted leaders (Platoon and below) to synchronize small unit 
maneuver and exercise command and control. This combat-proven radio 
extends our mission command networks to the squad and team leader 
level, allows leaders, for the first time, to view the locations of 
their individual soldiers as part of the Common Operating Picture, and 
provides a National Security Agency approved voice communication 
capability. The Rifleman Radio leverages the JTRS developed Soldier 
Radio Waveform, while providing a lightweight capability that addresses 
the need for greater survivability/accountability and a reduction in 
fratricide. Ultimately, the true value of the Rifleman Radio is its 
ability to leverage a small size, lightweight and low power consumption 
network capability to enable effective decision making at the tactical 
edge.

    132. Senator Brown. General Odierno, is the current program of 
record achieving those requirements?
    General Odierno. The Rifleman Radio (RR) is achieving the key 
requirements of Intra-Squad Communication, Soldier Location, and Net 
Readiness. The RR was employed in a desert environment, urban 
environment and an environment with heavy vegetation during its Initial 
Operational Test and Evaluation at NIE 12.1. The RR enhances small unit 
operations by allowing leaders to issue voice commands, send text 
messages, place way points on the position location map application and 
share individual Position Location Information of team members using 
the networking Soldier Radio Waveform, all of which increases 
survivability, lethality and accountability while reducing fratricide. 
Warfighters who used the RR in both Test and Operational environments 
praised its ability because it allows them to communicate effectively 
using a small, lightweight, and low power-consuming radio.

    133. Senator Brown. General Odierno, when will the Army actually 
field these radios to soldiers in the field?
    General Odierno. To date, approximately 700 RR systems have been 
fielded in small increments via Operational Needs Statements to the 
75th Ranger Regiment/U.S. Army Special Operations Command (USASOC) to 
support combat operations, the 173rd Airborne BCT and the 1st BCT, 2nd 
Armored Division supporting the NIE. In fiscal year 2013, the Army 
expects to continue the fielding of this critical capability to BCTs, 
as well as providing additional assets to USASOC.

            EVIDENCE-BASED, ALTERNATIVE THERAPY INITIATIVES

    134. Senator Brown. General Odierno, can you talk about the Army's 
evidence-based, alternative therapy initiatives and how they are 
integrated into the Army's resiliency training programs?
    General Odierno. The Comprehensive Pain Management Campaign Plan 
(CPMCP) includes non-traditional approaches. Interdisciplinary pain 
teams are being developed at military medical treatment facilities to 
provide holistic pain care that integrates the conventional medical 
modalities with these complementary and alternative medicines the 
therapies. As part of the Army's resiliency training program, the CPMCP 
includes acupuncture, bio-feedback, massage therapy, yoga, chiropractic 
care, and counseling.
    The Comprehensive Soldier Fitness (CSF) Program focuses on helping 
soldiers stay healthy while they face the challenges that are common to 
Army life. A preliminary evaluation completed by Army and civilian 
scientists showed that soldiers who received CSF training reported 
higher levels of resilience and psychological health over time than did 
soldiers who did not receive the training. This training was more 
effective for 18-24 year olds than for older soldiers.
                                 ______
                                 
               Questions Submitted by Senator Rob Portman

                          TANK INDUSTRIAL BASE

    135. Senator Portman. General Odierno, please provide insight to 
the current Abrams tank industrial base. Specifically, there has been 
mention of an opportunity to bring more foreign work back to the United 
States. If so, how much of the industrial base would this work sustain?
    General Odierno. The Army is confident current and pending Abrams 
Tank FMS opportunities will help sustain the Abrams tank industrial 
base and bring manufacturing work to ANAD, Anniston, AL, and the JSMC, 
Lima, OH. They include:

         Country of Egypt: Increment 10 tank hardware (125 tank kits) 
        is under contract; two tank kits a month will be shipped to 
        Egypt through June 2013. Increment 11 tank hardware (125 tank 
        kits) is under contract; four tank kits a month will be shipped 
        to Egypt from September 2012 through April 2015.
         Kingdom of Saudi Arabia (KSA) ARNG: KSA ARNG Light Armored 
        Vehicle (LAV) turret structures are under contract; 245 LAV 
        turrets are to be delivered through 2013.
         Kingdom of Saudi Arabia (KSA): The initial FMS case (Phase I) 
        will recapitalize approximately 143 Abrams M1A2 KSA tanks to 
        the M1A2S configuration. Manufacturing work will be conducted 
        at the ANAD and the JSMC. The production schedule is 
        anticipated to be June 2013 to March 2015. A follow-on effort 
        (Phase II) will provide an additional 130 KSA tank conversions 
        and is anticipated to be approved in early 2013. The production 
        schedule is anticipated to be March 2015 to September 2016.
         Country of Greece: The potential FMS case is currently 
        working. The Army anticipates an approved FMS case in late 
        2013. This case would involve a co-production effort. We 
        anticipate the program to provide refurbished Abrams Tank kits 
        to the JSMC at seven a month beginning in early 2015 for 
        shipment to an assembly facility in Greece with schedule 
        running through 2021.
         Country of Morocco: On 19 June 2012 Defense Security 
        Cooperation Agency notified Congress of the potential FMS. If 
        the FMS case is implemented by August 2013, the effort would 
        provide 200 Abrams M1A1 tanks to the FMS customer with 
        manufacturing work conducted at the ANAD and the JSMC with a 
        production schedule beginning in August 2014 through September 
        2017.
         Country of Israel: An additional Foreign Military Funding 
        (FMF) case on contract between GDLS and Israel will help 
        sustain the JSMC, Lima, OH. Israel Namer Armored Personnel 
        Carrier is under contract; 275 vehicles will be delivered 
        through fiscal year 2017.

    136. Senator Portman. General Odierno, are there Abrams tank 
suppliers that provide U.S. specific content that we would be in danger 
of losing if we did not produce any domestic tanks? If yes, what types 
of technologies do they provide?
    General Odierno. The Army is proactively working with the OSD S2T2 
study effort to evaluate specific suppliers that could be at risk when 
the M1A2SEP v2 production is complete in June 2014, irrespective of 
potential benefits from pending FMS cases. The Army previously 
identified special armor as a critical item and has subsequently funded 
its continued production at the minimum sustaining rate through fiscal 
year 2018. We are currently assessing supply chain impacts that will 
lead to establishment of cost effective 2nd-4th tier mitigation 
strategies that will target specific impacted suppliers. We anticipate 
that our initial results will be available in September 2012.

    137. Senator Portman. General Odierno, are you satisfied that you 
and your leadership completely understand the risk associated with 
shutting down the U.S. tank industrial base in 2014?
    General Odierno. The Army is not ``shutting down'' the JSMC. 
Rather, the Army is slowing the current production rate in the facility 
by ending the Abrams M1A2SEP v2 production line in anticipation of 
planned upgrades coming in fiscal year 2017. Work at JSMC will 
continue, irrespective of the quantity of M1A2SEP v2 tanks produced 
between fiscal year 2014 and fiscal year 2017. In 2011, there appeared 
to be limited opportunities for additional manufacturing work for the 
ANAD and the JSMC. However, this has changed with recent significant 
FMS interest in the Abrams tank. As a result, the tank industrial base 
will benefit by new manufacturing work as a result of several pending 
FMS cases that are nearing approval and are likely to impact production 
beginning in the 2013 timeframe. This additional production will help 
mitigate most of the vendor risks, and the Army is analyzing other 
mitigating activities for vendor capabilities not addressed by the 
increased FMS sales.

    138. Senator Portman. General Odierno, there is general agreement 
that there is a cost associated with shutting down the U.S. tank 
industrial base as well as a cost to restart the base later in the 
decade. Are these costs funded in the Army budget request?
    General Odierno. No, the shut down and startup costs are not in the 
Army budget request. The Army is not ``shutting down'' the JSMC, Lima, 
OH. Rather, the Army is slowing the current production rate in the 
facility by ending the Abrams M1A2SEP v2 production line. With the 
fiscal year 2012 congressional add of $255 million (42 Abrams M1A2 
SEPv2s) in fiscal year 2012 and the recent significant FMS interest in 
the Abrams tank, the Army is confident that opportunities exist to help 
sustain the Abrams tank industrial base and bring manufacturing work to 
ANAD, Anniston, AL, and the JSMC, Lima, OH. Any cost associated with 
the slowdown of Army tank production will be addressed in future budget 
requests.

                                STRYKER

    139. Senator Portman. General Odierno, the Stryker vehicle has been 
one of the Army's most successful acquisition programs and the vehicle 
remains deployed today in Afghanistan, in a double-V hull configuration 
proving extremely effective against the IED threat. Yet the fiscal year 
2013 budget request has little funding for Stryker modernization and 
essentially 1 more year of procurement. What is the Army's long-term 
modernization strategy for Stryker?
    General Odierno. Stryker Modernization will continue with a 
limited-scope Engineering Change Proposal (ECP) effort. The Army will 
conduct a Cost-Benefit Analysis to determine technology and variant 
combinations to be included in the scope of the ECP. We are analyzing 
the benefits of buying-back Space, Weight, Power, and Cooling (SWaP-C) 
deficiencies, improving mobility and protection, and providing the 
ability to accept future network and protection upgrades.

    140. Senator Portman. General Odierno, given the success of the 
double-V hull Stryker, why do you want to end procurement at 742 
vehicles?
    General Odierno. The Army is not ending procurement of the double-V 
hull (DVH) Stryker at 742 vehicles-these 742 vehicles currently equip 
the two operationally committed SBCTs supporting OEF in Afghanistan. We 
are, in fact, procuring another 49 vehicles through a program that 
exchanges flat-bottom Strykers to DVH. Of these, 47 will reconstitute 
the DVH Stryker Ready to Fight fleet and two will replace battle 
losses. This will give the Army a total of 789 DVH Strykers. Procuring 
beyond 789 vehicles will depend on operational requirements, pending 
force structure decisions and the prioritization of future resources.

    141. Senator Portman. General Odierno, given the success of the DVH 
Stryker program in saving countless lives, could we convert existing 
flat bottom Stryker vehicles to double-V hulls? If so, what is the plan 
to upgrade the flat-bottomed hull Strykers with double-V hulls?
    General Odierno. The Army is conducting a pilot program to produce 
DVH Strykers via an exchange program in which components and mission 
equipment package will be removed from flat bottom hull (FBH) Strykers 
currently in the inventory, inspected and refurbished as needed, and 
then reassembled in a new DVH structure with the associated DVH unique 
components. We are conducting this pilot program as a means to replace 
two of our 742 authorized DVH Strykers that were complete battle losses 
and are nonrepairable. The Army has validated a requirement for 47 
additional DVH Strykers to reconstitute the DVH Ready to Fight (RTF) in 
Afghanistan which was consumed when a second Stryker BCT was committed 
to OEF. Procurement of the 47 additional DVH is pending approval of the 
Defense Acquisition Executive. If approved, the 47 additional DVH will 
also be procured via exchange. Based on the outcome of this pilot 
program the Army will be positioned to make a more informed decision on 
exchanging FBH Strykers for DVH Strykers in the future within the 
affordability constraints of our Combat Vehicle Modernization Portfolio 
and Strategy.
                                 ______
                                 
               Questions Submitted by Senator John Cornyn

 CRISIS IN SYRIA AND THE ARMY'S BUSINESS DEALINGS WITH ROSOBORONEXPORT

    142. Senator Cornyn. Secretary McHugh and General Odierno, Russia's 
primary exporter of military weapons is a State-controlled firm called 
Rosoboronexport, who the U.S. Government has sanctioned in the past and 
who today continues to supply the Syrian military with the means to 
commit these heinous acts against its own people. Rosoboronexport's 
customer list also includes the U.S. Army. It is my understanding that 
the Army's Non-Standard Rotary Wing Aircraft office, out of Huntsville, 
AL, is currently buying at least 21 dual-use Mi-17 helicopters for the 
Afghan military from this same company. The Army's June 1, 2011, 
contract award to Rosoboronexport is listed at over $375 million for 
the purchase of these helicopters and spare parts to be completed by 
2016. Media reports from last year indicate that the contract comes 
with an option for $550 million in additional purchases, which would 
raise the total value of the contract to nearly $1 billion. One can 
reasonably conclude that the sizeable proceeds of this Army contract 
are helping to finance a company that is essentially complicit in mass 
atrocities in Syria, especially in light of Syria's history of actually 
paying for these Russian weapons. As I understand it, the Army has the 
ability to withdraw from the contract, and instead procure the same 
dual-use civilian-military helicopters legally through other means, 
such as private companies that can buy them directly from the 
manufacturer. As the crisis in Syria intensifies, so grows the 
potential the U.S. military might have to get involved. If that occurs, 
it is likely that Russian-made weapons sold to Syria by Rosoboronexport 
could be turned against the U.S. military. Do you see any cause for 
concern here?
    Secretary McHugh and General Odierno. The Army's contract with 
Rosoboronexport has a $550 million ceiling price for the entire 
contract, including the 21 aircraft baseline and the 12-aircraft 
option. The option line provides for up to 12 aircraft at a range of 
pre-negotiated prices that depend on the desired delivery date. Two 
aircraft with initial spares, tools, and technical publication support 
were ordered in February to replace two aircraft destroyed in accidents 
at $33.4 million. The NATO Training Mission-Afghanistan (NTM-A) has 
also identified the need for ten aircraft to replace Mi-17s that are 
nearing their life limited flight hours. The DOD Afghanistan Resources 
Oversight Council, established in compliance with Congressional 
direction, has reviewed and approved NTM-A's request and funding 
source. Exercise of the 10 aircraft option, including initial spares, 
tools, and technical publications is planned for fourth quarter fiscal 
year 2012 at a projected price of $184.3 million.
    The Army always retains the right to terminate any of its 
contracts. The relationship with Rosoboronexport can be severed; 
however, the United States currently benefits from this relationship in 
two ways. First, we are assured of proper Mi-17 delivery and support to 
the Afghan Air Force that enables Partner Nation Capability and timely 
U.S. withdrawal, and second, we obtain accurate engineering information 
to ensure air-safe operations of these aircraft not only for the 
Afghans, but also for U.S. pilots, aircrews, and passengers when they 
are onboard these aircraft.
    These same considerations influenced the Army's decision to enter 
into a contract with Rosoboronexport subsequent to the lifting of the 
sanctions against Rosoboronexport by the U.S. Government in May 2010. 
Since the requirement is for aircraft that are military end-use only, 
procuring civilian helicopters through a private company would 
necessitate costly modifications. We also have confirmed, with 
assistance from the diplomatic community that Russian law gives 
Rosonboronexport exclusive control over exports of Mi-17 aircraft 
intended for military purposes. While others may be able to purchase 
Mi-17s, delivery from within the Russian Federation could be blocked by 
Rosoboronexport. More importantly, the United States needs access to 
the prime aircraft manufacturer, Kazan, for accurate engineering 
support and data to ensure safe operations and maintenance and 
airworthiness on behalf of Afghan and U.S. personnel that operate, 
maintain, or are transported on these aircraft.

    143. Senator Cornyn. Secretary McHugh and General Odierno, do you 
agree that the Army's business relationship with Rosoboronexport 
undermines our goals for national security?
    Secretary McHugh and General Odierno. No. As the lead service for 
all Non-Standard Rotary Wing Aviation procurements, which includes the 
Mi-17, the Army is executing Afghan policy as established by the 
Secretary of Defense. The United States currently benefits from this 
relationship in two ways. First, we are assured of proper Mi-17 
delivery and support to the Afghan Air Force that enables Partner 
Nation Capability and timely U.S. withdrawal, and second, we obtain 
accurate engineering information to ensure air-safe operations of these 
aircraft not only for the Afghans, but also for U.S. pilots, aircrews, 
and passengers when they are onboard these aircraft. These same 
considerations influenced the Army's decision to enter into a contract 
with Rosoboronexport subsequent to the lifting of the sanctions against 
Rosoboronexport by the USG in May 2010. Since the requirement is for 
aircraft that are military end-use only, procuring civilian helicopters 
through a private company would necessitate costly modifications. We 
also have confirmed, with assistance from the diplomatic community that 
Russian law gives Rosonboronexport exclusive control over exports of 
Mi-17 aircraft intended for military purposes. While others may be able 
to purchase Mi-17s, delivery from within the Russian Federation could 
be blocked by Rosoboronexport. More importantly, the U.S. needs access 
to the prime aircraft manufacturer, Kazan, for accurate engineering 
support and data to ensure safe operations and maintenance and 
airworthiness on behalf of Afghan and U.S. personnel that operate, 
maintain, or are transported on these aircraft.

    144. Senator Cornyn. Secretary McHugh and General Odierno, please 
outline all of the Army's business dealings with Rosoboronexport since 
September 11, 2001.
    Secretary McHugh and General Odierno. The 26 May 2011 procurement 
contract for 21 Mi-17 aircraft in support of the Afghan Air Force, is 
the only business dealing that the Army has had with Rosoboronexport.

                               FRATRICIDE

    145. Senator Cornyn. Secretary McHugh and General Odierno, our 
military suffered a tragic 24 percent fratricide casualty rate in the 
1991 Gulf war. In the 20 years since, Congress has provided substantial 
research and development funding to DOD in an effort to reduce 
fratricide casualties in present and future conflicts. Yet to date, no 
dedicated combat identification (CID) technology has been fielded. 
Please provide an update on the Army's CID Program.
    Secretary McHugh and General Odierno. Previous fratricide incidents 
in U.S. Central Command's AOR highlight the continued need to sustain 
the fielding of situational awareness and target identification 
solutions that enable the CID process and prevent fratricide. The Army 
is committed to providing our brave men and women in uniform with 
materiel and non-materiel solutions to mitigate these tragic incidents.
    On June 13, 2011, the Army Acquisition Executive convened an 
Overarching Integrated Product Team (OIPT) of general officer and 
senior executive service principals from OSD, Joint Forces Command and 
the Services. The OIPT participants reviewed Analysis of Alternatives 
results, recommendations, and Service positions on whether a new Joint 
Cooperative Target Identification-Ground (JCTI-G), interrogation-
response capability, would offer significant advantages over the 
combination of already fielded and programmed alternatives in 
preventing fires-on-dismounts and air-to-ground fratricide. The Army, 
Marine Corps, Navy and the Air Force unanimously agreed to not proceed 
with an additional JCTI-G program at this time, but to mature those 
potential solutions, while pursuing fielded and programmed capability 
improvements and non-materiel alternatives.
    The Deputy Under Secretary of Defense (Acquisition, Technology & 
Logistics) subsequently concurred with the Services' positions. He 
directed them to coordinate with the DOD CID-Friendly Force Tracking 
Executive Steering Committee on non-materiel CID capabilities, while 
the Army provides an assessment of fires-on-dismount technologies 
demonstrated at Bold Quest 2011, a CID exercise placing technologies in 
the hands of warfighters. The Deputy Assistant Secretary of the Army 
(Research and Technology) has the lead on staffing this written 
assessment. The Joint CID Marking System is the Army's current program 
of record to prevent fires-on-vehicle fratricide. Additionally, Force 
XXI Battle Command Brigade and Below and its successor, Joint Battle 
Command-Platform, will continue to provide advanced situational 
awareness. Improved electro-optics, forward looking infrared and the 
long range laser designator rangefinder are examples of the many target 
identification systems that have been fielded. All of these initiatives 
enhance combat effectiveness and help prevent fratricide.

    146. Senator Cornyn. Secretary McHugh and General Odierno, please 
elaborate on other steps the Army is taking to reduce the fratricide 
casualty rate in Afghanistan.
    Secretary McHugh and General Odierno. The Army in Afghanistan has 
provided its soldiers, leaders, other joint warfighters and coalition 
partners significant capabilities that enhance ground-to-ground and 
air-to-ground CID and, thereby, prevent fratricide. The Army also 
continues to support joint and coalition initiatives to improve current 
capabilities and develop new ones.
    Army situational awareness systems in Afghanistan include: Force 
XXI Battle Command, Brigade and Below (FBCB2), a system that generates 
and shares situational awareness (SA) information for both ground and 
rotary wing joint platforms (including 10,000 for the MRAP vehicles); 
Friendly Force Tracking System for SA with coalition partners; Movement 
Tracking System for logistics operations; Special Operations Forces' 
Mini-transmitter; and, SA generated by other systems and shared world-
wide by the CONUS National Operations Center.
    Target identification/acquisition systems in Afghanistan include 
improved electro-optics (thermal, image enhancement and hybrid sights 
and viewers), and enhanced night vision devices for both ground-to-
ground and air-to-ground employment. The Joint CID Marking System, 
which identifies friendly ground platforms, was fielded to forces in 
Operation Iraqi Freedom and OEF.
    Visual identification training. The Army's CID visual training 
capability, ``Recognition of Combatants'' (ROC), uses as-seen-through 
Forward-Looking Infrared Radar imagery as the basis for interactive 
software and simulations. ROC is broadly fielded to Army schools and 
units, and embedded in fielded SA systems, such as FBCB2, in order to 
train, rehearse and prepare units for combat. ROC is contained in an 
Army Chief of Staff initiative that will provide the Army squad an 
overmatch capability moving forward. Army live-fire ranges now use high 
resolution and interactive targets to impart CID knowledge and skills.
    Army contributions to new joint and coalition capabilities. The CID 
Server air-to-ground SA system in Afghanistan helps coalition fixed 
wing aircraft clear air-to-ground fires before engaging targets. Army 
FBCB2 provides critical ground position location data into a ground 
server, where it is continually updated and provided to aircraft on 
demand.

                         REVERSIBILITY OF CUTS

    147. Senator Cornyn. Secretary McHugh and General Odierno, in DOD's 
strategic guidance announcement in January, both Secretary Panetta and 
General Dempsey highlighted the need to build in reversibility as these 
significant cuts to our Nation's defense budget are made. The strategic 
guidance document also states, ``the concept of `reversibility'--
including the vectors on which we place our industrial base, our 
people, our Active-Reserve component balance, our posture, and our 
partnership emphasis--is a key part of our decision calculus.'' 
Reversibility sounds like a euphemism for ``we're not totally sure that 
these cuts represent sound policy.'' In your opinion, is it realistic 
to think that, within a reasonable timeframe, we could reverse 
decisions as monumental as downsizing our Army by nearly 80,000 troops 
(close to pre-September 11 levels) and delaying or cancelling major 
acquisition programs?
    Secretary McHugh and General Odierno. The Army will conduct end 
strength reductions using a gradual ramp over a 6-year period. The 
gradual reductions will also allow the Secretary and I the flexibility 
to evaluate each year whether we are moving at the right pace. If 
reversals are necessary, we are confident that the flexibility built 
within the gradual ramp will allow us to regrow the Army in a 
reasonable timeframe to address any unforseen contingencies.
    The New Defense Strategy released in January 2012 notes that since 
we cannot predict how the strategic environment will evolve with 
absolute certainty, we need to manage the force in ways that protect 
its ability to regenerate capabilities should they be needed to meet 
future, unforeseen demands. The Army will reverse and expand through 
the adaptation of current manning, equipping, training, and acquisition 
policies to support regeneration of additional BCTs and enablers in 
response to any unforeseen requirements or changes in the defense 
strategy. We are examining existing policies and procedures and will 
make adjustments that would posture the Army to slow down and reverse a 
planned drawdown.

                     DOWNSIZING OF U.S. LAND FORCES

    148. Senator Cornyn. Secretary McHugh and General Odierno, 
according to the DOD strategic guidance document released in January, 
the new strategy must ``protect key investments in the technologically-
advanced capabilities most needed for the future . . . [and] no longer 
size Active Forces to conduct large and protracted stability operations 
while retaining the expertise of a decade of war.'' As a result, DOD 
has proposed eliminating about 80,000 soldiers from the Army. Although 
weapons development can usually be accelerated, there is no real way to 
accelerate the development of quality military leaders during times of 
crisis. Our force has such leaders in it today, including many 
thousands of NCOs who learned the hard lessons of Iraq and Afghanistan. 
But once they leave the force, in most cases they cannot be replaced. 
Following every war since World War II, the United States has 
significantly reduced Army and Marine Corps levels while focusing on 
developing air and sea forces. In recent decades, when confronted with 
the next crisis--including Korea, Vietnam, and the Persian Gulf--we 
have been forced to try to regenerate sizeable land forces. In your 
opinion, can the Army ensure that it retains the expertise and 
experience garnered by our NCOs and other leaders over the past decade, 
preserving it for the next conflict, while making such drastic 
reductions to our Army end strength? If yes, how do you propose to do 
this?
    Secretary McHugh and General Odierno. Yes, the Army intends to 
minimize induced (forced) losses across the enlisted force by lowering 
accessions without jeopardizing future Army requirements. This, 
combined with natural attrition will mitigate forced losses and 
preserve the maximum amount of experience across our NCO Corps. Because 
personnel life-cycle policies and processes are designed to satisfy 
structure requirements, this strategy also supports our ability to 
expand to meet unexpected operational demands. A key planning precept 
is that the Army will make the choices, to the greatest extent 
possible, on who will remain and who will separate. We will not 
sacrifice our investment in leader development and we will continue to 
shape policies to support the Army's leader development strategy. The 
resulting enlisted force, with execution of the Army's personnel life-
cycle policies/processes, will satisfy future requirements while 
retaining experiences acquired following a decade of war.
    The Army plans to retain a higher level of combat veteran officers 
and NCOs with significant combat and operational experience in the 
Generating Force. They will occupy positions that already exist in our 
schoolhouses and support units that the Army has been unable to fill 
for the past decade due to exceptionally high OPTEMPO and mission 
demands. These officers and NCOs will be experienced trainers, doctrine 
writers, platform instructors, personnel developers, combat systems 
subject matter experts, all lending their knowledge of emerging threats 
and operational techniques to the institutional systems that will mold 
and temper our future Army units. These officers and NCOs will also 
circulate into and out of operational units as part of normal career 
assignment patterns. All will be able to transition back to operational 
support of mission units with a minimum of preparation.

    149. Senator Cornyn. Secretary McHugh and General Odierno, given 
that we are still fighting a land war in Afghanistan, coupled with our 
historical inability to predict the next conflict, what is your 
assessment of the DOD strategic guidance conclusion that we will rely 
more heavily on air and sea capabilities in the future?
    Secretary McHugh and General Odierno. The DOD Strategic Guidance 
released in January 2012 does not make such a conclusion. While stating 
the Primary Missions of the U.S. Armed Forces, it does state that we 
will have a global presence emphasizing the Asia Pacific and the Middle 
East while still ensuring our ability to maintain our defense 
commitments to Europe, and strengthening alliances and partnerships 
across all regions. This global presence requires a Joint Force that is 
prepared to confront and defeat aggression anywhere in the world. 
Relying primarily on a narrow concept of air and sea capabilities is to 
provide a focused vision on one part of the world, not a global 
strategy.
    The evolving challenges and opportunities in the Asia-Pacific 
region are forcing us to rebalance toward that area of the world, but 
we must also maintain our defense efforts in the Middle East and Europe 
to defeat violent extremists and destabilizing threats as well as 
upholding our commitment to allies and partner states. To meet these 
and any other challenges, the Joint Force requires a ready and agile 
Land Force Component. Land Forces provide the Nation with the 
capability to react to those conflicts we have historically been unable 
to predict. Land Forces build relationships with allies and partners 
that develop and maintain interoperable military capabilities and 
access to land areas.
    Whenever military forces are committed to a conflict, the type of 
force brought to bear is a function of the force requirements 
determined and requested by the theater combatant commander based on 
the context in which it takes place. In all cases, the response 
requires a Joint Force that includes all Services, though each conflict 
will require differing proportions of each. As our recent experience 
and history teaches us, we are poor at predicting where, when, and how 
we are required to use our military. One consistent theme, however, is 
that ground forces are required to achieve decisive and lasting 
results, particularly when our interests include ensuring stability in 
a strategically important region.

                  PERMANENT CHANGE OF STATION POLICIES

    150. Senator Cornyn. Secretary McHugh and General Odierno, current 
Army policy requires relatively frequent permanent change of station 
(PCS) moves for most soldiers and their families. At a time when each 
of the Military Services is being pressured to find ways to stretch 
each and every dollar and improve its fiscal stewardship, a thoughtful 
and sensible revision of the Army's PCS policies could potentially save 
millions of dollars annually, which the Army could use to meet other 
requirements. Requiring PCS moves every 5 or 6 years--instead of every 
2 or 3 years--would also improve the quality of life of our soldiers 
and reduce the strain on military families, certainly a worthy goal. In 
so doing, you would enable many military spouses to pursue their own 
careers without facing frequent relocations, and you would ease the 
stress that frequent moves and school relocations put on military 
children. Perhaps most importantly, you would ensure that units remain 
intact after deployment, which would provide a better support system 
for soldiers who are dealing with post-deployment issues such as post 
traumatic stress disorder (PTSD) or potential suicide. Do you see any 
potential for the Army to rethink its current PCS policies to cut 
unnecessary expenses and improve the quality of life for soldiers and 
their families? If so, how would these policies have to be reformed to 
accomplish this?
    Secretary McHugh and General Odierno. The Army has already 
maximized the benefit to soldiers, their families, and the operational 
Army by extending dwell time by 1 year in the ARFORGEN cycle. The 
existing DOD's PCS program which the Army implements is essential to 
providing the resources to sustain the Army's force, meet 
congressionally mandated end strengths and directed missions through 
the use of accession, training, operational, rotational, unit and 
separation moves. Of these categories only Operational and Rotational 
moves are considered discretionary.
    Currently, DOD prescribes a minimum of 36 months Time on Station 
constraint before we assign soldiers within or from the continental 
United States. The Army has extended that constraint to 48 months. 
While waivers are permitted, they are restricted to the Headquarters 
that directs assignments for the Service. We have an active program to 
encourage soldiers to extend their overseas tour to include permitting 
a generous Assignment Incentive Pay program to encourage overseas tour 
extensions. We have extended the prescribed tour lengths in Korea, in 
some instances, to 36 months to permit more soldiers to serve in an 
accompanied status.
    Adopting an ARFORGEN focused manning system provides a platform to 
increase stability and predictability for soldiers and Families and 
facilitate improved unit rotational readiness. We are looking at 
reducing our training costs through distance learning and education 
permitting the soldier to remain assigned to their home stations. In 
summary, under the All-Volunteer Force program, soldiers enter the Army 
for a fixed period of time. Except for extraordinary circumstances, 
soldiers are free to leave the Army at the end of their obligation. 
These losses generate near-equal numbers of replacements and associated 
training requirements. These three major elements of the PCS program 
account for approximately two-thirds of the annual PCS move count. The 
remaining moves are used to meet the day-to-day mission needs, defined 
in PCS terms as rotational, operational and unit moves. Consequently a 
big reduction of the remaining 25 percent would prevent the Army from 
fulfilling their mandates to equip, train, and maintain the readiness 
of the force.

                            C-27 DIVESTMENT

    151. Senator Cornyn. Secretary McHugh and General Odierno, as you 
know, the fiscal year 2013 budget request details the Air Force's plans 
to eliminate the C-27 from their inventory. The Air Force took over the 
C-27 program from the Army in 2009, although the C-27 was developed and 
procured to provide a niche capability to directly support Army urgent 
needs in difficult environments such as Afghanistan, where the C-130 
might not be able to operate effectively. Do you support the Air 
Force's decision to divest an entire fleet of brand new C-27s?
    Secretary McHugh and General Odierno. The Army has a capability 
requirement for intra-theater lift to be provided to ground forces, as 
the Army currently has in Afghanistan. CH-47s are used heavily and 
cannot bear the whole load. To assist us with our requirement, the Air 
Force has agreed to provide fixed wing aircraft for resupply. A 
Memorandum of Agreement signed by the Air Force and Army on January 27, 
2012, states ``The Combatant Commander/Joint Force Commander should 
TACON (Tactical Control) an Expeditionary Airlift Squadron or 
Detachment to the Commander, Army Forces who will exercise Tactical 
Control through the Senior Army Aviation Authority. The dedicated 
Expeditionary Airlift Squadron may, at the discretion of the Combatant 
Commander/Joint Force Commander, collocate with an Army Combat Aviation 
Brigade or Task Force to provide tactical airlift for transport of Army 
Forces time sensitive/mission critical equipment, supplies and 
personnel.'' The Air Force assures the Army it will be able to fulfill 
this requirement with their current C-130 fleet. The Air Force 
commitment to meet the Army's intra-theater lift requirement using C-
130 aircraft to support Army ground forces fulfills this requirement. 
The Army does not currently have or foresee any gaps or shortfalls for 
intra-theater lift requirements or theater logistical supply chain 
requirements based upon this agreement.

    152. Senator Cornyn. Secretary McHugh and General Odierno, do you 
agree with their assessment that mission requirements can be fully met 
with C-130s and C-17s?
    Secretary McHugh and General Odierno. The Army has a capability 
requirement for intra-theater lift to be provided to ground forces, as 
the Army currently has in Afghanistan. CH-47s are used heavily and 
cannot bear the whole load. To assist us with our requirement, the Air 
Force has agreed to provide fixed-wing aircraft for resupply. A 
Memorandum of Agreement signed by the Air Force and Army on January 27, 
2012, states ``The Combatant Commander/Joint Force Commander should 
TACON (Tactical Control) an Expeditionary Airlift Squadron or 
Detachment to the Commander, Army Forces who will exercise Tactical 
Control through the Senior Army Aviation Authority. The dedicated 
Expeditionary Airlift Squadron may, at the discretion of the Combatant 
Commander/Joint Force Commander, collocate with an Army Combat Aviation 
Brigade or Task Force to provide tactical airlift for transport of Army 
Forces time sensitive/mission critical equipment, supplies and 
personnel.'' The Air Force assures the Army it will be able to fulfill 
this requirement with their current C-130 fleet. The Air Force 
commitment to meet the Army's intra-theater lift requirement using C-
130 aircraft to support Army ground forces fulfills this requirement. 
The Army does not currently have or foresee any gaps or shortfalls for 
intra-theater lift requirements or theater logistical supply chain 
requirements based upon this agreement.

    153. Senator Cornyn. Secretary McHugh and General Odierno, could 
you support a move by Congress to keep these new aircraft in the Air 
Force inventory, instead of allowing them to be divested, as the Air 
Force is requesting?
    Secretary McHugh and General Odierno. The Army has a capability 
requirement for intra-theater lift to be provided to ground forces, as 
the Army currently has in Afghanistan. CH-47s are used heavily and 
cannot bear the whole load. To assist us with our requirement, the Air 
Force has agreed to provide fixed wing aircraft for resupply. A 
Memorandum of Agreement signed by the Air Force and Army on January 27, 
2012, states ``The Combatant Commander/Joint Force Commander should 
TACON (Tactical Control) an Expeditionary Airlift Squadron or 
Detachment to the Commander, Army Forces who will exercise Tactical 
Control through the Senior Army Aviation Authority. The dedicated 
Expeditionary Airlift Squadron may, at the discretion of the Combatant 
Commander/Joint Force Commander, collocate with an Army Combat Aviation 
Brigade or Task Force to provide tactical airlift for transport of Army 
Forces time sensitive/mission critical equipment, supplies and 
personnel.'' The Air Force assures the Army it will be able to fulfill 
this requirement with their current C-130 fleet. The Air Force 
commitment to meet the Army's intra-theater lift requirement using C-
130 aircraft to support Army ground forces fulfills this requirement. 
The Army does not currently have or foresee any gaps or shortfalls for 
intra-theater lift requirements or theater logistical supply chain 
requirements based upon this agreement.

                            MILITARY VOTING

    154. Senator Cornyn. Secretary McHugh, the Military and Overseas 
Voter Empowerment (MOVE) Act enacted by Congress as part of the NDAA 
for Fiscal Year 2010, requires DOD to create a motor voter-style voting 
assistance office on every military installation, thereby providing 
military servicemembers and their families with critical voting 
assistance, regardless of how far they might be from their hometowns. 
As the 2012 elections fast approach, I am concerned that the Army and 
the other Military Services have dragged their feet on fully 
implementing this requirement. This provision was passed in order to 
provide servicemembers the same level of assistance that civilians 
receive under the Federal motor voter law--the National Voter 
Registration Act (NVRA)--I know you agree that their service and 
sacrifice demand no less. Please outline the Army's efforts, to date, 
to comply with this requirement.
    Secretary McHugh. The Army is committed to providing our 
servicemembers, their family members, and our civilian employees 
numerous opportunities to receive voting assistance--we take that 
responsibility very seriously. We also take our role in ensuring that 
each person has the opportunity to cast their ballots in general, 
primary and special elections equally seriously.
    Since enactment of the MOVE Act and the November 2010 release of 
the DOD Directive-Type Memorandum that provided implementing 
instructions, the Army has taken significant steps to ensure the Voting 
Assistance Offices are established, manned, and resourced to accomplish 
their role in compliance with the MOVE Act and fulfilling our 
obligation to facilitate our personnel's right to vote wherever their 
duties may take them.
    Key steps the Army has taken include:

         On December 9, 2010, the Army issued Military 
        Personnel Message 10-323--Guidance in Implementing Installation 
        Voting Assistance Offices Service-wide.
         On June 3, 2011, The Adjutant General sent a 
        Memorandum to the Army's Installation Management Command 
        detailing the requirements for implementation of the Federal 
        Voting Assistance Program's (FVAP) revised Measures of Success 
        Reporting and Installation Voting Assistance Offices.
         On September 3, 2011, the Army published the 2011 Army 
        Voting Action Plan which formalized the already-established 
        Installation Voting Assistance Office Requirement.
         The Army's Voting Action Officer has established and 
        maintains a robust communications strategy with Installation 
        and Unit Voting Assistance Offices alike, using general and 
        specifically targeted communications to ensure voting 
        information is rapidly and effectively distributed.
         The Army Budget request for fiscal years 2013-2017 
        includes a provision for $20 million specifically to fund the 
        sustainment and staffing of these offices.
         In their 2010 DOD Inspector General Evaluation of the 
        DOD Federal Voting Assistance Program, dated March 22, 2011, 
        the Inspector General found the Army to have an effective and 
        compliant Voting Assistance Program.
         Additionally, the U.S. Army Recruiting Command reports 
        the number of Voter Registration Forms handed out on a 
        quarterly basis, expanding our supported population well beyond 
        the Army's ranks.

    As of June 1, 2011, the FVAP confirmed the Army is fully compliant 
with the requirement of establishing Voting Assistance Offices to 
supplement and seamlessly integrate with the already well-established 
and extensive network of Unit Voting Assistance Officers.

    155. Senator Cornyn. Secretary McHugh, are you willing to get 
personally involved to ensure the Army complies with the MOVE Act and 
the motor voter law on every military installation, as required?
    Secretary McHugh. I continue to be personally involved in the 
Army's successful implementation of the MOVE ACT and the motor voter 
law on all Army installations. I have taken a personal interest in the 
program, ensuring that the offices have not only been established, but 
that they are manned, resourced, and integrated into the total Army 
Voting Assistance Program. I have also emphasized the importance of 
sustaining our successes in compliance with the MOVE Act in the long 
term and the full spectrum of the Army Voting Program from my office 
down to individual unit voting officers.
    The Army has established a close partnership with the FVAP and is 
integrating an unprecedented level of absentee voter-related 
communications to empower the individual voter and to further assist 
the Voting Assistance Officers and the Absentee Voting Program in 
general.

         The Adjutant General of the Army and Sergeant Major of 
        the Army Chandler have each filmed two voting Public Service 
        Announcements that are being broadcast on the Armed Forces 
        Network worldwide as well as over Internet outlets.
         We transmitted over 1.6 million emails to soldiers, 
        retirees, and family members and already have plans to send 
        another email broadcast as we approach the 2012 General 
        Elections.
         Each soldier's Leave and Earnings Statement for 
        December 2011 included a message emphasizing the voting 
        program. A similar message will re-emphasize the program as we 
        draw closer to the general elections.
         The Army Voting Program has made extensive use of 
        social media outlets such as Facebook to assist soldiers and 
        their family members with their voting needs.
         The Army continues to use collaborative tools and 
        information sharing sites to push current and relevant voting 
        information to our Voting Assistance Officers and personnel.

    156. Senator Cornyn. Secretary McHugh, is it your assessment that 
the Army is in full compliance with its full range of obligations under 
the NVRA, as required by the MOVE Act?
    Secretary McHugh. The Army is in full compliance with its 
obligations under NVRA. I continue to be personally involved in the 
Army's successful implementation of the MOVE ACT and the motor voter 
law on all Army installations. I have taken a personal interest in the 
program, ensuring that the offices have not only been established, but 
that they are manned, resourced, and integrated into the total Army 
Voting Assistance Program. I have also emphasized the importance of 
sustaining our successes in compliance with the MOVE Act in the long 
term and the full spectrum of the Army Voting Program from my office 
down to individual unit voting officers.
    The Army has established a close partnership with the FVAP and is 
integrating an unprecedented level of absentee voter-related 
communications to empower the individual voter and to further assist 
the Voting Assistance Officers and the Absentee Voting Program in 
general.

         The Adjutant General of the Army and Sergeant Major of 
        the Army Chandler have each filmed two voting Public Service 
        Announcements that are being broadcast on the Armed Forces 
        Network worldwide as well as over Internet outlets.
         We transmitted over 1.6 million emails to soldiers, 
        retirees, and family members and already have plans to send 
        another email broadcast as we approach the 2012 General 
        Elections.
         Each soldier's Leave and Earnings Statement for 
        December 2011 included a message emphasizing the voting 
        program. A similar message will re-emphasize the program as we 
        draw closer to the general elections.
         The Army Voting Program has made extensive use of 
        social media outlets such as Facebook to assist soldiers and 
        their Family Members with their voting needs.
         The Army continues to use collaborative tools and 
        information sharing sites to push current and relevant voting 
        information to our Voting Assistance Officers and personnel.
                                 ______
                                 
              Questions Submitted by Senator David Vitter

                              DEFENSE CUTS

    157. Senator Vitter. Secretary McHugh, you have stated that our 
Nation and Army are at a strategic crossroads marked by significant 
challenges. In your opinion, does the current budget do sufficient work 
at targeting inefficiencies, redundancies, and to address unnecessary 
waste, or does it put the primary weight of the cuts on the men and 
women serving in uniform?
    Secretary McHugh. We are always looking for opportunities to 
maximize the value of every dollar that the taxpayer provides and 
Congress appropriates. We built a fiscal year 2013 budget request that 
funded the Army's requirements. The President's budget reflects $3.6 
billion in Track 1 efficiencies that were taken during the development 
of the fiscal year 2012-2016 program. Resultant savings enabled the 
Army to fund our highest Readiness, Quality of Life, and the future 
capabilities priorities and reaffirmed the compact we have with our men 
and women in uniform and their families.

    158. Senator Vitter. Secretary McHugh, what are areas where, in 
your opinion, the numbers could be maintained and the cuts redirected 
to root out wasteful spending?
    Secretary McHugh. I believe that the reductions and savings that 
were taken when we prepared the fiscal year 2013 budget request results 
in manageable risk to the Army. The Army has never supported wasteful 
spending. We are fully engaged in implementing the Presidential 
directive to cut spending from areas like travel, conferences, 
printing, the proliferation of IT and communications devices, and the 
size of our vehicle fleets. We will continue to identify ways to 
maximize the value of the resources that you provide to the Army.

    159. Senator Vitter. Secretary McHugh, do you see energy as the 
largest venue for the military to save?
    Secretary McHugh. No. The Army is the largest facilities energy 
consumer in the Federal Government, spending $1.3 billion on facility 
energy in fiscal year 2011. We are making tremendous progress in saving 
energy in our facilities. Reducing energy use across the Army is 
mission critical, operationally necessary and financially prudent. 
Energy is fundamental to Army capability and performance and the Army's 
energy requirements are driven by the military mission. Since fiscal 
year 2003, the Army's facilities energy consumption has dropped 13 
percent although costs have increased by more than 50 percent due to 
increases in cost from utility providers. Investments in energy 
efficiency and renewable energy on our installations are vital to 
maintaining mission capability and performance while serving to provide 
some control over escalation in energy costs. Saving energy does not 
directly result in reduced costs.

    160. Senator Vitter. General Odierno, you have previously 
highlighted the essential component that the Joint Force plays in 
maintaining the Army's ability to combat across a full range of 
operations as part of a Joint Force. On August 4, 2011, at the `Casing 
the Colors of U.S. Joint Forces Command' you stated that, ``today's 
complex operating environment requires a Joint Force that is flexible 
and adaptive to the challenges of this new environment. We have 
employed our land, air, and maritime forces in ways we didn't envision 
a decade ago, but in ways which are now standard practice--in ways 
which are essential to meet our current national strategy and 
warfighting demands.'' I strongly support your statement, and our men 
and women in uniform who are working to support core missions such as 
joint training and joint integration. I also believe that in line with 
this we must make cuts that do not negatively affect the joint effort 
of our overall training system that has led the United States to become 
the highly effective elite fighting force it is today.
    I understand that the Air Force has recently announced in its 
fiscal year 2013 budget to largely reduce the total number of A-10 
fleet. While I understand the need for certain reductions, the Air 
Force announcement to cut all 24 A-10s from Barksdale Air Force Base 
(AFB)--21 eliminated, 3 transferred--according to Air Force documents, 
appears to be in contradiction of joint operational preparation needed. 
I believe the Air Force announcement to cut all 24 A-10s from Barksdale 
AFB hugely effects fundamental joint operations. These aircraft were 
strategically placed in Barksdale AFB to support joint training at the 
Joint Readiness Training Center (JRTC) at Fort Polk.
    My concern is that the A-10s slated to be cut entirely from 
Barksdale AFB are used to support the joint training mission of the 
Army in Fort Polk. In addition to the necessity for training, I do not 
believe that it is possible to strip away the A-10s from Barksdale 
while also maintaining the force necessary at Fort Polk without 
increasing cost of operations.
    Have the joint operational training aspects been considered in this 
decision, and was the Army consulted on this decision?
    General Odierno. The U.S. Air Force (USAF) did not consult with the 
Army regarding moving the A-10 mission out of Barksdale. The Army will 
continue to request joint assets through the Global Force Management 
Allocation Process and does not foresee any gap in joint capability. 
From the Army perspective, the stationing of the aircraft is not a 
concern. The Army has expressed the importance of having platforms 
available for Army training at the JRTC, the National Training Center 
(NTC), and the Joint Multinational Training Center.

    161. Senator Vitter. General Odierno, are you aware of any 
consultation between the Army and the Air Force regarding the removal 
of this mission from Fort Polk? If so, please provide the cost savings 
to DOD of bringing A-10s into Louisiana for training when the nearest 
planes needed for Army training would now be located in Georgia, 
Florida, Idaho, or Arizona.
    General Odierno. The U.S. Air Force (USAF) did not consult with the 
Army regarding moving the A-10 mission out of Barksdale. The USAF is 
best suited to provide any DOD cost savings based on aircraft locations 
in relation to Army training support and Air Force missions.

    162. Senator Vitter. General Odierno, please provide a cost 
assessment of the JRTC usage of A-10 fighters based out of Barksdale 
AFB, and what the Air Force reduction of the A-10 unit in Barksdale 
will do to the JRTC training in Fort Polk.
    General Odierno. There is no additional cost to the JRTC due to the 
decision of A-10 basing by the USAF. JRTC and the USAF Green Flag East 
(GFE) exercises run concurrently. The Close Air Support (CAS) for GFE 
also supports JRTC training audiences. There is no distinction between 
the two with regard to fixed-wing CAS sorties. The Army does not 
anticipate any impacts to the JRTC joint opportunities. The Army will 
fill training support through the Global Force Management Allocation 
process. This process will match requirements with available assets.

    163. Senator Vitter. General Odierno, the current Director of 
National Intelligence recently testified before the Senate that ``The 
next 2 to 3 years will be a critical transition phase for the terrorist 
threat facing the United States.'' Do you believe that in keeping with 
the current National Defense Strategy laid out earlier this year, the 
Army is building our future force to meet the Nation's requirements as 
you see what lies ahead of us?
    General Odierno. While the future is uncertain and complex we can 
be certain our Nation will continue to call on America's Army. The 
characteristics of the future force are very similar to those of the 
current force; a force with seasoned, innovative and adaptive leaders. 
The Army will capitalize on the investments in our leaders, 
Intelligence, Surveillance, and Reconnaissance capabilities, Special 
Operations (SOF) and Aviation as we move forward meeting the Nation's 
requirements. Additionally, we will continue the strides we've made in 
our SOF and conventional force integration over the past decade of war 
by ensuring training opportunities at our Combat Training Centers.
    Cyber will also shape the future environment, and in accordance 
with the defense strategy, we will continue to participate in the DOD 
effort to work with domestic and international allies and partners and 
invest in advanced capabilities to defend our networks, operational 
capability, and resiliency in cyberspace and space.
    The Army will respond, as part of the joint force, to any 
contingency that threatens our Nation and our way of life. Under the 
new defense strategy, force reductions in the present budget-
constrained environment will challenge the Army's ability to project 
land power. However, it's essential that we, the Army, do our part in 
helping to get the budget right, to get our economy moving, and to 
ensure that we reduce spending. As we reduce the force, we will need to 
manage risk by balancing end strength, readiness, and modernization. We 
must ramp down gradually, retain mid-grade officers and NCOs, and will 
continue to rely on OCO funding.

    [Whereupon, at 12:41 p.m., the committee adjourned.]


DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR 
               2013 AND THE FUTURE YEARS DEFENSE PROGRAM

                              ----------                              


                        TUESDAY, MARCH 13, 2012

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

            U.S. SOUTHERN COMMAND AND U.S. NORTHERN COMMAND

    The committee met, pursuant to notice, at 9:32 a.m. in room 
SD-G50, Dirksen Senate Office Building, Senator Carl Levin 
(chairman) presiding.
    Committee members present: Senators Levin, Lieberman, Reed, 
Webb, Udall, Hagan, Begich, Blumenthal, McCain, Chambliss, 
Brown, and Ayotte.
    Committee staff members present: Richard D. DeBobes, staff 
director; and Leah C. Brewer, nominations and hearings clerk.
    Majority staff members present: Richard W. Fieldhouse, 
professional staff member; Jessica L. Kingston, research 
assistant; and Michael J. Kuiken, professional staff member.
    Minority staff members present: Ann E. Sauer, minority 
staff director; Adam J. Barker, professional staff member; 
Christian D. Brose, professional staff member; and Daniel A. 
Lerner, professional staff member.
    Staff assistants present: Kathleen A. Kulenkampff; Bradley 
S. Watson; and Maggie K. McNamara.
    Committee members' assistants present: Bryon Manna, 
assistant to Senator Lieberman; Carolyn Chuhta, assistant to 
Senator Reed; Gordon Peterson, assistant to Senator Webb; Casey 
Howard, assistant to Senator Udall; Lindsay Kavanaugh, 
assistant to Senator Begich; Clyde Taylor IV, assistant to 
Senator Chambliss; Charles Prosch, assistant to Senator Brown; 
Brad Bowman, assistant to Senator Ayotte; Sergio Sarkany, 
assistant to Senator Graham; and Joshua Hodges, assistant to 
Senator Vitter.

       OPENING STATEMENT OF SENATOR CARL LEVIN, CHAIRMAN

    Chairman Levin. Good morning, everybody. The committee 
meets this morning to hear from two distinguished military 
leaders to discuss security in our hemisphere: General Douglas 
M. Fraser, USAF, Commander, U.S. Southern Command (SOUTHCOM); 
and General Charles H. Jacoby, Jr., USA, Commander, U.S. 
Northern Command (NORTHCOM), and Commander, North American 
Aerospace Defense Command (NORAD).
    This is General Jacoby's first appearance before the 
committee as commander and we look forward to working with you, 
General, in your new position.
    General Fraser, this is likely to be your last posture 
hearing before the committee and we've greatly appreciated your 
testimony and advice over the past 3 years. Our Nation 
appreciates your 37-plus years of service in the U.S. Air 
Force. I understand that you and your wife, Rena, are planning 
to enjoy some much-deserved down time after your change of 
command and we truly wish you all the best.
    In addition to thanking each of you for your long and 
distinguished service to our Nation, we would also ask that you 
express our heartfelt gratitude to the men and women who serve 
with you for their exceptional service and for their many 
contributions to our security. We offer our thanks to your 
families and the families of all your personnel, since they 
share in the sacrifices of their service and because their 
support is so important to the success of your missions and 
thus to our Nation's security.
    NORTHCOM, which was established after the terrorist attacks 
of September 11, is responsible for the defense of the Homeland 
and for providing defense support to civil authorities in 
response to natural or manmade disasters here at home. Its area 
of responsibility (AOR) also includes all of North America, 
including Canada and Mexico. General Jacoby also serves as 
Commander of NORAD, the binational command with Canada that has 
the mission to provide aerospace warning, aerospace control, 
and maritime warning for North America. We'd be most interested 
to learn, General, about how NORTHCOM and NORAD might 
contribute to the emerging domain of cyber security in the 
Homeland.
    As part of the mission of providing defense support to 
civil authorities NORTHCOM must work closely and cooperatively 
with other Federal agencies, particularly the Department of 
Homeland Security (DHS), and with all the States on plans and 
coordination for the emergency response to domestic disasters. 
This requires close coordination with the State Governors and 
the National Guard Forces to improve their combined Federal and 
State response capabilities to a wide variety of emergencies.
    We made significant progress on this front last year with 
several initiatives, including the new dual-status command 
capability, which is intended to allow State and Federal 
military forces to work together to support a Governor's needs 
for disaster assistance. As part of this effort, Congress 
authorized legislation to permit the callup of Federal military 
Reserve Forces to support Governors responding to a natural 
disaster. We would be interested to hear General Jacoby's views 
on how these new initiatives are working and how they will 
work.
    As part of its Homeland defense mission, NORTHCOM is also 
the combatant command responsible for the operation of the 
Ground-based Midcourse Defense (GMD) system, to defend the 
United States against the threat of a potential future 
ballistic missile attack from nations such as Iran and North 
Korea. The last two flight tests of the GMD system using the 
latest model of the Exoatmospheric Kill Vehicle (EKV) resulted 
in failures. The Missile Defense Agency (MDA) is taking steps 
to ensure that the new EKVs work reliably and effectively 
before we produce more, including adequate testing and system 
enhancements, as this committee recommended in last year's 
bill.
    The Department of Defense (DOD) is also pursuing 
improvements to the reliability of the GMD system that will 
allow the use of fewer interceptors to defeat future 
intercontinental ballistic missiles, thus effectively 
increasing our inventory of interceptors over time. In 
addition, as part of phase 4 of the Phased Adaptive Approach to 
missile defense, DOD is developing the Standard Missile 3 Block 
IIB (SM-3 IIB), to defend against potential long-range Iranian 
missiles that could reach our Homeland. This would augment our 
GMD system and we look forward to hearing General Jacoby's 
views on these and related programs.
    Turning to the southern part of our hemisphere, in July 
2011, the President released his Strategy to Combat 
Transnational Organized Crime (TOC). This strategy is the first 
of its kind, but the threat posed by transnational criminal 
organizations (TCO) is not new to either of our witnesses. 
Today, we hope our witnesses will provide their assessment of 
the threat posed by these TCOs and help the committee 
understand their respective commands' role in addressing this 
threat.
    NORTHCOM and SOUTHCOM are the primary entities through 
which DOD engages in the Western Hemisphere. The ability of 
TCOs to outgun civilian law enforcement and to buy influence 
has meant that militaries have been asked to take on internal 
security responsibilities throughout the region. This expanded 
role for our neighbors' militaries provides opportunities for 
our military to improve its advise and assist activities and to 
enhance our military-to-military relations.
    The committee looks forward to learning of your continued 
engagement in the hemisphere and the opportunities it presents 
for our commands, including on matters such as respect for 
civilian control of the military and respect for human rights. 
Given the horrific level of violence in Mexico, especially 
related to drug trafficking and the flow of money and guns from 
our country into Mexico, we want to hear General Jacoby's 
assessment of the current security situation along and below 
our border and the cooperation between our two militaries to 
help defeat TCOs.
    The SOUTHCOM AOR includes the Caribbean and Central and 
South America. General Fraser, as we discussed last week, while 
there is no traditional military threat emanating from the 
region, SOUTHCOM is contending with an increasingly powerful 
and capable threat in the form of TOC. These criminal 
organizations have grown to the point where they are a real 
threat to national and international security. The committee is 
deeply concerned about this matter and is prepared to consider 
ways to enable DOD to provide its unique capabilities to 
American law enforcement, as well as foreign law enforcement 
and militaries where appropriate, to ensure that these 
organizations are brought to justice.
    Efforts to combat TCOs and other armed groups in the region 
have seen some success. Over the past two decades, the United 
States has invested heavily in building the capacity of the 
Colombian military and police and the results of this 
investment are becoming increasingly clear. The Colombian 
Government is now in control of the vast majority of the 
country and the Revolutionary Armed Forces of Colombia are 
largely on the run and operationally limited to fleeting 
attacks against government installations in remote parts of the 
country.
    In Central America, the impact of TCOs is most acute. The 
efforts of SOUTHCOM to detect and monitor aerial and maritime 
trafficking in the eastern Pacific and the Caribbean have 
driven these criminal organizations to more complex methods of 
trafficking their drugs, money, and weapons, including semi- 
and fully-submersible vessels.
    TCOs have also begun to take advantage of nations that 
either lack the capacity and/or the will to confront their 
trafficking. These complex criminal networks require SOUTHCOM 
to continue to adapt and expand its activities with willing 
partners to confront the threat.
    Further south, General Fraser, a different picture emerges. 
Brazil, Argentina, and Chile are developed nations with capable 
militaries that help improve international security by 
contributing to various multilateral operations around the 
globe. These contributions are important and they should not go 
unnoticed.
    In Venezuela, the United States is confronted by a 
government and a military that is a purveyor of instability. 
President Chavez and his followers sow instability through 
their support to TCOs which traffic drugs, money, and weapons 
through the region. We look forward to your testimony on that 
matter as well, General Fraser.
    So, General Fraser, General Jacoby, I have just touched the 
surface of the issues that face you in your commands. We look 
forward to hearing your testimony and to continuing to do 
everything we can to help SOUTHCOM and NORTHCOM accomplish 
their security objectives. We thank you both again for 
appearing before the committee and for your service to our 
Nation.
    Senator McCain.

                STATEMENT OF SENATOR JOHN McCAIN

    Senator McCain. Thank you, Mr. Chairman. I join you in 
welcoming our witnesses today and thanking them for their many 
years of distinguished service to our Nation. I also want to 
extend my appreciation to the dedicated men and women serving 
under their commands.
    I especially want to recognize General Fraser as this will 
be his final time testifying before this committee in uniform. 
I imagine he'll be celebrating this occasion later today.
    What is clear from the testimony this committee has 
received over the last several weeks from our various regional 
combatant commanders is that the threats confronting our 
Nation, our interests, and our ideals are not diminishing. 
Rather, they are increasing in scope and complexity. As a 
result, the work of our Armed Forces remains vitally important 
to our national security.
    As the prepared testimony from our witnesses today 
illustrates, this is particularly true of the situation in our 
own hemisphere. The horrific violence attributed to TCOs and 
cartels continues to threaten the United States and erode 
governance and security across the region. These organizations 
exploit weak security forces, bribe corrupted government 
officials, and transit easily across undergoverned territory 
and porous borders. Their distribution networks have grown in 
scale and sophistication and we have seen a diversification in 
what is being trafficked, which now includes not just drugs, 
but also human beings, bulk cash, and military-grade weapons.
    These groups maintain enormous cash reserves and in many 
cases are better equipped and more capable of the government 
forces who are trying to stop them. Of particular concern is 
the deteriorating situation in Central America. As General 
Fraser notes in his testimony, ``Central America has become the 
key transshipment zone for illicit trafficking in the 
hemisphere.'' Approximately 90 percent of cocaine destined for 
the United States transits the sub-region. As a result, 
violence has risen to alarming levels. Last year, the city of 
San Pedro Sula in Honduras overtook Ciudad Juarez in Mexico as 
the most dangerous city in the world.
    The reach of these criminal organizations extends from 
South and Central America directly into North America, 
including the U.S. Homeland. In Mexico, we have witnessed an 
escalation of the violence that continues to terrorize its 
citizens. President Calderon and his administration have 
demonstrated courageous leadership in their country's fight 
against drug cartels and criminal gangs. But this fight has 
come at great cost. Since 2006, nearly 50,000 Mexicans have 
been killed as a result of drug-related violence, including 
13,000 last year alone. Such tragic figures serve as a stark 
reminder of the threat that these groups pose and underscore 
the need for continued U.S. support to our partners in Mexico.
    The threat from these groups does not end at the border, 
however. According to the 2011 National Drug Threat Assessment 
released by the Department of Justice (DOJ), the cartels now 
maintain a presence in over 1,000 U.S. cities.
    General Jacoby, I look forward to your assessment on the 
reach of these networks, what NORTHCOM is doing to assist its 
U.S. law enforcement counterparts in combatting them, and what 
can be done to improve and expand this partnership.
    General Jacoby, as Commander of NORTHCOM, you're tasked 
with one of our government's most fundamental responsibilities, 
the defense of the Homeland. What this committee has learned 
over the last several weeks of testimony is that the world is 
complex and dangerous. This places significant responsibility 
on you and NORTHCOM to properly posture itself to defend 
against and respond to the myriad threats that confront us. I'm 
interested in your assessment of what the greatest threats to 
the Homeland are and what is being done by your command in 
coordination with the interagency to address them.
    Again, I thank you both for appearing before this committee 
today and I look forward to your testimony.
    Thank you, Mr. Chairman.
    Chairman Levin. Thank you very much, Senator McCain.
    General Fraser.

  STATEMENT OF GEN. DOUGLAS M. FRASER, USAF, COMMANDER, U.S. 
                        SOUTHERN COMMAND

    General Fraser. Mr. Chairman, Senator McCain, distinguished 
members of the committee: Thank you for the opportunity to 
appear before you this morning and thank you for the kind 
words, not only for me but, more importantly, for the men and 
women who serve in SOUTHCOM. It really is my distinguished 
honor to represent them here today.
    I'm extremely pleased also this morning to join my good 
friend and close partner, Chuck Jacoby, as we have a very clear 
and close partnership between NORTHCOM and SOUTHCOM as we work 
the topics and the criminal organizations transitting through 
our two regions. Our routine cooperation and collaboration 
means that the relationships between our staffs grow closer 
every day.
    With the continued support of Congress and the members of 
this committee, SOUTHCOM will continue defending the southern 
approaches to the United States, enhancing regional security, 
and building enduring partnerships.
    Mr. Chairman, I have prepared a full statement and 
respectfully request that it be entered into the record.
    Chairman Levin. It will be made part of the record.
    General Fraser. Mr. Chairman, I want to briefly discuss two 
topics with you this morning, and both you and Senator McCain 
briefly talked about them. That's countering TOC. My other 
topic is building enduring partnerships.
    As I have discussed with you in previous testimony, as you 
mentioned this morning, SOUTHCOM has increasingly focused on a 
concern that permeates the region--TOC. As Vice President Biden 
discussed during his visit to Mexico and Honduras last week, 
TOC is seriously impacting citizen safety in Central America, 
especially Guatemala, El Salvador, and Honduras. TCOs threaten 
to overwhelm law enforcement capacities and, in an effort to 
reduce violence and halt the spread of these criminal groups, 
these countries have deployed their militaries in support of 
law enforcement organizations.
    To address this growing threat, last year the President 
implemented a strategy to combat TOC. In support of this 
strategy, SOUTHCOM developed and implemented Operation 
Martillo, a focused plan to eliminate illicit maritime traffic 
in the departure zones of South America and the arrival zones 
in Central America. In Central America, we help train our 
partner militaries to effectively support their law enforcement 
organizations. SOUTHCOM supports U.S. interagency and 
international efforts by providing network analysis of TCOs and 
their operations.
    In the Caribbean, under the Caribbean Basin Security 
Initiative, we are developing a regional maritime interdiction 
plan to enhance the capabilities of our Caribbean partners. In 
South America, we will sustain our support to Colombia and to 
Peru as they fight narcoterrorist groups in these countries.
    Success in combatting TOC will be enhanced by fostering 
enduring partnerships with international and interagency 
organizations. That's my second topic this morning. SOUTHCOM is 
working to build such partnerships by enhancing cooperation and 
promoting information-sharing with regional and interagency 
organizations. In addition, we are strengthening our 
partnerships through traditional military engagement programs 
and activities with our counterparts across Latin America. We 
work with them to strengthen humanitarian assistance and 
disaster relief capacities and we remain ready to respond 
should our assistance be requested.
    Last year, we conducted hundreds of training and 
educational events, 11 major multinational exercises with 
partner nations in the hemisphere, and 57 medical readiness 
training exercises in 14 different countries. This sustained 
engagement is yielding important benefits. Last year, for the 
first time Colombia assumed the land component commander role 
during Panamax, our annual multinational exercise focused on 
supporting the defense of the Panama Canal. This year Brazil 
will also join Colombia and they will assume the role as the 
maritime component commander, an important step in 
strengthening and expanding our partnerships throughout the 
hemisphere.
    In closing, Mr. Chairman, I'd like to thank Congress for 
your years of support to Colombia. As you mentioned, I ask for 
your continued support to help them achieve a lasting peace.
    Finally, I want to thank you for your unwavering support to 
the men and women of SOUTHCOM, who work diligently every day to 
ensure our security. I look forward to our discussion, Mr. 
Chairman.
    [The prepared statement of General Fraser follows:]

           Prepared Statement by Gen. Douglas M. Fraser, USAF

                              INTRODUCTION

    Chairman Levin, Senator McCain, distinguished members of the 
committee: thank you for the opportunity to appear before you today to 
report on the posture, security concerns, and future direction of U.S. 
Southern Command (SOUTHCOM). Within the context of modest funding, we 
continue to accomplish our primary objective of defending the United 
States while also promoting regional security and enduring 
partnerships. The key to our defense-in-depth approach to Central 
America, South America, and the Caribbean has been persistent, 
sustained engagement, which supports the achievement of U.S. national 
security objectives by strengthening the security capacities of our 
partner nations. Militaries in our area of responsibility (AOR) are 
increasingly capable, professionalized, and rank among the most trusted 
institutions in many countries in the region.\1\
---------------------------------------------------------------------------
    \1\ Aravena, F. Confianza: base para la gobernabilidad y la 
convivencia democratica en America Latina y el Caribe, 2010. (Trust: 
Foundation of Governability and Democratic Coexistence in Latin America 
and the Caribbean). Facultad Latinoamericano de Ciencias Sociales.
---------------------------------------------------------------------------
    Interagency coordination is the foundation of SOUTHCOM's approach. 
Our relatively lean budget necessitates that we embrace innovative 
techniques to accomplish our mission; we do so by leveraging the 
capabilities and resources of our partners within the region, the U.S. 
Government, and our command. Thirty-three interagency representatives 
and foreign liaison officers from five countries are integrated into 
our command, allowing us to capitalize on in-house expertise and align 
our engagement activities within U.S. Government frameworks. We are 
continuing to refine our organizational model, but the guiding 
principle remains unchanged: we support a comprehensive interagency 
approach that employs whole-of-government solutions to address the 
complex challenges in the region.
    Joint Interagency Task Force South (JIATF-South), our key component 
in detection and monitoring of illicit traffic, exemplifies this unity 
of effort. Considered the linchpin in U.S. counterdrug efforts, JIATF-
South capitalizes on the unique capabilities, authorities, and 
strengths of interagency partners such as the Drug Enforcement 
Administration, the Federal Bureau of Investigation, and the Department 
of Homeland Security. In 2011, JIATF-South operations resulted in the 
disruption of 117 metric tons of cocaine, denying illicit traffickers 
approximately $3 billion in revenue. Our return on investment is 
substantial; in 2010, JIATF-South supported the interdiction of eight 
times the amount of cocaine than was interdicted on the Southwest 
border, at a third of the cost and in an operating area that covers 42 
million square miles.\2\
---------------------------------------------------------------------------
    \2\ In fiscal year 2010, the U.S. Government expended a combined 
$1.8 billion across 11 agencies on interdiction efforts on the 1,969-
mile long Southwest border (SWB); fiscal year 2010 total operating cost 
for JIATF-South was $565.5 million. In fiscal year 2010, law 
enforcement agencies seized 19 metric tons of cocaine at the SWB; in 
comparison, JIATF-South operations resulted in the disruption 154 
metric tons.
---------------------------------------------------------------------------
    None of our efforts would have been possible without the continued 
support of Congress. Almost three decades ago, Congress recognized the 
important role the Department of Defense (DOD) could play to counter 
the threat of drug trafficking, particularly in support of civilian law 
enforcement efforts. More recently, through the provision of 
authorities commonly referred to as Sections 1206, 1207, and 1208, we 
trained and equipped partner-nation forces to help the United States 
combat terrorism and conduct stability operations. Congressional 
approval to delink the International Military Education and Training 
(IMET) program from the American Servicemembers' Protection Act 
sanctions has allowed us to educate and train hundreds of military 
personnel in the region, a critical element in strengthening military-
to-military relations. We also appreciate the ongoing support Congress 
provides to the Department of State's regional security initiatives 
such as the Central American Regional Security Initiative (CARSI), the 
Caribbean Basin Security Initiative (CBSI), and the Colombia Strategic 
Development Initiative, all of which provide direction and support to 
our engagements in the region.
    As we look to the future, we will continue to seek innovative ways 
to support interagency coordination; streamline programs and 
initiatives; and replicate the success of our highly effective, small-
footprint approach that bolsters the security capacity of regional 
militaries and ensures the multi-layered defense of the United States. 
We believe our approach will be increasingly important given 
constrained resources and the complex challenges we face in our AOR. 
While we do not see a traditional military threat emanating from the 
region, nations throughout our hemisphere are contending with an 
asymmetric threat to national and international security: Transnational 
Organized Crime (TOC). In addition to this primary concern, SOUTHCOM 
also remains watchful for the potential impact of natural disasters; 
the activities of violent extremist organizations; and the implications 
of the activities of nations such as Iran in our AOR.

                         STRATEGIC ENVIRONMENT

Security Concerns
    During the past decade, the international system underwent a 
profound transformation as globalization irrevocably altered commerce, 
culture, trade, and technology. With these developments, however, came 
the parallel globalization of organized crime, violence, murder, and 
kidnappings related to illicit trafficking. In many parts of our 
hemisphere--but most acutely in Central America--TOC has evolved into a 
volatile and potentially destabilizing threat to both citizen and 
regional security. Fluid, agile, and complex, these sophisticated 
networks conduct illicit operations that traverse the boundaries of the 
Geographic Combatant Commands (GCCs). Illicit trafficking by 
transnational criminal organizations is expanding between our AOR and 
the AORs of U.S. Northern Command (NORTHCOM), U.S. Africa Command, and 
U.S. European Command, underscoring the truly global nature of this 
networked threat.
    Central America has become the key transshipment zone for illicit 
trafficking in the hemisphere; approximately 90 percent of cocaine 
destined for the United States now transits the sub-region. Guatemala, 
Honduras, and El Salvador are experiencing alarming increases in 
murders and brutality. The rising wave of violence and illicit 
trafficking, coupled with the expansive resources of TOC, is 
challenging the law enforcement capacities of some Central American 
governments. Accordingly, these countries view their militaries as the 
only entities capable of responding to these threats. In 2011, El 
Salvador extended the 2010 deployment of its military to support 
domestic law enforcement, while Guatemala and Honduras repeatedly 
relied on their armed forces to counter the spread of TOC. Guatemalan 
law enforcement institutions struggled to bring violence under control 
in 2011; after the massacre of 27 farm workers in Peten by operatives 
of the Mexican-based Los Zetas organization, Guatemala declared a 60-
day military state-of-siege, the second in less than a year.
    To Central America's north, the Government of Mexico has fully 
committed to reducing the power and impunity of TOC and drug cartels. 
Events in Mexico and in SOUTHCOM's AOR are inherently connected, 
requiring an integrated effort across law enforcement, military, and 
civilian agencies. Many countries in Central America face challenges in 
addressing impunity, porous borders, and large areas of under-governed 
territory, all of which underscore the imperative of a whole-of-
government approach. The emergence of a collective of compromised 
states in Central America that is unable to counter transnational 
threats would have enormous implications for the United States and the 
hemisphere. The inability of one country to effectively respond to the 
intertwined threats of TOC and illicit trafficking is troubling; the 
inability of an entire sub-region has serious implications for regional 
stability and the security of the United States.
---------------------------------------------------------------------------
    \3\ The U.S. interagency flow numbers use Documented Cocaine 
Movement, which is drawn from analysis of the Consolidated Counterdrug 
Database (CCDB) and augmented by law enforcement reporting. JIATF-
South's Projected Cocaine Movement is calculated based on demand-driven 
methodology to project the amount of cocaine that must be leaving South 
America to satisfy global demand. JIATF-South's methodology attempts to 
capture the `unknowns' inherent to cocaine flow figures.
---------------------------------------------------------------------------
Profile of transnational criminal organizations
      
    
    
      
    In recent years, TCOs have diversified their portfolios beyond 
cocaine, trafficking in precursor chemicals from India, China, and 
Bangladesh; commercial weapons from the United States; people, 
including the forced trafficking of humans and the smuggling of 
migrants and special interest aliens; and drug proceeds in the form of 
bulk cash from the United States. This cash is increasingly entered 
into the global financial system through countries such as Panama, 
Guatemala, Argentina, and Venezuela,\4\ often under the guise of 
legitimate trade. The narcotics business model has also evolved. Many 
criminal organizations operate with impressive acumen, employing an 
interconnected network of operational enablers: brokers who negotiate 
with coca growers in South America; transportistas who act as sub-
contractors to coordinate cocaine shipments through the transit zone; 
specialists who construct sophisticated submersible vessels capable of 
transporting 8-10 metric tons of cocaine in one trip; hitmen or 
sicarios whose violent services ensure compliance and territorial 
protection through 1coercion and intimidation; wholesalers and 
retailers in the United States who distribute illicit products; and 
attorneys, bankers, and accountants who help launder illicit proceeds 
that can be used for corruption of police and border officials to 
ensure freedom of movement.
---------------------------------------------------------------------------
    \4\ Department of State. 2011 International Narcotics Strategy and 
Control Report, vol. II; Financial Action Task Force (FATF). List of 
jurisdictions with AML/CTF deficiencies, October 28, 2011.
---------------------------------------------------------------------------
    While Mexican criminal organizations have expanded and consolidated 
control over key illicit trafficking routes in Central America, they 
are by no means the only illegal groups operating in the region. 
Terrorist groups, like the Fuerzas Armadas Revolucionarias de Colombia 
(FARC) and Sendero Luminoso in Peru, fund their insurgencies through 
illicit trafficking. Criminal activities extend into the Venezuelan 
government; in September 2011, the Department of the Treasury 
designated four Venezuelan officials under the Foreign Narcotics 
Kingpin Act--identical to the 2008 designation of General Henry Rangel 
Silva, the new Minister of Defense--for supporting the FARC's narcotics 
and arms trafficking. The bandas criminales (BACRIM) in Colombia are 
testament to the highly adaptive nature of TOC; these criminal networks 
grew from the vestiges of disbanded paramilitary groups and are now 
focused on illicit profits rather than territorial control. In Brazil, 
criminal gangs control cocaine trafficking and many of the country's 
favelas. Transnational gangs like Mara Salvatrucha 13 (MS-13) and Calle 
18 (M-18) have a long-established presence in Central America and 
maintain active ties to U.S.-based affiliates, engaging in extortion, 
kidnapping, and murder-for-hire in El Salvador, Guatemala, Honduras, 
and the United States. Increasingly, these gangs are collaborating with 
larger trafficking organizations to provide a range of criminal 
services.
    TCOs possess a critical enabler that many states in Central America 
lack: enormous financial reserves. The illicit financial flows 
associated with TOC are staggering; the United Nations Office of Drugs 
and Crime (UNODC) estimates annual global gross profits from cocaine 
sales at $84 billion, $35 billion of which is generated in retail and 
wholesale profits in North America alone.\5\
---------------------------------------------------------------------------
    \5\ UNODC. Estimating illicit financial flows resulting from drug 
trafficking and other TOC, 2011. Similar estimates are provided by the 
DEA; according to the 2011 National Drug Control Strategy, the DEA 
estimates that Mexican and Colombian drug traffickers generate, remove, 
and launder between $18 billion and $39 billion annually in wholesale 
drug proceeds, which are largely smuggled in bulk out of the United 
States via the Southwest Border.
---------------------------------------------------------------------------
      
    
    
      
    Illicit traffickers in South America, Central America, and the 
Caribbean pocket an estimated $18 billion in gross cocaine profits per 
year.\6\ Lucrative profits enable organized crime to increase 
operational capacity at a rate that far outpaces that of regional law 
enforcement and militaries, purchasing sophisticated, military-grade 
weapons, investing in semi and fully submersible vessels to improve 
transportation, corrupting and coercing government officials to ensure 
freedom of movement, and recruiting and bankrolling highly trained 
specialists, many with military backgrounds.
---------------------------------------------------------------------------
    \6\ UNODC, op. cit.
    \7\ UNODC. 2011 Global Study on Homicide: Trends, Context, Data.
---------------------------------------------------------------------------
Threat to Citizen Safety
    In support of security initiatives led by the Department of State, 
we focus our efforts on countering the impact of transnational criminal 
activity on citizen security, which is currently most threatened in 
Central America. Lack of rule of law and widespread impunity provide 
fertile ground for illicit trafficking and unchecked criminal violence. 
Present-day homicide rates in Central America have reached crisis 
levels.\8\ Honduras posted a record-setting homicide rate not seen in 
the hemisphere since Colombia in the 1980s; in 2011, San Pedro Sula 
overtook Ciudad Juarez as the most violent city in the world, with 159 
homicides per 100,000 residents.\9\ Although still low by regional 
standards, Panama's rate represents a 140 percent increase over the 
past five years. In Guatemala, Honduras, and El Salvador, we have also 
seen troubling instances of targeted murders of government officials, 
community activists, journalists, and law enforcement personnel. In 
2011, drug traffickers killed and dismembered an auxiliary prosecutor 
in Coban, Guatemala, leaving his decapitated body in front of the 
governor's house. In El Salvador, gangs have repeatedly attacked or 
murdered local officials, police officers, and soldiers. In Honduras, 
23 journalists have been assassinated in the past 5 years, 10 of whom 
were specifically targeted for covering illicit trafficking and 
corruption.
---------------------------------------------------------------------------
    \8\ Due to inconsistencies in data collection, it is difficult to 
ascertain how much of this violence is directly caused by illicit 
trafficking, organized crime, and gang activity, but the UNODC's 2011 
Global Study on Homicide assesses that between 25 and 40 percent of 
violence in the Americas is related to organized crime and gangs.
    \9\ Consejo Ciudadano para la Seguridad, Justicia y Paz Penal A.C. 
(Citizen Council for Public Security and Criminal Justice), Mexico, 
2011.
---------------------------------------------------------------------------
Threat to U.S. National Security
    Of particular concern, TCOs operating in the region control the 
smuggling routes that traverse the hemisphere, many of which lead into 
the United States. These routes represent potential access points that 
could be leveraged by other groups. South American-based Alien 
Smuggling Organizations (ASOs) provide a critical link for 
international trafficking networks and facilitate the illegal movement 
of Special Interest Aliens (SIAs) through South and Central America for 
attempted entry into the United States.\10\ While we have not yet seen 
any attempts by international terrorist groups to leverage these 
smuggling routes, we remain watchful for the potential threat of TCOs 
collaborating to move terrorists through our AOR and into the United 
States.
---------------------------------------------------------------------------
    \10\ The Department of Homeland Security defines SIAs as 
individuals from ``Special Interest'' countries, or countries that have 
some connection to international terrorism.
---------------------------------------------------------------------------
    Additionally, the global illicit economy is underpinned by vast and 
intricate money laundering systems that are utilized by both criminals 
and terrorists alike, albeit to different ends. Understanding the 
complex financial flows of these networks can help the law enforcement, 
intelligence, and defense communities focus our efforts on groups 
engaging in activities that most directly threaten U.S. national 
security. We do see evidence of international terrorist groups 
benefitting from the intertwined systems of illicit trafficking and 
money laundering in our AOR; in South America, funding for Hizballah is 
raised through licit avenues, such as charitable donations, and illicit 
means, including trafficking in drugs, counterfeit, and pirated goods. 
In 2011, the U.S. Treasury Department identified the Lebanese Canadian 
Bank as a ``primary money laundering concern'' for its role in 
facilitating the money laundering activities of Ayman Joumaa and his 
Lebanon-based drug trafficking network, which also channeled financial 
support to Hizballah. Joumaa is also accused of smuggling U.S.-bound 
cocaine through Central America and Mexico and providing money 
laundering services to Los Zetas and numerous Colombian and Venezuelan 
suppliers.\11\
---------------------------------------------------------------------------
    \11\ United States of America v. Ayman Joumaa. U.S. District Court 
for the Eastern Division of Virginia, November 3, 2011.
---------------------------------------------------------------------------
    Finally, the pernicious reach of TOC is exemplified by one word: 
transnational. The National Drug Intelligence Center assesses that 
Mexican-based TCOs and their associates operate in upwards of 1,000 
U.S. cities, working with domestic U.S. gangs to distribute and traffic 
illicit drugs throughout the United States.\12\ Additionally, 
transnational gang activity in the United States is a growing concern 
for the FBI. MS-13 leaders in El Salvador manage five regional 
``programs'' of cliques in cities such as Boston, Greensboro, Miami, 
and Dallas, and have authorized retaliatory actions against U.S. law 
enforcement personnel in the Virginia and Maryland areas, which 
fortunately did not come to fruition. The deepening linkages between 
illicit trafficking inside the United States and TOC in our AOR are 
representative of the wide-reaching impact of this networked threat.
---------------------------------------------------------------------------
    \12\ National Drug Intelligence Center, 2011 National Drug Threat 
Assessment.
---------------------------------------------------------------------------
Regional Stability
    In addition to the threat posed by TOC, the region is also 
vulnerable to humanitarian crises, mass migrations, and natural 
disasters. SOUTHCOM remains a committed and responsive partner in 
foreign humanitarian assistance and disaster relief efforts. To enhance 
partner-nation preparedness, we strengthen the humanitarian assistance 
and disaster relief (HA/DR) capacities of regional militaries-through 
our multinational training exercises and security cooperation 
activities. Our efforts are yielding long-term dividends while also 
promoting the shared responsibility and costs of regional leadership in 
responding to catastrophes. Countries such as Guatemala, El Salvador, 
Costa Rica, and Colombia have demonstrated an increased capacity to 
respond to natural disasters without asking for U.S. or international 
aid, a testament in part to the effectiveness of our programs.
    SOUTHCOM is also watchful for potential geopolitical turbulence 
that could impact U.S. citizens and military personnel in the region, 
particularly in Cuba, Haiti, Bolivia, and Venezuela. Fidel Castro's 
leadership transition to his brother Raul is complete, but the long-
term effects of the government's market reforms remain to be seen. 
Haiti, while making slow but steady progress, remains vulnerable to 
natural disasters and economic hardship. Public demonstrations in 
Bolivia related to wages, food prices, and energy shortages are likely 
to continue until the government addresses the underlying causes of 
social turmoil. In Venezuela, uncertainties about President Chavez's 
health, continued economic instability, and escalating levels of 
violence are placing increasing demands on the Venezuelan Government.

Violent Extremist Organizations and Influence of Iran
    In addition to Hizballah supporters throughout South America, the 
region is home to a small number of violent extremist organizations. We 
remain vigilant for the potential radicalization of homegrown 
extremists. Sunni extremists, while small in number, are actively 
involved in the radicalization of converts and other Muslims; these 
efforts can be seen through the influence of public personalities like 
Jamaica's Shaykh Abdullah al-Faisal, who was convicted in the United 
Kingdom for inciting terrorism. Current al Qaeda senior operative Adnan 
el-Shukrijumah has held valid passports for the United States as well 
as Guyana and Trinidad and Tobago, where he has family and associates. 
Despite the recent convictions in the 2007 plot to attack the John F. 
Kennedy International Airport, one alleged co-conspirator remains at 
large in Guyana.
    In an attempt to circumvent international sanctions, Iran continues 
its overtures to the region and has succeeded in establishing modest 
economic, cultural, and security ties, mostly with nations aligned with 
the Bolivarian Alliance for the People of our Americas (ALBA), such as 
Venezuela, Ecuador, Bolivia, Nicaragua, and Cuba. Iran also propagates 
its agenda through its 36 Shia cultural centers. The Fundacion Cultural 
Oriente--an Iranian outreach center dedicated to strengthening Iranian 
ties to Latin America--is run by the radical cleric Moshen Rabbani, 
currently on the Interpol Red List for involvement in the 1994 bombings 
of a Jewish cultural center in Buenos Aires. Rabbani oversees several 
media outlets and has recruited students from the region to study in 
Iran. We take Iranian activity in the hemisphere seriously and we 
monitor its activities closely. The U.S. Government's successful 
detection and thwarting of the plot to assassinate the Saudi ambassador 
to the United States reinforces the importance of that monitoring and 
the effectiveness of U.S. countermeasures.

Russia and China in the Region
    Russia and China also factor into the strategic environment in the 
region. Russia's outreach to the region is centered primarily on arms 
sales and expanding military ties. Russian weapons provide a low-cost 
alternative that is appealing to many nations in the region; in 2011, 
Venezuela became the largest importer of Russian arms in the world.\13\ 
Brazil, Colombia, Ecuador, and Peru all have engaged in arms transfer 
agreements with Russia over the past few years, and the Latin American 
market represents a large and growing segment of global arms sales by 
Russia. Historically, Russia's strongest partnerships have been with 
Venezuela, Cuba, and Nicaragua, but its engagement efforts are 
expanding.
---------------------------------------------------------------------------
    \13\ According to the Center for Analysis of World Arms Trade, in 
2011 Venezuela purchased an unspecified number of T-72B1 tanks, BMP-3M 
infantry fighting vehicles, BTR-80A armored personnel carriers, Msta-S 
152-mm self-propelled howitzers, Nona-SVK 120-mm self-propelled 
mortars, Grad multiple rocket launchers, and an assortment of other 
weaponry, In 2012, the country will begin production of AK-103 assault 
rifles.
---------------------------------------------------------------------------
    China's strategy vis-a-vis the region is based on expansion of 
trade and investment in commodities. Beijing has also increased its 
engagements in the military realm; Chinese arms sales to regional 
militaries have more than quadrupled in the past 5 years, while the 
frequency of high-level Chinese visits has also increased 
substantially. Currently, 18 countries in Central America, South 
America, and the Caribbean receive military training from China. In 
September 2011, the Chinese hospital ship ``Peace Ark'' embarked on its 
first-ever humanitarian mission to the Western Hemisphere, visiting 
Cuba, Jamaica, Trinidad and Tobago, and Costa Rica and provided 
bilateral medical exchanges and assistance in each port visit. This 
type of endeavor is consistent with China's declared intent to expand 
diplomatic, economic, and military relations in the region.\14\
---------------------------------------------------------------------------
    \14\ China's Policy Paper on Latin America and the Caribbean, 2008.
---------------------------------------------------------------------------
    SOUTHCOM will continue to maintain and deepen our existing 
partnerships, while exploring avenues for future cooperation with key 
nations in the region. Throughout the world, U.S. military and defense 
partnerships are essential to ensuring national security, but nowhere 
more so than within our own hemisphere, which is comprised of nations 
that share the same interest in promoting regional and global 
stability, freedom, and prosperity. SOUTHCOM is committed to being the 
security partner of choice for these nations. We demonstrate this 
commitment through our multinational training exercises, security 
cooperation activities, humanitarian assistance programs, and military-
to-military engagements, all of which build strong security 
partnerships that help every nation meet the challenges of an uncertain 
and complex security environment.

                           STRATEGIC APPROACH

Strengthening Our Partnerships
    Building partnerships is the cornerstone of our strategic approach, 
ensuring the forward defense of the United States by promoting capable 
regional militaries that share in the responsibility of hemispheric 
security and stability. Our efforts are designed to strengthen and 
enhance the capacities of partner nations to respond to domestic and 
regional threats, both individually and collectively. We envision a 
hemisphere characterized by nations working together to address the 
emerging security challenges of the coming decade. SOUTHCOM's modest 
budget and small footprint have encouraged us to embrace innovative, 
low-cost approaches to achieving our security objectives; annual 
exercises, rotational presence, and advisory roles are integral to our 
engagement with the region. Through our component commands, our efforts 
focus on strengthening the security capacity of regional militaries in 
support of civilian government-led efforts to counter TOC and illicit 
trafficking; respond effectively to natural and humanitarian disasters; 
contribute to global stability operations; and assist in our efforts to 
ensure a safe, secure, and stable region.

Countering Transnational Organized Crime
    Within our authorities, SOUTHCOM is supporting the efforts of 
militaries throughout Central America that have been tasked by their 
civilian governments to assist in countering TOC. Our component command 
12th Air Force (U.S. Air Forces Southern) began implementation of its 
successful Sovereign Skies Expansion Program with Air Forces in Belize, 
Guatemala, Honduras, and El Salvador. Working closely with NORTHCOM, 
the State Department, and the U.S. Embassies in Guatemala, Belize, and 
Mexico, we supported full implementation of our Border Security 
Initiative, providing targeted counter-narcotics training, equipment, 
and infrastructure to all three countries. Under this initiative, we 
facilitated the establishment of an Interagency Border Security Unit in 
Tecun Uman and a border checkpoint at El Carmen to increase land 
interdiction capabilities along the Guatemala-Mexico border. Further 
south on the Central American isthmus, we worked with the U.S. Embassy 
in San Jose to conduct training and checkpoint infrastructure 
improvements in Costa Rica to help address the flow of illicit traffic 
along the Pan-American Highway.
    Executed by our component command U.S. Naval Forces Southern 
Command, our multinational naval training exercise Southern Seas 
continues to yield positive results in increased maritime domain 
surveillance and interdiction capabilities throughout our AOR. The 2011 
Southern Seas included two multinational exercises conducted off the 
eastern and western coasts of South America. Unitas Atlantic and Unitas 
Pacific provided training on multinational naval interoperability, 
maritime interdiction operations, and naval special warfare. Over 4,000 
participants from navies in the region participated in the 2011 Unitas 
exercises in Brazil and Chile. Thanks in part to participation in our 
security cooperation activities, the Nicaraguan, Honduran, Salvadoran, 
Panamanian, and Colombian navies are contributing important 
interdiction capacities to JIATF-South's ongoing operations. Capable 
militaries and security forces that help counter illicit trafficking 
act as force multipliers to regional efforts and are indicative of the 
long-term dividends of our training and exercise programs. Cocaine 
seizures in Colombia, particularly by the Colombian Navy, are among the 
highest in our AOR, while Brazil seized a record 115 tons of illegal 
drugs on their borders this year.
    Our annual multinational exercises are also designed to improve 
interoperability and promote collaboration among participants, skills 
that can be employed at the regional level and in multinational 
operations. Held in El Salvador and executed by our component Special 
Operations Command South, this year's Fuerzas Comando helped improve 
the training, readiness, and capability of 250 Special Operations Force 
(SOF) soldiers and special police units. During the 2011 Southern 
Partnership Station exercise, U.S Naval Forces Southern Command 
deployed a High Speed Vessel (HSV) SWIFT team, which conducted 
engagements in five partner nations centered on medical, Naval Criminal 
Investigative Service, and Maritime Civil Affairs discussions with 
partner-nation counterparts.
    Although we are focusing our current efforts in Central America, we 
recognize the interconnectedness and adaptability of transnational 
threats throughout the hemisphere. Colombia and Peru remain top 
priorities; both countries are engaged in definitive campaigns to 
defeat the weakened terrorist threats within their borders. U.S. 
support to both nations remains important at this critical juncture. 
Due to its proximity to the United States and former role as the 
primary transit zone, the Caribbean remains vulnerable to exploitation 
by TOC. In support of the CBSI, programs like Secure Seas and our 
multinational training exercises are improving maritime interdiction in 
the Dominican Republic, Jamaica, and throughout the Eastern Caribbean, 
providing an important preventative capacity each nation can use to 
enhance their security. Led by our component U.S. Marine Corps Forces 
South, over 1,000 military personnel from the Caribbean and the United 
States participated in our 2011 Tradewinds exercise, which focused on 
improving maritime interdiction and ground security skills at the 
tactical and operational levels.

Promoting Regional Stability and HA/DR Capacity
    As demonstrated by our support to the U.S. response effort after 
the 2010 earthquake in Haiti, SOUTHCOM possesses unique capabilities to 
respond to natural disasters. These capabilities provide critical 
support to lead Federal agencies in disaster response efforts and 
ensure that we remain prepared to conduct non-combatant evacuation 
operations for American citizens in Central America, South America, and 
the Caribbean, if necessary. We also stand ready to bolster the efforts 
of regional militaries to provide support to civilian authorities in 
foreign HA/DR events. During 2011, we made significant progress 
advancing a framework for military support to civilian-led disaster 
relief operations, using the computer-networking tool All Partners 
Access Network (APAN) as a potential standardized technology platform 
to facilitate collaboration among regional militaries during disaster 
response efforts. We also continued development on our Caribbean 
Disaster Emergency Management Agency (CDEMA) initiative, promoting 
increased disaster resilience and response capability in the 18 
Caribbean Community (CARICOM) nations.
    In 2011, SOUTHCOM also engaged with our partners through several 
complementary activities: our Humanitarian Assistance Program (HAP), 
disaster preparedness projects, and annual humanitarian assistance 
exercises. This past year we completed 255 HAP projects in 28 countries 
in our AOR, constructing disaster response warehouses, wells, potable 
water systems, and emergency operations centers. We also executed 22 
low-cost projects designed to increase disaster preparedness in 
Honduras, Guatemala, El Salvador, Colombia, Dominica, Haiti, St. Kitts, 
and Suriname. In conjunction with these projects, we provided training 
to first responders and disaster response managers, imparting a 
critical skill that can be employed long after our forces have left the 
country. Held in Trinidad and Tobago and Guatemala and led by our 
component U.S. Army South, the 2011 Fuerzas Aliadas Humanitarias 
exercise brought together more than 480 participants from regional 
militaries, civilian disaster management agencies, and first responders 
to provide field training in disaster relief and recovery efforts. Of 
note, our cost-effective HAP program has attracted funding from the 
international community; the Inter-American Development Bank has 
pledged to incorporate the sustainment of eight HAP schools being built 
in 2012 into its $50 million grant package that supports public and 
primary education in Haiti.
    Our Continuing Promise humanitarian mission continues to foster 
goodwill and demonstrate core U.S. values. In 2011, the USNS Comfort 
visited nine countries in the region, providing invaluable training to 
U.S. service men and women and partner-nation personnel while also 
providing free medical care and civic assistance to communities 
throughout our AOR. During the 2011 mission, the 850-person crew--
comprised of U.S. servicemembers, civilians, volunteers from 
nongovernmental organizations, and members of partner-nation 
militaries--treated approximately 70,000 patients, performed more than 
1,000 surgeries, and conducted 16 engineering projects in Colombia, 
Costa Rica, Ecuador, El Salvador, Guatemala, Jamaica, Nicaragua, Peru, 
and Haiti.
    Our component U.S Army South led the 2011 humanitarian civic 
assistance exercises Beyond The Horizon and New Horizons in El 
Salvador, the Dominican Republic, and Haiti, while 12th Air Force (U.S 
Air Forces South) executed the 2011 New Horizons in Suriname. An 
integral part of these missions, our medical readiness training 
exercises resulted in the treatment of 85,364 patients and provided 
training opportunities to more than 6,000 U.S. Reserve component and 
Active Forces and 250 partner-nation personnel, while also bolstering 
partner-nation state presence in rural, often under-governed areas. As 
our only forward operating location, Joint Task Force-Bravo (JTF-B) 
supports immediate response to HA/DR events and DEA-led counter-drug 
operations. In 2011, U.S. medical forces stationed at JTF-B treated 
20,257 patients throughout Central America and assisted with 
transporting food and supplies to local schools and orphanages in 
Honduras. Although small in force size, JTF-Bravo serves as a tangible 
representation of U.S. values and of our steadfast commitment to the 
region.

Promoting Shared Responsibility
    Our security cooperation activities and military-to-military 
engagements by SOUTHCOM and our components have helped increase 
security across the entire region and helped promote shared 
responsibility for hemispheric security. For example, during the 
Sovereign Skies program, our component 12th Air Force (U.S. Air Forces 
Southern) provided training and conducted interoperability exercises 
with the Dominican Republic Air Force to increase illicit air 
interdiction capacity in the Caribbean. This training--in conjunction 
with the country's purchase of Brazilian A-29 Super Tucano aircraft and 
Italian radars--helped reduce illicit air tracks into the Dominican 
Republic from over one hundred per year to almost zero. Led by U.S. 
Army South, PANAMAX focuses on the cooperative defense of the Panama 
Canal. PANAMAX is one of our oldest multinational exercises, growing 
from two participating nations in 2003 to over seventeen this year. 
Colombia's participation culminated by leading the Combined Forces Land 
Component Command in 2011. This remarkable achievement is a testament 
to Colombia's success in regaining security and the importance of 
ongoing U.S. engagement with Colombia, which is yielding enormous 
dividends in other areas. Colombia is now a leading provider of 
bilateral security assistance and a regional partner in security 
operations throughout Central America, South America, and the 
Caribbean.
    Our engagement with regional militaries also includes training for 
peacekeeping operations in support of multinational peace and stability 
efforts. We execute the Department of State's Global Peace Operations 
Initiative (GPOI) to build the peacekeeping capacity of 11 
participating partners. In support of this objective, our components 
U.S. Marine Corps Forces South and U.S Army South conduct two annual 
training exercises, Partnership of the Americas and Peacekeeping 
Operations Americas (PKO-A). The GPOI program and our exercises provide 
the opportunity for our partners to sustain capacity to support United 
Nations peace support operations. Countries in our AOR contribute 
nearly 8,000 personnel to peace support and stability operations 
throughout the world, including critical and ongoing support to the 
U.N. Missions in Haiti, Lebanon, and the Sudan. We are also seeing 
GPOI-funded countries exporting their peace support training; in 2011, 
a GPOI-funded Peruvian Military Mobile Training Team provided training 
to the El Salvadoran military in support of its deployment to the U.N. 
Mission in Lebanon.
    We engage with regional militaries through our educational and 
academic institutes: the Western Hemisphere Institute for Security 
Cooperation, the Inter-American Defense College, the Center for 
Hemispheric Defense Studies. We also utilize the International Military 
Education and Training program to achieve our objectives for regional 
military engagement. I want to thank Congress for its continued support 
for these important programs, which build enduring relationships 
between future military leaders in the region and the United States and 
promote positive relations between partner nations. We further expand 
on these relationships through our engagements with senior defense 
leaders throughout our AOR. Our component command U.S. Army South 
supported the 2011 Central American Regional Army Leaders Conference, 
bringing the Guatemalan, Honduran, Salvadoran, and Nicaraguan Army 
Commanders together for the first time to discuss shared security 
concerns related to TOC. U.S. Marine Corps Forces South's 2011 Marine 
Leaders and Senior Enlisted Leaders Conferences helped enhance 
relations between the Marine Corps and Naval Infantries in North, 
Central, and South America, while 12th Air Force's (U.S. Air Forces 
Southern) support to the 2011 System of Cooperation Among the American 
Air Forces brought together representatives from 13 member nation Air 
Forces in the Western Hemisphere to discuss opportunities for mutual 
cooperation.
    As we look to future engagements, SOUTHCOM is working with the 
armed forces of other willing nations, such as Colombia, Chile, and 
Brazil, to enhance security throughout the Western Hemisphere. Colombia 
is providing training to military personnel in its Regional Training 
Center \15\ and to over 2,000 police officers in Central America. In 
2011, the Colombian Air Force began working with its Honduran 
counterparts to interdict illicit air traffic and expand intelligence 
sharing. In support of the 2011 Central American Integration 
Secretariat's (SICA) Donors Conference, Chile offered to share its 
naval expertise in securing its maritime domain with Central American 
militaries and security forces. In 2011, Brazil played a pivotal role 
in facilitating improved trilateral counterdrug efforts with Bolivia 
and the United States, and we hope to expand and deepen this kind of 
cooperation in the coming year.
---------------------------------------------------------------------------
    \15\ Under the U.S. OH-58 helicopter initiative, the Rotary Wing 
Entry Training Center in Melgar, Colombia is currently training 24 
Mexican pilots per year, enhancing efforts in the AORs of both SOUTHCOM 
and NORTHCOM.
---------------------------------------------------------------------------
    Our engagement efforts also extend to the private sector and 
nongovernmental organizations (NGOs). Many NGOs have their own active 
programs in the region and can lend unique capabilities and expanded 
resources to complement our engagement initiatives. SOUTHCOM championed 
public-private cooperation during Operation Unified Response (OUR), and 
this type of collaboration can yield enormous benefits for U.S. 
departments and interagency, and our partner nations. In 2011 our 
business engagement team facilitated support from a multinational 
corporation to a local U.S. Agency for International Development 
(USAID) project in Honduras and coordinated the donation of $20 million 
worth of pharmaceuticals from NGOs to clinics and hospitals in 
Honduras, Guatemala, Colombia, Trinidad and Tobago, and Guyana, helping 
strengthen partner-nation state presence in under-governed areas. The 
cumulative result of this type of engagement--along with our ongoing 
exercises and security cooperation activities--is a region comprised of 
nations, militaries, and citizens that are willing and able to share in 
the responsibility of ensuring hemispheric security and stability.

Ensuring the Safe, Humane, and Transparent Care and Custody of 
        Detainees
    As part of our strategic objective to defend the United States, 
SOUTHCOM also remains committed to providing a safe, humane, and 
transparent detention center at U.S. Naval Station, Guantanamo Bay, 
Cuba, for detainees and prisoners in U.S. military custody there. In 
accordance with guidance from the Secretary of Defense, SOUTHCOM will 
continue operations at Joint Task Force-Guantanamo until such time as 
directed otherwise. We will also continue to support the transfer of 
those detainees who are approved for transfer to their country of 
origin for repatriation or third-countries for resettlement, consistent 
with applicable U.S. laws and reporting requirements. Joint Task Force-
Guantanamo and SOUTHCOM routinely meet with International Committee of 
the Red Cross representatives to discuss their observations following 
regular visits to the detention facilities. Additionally, coverage of 
the 2011 arraignment of Abd al-Rahim al-Nashiri was broadcast via 
closed circuit television in selected sites in Norfolk and the 
Washington DC areas, enhancing the transparency of military commission 
proceedings at Joint Task Force-Guantanamo.

                         LOOKING TO THE FUTURE

Strategic Priorities
    In the immediate future, we will focus our efforts on strengthening 
the security capacities of our partners in Central America. As the lead 
U.S. agency responsible for directing illicit trafficking detection and 
monitoring activities, we are undertaking operational and tactical 
activity in support of whole-of-government efforts to counter TOC in 
the maritime approaches to Central America. On January 15, within our 
existing resources, we began Operation Martillo, a joint, interagency, 
and combined operation led by SOUTHCOM and JIATF-South and coordinated 
with partner-nation assets on patrol or alert. This persistent 
operation aims to disrupt maritime illicit trafficking along the 
Central American littorals. We recognize that the effects of Operation 
Martillo can be amplified by aligning our air and maritime focus with 
complementary land law enforcement activities conducted by partner 
nations; as such, we have coordinated our activities with the Central 
American Governments and international donors to maximize all possible 
means for supporting this effort.
    While we work to achieve our strategic objectives in the long-term, 
the challenge for SOUTHCOM is to find creative ways to enhance 
interagency, public-private, and partner-nation cooperation as we plan, 
train, and operate with regional militaries to address the predominant 
security concerns in the region. The intricately networked, globalized 
nature of TOC signifies that no one country or agency can solve this 
problem alone; collaboration with partner nations and across the U.S. 
Government will be essential to successfully mitigate this threat. Our 
goal is to support partner-nation and U.S. Government efforts to 
improve citizen safety by reducing the threat of TOC from a national 
and regional security threat to a public safety problem.
    We expect militaries in Guatemala, Honduras, and El Salvador will 
continue to be called upon to play an important role in domestic 
security matters in the coming years, given the increasing threat to 
citizen security and the numerous challenges facing regional law 
enforcement institutions, which are under-resourced, poorly trained and 
equipped, and prone to corruption. While we recognize this is a 
necessary initial step to help curb the rising tide of violence, we 
also recognize that this approach is unsustainable in the long term; 
strengthening civilian law enforcement institutions is critical, and we 
will support the Department of State as the lead agency in this 
endeavor. As militaries continue to take on internal security 
responsibilities, our Human Rights Initiative will remain a critical 
mission set. Through this program, we will continue to support partner-
nation military and security forces in instituting human rights 
training; revising policies and regulations to include human rights 
principles; strengthening internal control mechanisms; and improving 
cooperation with civilian authorities and civil society.
    To address the growing threat of TOC, SOUTHCOM has shifted its 
approach towards a more holistic strategy that will help us prioritize 
programs, streamline activities, and integrate our efforts across the 
U.S. interagency. While our primary focus will remain strengthening 
partnerships to enable effective regional security, we will also 
support and contribute to the disruption of illicit trafficking; the 
dismantling of TOC networks; and the fostering of alternatives to 
criminal influence in under-governed areas. Our efforts complement both 
the National Strategy to Combat Transnational Organized Crime and the 
citizen safety goals of CARSI and CBSI. The key concept in our strategy 
is support. With the exception of fulfilling our statutory 
responsibility as the lead agency for detection and monitoring of 
aerial and maritime transit of illegal drugs, DOD plays a supporting 
role in all counter-narcotics and related efforts.
    Enhanced support is only one part of our refined approach; we are 
also examining how to use our capacities in network analysis and 
operational planning to maximize U.S. Government and partner-nation 
efforts throughout the region. We are working with the U.S. interagency 
to support a more effective integration of effort, improving the 
alignment of our operations, exercises, and initiatives with those of 
NORTHCOM, the Department of State, the Drug Enforcement Administration, 
the Department of Homeland Security, USAID, and others. SOUTHCOM will 
continue to support the Department of State as it leads the effort to 
integrate U.S. security initiatives with SICA's regional security 
strategy, which incorporates assistance offered by donor nations like 
Canada, Spain, and Chile and organizations like the Inter-American 
Development Bank and the World Bank. We will also sustain our support 
to Colombia and Peru, countries that are fighting narco-terrorist 
groups whose illicit trafficking activities extend throughout the 
hemisphere. Finally, in close coordination with the Regional Security 
System, CARICOM, and Caribbean nations, we will continue to play an 
active role in developing a regional maritime interdiction plan in the 
Caribbean.

Resources and Requirements
    We recognize difficult adjustments will be required as we enter 
into an era of fiscal austerity. The emerging security threats in our 
AOR, however, necessitate that we remain engaged with militaries in the 
region. Historical events in our AOR have demonstrated that investing 
in early and routine engagement activities can avoid exponentially 
larger expenditures in the future. We firmly believe that building, 
maintaining, and sustaining capable security partners is a wise 
investment to hedge against future security challenges and guarantee 
the long-term stability of the Western Hemisphere. The new Defense 
Strategic Guidance recognizes our approach as the model for the future. 
As DOD prioritizes resources across the Joint Forces, we will look to 
share the ``best practices'' of our agile, small-footprint approach to 
building partner capacity and promoting the layered defense of the 
United States.
    As we look to the future, SOUTHCOM is exploring ways to improve our 
flexibility to address the problems facing Central America, including 
an examination of the authorities available to DOD; how we can better 
support the U.S. interagency; and our engagement with the Guatemalan 
military, which remains limited by restrictions on U.S. security 
assistance. In 2011, Guatemala took important steps to address past 
human rights violations through release of key documents pertaining to 
the country's civil conflict and continues to make progress on 
enforcing the rule of law and respecting human rights. SOUTHCOM 
supports efforts by the Department of State and Congress to find a 
constructive way forward to improve the human rights situation in 
Guatemala and address the existing restrictions that prevent full 
support to the Guatemalan military.

Budget Considerations
    In 2011, SOUTHCOM took proactive steps to identify and enact cost-
saving measures. Having improved the command's organizational structure 
during our 2010 reorganization, this year we conducted a manpower 
analysis to further align resources and functions. As directed by the 
Secretary of Defense, SOUTHCOM eliminated the Standing Joint Force 
Headquarters and froze DOD civilian senior executives, general, and 
flag officer positions at 2010 levels. We also applied reductions in 
areas such as: reduction of support to Operation Southern Voice; 
reduction or adjustments to annual foreign military interaction 
exercises; and reduction in discretionary travel. We have also reduced 
activities in certain lower-priority portfolios and revamped our 
internal business practices to better manage resources.
    While we are committed to enacting cost-saving mechanisms, reducing 
duplication, and improving the accountability and cost-effectiveness of 
our programs, we remain committed to our most important resource: our 
people. As a joint command, SOUTHCOM supports the needs of our Army, 
Marine, Navy, Air Force, and Coast Guard servicemembers, their 
families, as well as our civilians. In 2011, we took measures to extend 
our survivor outreach program to the families of the more than 100 
servicemembers from South Florida who have died in the conflicts in 
Afghanistan and Iraq. Many of these survivors live hundreds of miles 
away from the nearest long-term survivor program for their particular 
supporting Service. SOUTHCOM is working with the Service Casualty 
Chiefs to establish an agreement to allow our survivor outreach 
coordinator to offer long-term support to all the families of fallen 
heroes in South Florida, regardless of Service affiliation. I am proud 
of this effort and I believe it embodies the truly joint nature of our 
command.

                               CONCLUSION

    This will very likely be my last opportunity to testify before you 
in my current capacity. Over the last 3 years, it has been my great 
honor to serve with the men and women of SOUTHCOM. It has also been a 
distinct privilege to serve with the dedicated and capable leaders of 
Central and South America and the Caribbean. My time at SOUTHCOM 
brought me back to the region I left almost 41 years ago. Returning 
reinforced my belief in the importance of the region: the role it plays 
for the security of the United States and the critical need to remain 
engaged with our military partners. I also believe strongly in the 
importance of expanding interagency, regional, and multilateral efforts 
to address transnational security concerns, and in the value of being 
prepared to support disaster relief efforts.
    As I finish my tenure at SOUTHCOM, I want to thank Congress and the 
distinguished members of this committee, especially Senators Levin and 
McCain, for your continued support to our men and women in uniform. Our 
Armed Forces remain strong and capable because of your leadership, your 
focus, and your commitment to ensuring they remain the best armed 
forces in the world. My parting request to the Members of Congress is 
to sustain the unmatched capability of our Armed Forces, continue to 
support the incredibly dedicated, imaginative, flexible, and wonderful 
men and women in our Armed Forces, and keep faith with our veterans and 
their families. Thank you.
      
    
    
      
    
    
      
    
    
      
    
    
      
    
    

    Chairman Levin. Thank you very much, General Fraser.
    General Jacoby.

 STATEMENT OF GEN CHARLES H. JACOBY, JR., USA, COMMANDER, U.S. 
 NORTHERN COMMAND/COMMANDER, NORTH AMERICAN AEROSPACE DEFENSE 
                            COMMAND

    General Jacoby. Chairman Levin, Senator McCain, members of 
the committee: Thank you for the opportunity to appear before 
you this morning. It's an honor to be here. It's a pleasure to 
join my fellow combatant commander and friend, General Doug 
Fraser. Also with me today, I am happy to acknowledge my 
Command Sergeant Major, Bob Winzenried. On behalf of the men 
and women of NORTHCOM and NORAD, I appreciate this committee's 
continuing support of our missions of Homeland defense, 
including ballistic missile defense, defense support to civil 
authorities, for which the highlight last year was the team 
response to Hurricane Irene, and security cooperation, 
including our expanded cooperation with the Mexican military as 
they tackle the brutal TCO.
    In the case of NORAD, our assigned missions for the United 
States and Canada include aerospace warning and control through 
our safe and successful Operation Noble Eagle, and maritime 
warning, where we continue to grow capability through improved 
interagency and international information-sharing. In addition 
to cooperative defense with our ally Canada, we are steadily 
improving our security cooperation with our good friends in 
Mexico and the Bahamas at a pace determined by mutual agreement 
and with constant respect for national sovereignty.
    Our vision is that, with our trusted partners, we will 
defend North America by outpacing all threats, maintaining 
faith with our citizens, and supporting them in their times of 
greatest need. We view our missions as a sacred trust by our 
governments and our citizens. We appreciate that the American 
people and their elected representatives in Congress and the 
White House rightly have high expectations of our ability to 
defend them here at home.
    Consistent with the necessity for collaboration and with 
many other organizations in a wide variety of challenging 
situations that can threaten the citizens of our great Nation, 
my priorities are:

         to expand and strengthen our trusted 
        partnerships;
         to advance and sustain the binational military 
        command, NORAD;
         to gain and maintain all-domain situational 
        awareness, including air, space, cyberspace, land, 
        maritime, and the unique and fast-changing domain known 
        as the Arctic;
         to advocate and develop the abilities in our 
        core mission areas to outpace all threats; and
         to take care of our people as they are our 
        foundation.

    I'm tremendously proud of the committed and selfless men 
and women, military and civilian, Americans and Canadians, who 
serve in our commands. When appropriate, in accordance with the 
Stafford Act, the National Response Framework, and other laws 
and guidance such as on the request of a Governor and upon 
direction of the President or Secretary of Defense, NORTHCOM 
pulls together the unique capabilities and capacities of DOD to 
multiply the impact of a primary Federal agency such as our 
close partner the Federal Emergency Management Agency.
    Now, thanks to Congress and the President, the 2012 
National Defense Authorization Act put into law initiatives 
supported by the Council of Governors and the Secretary of 
Defense concerning dual-status commanders and activation of 
Reserves in domestic disaster response. I appreciate this 
committee's support for these two important measures, which 
surely will help save American lives.
    It was my privilege to serve in Afghanistan and Iraq with 
many superb members of the National Guard and Reserves. I 
believe that in the crucible of over 10 years of continuous 
conflict, with the support of Congress, we have developed the 
finest Total Force that I've ever seen, and NORAD and NORTHCOM 
depend on that Total Force every day.
    This past year has been busy. We've synchronized our 
activities with many partners and we've done our part to 
realize efficiencies that we've worked through the budget 
process for fiscal year 2012, trimming our workforce by 141 
full-time equivalents and for fiscal year 2013 reducing our 
operations and maintenance funding by about 6 percent. But with 
the resources and authorities at hand and maintaining our 
vigilance, we'll be able to continue to defend and support the 
American people.
    Thank you for this opportunity to appear today and I look 
forward to the discussion.
    [The prepared statement of General Jacoby follows:]

         Prepared Statement by GEN Charles H. Jacoby, Jr., USA

    Chairman Levin, Senator McCain, distinguished members of the 
committee, I appreciate this opportunity to report on the posture of 
U.S. Northern Command (NORTHCOM) and North American Aerospace Defense 
Command (NORAD). The men and women of NORTHCOM and NORAD are dedicated 
to defending the U.S. and Canadian Homelands. We accept the obligation 
to defend the homelands as the most fundamental and enduring of our 
responsibilities. Consistent with the Department of Defense's 
Sustaining U.S. Global Leadership: Priorities for 21st Century Defense, 
January 2012, as directed by the President, our Nations depend on the 
might of our militaries and the security of our Homeland to project and 
sustain military power, ensure our economic vitality, and safeguard our 
people and their will. This source of strength and resiliency must be 
carefully guarded. As we rebalance our military to deal with the 
challenges of the 21st century, we recognize that the security of our 
citizens cannot be compromised. Earning and keeping the trust of the 
American people drives our motto, ``We have the watch.''
    I am honored to lead this exceptional command team made up of 1,725 
full-time U.S. military and DOD civilians assigned to the command's 
headquarters, including nearly 80 National Guardsmen from 33 States, 
augmented by an additional 237 part-time Reserve component personnel. 
In addition, 114 Canadian military members are fully integrated into 
our NORAD headquarters and two Mexican liaison officers work alongside 
our NORTHCOM staff. Rounding out our team are representatives from over 
60 Federal mission partner organizations.
    NORTHCOM and NORAD are two separate commands that are inextricably 
linked. Neither command is subordinate to, nor a part of the other, but 
most elements of our headquarters staffs are combined and we all work 
very closely together. We hold the missions of NORTHCOM and NORAD as a 
sacred trust.

         NORTHCOM Mission: U.S. Northern Command partners to 
        conduct homeland defense, civil support, and security 
        cooperation to defend and secure the United States and its 
        interests.
         NORAD Mission: North American Aerospace Defense 
        Command conducts aerospace warning, aerospace control, and 
        maritime warning in the defense of North America.

    Our commands' missions are not only complementary, they are also 
inseparable, as the missions of aerospace warning and control, maritime 
warning, homeland defense, and civil support are more aligned than 
ever. To ensure that NORTHCOM and NORAD are strong and ready, we 
balance the day-to-day missions and operational concerns of the two 
commands with planning and preparing for an uncertain future. In 
support of these goals, these are my priorities:

         Expand and strengthen our trusted partnerships--The 
        strength of NORTHCOM and NORAD is found in the partnerships 
        that we create and sustain across joint, interagency, and 
        multinational organizations. Accordingly, in the months ahead, 
        we will continue our efforts to integrate across and develop 
        trust among capable mission partners.
         Advance and sustain the binational military command--
        Over the last half-century, NORAD has been a mechanism for 
        collaboration between the United States and Canada in the 
        interest of security. As we look ahead to the next half-century 
        of this partnership, NORAD will remain a model for 
        international cooperation in defense planning, execution, 
        training, information management, and technological innovation.
         Gain and maintain all-domain situational awareness--
        Ensuring global reach and projection is a function of a secure 
        homeland. Our global reach is being challenged by both 
        symmetric and asymmetric threats in and across space, 
        cyberspace, land, sea, and air. Combining appropriate whole-of-
        government and whole-of-society efforts, we will keep our 
        Homelands safe by giving priority to technologies and 
        collaborative interagency processes for anti-access/area denial 
        against potential adversaries, including those who attack from 
        the inside.
         Advocate and develop capabilities in our core mission 
        areas to outpace threats--There is no doubt that both long-
        understood threats and future asymmetric threats will look to 
        exploit seams and vulnerabilities in our technologies and 
        procedures. As Commander of NORTHCOM and NORAD, I help mission 
        partners advocate for capabilities to close any seams, mitigate 
        any vulnerabilities, and enhance security to meet the evolving 
        challenges of an interconnected world.
         Take care of people; they are our foundation--We will 
        always remember that the success of NORTHCOM and NORAD is due 
        to the professionalism, commitment, and tireless service of our 
        people. As we do our part during the next few years to reset 
        the force in the drawdown from two wars, we will do everything 
        we can to ensure our men and women in uniform have the tools 
        they need to keep our Nations safe and free.

    With these priorities as our focus, we will continue to improve our 
Homeland defense, civil support, and security cooperation capabilities. 
It is my privilege today to report on the actions we are taking in each 
of these mission areas.

                    HOMELAND DEFENSE--A SACRED TRUST

    North America faces an ever-changing world that presents many 
challenges. Violent extremists, proliferation of weapons of mass 
destruction, rogue states, traditional competitor states, transnational 
criminal organizations (TCOs), insecurity in various domains, economic 
distress, and the effects of climate change continually reshape our 
strategic environment. Each of these challenges poses a potential 
threat to the United States, Canada, and our regional partners, and 
each is pertinent to the missions of NORTHCOM and NORAD. Continued 
successful defense and security of the continent require flexible, 
multi-domain, whole-of-government, multinational, and combined arms 
approaches from our commands.
    As such, the commands are integral parts of an active, layered 
defense of the Homelands. We work closely with our interagency, private 
sector, and international mission partners to sustain continuous 
situational awareness and readiness to deter, prevent, and defeat a 
range of threats in all domains when directed at our Homelands across 
the spectrum of missions assigned to the commands.

Missile Defense
    The American people have a deservedly high expectation of success 
in our Homeland defense efforts. Every nation should pursue the right 
to protect its population and critical infrastructure from the terror 
of ballistic missiles. Accordingly, no homeland task is more important 
than protecting the United States from a limited intercontinental 
ballistic missile (ICBM) attack. NORTHCOM is responsible for directing 
missile defense operations to protect the Homeland from hostile acts 
while assisting the Missile Defense Agency in developing improved 
capability. We work to balance development, testing, training, and 
daily readiness for this complex mission. Indicative of the success of 
the Total Force concept, the Army National Guard provides all of the 
manning (over 300 people) at our Ground-Based Interceptor (GBI) sites 
in support of missile defense. It is due to the professionalism of 
these dedicated warriors, coupled with the current capability of the 
Ballistic Missile Defense System (BMDS), that I am confident of 
NORTHCOM's ability to successfully defend the Homeland from the current 
set of limited long-range ballistic missile threats. However, because 
of the uncertainty of threat intentions and capabilities, we must 
remain vigilant and continue to develop, refine, and adapt the system.
    The Ground-Based Midcourse Defense (GMD) system, which is part of 
the BMDS, was fielded using a spiral development acquisition approach 
and, as system updates are delivered and new elements added to the 
architecture, we continue to assess and refine our operational 
procedures to maximize the effectiveness of the GMD system. As the 
Nation develops and fields more robust regional BMDS capabilities using 
the Phased Adaptive Approach, we will reevaluate our procedures and 
adjust if needed to ensure synchronization of the entire missile 
defense enterprise. The GMD system stands ready to defend against 
limited ballistic missile threats to the Homeland; however, we are 
continually monitoring the development and progress of regional 
ballistic missile programs to ensure we stay ahead of any advances in 
threat capability. We must not allow regional actors, such as North 
Korea, to hold U.S. policy hostage by making our citizens vulnerable to 
a nuclear ICBM attack. I cannot overemphasize the importance of 
executing a robust testing program to validate current and future 
capabilities that comprise the GMD system. I strongly support the 
Missile Defense Agency's test cadence of conducting at least one GMD 
flight test annually. We are making great strides to improve system 
capability in partnership with the Missile Defense Agency. The Missile 
Defense Agency completed major construction on Missile Field 2 at Fort 
Greely, AK, this past year. This new missile field will provide 
important flexibility to increase capability in the future, if needed. 
The Missile Defense Agency is fielding new kill vehicle software this 
fiscal year, which will improve not only the accuracy, but also the 
reliability of our GBI fleet. The Missile Defense Agency will soon test 
the fix for the problem that caused the failure of the last GMD flight 
test and is well on its way to return to flight testing and production 
of an improved kill vehicle.
    In addition, we must be better prepared to respond to threats that 
give us little to no advance warning, which places a tremendous burden 
on the low-density, high-demand sensors we have available today to 
detect these threats and places a greater emphasis on our requirements 
for tracking through all phases of flight. This requires pursuing 
future sensor capability, such as the Space-based Precision Tracking 
Space System, ensuring we have the highest level of GMD for the 
Homeland.

Aerospace Control Alert
    Our Nation continues to face threats from the air because our 
adversaries still view aircraft as potent weapons and a means to 
covertly gain access to our Homeland. As a nation, with all our 
partners, we have made it hard for air attacks to be successful and we 
must continue to do so by improving our air domain awareness and 
addressing gaps.
    An effective air defense and a strong air sovereignty capability 
are critical components of homeland defense. Since the September 11 
attacks, NORAD has defended the airspace of the United States and 
Canada through airspace surveillance, a ready alert force, air patrols, 
and the National Capital Region Integrated Air Defense System. This 
mission was previously known as Air Sovereignty Alert. In 2011, we 
expanded the term to Aerospace Control Alert because it captures the 
totality of this mission, which includes the air defense mission, as 
well as the air sovereignty mission.
    For the air defense mission, armed fighters are positioned across 
the United States and Canada on alert to intercept and identify suspect 
aircraft, which allows NORAD to be postured to defend against strategic 
airborne threats to the United States and Canada. Thanks to our Total 
Force partners, the Air National Guard provides the majority of NORAD's 
operational force for Aerospace Control Alert missions, while the Army 
National Guard provides ground-based air defense capabilities 
protecting our Nation's capital.
    Providing our National Guard partners with capable equipment is key 
to Aerospace Control Alert, which requires the modernization of NORAD 
airframes. Legacy fighters are aging, but will be able to perform their 
mission through the 2013-2025 timeframe. However, recapitalizing our 
fighter, tanker, and airborne early warning aircraft will remain a 
requirement. Another capability we are actively pursuing is our ability 
to respond to low, slow airborne threats. We have submitted this 
capability into the joint requirements process and have begun work on 
an Analysis of Alternatives. Based on our initial timelines, we 
anticipate having a way ahead by late summer.
    The second part of the Aerospace Control Alert mission is air 
sovereignty operations. NORAD safeguards the sovereign airspace of the 
United States and Canada by responding to unknown, unwanted, and 
unauthorized air activity approaching or operating within either 
country's airspace. NORAD conducts Northern Sovereignty Operations to 
detect and respond to long-range aviation conducted by the Russian 
military in the vicinity of U.S. and Canadian airspace. This includes 
monitoring all northern approaches to U.S. and Canadian airspace and 
identifying all aircraft approaching it. In addition, we remain 
vigilant and ready to conduct Southern Sovereignty Operations in the 
event that North American air sovereignty is challenged by foreign 
aircraft operating in the southern portion of our area of operations.
    After the fall of the Soviet Union, Russia conducted military long-
range aviation flights on a very limited basis; however, in the summer 
of 2007, Russian officials publicly announced their intent to resume a 
more robust schedule of long-range aviation activity. Since then, 
Russian bomber aircraft have conducted northern patrols and training 
activities on a regular basis. These flights are flown both northwest 
of Russia, prompting responses from European nations, and northeast of 
Russia approaching the United States and Canada. These flights 
routinely enter the U.S. and/or Canadian Air Defense Identification 
Zones.
    If Russian aircraft have not provided prior notice via a flight 
plan, or do not respond to air traffic control instructions, they are 
detected and labeled as unknown aircraft. It is the responsibility of 
NORAD to respond appropriately to any unknown aircraft. Our actions 
demonstrate not just to Russia, but to all, our capability and 
intention to defend North American air sovereignty.
    This does not mean we view Russia as an enemy. In fact, in an 
effort to increase cooperation with the Russian military, NORAD and the 
Russian Federation Air Force conducted the second Vigilant Eagle 
exercise in August 2011, where each side practiced tracking, 
intercepting, and passing control for monitoring and escorting a live-
fly, simulated hijacked aircraft into the other's airspace. The 
benefits we realize from this type of exercise are invaluable as they 
are by nature complicated and require high levels of synchronization 
between NORAD and the Russian Federation Air Force. As a result, this 
process by itself opens up new avenues for discussion and cooperation, 
establishes long-term contacts, and fosters better understanding among 
our governments, and especially among our militaries. These open lines 
of communication help our respective militaries avoid misunderstandings 
that could result in heightened tensions and unintended consequences.
    Vigilant Eagle is a symbol of what can be achieved using an 
incremental, stepping-stone process--each event building on the success 
of the prior year's effort--which we hope over time will lead to even 
greater levels of openness and cooperation among our nations.

Maritime Domain
    While most American and Canadian citizens are familiar with our air 
defense capabilities, our less-publicized maritime operations remain a 
strong deterrent capability for our nations. NORTHCOM and NORAD partner 
with geographic combatant commanders, U.S. and Canadian Government 
agencies, allied nations, and the commercial/private sector to maximize 
maritime warning and maritime domain awareness for North America 
through information sharing, plan development, and cooperative 
training. Sixteen stakeholders now contribute to the common operating 
picture with NORAD, to include the U.S. Coast Guard, the other 
combatant commands, Fleet Forces Command, and Canada Command. NORAD 
processes, assesses, and disseminates intelligence and information 
related to the respective maritime areas and internal waterways of, and 
the maritime approaches to, the United States and Canada. We leverage 
maritime domain awareness to develop a comprehensive shared 
understanding of the maritime operating environment and to issue 
binational warnings of maritime threats or attacks against North 
America.
    As we look to the future, NORTHCOM and NORAD continue to refine and 
report requirements, efficiencies, and deficiencies to the Joint Staff 
and via the annual Maritime Domain Awareness Plan submission to the 
Secretary of the Navy in his capacity as DOD Executive Agent for 
Maritime Domain Awareness.

Cyber Events
    Cyber security is a growing critical mission. Since NORTHCOM and 
NORAD rely on data systems, the Internet, and inter-networked 
commercial and military infrastructure, cyber attacks pose potentially 
grave risks to our ability to accomplish our missions. To improve our 
capability to fight in a degraded cyber environment, we are working 
within the DOD to establish responsive policies, authorities, and 
technologies and to develop a skilled cyber workforce to enhance 
mission assurance and resiliency.
    Outside of the DOD, the Department of Homeland Security (DHS), in 
partnership with other Federal Departments and Agencies; State, local, 
tribal and territorial governments; the private sector; and 
international partners, is improving its capability for a fully-
coordinated response to a significant cyber incident to minimize 
impact, restore operations, and reduce the risk of a future occurrence. 
Given that much of the critical infrastructure that the DOD and civil 
authorities use is owned by the private sector, the continued 
development of these partnerships, information sharing, and advancement 
of defensive measures is an imperative. Therefore, NORTHCOM continues 
its good relationships with DHS and U.S. Cyber Command to coordinate 
and collaborate on cyber situational awareness, and to effectively 
provide ``response and recovery'' support to civil authorities when 
requested in the event of a serious domestic cyber attack with second- 
and third-order physical effects.

Anti-Terrorism and Force Protection
    Fundamental to homeland defense is the protection of our 
servicemembers to ensure full mission capability. In executing our 
Force Protection mission, NORTHCOM continues to improve information 
sharing with our interagency partners and to streamline reporting 
within the DOD to proactively detect emerging threats directed against 
our Nation, our military personnel, and our critical capabilities. The 
Intelligence Community and other interagency representatives in 
NORTHCOM, including Federal and Service law enforcement investigative 
agencies, meet on a daily basis with NORTHCOM Anti-Terrorism and Force 
Protection experts to examine threat information and to implement 
mitigation measures to achieve the best possible protective posture in 
the most economical way. NORTHCOM also participates in the Fort Hood 
Senior Steering Group and attendant sub-working groups to conduct a 
comprehensive review of lessons learned, and to implement processes and 
procedures that facilitate synchronization of our defensive strategy to 
warn against and mitigate threats across geographic regions, 
jurisdictions, and operational chains of command. We have had 
significant success in this area and our partnership with the Federal 
Bureau of Investigation in this endeavor is a model for interagency 
coordination.

            CIVIL SUPPORT--RESPONDING TO OUR NATION'S NEEDS

    NORTHCOM stands ready to support primary agencies in responding 
quickly to natural and manmade disasters and to the effects of 
terrorist attacks. The DOD has a long history of supporting civil 
authorities with specialized skills, capabilities, and capacities that 
can rapidly stabilize and improve the situation in the wake of 
catastrophic events. All requested DOD support is provided at the 
direction of the President or Secretary of Defense and in accordance 
with the National Response Framework and applicable laws, including the 
Stafford Act and the Economy Act.
    In coordination with our DOD and interagency partners, NORTHCOM has 
made significant improvements in Defense Support of Civil Authorities 
(DSCA) and, therefore, our ability to respond quickly and more 
effectively to manmade or natural disasters. These improvements 
include: (1) implementation of a Dual-Status Commander Concept of 
Operations through which we are able to achieve greater unity of effort 
between Federal and State military forces during contingencies; and (2) 
implementation of a new Chemical, Biological, Radiological, and Nuclear 
(CBRN) Response Enterprise that is able to deliver more lifesaving 
capability faster than ever before.
    In accordance with the Joint Action Plan, which was a collaborative 
effort of designated representatives of the Council of Governors, the 
DOD, the DHS, and the Federal Emergency Management Agency (FEMA), 
NORTHCOM led the development and implementation of the Dual-Status 
Commander Concept of Operations. This has allowed the DOD and the State 
governors to jointly pre-identify, train, and certify senior military 
officers to perform simultaneously as commanders of both National Guard 
Forces in State status and Federal military forces in Title 10 status. 
Prior to Hurricane Irene in 2011, the DOD employed Dual-Status 
Commanders only for selected pre-planned events. Now that all States 
have designated Dual-Status Commanders, this joint initiative postures 
the DOD and the States to employ these officers for short- or no-notice 
events such as earthquakes, hurricanes, or other natural disasters.

Reserve Mobilization Authority
    Since access to trained forces is vital to successful civil support 
operations, we appreciate the Committee's action to include a provision 
in the National Defense Authorization Act for Fiscal 2012, supported by 
the Council of Governors, to authorize the Secretary of Defense to 
order Army, Air Force, Navy, and the Marine Corps Reserves 
involuntarily to active duty for a major disaster or emergency. This 
new authority makes the significant capabilities of the Army Reserve, 
Air Force Reserve, Navy Reserve, and Marine Corps Reserve Forces all 
available to assist civil authorities in responses to major disasters 
and emergencies, thus enabling a truly Total Force approach to DOD 
disaster response.

Chemical, Biological, Radiological, and Nuclear Response
    As an important subset of DSCA, managing the aftermath of a CBRN 
event will be exceptionally challenging due to the potential scope of 
the event, the specialized skills and equipment required to respond, 
and a general lack of knowledge among our Nation's population of the 
hazards associated with such events. NORTHCOM has a key leadership role 
in ensuring that our Government is prepared to succeed in this 
important mission area.
    Over the past 18 months, the DOD has taken significant steps to 
improve its ability to support civil authorities in responding to 
catastrophic incidents in major metropolitan areas, particularly 
weapons of mass destruction attacks and major industrial accidents. The 
CBRN Response Enterprise includes National Guard, Reserve, and Active 
component forces prepared to rapidly respond to a CBRN incident within 
the Homeland. Having already achieved initial operational capability, 
the CBRN Response Enterprise will reach full operational capability on 
1 October 2012 with over 18,000 Active component, Reserve component, 
and National Guard servicemembers dedicated to this vital mission. 
These forces are focused on lifesaving and are trained and equipped to 
provide critical search and rescue, decontamination, emergency medical 
care, and medical evacuation in support of the Primary Federal Agency, 
the affected regions and States, and local incident commanders. Ever 
vigilant, these forces maintain a graduated response posture and are 
prepared to deploy within hours after an incident in order to save 
lives and minimize human suffering within the critical first 72 hours.
Hurricane Response Operations
    We continue to stand ready to provide robust military support 
during hurricane response operations. We have incorporated lessons 
learned into our operational planning, and we have conducted rigorous 
exercises to hone our capabilities. These activities ensured that we 
were prepared, in August 2011, when NORTHCOM coordinated support to the 
FEMA, State and local response efforts throughout the Hurricane Irene 
experience. In anticipation of the storm, the command quickly deployed 
9 of our 10 Defense Coordinating Elements, each led by a Defense 
Coordinating Officer, to join with FEMA Incident Management Teams 
across the northeastern United States. In all, more than 6,500 active 
duty servicemembers were ready to assist States affected by Hurricane 
Irene. In New Jersey, nearly 100 troops provided command and control 
for military forces supporting efforts in the northeast.
    Hurricane Irene response activities marked the first time that 
Dual-Status Commanders were in position for an unplanned event to 
provide command and control over both Active Duty and Reserve component 
(National Guard and Army Reserve) forces. Indicative of the success of 
the program and continuing collaboration between NORTHCOM and the 
States, Dual-Status Commanders for the response missions were appointed 
in New Hampshire, New York, North Carolina, and Rhode Island.

National Security Implications from Arctic Change
    The progressive opening of the Arctic represents both challenges 
and opportunities. Climate change in the Arctic is impacting the land 
and seascape, creating opportunity for increased human activity and 
presenting a new set of regional vulnerabilities and potential resource 
competitions. Emerging Arctic challenges require deliberate preparation 
to ensure economic access and freedom of maneuver, and to prevent 
irresponsible actions. As the Arctic opens, there will be a marked 
increase in human activity in a push for resources (e.g., fish, 
diamonds, natural gas) and eco-tourism. Special capabilities will be 
required to operate successfully in the Arctic. For instance, 
icebreakers are an essential capability for the United States to 
exercise our responsibilities. I believe the Nation should continue to 
exercise freedom of navigation to assure access to this new dimension 
of the maritime domain.
    Regardless, the Arctic will remain an austere and formidable 
environment that requires unique capabilities and skills. We are 
looking ahead at how best to fulfill our responsibilities for DOD 
military operations within the Arctic portion of our area of 
responsibility to advocate for DOD capabilities in the Arctic region.
    As Arctic nations, the United States and Canada have broad and 
fundamental interests in the Arctic region where we seek to sustain our 
national security equities, protect the environment, manage resources 
responsibly, advance the social and economic development of indigenous 
communities, support scientific research, and strengthen international 
cooperation. In support of these interests, NORAD, NORTHCOM, and Canada 
Command are working toward a Tri-Command Framework for Arctic 
Cooperation, which synchronizes planning, operations, domain awareness, 
information sharing, exercises, and capability development among the 
commands in the Arctic region.
    In addition to our partnership with Canada, NORTHCOM is also 
committed to developing ``whole-of-nation'' solutions to Arctic 
challenges through collaboration with our DOD, interagency, and 
industry partners to address gaps in Arctic communications, domain 
awareness, mass rescue, disaster response, and weather forecasting 
capabilities.
    Later this month, NORTHCOM will host an Arctic Collaborative 
Workshop at the National Defense University in conjunction with these 
partners to validate our near-term operating concepts and capability 
development. The Workshop will also inform our series of exercises to 
be conducted in the Arctic this summer. Lessons learned from these 
events will drive our Theater Campaign Plan's evolution to better 
support our partners in promoting security, safety, stability, and 
economic growth in the region.
    The foundation of our future success in the Arctic must be built 
upon the 1982 Convention on the Law of the Sea, the seminal agreement 
that provides the international legal framework for use of the world's 
seas and oceans, including the Arctic Ocean. I believe that joining the 
Convention would protect and advance a broad range of U.S. interests, 
including navigational mobility and offshore resources. In short, 
joining the Convention would bolster our national security, secure U.S. 
rights over extensive marine areas, and formalize the United States' 
standing where our vital interests are at stake.

Exercise and Training
    The Combatant Commander's Exercise Engagement Program (CE2) 
supports all aspects of the mission-critical NORAD and NORTHCOM 
Exercise and Engagement program. This CE2 program helps us build 
partner capacity and readiness across 54 States and territories, 
Canada, Mexico, and the Bahamas. We appreciate the committee's support 
of this critical program that directly supports our readiness to defend 
the Homeland and save lives during domestic crises.
security cooperation--cooperative defense through enduring partnerships
    NORTHCOM and NORAD do not meet today's complex challenges alone, 
and as such our allies and partner nations actively contribute to the 
cooperative defense of North America. We support and enable other 
agencies, advocate for complementary resources, and work toward common 
objectives to improve interagency planning and coordination that 
synchronize U.S. support for building our partners' capacities. These 
partnerships allow us to defend the Nation in depth.

Countering Transnational Criminal Organizations
    There has been a continued steady increase in the number of deaths 
as a result of this ongoing conflict since 2006, although the rate of 
increase slowed in 2011. TCOs represent a globally-networked national 
security threat. This sophisticated network of networks includes 
criminal organizations and street gangs, frequently serving as 
enforcers and drug distributors for TCOs. The criminal organizations 
have global reach that spans a diverse set of illicit activities that 
includes, but is not limited to drug trafficking, kidnapping, human 
trafficking, and extortion. According to the Department of Justice 
National Drug Intelligence Center's 2011 National Drug Threat 
Assessment, TCOs have links in over 1,000 U.S. cities. According to the 
2009 National Drug Threat Assessment, our Nation's demand for illegal 
drugs results in wholesale proceeds of up to $39 billion annually from 
illicit drug trafficking via the Southwest Border. This transnational 
problem needs to be approached in a holistic, interagency manner.
    In support of the President's Strategy to Combat Transnational 
Organized Crime, NORTHCOM coordinates with Mexico, Canada, The Bahamas, 
U.S. Southern Command, and our other partners in the Caribbean, to 
enhance mutual trust, increase collaboration, improve capacity against 
TCOs and their activities, and to contribute to a cooperative defense 
of North America. NORTHCOM is just one supporting organization in a 
much larger interagency and international law enforcement effort to 
counter the TCOs operating worldwide.
    As requested by Mexico, NORTHCOM cooperates with the Mexican 
military in support of their efforts to build capabilities and 
capacities to employ against TCOs. Above all, we will continue to 
respect Mexico's sovereignty and we stand ready to increase 
coordination and collaboration to the extent that Mexico desires and in 
accordance with U.S. Government policies. Under the courageous 
leadership of Mexican civil authorities, the Mexican military is making 
progress against TCO activity. At the invitation of our Mexican 
partner, NORTHCOM provided assistance in several key areas.
    In support of the Merida Initiative, we will improve our 
collaboration with international and interagency partners to disrupt 
and reduce transnational threats to North America and provide regional 
security through a whole-of-government approach. We will encounter both 
challenges and opportunities as our partners develop and improve their 
capacities.
    An important element of our efforts to combat TCOs is the Western 
Hemisphere Institute for Security Cooperation (WHINSEC). Late last 
year, I participated in a WHINSEC Board of Visitors curriculum review 
at Fort Benning, GA. This organization provides an effective mechanism 
to build relationships with militaries throughout the hemisphere and to 
influence a positive trajectory on human rights.

Security Cooperation with Mexico
    The military-to-military relationship between the United States and 
Mexico has advanced to unprecedented levels of coordination. Today, 
Mexico and the United States are strategic partners, respecting the 
laws and sovereignty of our individual nations, and at the same time 
facing shared challenges and applying lessons learned. While our 
Mexican colleagues share information about fighting TCOs, as well as 
their expertise in providing humanitarian assistance and disaster 
response, we share our experiences in asymmetric conflict, to include 
intelligence-driven operations, law of land warfare, whole-of-
government solutions and rule of law challenges. In addition, we have 
shared mutual perspectives on how to incorporate a whole-of-nation 
approach.
    We work closely with the Mexican military to enhance planning, 
tactical skills, communication capabilities, and incorporation of human 
rights principles, and meet frequently to build personal relationships 
and coordination. As an example, we conduct combined planning and 
exercises such as Quickdraw, a tactical-level exercise that tests the 
capability of U.S., Canadian, and Mexican maritime forces in a joint 
response against illicit activity threatening North American Maritime 
Security. We have also incorporated bilateral and multilateral 
arrangements such as the North American Maritime Security Initiative 
(an information-sharing and cooperation arrangement among NORTHCOM, 
Canada Command, the Mexican Navy and the U.S. Coast Guard), and have 
conducted Subject Matter Expert Knowledge Exchanges, which allow us to 
learn military best practices from each other. We conduct bilateral and 
multilateral conferences for broader coordination in dealing with 
issues such as natural disasters, pandemics, and search and rescue. The 
United States also shares information in resource management and 
logistics, operations development, and aviation training with the 
Mexican military.
    Additionally, for the past few years, NORTHCOM has had resident 
Mexican Foreign Liaison Officers from both SEMAR (Mexican Navy and 
Marines) and SEDENA (Mexican Army and Air Force) in our Headquarters, 
which has helped tremendously to improve cooperation. For the first 
time, in May 2012, NORTHCOM and the Mexican military will conduct 
Ardent Sentry 12, a combined Defense Support of Civil Authorities 
exercise designed around mutually-agreed objectives.
    We are partnering with U.S. Southern Command and working with 
security forces from Mexico, Guatemala, and Belize to strengthen ties 
and promote a coordinated approach to enhancing security along the 
Mexico-Guatemala-Belize border region. With our assistance, our 
southern neighbors are fortifying this porous border region and slowing 
the flow of illicit trafficking northward.

Support to Law Enforcement Agencies
    DOD support to U.S. law enforcement agencies (LEAs) and the Mexican 
military ultimately contributes to a safe and more secure border and 
supports the broader Counter-TCO fight. This is one fight against a 
common enemy for the Mexican military and our Federal agency partners. 
NORTHCOM's role in the border security mission is to provide DOD 
support to U.S. and foreign law enforcement agencies. Through our 
subordinate unit, Joint Task Force North (JTF-N), we provide mutually-
beneficial DOD support in a broad range of unique military categories.
    Our vision is for JTF-N to be the most effective integrator of DOD 
support to LEAs. Fostering our important relationships with LEAs, State 
National Guard counterdrug task forces, and the Mexican military is 
vital to securing our Nation's borders against drug traffickers and 
their associated criminal activities.
    In coordination with our DOD and interagency partners, NORTHCOM is 
developing systematic improvements in our ability to provide more 
effective and efficient LEA support. One improvement, coordinated by 
JTF-N with our LEA partners, is the new DHS comprehensive campaign 
planning process. This new planning cycle helps support the development 
of DHS and Department of Justice (DOJ) strategic guidance, increases 
interagency planner cooperation, and ultimately improves unity of 
effort and synchronization of resources for countering illegal drugs 
and other transnational threats.
    A second improvement is the military intelligence training support 
provided to the DHS-led Border Intelligence Fusion Section within the 
DOJ-led El Paso Intelligence Center. The Border Intelligence Fusion 
Section, comprising of military intelligence analysts supporting 
training and intelligence fusion, develops operational intelligence 
products that we share with our interagency partners for their use in 
early cueing, warning, and interdiction operations.
    Operational support to LEA partners includes detection and 
monitoring missions using a variety of multi-domain sensors and 
platforms that are unique to the DOD, in order to improve a supported 
LEA's ability to interdict transnational threats. Together we are 
exploring our spectrum of authorities to determine where modifications 
could enhance our ability to support our U.S. Government partners, 
better defend our Homeland in depth, and enhance cooperation with our 
Mexican partners.
    In sum, I believe DOD support to law enforcement is a ``win-win'' 
cooperation effort for our Nation's homeland security and defense 
missions. DOD units are afforded the opportunity to conduct operational 
training in an interagency environment, and our LEA partners are 
provided support through unique DOD capabilities to counter an adaptive 
threat to our Nation.

Partnership with Canada
    Canada is a trusted partner with whom we share the defense of the 
continent. The military-to-military relationship between NORTHCOM and 
Canada Command is strong, and has progressed to unprecedented levels of 
cooperation. At the Permanent Joint Board on Defence this past January, 
Lieutenant-General Walter Semianiw, Commander of Canada Command, and I 
signed the Civil Assistance Plan and the Combined Defence Plan to 
codify cooperative efforts among NORAD, NORTHCOM, and Canada Command to 
advance continental security, safety, and stability.
    Canada and the United States are allies and strategic partners in 
the security cooperation arena, with NORTHCOM and Canada Command 
working together as never before on emerging regional engagements such 
as the North American Maritime Security Initiative.
    Meanwhile, Canada Command is developing a plan for complementary 
regional engagements along Mexico's southern border with Guatemala and 
Belize, supporting the fight against TCOs as well as providing 
expertise and training to the Mexican military and civil authorities as 
they transition their legal system to a model better able to prosecute, 
convict, and incarcerate TCO members.
    NORTHCOM and Canada Command also closely coordinate security 
cooperation activities with other partner nations, as well as refine a 
common exercise schedule, to ensure that all activities provide the 
most value for their cost and that no time is wasted on duplicating 
efforts.
    Additionally, for the past few years NORTHCOM has had a resident 
Liaison Officer at Canada Command Headquarters, and Canada Command now 
has a resident Liaison Officer at NORTHCOM and NORAD Headquarters, 
further improving the already excellent coordination between our 
commands and nations.

Theater Security Cooperation with the Bahamas
    The United States and the Bahamas share a strong bilateral 
relationship built on bolstering citizen security and promoting trade 
and cultural exchange. These shared interests, including a common 
belief in the rule of law and democratic values, and The Bahamas 
geographic proximity to the United States, are the foundation upon 
which we have built a longstanding partnership. The Bahamian Government 
is committed to close cooperation with the United States on law 
enforcement and maritime security concerns, as well as on counterdrug 
efforts. This strong security cooperation relationship is highlighted 
by Operation Bahamas, Turks and Caicos, which is a trilateral 
counternarcotics effort conducted by personnel of the Royal Bahamas 
Police Force, Royal Bahamian Defense Force, and the Turks and Caicos 
Islands police with counterparts from the U.S. Drug Enforcement 
Administration (DEA) and the U.S. Coast Guard.
    One of the key focus areas in The Bahamas is the Hawk's Nest 
Forward Operating Base, a staging location for counterdrug operations. 
Hawk's Nest is a centrally-located facility on Great Exuma used by 
Bahamian and interagency counternarcotics partners. We are supporting 
the U.S. Embassy-Nassau, in their effort to develop a cost-sharing 
agreement with the Department of Homeland Security, U.S. Customs and 
Border Protection, DEA, the U.S. Coast Guard, and the Federal Aviation 
Administration, all of which have equities in either operating from 
Hawk's Nest or retaining radars and other equipment located at the 
site. The proximity of The Bahamas to the United States means that 
relatively small sites like Hawk's Nest have strategic importance for 
the Counter-TCO and Cooperative Defense mission areas.

                 THE NATIONAL GUARD--OUR VITAL PARTNER

    NORTHCOM and NORAD rely on the support of National Guard soldiers 
and airmen who work each day at the headquarters and within the NORAD 
Regions and NORTHCOM's Service components and joint subordinate 
commands. This includes one three-star, two two-star, and three one-
star National Guard officers who serve as my NORTHCOM Deputy Commander, 
subordinate commanders, and direct advisors. I believe this allows the 
commands to leverage National Guard expertise and experience bringing 
the best mix of DOD assets to bear in executing the full spectrum of 
homeland defense and civil support missions. The commands also benefit 
from their understanding of National Guard policies and programs to 
ensure the commands' planning and collaboration with the National Guard 
are informed and effective. Through the National Guard Bureau, NORTHCOM 
and NORAD coordinate with each State's Joint Force Headquarters for 
planning purposes and to maintain situational awareness of National 
Guard actions and commitments. I believe that no force is better suited 
to help deter, prevent, and defeat many of the threats we face than 
today's National Guard. Simply put, the National Guard is a natural 
partner in all we do.

                          FUTURE CAPABILITIES

    As we investigate existing technologies and capabilities for 
innovative uses, we are also focusing on emerging technologies to meet 
our requirements.
Aerospace Threats
    One of the more pressing challenges that NORTHCOM and NORAD will 
face in defense of the Homeland in the near future is from emerging air 
threats, to include low, slow-flying General Aviation aircraft, cruise 
missiles, unmanned aerial systems, and short- and medium-range 
ballistic missiles. Our Nation is developing a more responsive, 
tailorable integrated air and missile defense capability to defend 
against these threats. In the past year, NORTHCOM and NORAD have made 
significant strides toward protecting the Homeland against these 
threats through exercises, experiments, and tests with other 
organizations within the DOD. As the threat of terrorism looms and the 
proliferation of advanced asymmetric capabilities grows, it becomes 
increasingly important to improve existing air and missile defense 
systems-of-systems tailored to meet the unique needs of the Homeland.

Smart Power Infrastructure Demonstration for Energy Reliability and 
        Security
    We are also investigating ways to reduce the risk of our military's 
dependence on commercial power grids. We are currently partnering with 
U.S. Pacific Command, the Department of Energy, DHS, and five of the 
national labs (Sandia National Laboratories, Idaho National Laboratory, 
Pacific Northwest National Laboratory, Oak Ridge National Laboratory, 
and National Renewable Energy Laboratory) on a Joint Capabilities 
Technology Demonstration known as Smart Power Infrastructure 
Demonstration for Energy Reliability and Security (SPIDERS). With 
SPIDERS, we hope to create a cyber-secure smart microgrid that not only 
will augment existing power sources, but will also enable a military 
installation to remain operational when the commercial power grid is 
disrupted. We are currently working with our partners to test an energy 
control system at Joint Base Pearl Harbor-Hickam in Hawaii this summer. 
Later this year, we will begin work to demonstrate a cyber-secure 
microgrid at Fort Carson, CO, that will leverage previous electrical 
upgrades, a 2-megawatt solar array, electric vehicle-to-grid energy 
storage, and distributed backup generators to provide emergency power 
to a portion of this Army post. In 2014, we expect to demonstrate the 
first operational end-to-end SPIDERS cyber-secure microgrid at Camp 
Smith, HI.

                             FINAL THOUGHTS

    We are grateful for everything the members of this committee have 
done to ensure our ability to defend the Homeland. We appreciate your 
support to soldiers, sailors, airmen, marines, coast guardsmen, and to 
their families for their efforts to defend our Nation at home and 
abroad. With your help, North America will be even safer tomorrow than 
it is today. I am honored to appear before you, and look forward to 
your questions.

    Chairman Levin. Thank you very much, General Jacoby.
    We'll have a 7-minute first round.
    Let me ask both of you. DOD created a new defense strategy 
to guide creation of the fiscal year 2013 defense budget 
request. It's our understanding that the development of the 
strategy was a highly-inclusive process, and that each of you 
had the opportunity to provide input into the development of 
the new strategy. In your view, does the budget request support 
the strategy and do you support the budget? General Fraser?
    General Fraser. Mr. Chairman, we were very much included in 
the process and the development of the strategy through a 
series of conversations with the Chairman and with the 
Secretary of Defense. From where I sit, I'm very comfortable 
that the budget supports the strategy and that I can perform my 
mission within the allocated resources.
    Chairman Levin. General Jacoby?
    General Jacoby. Mr. Chairman, yes, I do. I feel that the 
strategy the Homeland appropriately considered, and I believe 
the budget supports the execution of the strategy in the 
Homeland. Thank you.
    Chairman Levin. Thank you.
    General Jacoby, as the executive branch works through the 
roles and missions of various military and civilian agencies 
for our Nation's cyber security, are you working with other 
agencies to determine what roles and missions would be 
appropriate for NORTHCOM and NORAD with regard to cyber 
security?
    General Jacoby. Mr. Chairman, yes, we're working very 
closely, particularly with our good partners in DHS and DOD, of 
course, with U.S. Cyber Command (CYBERCOM) and U.S. Strategic 
Command (STRATCOM).
    Chairman Levin. We face a number of malicious, many types 
of malicious cyber activity, from hackers to criminals to 
intrusions to steal our intellectual property and secrets, to 
also the possibility at least of an attack which could disrupt 
or damage or destroy our infrastructure, be it civilian or 
military.
    The Director of National Intelligence has told us that 
among the most difficult strategic challenges that he faces are 
the following: distinguishing between cyber espionage 
intrusions and potentially disruptive attacks; and providing 
timely warning of cyber threats and incidents. Now, are you 
involved in an effort to distinguish between these various 
types of cyber activity in order to determine whether and when 
our Nation is under a cyber attack and to provide timely 
warning of such an attack, and can you give us a status report 
as to where those discussions are? How close are we to reaching 
criteria to make that kind of distinction?
    General Jacoby. Mr. Chairman, these are important subjects 
you've raised with regard to cyber. My principal responsibility 
in the cyber domain is consequence management. In the event of 
a catastrophic cyber attack on this country, NORTHCOM could 
certainly be called upon to provide support to civil 
authorities in the recovery.
    But we think our role is broader than that. As you 
mentioned, we have some work to do in defining what's an attack 
in the cyber domain. It's a very collaborative process that 
we're doing as combatant commanders, along with STRATCOM and 
the sub-unified command, CYBERCOM. That's a work in progress. 
However, in the end, I believe it'll be a matter of policy to 
clearly define what is an attack or what isn't an attack.
    Until then, I continue to work closely, particularly with 
General Alexander and CYBERCOM, to ensure that we have ample 
warning to understand if there is a cyber attack or malicious 
cyber activity that's taking place that could compromise the 
defense of the Homeland. We have good cooperation across both 
DOD and with our partners in DHS to achieve that end.
    Chairman Levin. I think we all can understand why it has to 
be a work in progress, given the complexity of the issue. Would 
you say that we would have some way of bringing to a resolution 
that issue so we can have some criteria to determine when the 
Nation is under attack, military attack that needs a response, 
or a military-like attack that requires a response? Do you 
believe that we'll have that kind of sense or identification or 
criteria, for instance, within a year? Is that a reasonable 
expectation?
    General Jacoby. Senator, I don't think that's an 
unreasonable expectation. I wouldn't want to put an exact time 
limit on it. But I think there is momentum. There is a momentum 
across DOD and across the government, and we appreciate the 
support of this committee and the Senate in helping us think 
through this. I know you had a very successful tabletop 
exercise, lots of good feedback from that. Continuing efforts 
like that to inform, to educate, and to understand will help us 
get more quickly to that end state where we can define better 
the criteria which would determine whether we're under an 
attack or not.
    Chairman Levin. General Jacoby, as the combatant commander 
responsible for the Arctic, do you support the U.N. Convention 
on the Law of the Sea (UNCLOS) and, if so, why?
    General Jacoby. Mr. Chairman, yes, I do. It's DOD's 
position that we support accession to the UNCLOS.
    Chairman Levin. Is it your position as well?
    General Jacoby. Mr. Chairman, that's correct, it is my 
position. As the commander responsible for the Arctic, in my 
AOR it would be very helpful to have a seat at the table as we 
begin the lengthy and I'm sure long process of determining the 
continental shelf and all of the attributes to the Arctic that 
competing nations will be interested in.
    Chairman Levin. General Jacoby, do you support the current 
MDA plan to conduct two flight tests of the GMD system to 
verify a fix to the EKV that failed in the last flight test, 
before we resume production or refurbishment of the EKVs?
    General Jacoby. Mr. Chairman, yes, I do.
    Chairman Levin. Do you agree with General O'Reilly of the 
MDA that it's essential to have operational production-quality 
kill vehicle hardware on the intercept flight test plan to gain 
confidence that the system will work properly and reliably in 
the future?
    General Jacoby. Mr. Chairman, yes, I do. I support General 
O'Reilly's test program.
    Chairman Levin. There have been suggestions by some in 
Congress that we should deploy a ground-based interceptor (GBI) 
or interceptors on the east coast of the United States to 
defend the Homeland against a possible future long-range 
Iranian missile threat. You're the combatant commander who 
establishes the requirements for Homeland missile defense 
capability. Is there a requirement for deploying an east coast 
GBI site and are you seeking to deploy such a site on the east 
coast?
    General Jacoby. Mr. Chairman, today's threats do not 
require an east coast missile field and we do not have plans to 
do so.
    Chairman Levin. Thank you.
    Senator McCain.
    Senator McCain. Thank you, Mr. Chairman, and thanks again 
to the witnesses.
    General Jacoby, as you well know, nearly 50,000 Mexican 
citizens have lost their lives as the result of drug-related 
violence since 2006, nearly 13,000 last year alone, which shows 
an increasing trend according to those numbers. I note that 
recently the Department of State (DOS) issued a travel advisory 
in literally every one of the northern states of Mexico.
    What's your assessment of the current security situation in 
Mexico?
    General Jacoby. Senator, I concur with the numbers that you 
mentioned. Violence went up again in 2011. It began to trail 
off as the year concluded, but I don't think there's any 
conclusions yet to be drawn from that. So the Mexicans are in a 
tough fight with a brutal, adaptable enemy, and to my 
estimation they haven't blinked. They're taking the fight to 
the TCOs. But there's a lot of work to be done, and we are 
eager to continue to provide support to them as they request in 
that fight.
    Senator McCain. Last year they had 13,000 deaths, which is 
a very high number. Does that indicate--with the travel 
advisory which has recently been issued, does that indicate to 
you that we are winning or losing or at a stalemate? What is 
the basic situation?
    General Jacoby. Senator, I think it's too soon to make an 
estimation on winning or losing. I know the Mexican Government 
has made a courageous decision, an extraordinary decision, to 
put its military on the street.
    Senator McCain. I appreciate courageous decisions. I think 
we ought to have an assessment as to whether we are succeeding 
or failing and whether the Mexican Government is succeeding or 
failing, because then we ought to look at what strategies we 
are using. So I guess I'm asking, General, has the violence 
gotten worse or has it gotten better? Do you think we are 
succeeding or failing? I'd really appreciate that assessment.
    General Jacoby. I think that the violence has continued to 
increase. It wasn't a tremendous jump this year, but those are 
unacceptable numbers. As evidenced in the decision in Nuevo 
Laredo, where we issued a travel advisory, I think that's 
indicative of the security problem along our border.
    I also believe that the decapitation strategy, they've been 
successful at that. 22 out of the top 37 trafficking figures 
that the Mexican Government has gone after have been taken off 
the board. But it has not had an appreciable effect, an 
appreciable positive effect.
    So I agree that there are other things that need to be 
done, and the Mexican military is working on trying to 
establish security by reducing the violence across the 
communities, particularly in the northeast, and I think that's 
the correct strategy to follow.
    Senator McCain. What is your assessment of the situation 
along the U.S.-Mexico border?
    General Jacoby. The situation along the border, we see all 
the bad things that can be attributed to a TCO appearing at the 
border. We know from our experiences in Afghanistan and Iraq 
that at the border weak institutions are exploited by malicious 
activity and illicit activity. So the illicit activity that is 
really the heart and soul, the economic engine of the TCO, 
expresses itself on the border, as you mentioned, in illicit 
trafficking of human beings, weapons, cash, and drugs.
    Senator McCain. As you are aware, a great portion of that 
goes across the Arizona-Mexico border, including a large 
percentage of the drugs which get up to Phoenix and then are 
distributed nationwide; isn't that a correct assessment?
    General Jacoby. Senator, that's correct.
    Senator McCain. So is it your view that we still need to--
and we have improved border security, but we need to take 
additional steps on the issue of border security?
    General Jacoby. It's my view, Senator, that we need to 
continue our efforts along the border.
    Senator McCain. Additional steps.
    General Jacoby. Senator, what we do on the border as DOD is 
to provide support to the lead agencies, DHS primarily, DOJ's 
organizations as well. We're eager to provide that support. 
It's mutually beneficial to both the agencies and to the 
soldiers, sailors, airmen, and marines who are training, and we 
look for every opportunity to meet their requirements.
    Senator McCain. We have identified a lot of the cartels and 
their leaders. Guzman's name and others are very familiar to 
us. But according to the assessment released by the DOJ, the 
cartels now have presence in over 1,000 U.S. cities. Why don't 
we know those names? Maybe that's kind of an elementary 
question, but maybe I could ask you and General Fraser. We know 
the names of the cartel leaders, but we don't know the names of 
the people who are running these drug rings in over 1,000 
cities, or do we know them?
    General Jacoby. Senator, my estimation would be that we 
know to some level the members of the cartels that are 
operating within the United States. I've spoken to several 
agencies within the United States about this issue and I think 
that we have loose connections with some of the cartels in 
Mexico, but I believe that we have our own gang problem issues 
within the United States. I think they are fed or feed off of 
TCOs. So we recognize this as a problem and I know that our 
Federal agencies and DOJ are working it.
    Senator McCain. Guatemala has declared its second military 
state of siege to try to deal with the increased violence from 
Mexican drug cartels operating within its borders. How serious 
is this problem in Guatemala, General Fraser, the Mexican 
cartels extending their operations into not just Guatemala, but 
into Central and South America?
    General Fraser. Senator, it is an effort that we see that 
is moving down through Central America. As Mexico increases 
their pressure, we see that the networks from especially Los 
Zetas and Sinaloa are moving into Central America. Guatemala is 
obviously that first location, but we see their footprints 
further down into Central America as well.
    Senator McCain. Do you believe that in some cases the 
cartels are better trained and equipped than the security 
forces in some of these countries?
    General Fraser. Senator, I think they have some better 
equipment as you look at some of their armored SUVs and some of 
the high-powered weapons that they have, and in cases, yes, 
they are better-equipped than their military and law 
enforcement counterparts.
    Senator McCain. Obviously, with this much money washing 
around, the issue of corruption remains a very, very serious 
one?
    General Fraser. Corruption is still very, very serious 
throughout much of Central America.
    Senator McCain. Thank you very much, Mr. Chairman.
    Chairman Levin. Thank you, Senator McCain.
    Senator Lieberman.
    Senator Lieberman. Thanks, Mr. Chairman.
    Thanks to both of you for your service. General Fraser, let 
me join my colleagues in thanking you for a really remarkable 
career of service to our country and to wish you godspeed in 
the chapters ahead.
    Obviously, this set of hearings that we hold in this 
committee is all to inform us as we act on our authorization 
bill. We're acting in the context of a new defense strategic 
guidance which calls for a rebalancing toward the Asia Pacific, 
although not ignoring the Middle East, which continues to be 
very active and has a lot of threats to us there.
    But it strikes me as your two commands come before us, 
though you don't get as much attention publicly as the U.S. 
Central Command (CENTCOM), for instance, as the questions of 
Chairman Levin and Senator McCain indicate, you're involved in 
matters that are really important to the security of the United 
States and to the people of the United States.
    So I'm concerned about the extent to which the cuts in 
funding in the defense budget or the pressure on the defense 
budget is constricting your ability to do the job that we need 
you to do.
    General Fraser, I wanted to start with you. I noticed that 
last week you told reporters that SOUTHCOM at this point can 
only interdict about 33 percent of observed illicit traffic 
transitting the region en route to the United States because of 
what I take to be insufficient assets or personnel. I'm just 
going to quote you: ``We intercept about 33 percent of what we 
know is out there and that's just a limitation on a number of 
assets. More is getting through.''
    So I wanted to ask you just to amplify on that a little 
bit. In a very specific way, if you would indicate to the 
committee what specific assets would you like to see more of at 
SOUTHCOM, which would help you and your successor fulfill the 
mandate, the responsibility, that we've given you?
    General Fraser. Senator, the figures you quote are correct, 
and those are figures from the Joint Interagency Task Force-
South, which is our organization who conducts that operation.
    Senator Lieberman. Right.
    General Fraser. That is availability of not only DOD ships, 
but it's the U.S. Coast Guard and other assets. What we are 
working with the Navy on today is how they can make available 
other capacities which are not necessarily the traditional 
capacities that we've asked for: riverine vessels, offshore 
patrol vessels, capacity of that type. So it really is a 
maritime environment issue that we're focused on initially.
    We're also working with our partner countries in the region 
and providing them with interceptor capacity, because it's not 
only the United States that has a role in this effort; it is 
all the partner nations that we have. We're working with them 
in providing some interceptor vessels all the way along Central 
America, to provide them with the capacity to also intercept 
these vessels. That is an ongoing effort as we speak.
    Senator Lieberman. Yes. So my concern is--and you 
illustrate it--that there's tremendous demand in a lot of 
sections of the world for our maritime capabilities. Obviously, 
now we're focused on the Iranian threat in the Middle East and 
the Strait of Hormuz and we're moving more assets there. Of 
course, some assets have been engaged in Afghanistan, for 
instance.
    So can you get a little more specific, for instance, on the 
MC-12 aircraft and the needs that you think are there in your 
AOR? I know that obviously a number of those have been occupied 
in Afghanistan, and they're slated to come to Air National 
Guard squadrons in not the coming year, but fiscal year 2014.
    So tell me about the need for those aircraft, as you see it 
in the SOUTHCOM?
    General Fraser. Senator Lieberman, as those aircraft become 
available we see a great opportunity for use of those airplanes 
in support of our partners throughout the region. Many of our 
partner nations take captured drug trafficking aircraft that 
are very similar in form and they then transfer them with 
equipment that they perform a role very similar. So we think 
the MC-12 is a great companion to that effort.
    I'm comfortable with the fact that the MC-12s are focused 
in the place we need them right now as a Nation and that as 
those become available we have opportunities that we can really 
make use of them.
    Senator Lieberman. Am I correct to assume that the command 
is also being affected by the retirement of the Perry-class 
frigates, which have been a real mainstay of those interdiction 
efforts, before the replacement system, which is the littoral 
combat ship (LCS), is available in sufficient numbers?
    General Fraser. Senator, that is one of the issues we're 
seeing with the availability of naval ships, is the retirement 
of those frigates. This has been a gap that we have seen for a 
few years now coming. So the LCS will have a great capacity to 
also support our mission as well in the future.
    Senator Lieberman. Okay. I may file some questions for you 
or have our folks talk to your folks, because I think we're not 
giving the command the assets you need to get the job done that 
we want you to do. That's not your fault; that's our fault, if 
you will, or the budget's fault.
    Can I ask you a very different kind of question, General. I 
was really struck in your posture statement about what you had 
to say about Iranian activity in the AOR of SOUTHCOM. We're all 
aware of this really remarkable story just within the last year 
of the Iranian connection to the Mexican TOC groups aimed at 
sending somebody into the U.S. groups to kill the Saudi 
ambassador here in Washington.
    But I wanted to invite you and, if you want, General 
Jacoby, to talk more broadly about, there's unfortunately a 
natural coming together. It seems almost inevitable that if 
somebody wants to do us damage in the United States, terrorist 
group, extremist group, Islamist group, that they're going to 
find their way to these TOC groups that have become quite adept 
at getting into the United States and getting stuff into the 
United States, people into the United States.
    So I wanted to invite you both to talk more broadly about 
that problem. Then, General, if you could just describe a 
little bit for the record here some of what you say in your 
posture statement about the quite methodical movement of 
Iranian activities, personnel, particularly this man Rabbani, 
into Latin America, which is obviously not good for us.
    General Fraser. Senator, Iran is very engaged in the 
region. They have doubled their number of embassies in the last 
7 years. They now have 11 embassies. They have 40 cultural 
centers in 17 different countries throughout the region. We see 
their activity very much as trying to build cultural awareness 
and awareness for Iran, trying to circumvent international 
sanctions that are on their economy and on their activities. 
They are seeing an opportunity with some of the anti-U.S.-
focused countries within the region as a method on being able 
to do that.
    Our concern remains their traditional connections with 
Hezbollah and Hamas, who do have organizations in Latin 
America. Those organizations are primarily focused on financial 
support to organizations back in the Middle East, but they are 
involved in illicit activity. So that is the connection that we 
continue to look for as we watch in the future, that connection 
between the illicit activity and the potential pathway into the 
United States.
    Senator Lieberman. General Jacoby, did you want to add 
anything to that?
    General Jacoby. Senator, there's an extraordinary amount of 
vigilance across the interagency looking for that 
counterterrorism nexus with the TCOs. So we have our eye on 
that closely. It's a matter of great importance to the 
Homeland. I think it also reflects what I believe today is an 
intimate relationship between the home game and the away game. 
So what General Mattis is doing in the Gulf is very important 
to us, and so making that intelligence connective tissue with 
the other commands is critical to us, and we've worked hard to 
do that.
    There's an extraordinary amount of money in the TCO 
coffers. They're networks for hire, and so we'll be watching 
that carefully and working with our very good Mexican partners 
to that end.
    Senator Lieberman. Thank you both very much.
    Chairman Levin. Thank you, Senator Lieberman.
    Senator Chambliss.
    Senator Chambliss. Thanks very much, Mr. Chairman.
    Gentlemen, thanks to both of you for your service. General 
Fraser, you've been a good friend as well as providing great 
leadership to the Air Force and that leadership is going to be 
missed. But we certainly wish you the best.
    General Jacoby, in your written statement you note that 
``Legacy fighters are aging and recapitalizing our fighter, 
tanker, and airborne early warning aircraft will remain a 
requirement.'' Given the Air Force's planned delay now in the 
F-35, are you confident that the Air Force will provide the 
required aircraft and resources for the aerospace control alert 
(ACA) mission over the next 10 years, and is there a risk that 
we may not be able to provide that same level of air space 
control coverage as before based on a reduced number of 
tactical aircraft?
    General Jacoby. No, I'm not concerned about the aircraft, 
Senator. Whether it's F-16s, F-22s, or Canadian CF-18s, we go 
through a rigorous process of inspections and tests and 
exercises to ensure that all of our alert sites can meet the 
standard required for the aerospace control mission. So I know 
the Air Force has had to make some tough calls, but I have 
great faith that they'll provide capable aircraft for us to use 
in the future.
    I know that it includes challenges for recapitalization and 
fielding the F-35. I'm a big fan of the Air Force continuing 
those efforts, but I have trust and confidence the Air Force is 
going to give me what I need to get the job done.
    Senator Chambliss. General Fraser, both you and General 
Jacoby mentioned the Western Hemisphere Institute for Security 
Cooperation (WHINSEC) in your written statements and 
acknowledge the importance of this program in building enduring 
military-to-military relationships. I'm pleased to serve on 
that board with both of you. General Fraser, you particularly, 
since you've been there longer, you have been a real asset to 
air and you've put a lot of time and provided great leadership 
to that institution.
    I'd appreciate any thoughts you have regarding how the 
training with the Mexican and South American military personnel 
receive at WHINSEC has allowed them to be better capable of 
confronting these TCOs that are so active in the region. As we 
continue to focus on strengthening the security capacities of 
our partners in South and Central America, what additional role 
can WHINSEC play to increase our cooperation? Also, as I have 
done in the past, I'd appreciate your comment on the wisdom of 
the United States releasing and making public the names of the 
foreign military, civilian, and law enforcement personnel that 
train at WHINSEC?
    General Fraser. Senator Chambliss, thank you, and thank 
you, Senator Levin, for your support and continued support to 
WHINSEC. It remains a very useful organization for us. We've 
had almost 14,000 people trained and educated in WHINSEC over 
the last 11 years. I've talked with many of the graduates who 
come through that institution. We find two lanes. One, it's not 
only a partnership with the United States and an understanding 
as we work through WHINSEC of the respect for civil authority, 
as, Mr. Chairman, you asked that we address, respect for human 
rights, respect for the rule of law, and other training 
capacities. So it's that partnership with the United States and 
our ability from a military standpoint to work with them.
    But I also and they also mention that the partnerships that 
they form with one another from this institution are very 
important as well. As we look to the situation of TCOs and 
impacting that into the future, as well as working with law 
enforcement partners, those partnerships that they form with 
one another as well as the international community are critical 
to our success in the future.
    Senator Chambliss. The release of the names issue?
    General Fraser. That was a question that DOD studied, 
Senator, and the Secretary determined that he did not intend to 
release those names, and I support that position.
    Senator Chambliss. General, last year we discussed the need 
for improved intelligence, surveillance, and reconnaissance 
(ISR) as a requirement for SOUTHCOM and you noted the need for 
an imagery intelligence wide-area coverage sensor integration, 
signals intelligence, moving target indicators, layered ISR 
architecture and management tools, and biometrics. Do you 
believe that since we spoke last year you're getting the kind 
of support that you need from DOD and the Intelligence 
Community in terms of prioritizing and acquiring those assets, 
and has the need for those changed in any way?
    General Fraser. Senator, it's a complex undertaking that we 
work. I still have many of those same requirements as we look 
into the future. I'm comfortable with the prioritization of all 
our ISR assets as we approach the multitude of requests and 
requirements there are on our ISR architecture.
    We're continuing to take roads and pathways down 
opportunities in the information that is available. There is a 
lot of social media, blogs, a lot of information that's 
available, and we're looking very deliberately into those 
areas, as well as working with law enforcement and other 
agencies to figure out how we can take advantage of all the 
information that is there in a different way.
    We will continue those efforts as well as continue to work 
with the entire DOD and the interagency to continue to foster 
and build our ISR requirements.
    Senator Chambliss. General Jacoby, I want to go back to 
this issue of cyber security and your comments in response to 
Senator Levin. You note in your written statement that 
``NORTHCOM and NORAD operate on data and networking systems 
that rely on inter-networked commercial and military 
infrastructure,'' and as such cyber attacks pose potentially 
grave risks to our ability to accomplish your mission.
    Now, we know that Russia and China are leveraging cyber 
espionage to steal government and corporate secrets from the 
United States. The areas of information and communications 
technology and military technologies, including aerospace, 
aeronautical technologies, are at the greatest risk right now 
of cyber espionage.
    Can you comment on what you believe NORTHCOM and NORAD need 
to do to mitigate these risks and vulnerabilities to those 
systems?
    General Jacoby. Senator, we're focused very much on the 
defense of the networks we need for mission accomplishment. I 
feel that they are secure right now, but you have to stay 
vigilant on this. So there is great capability in the hacking 
world to put at risk points of vulnerability, especially where 
we have interconnectedness among government, military, and 
commercial systems. So we watch that closely and it is a great 
area of concern.
    We're working closely with CYBERCOM, coming up with unique 
defense solutions. Part of what we're doing is including 
receiving some expertise reinforcement in our cyber warriors at 
NORTHCOM.
    Senator Chambliss. Are you seeing any increase in the area 
of cyber attacks?
    General Jacoby. Not against NORTHCOM, Senator.
    Senator Chambliss. Thank you.
    Chairman Levin. Thank you, Senator Chambliss.
    Senator Reed.
    Senator Reed. Thank you very much, Mr. Chairman.
    General Fraser, General Jacoby, thank you for your 
testimony. General Fraser, thank you and your family for your 
great service to the Air Force and the Nation.
    Senator Lieberman touched on a series of issues about 
capacity, particularly maritime capacity in your AOR. One 
aspect of this is the reports frequently of submarines or 
submersibles being used to transport narcotics. Does that pose 
an emerging problem which complicates further your ability to 
interdict these vessels with maritime and in the air?
    General Fraser. Senator, it remains a concern. For the 
first time this year, we saw semi-submersible vessels in the 
Caribbean, and we had not seen them prior to this year. So the 
use of those vessels continues to expand within the TCOs.
    As I look at the problem, it's not just a maritime problem, 
because they're built in the jungles in Colombia, they acquire 
those assets, and they're commercially available assets, and 
they arrive somewhere off the coast of Central America and they 
transfer their goods there. It's a very expensive proposition 
to try and find them, follow them, detect them as they work 
through the maritime environment. It requires a lot of assets 
to be able to do that.
    We're working the entire connection. Our focus is really on 
where they're built and where they arrive to address the 
problem with trying to detect them and then intercept them when 
we do find them in the maritime environment.
    Senator Reed. I presume this is a collaborative effort with 
the host countries, if you will, they're not doing it with 
their permission, but they're doing it in Colombia and other 
places, and you're working closely with their intelligence 
services to do that?
    General Fraser. Yes, Senator. It's a great collaboration. 
We rely primarily on law enforcement information and it is 
really those countries and their law enforcement capacity who 
really take action to address this issue within their 
territory. Within our own interagency it's a very collaborative 
effort as well.
    Senator Reed. One of the consequences of our active 
commitment in other theaters, particularly CENTCOM, is overhead 
and other ISR factors. Do you think you have adequate support 
in this area to pursue these construction projects in the 
jungles and to pinpoint them early on, or is that a deficiency?
    General Fraser. Senator, I think I have adequate assets. We 
are continuing to look especially at capacity that can look 
through triple-canopy jungles. That's a capacity that we're 
testing and working on today. That will really help us a lot as 
we look at that effort. There are test programs under way to 
build that capacity. So I'm comfortable, Senator.
    Senator Reed. General, can you comment on the soon-to-be 
expansion of the Panama Canal in terms of your operations and 
just in general? I think in 2014 they're scheduled to begin the 
transit with the new canal, which would be a huge, huge change 
to seaborne transportation, not just in your AOR, but 
worldwide. Do you have any specific insights?
    General Fraser. Senator, you're correct, 2014 is the 
scheduled timeline and the Panama Canal Authority and the 
Government of Panama are very focused on achieving that goal. 
It will change the amount of commercial activity that comes 
through the Panama Canal, maybe not the number of ships, but 
the amount of commercial activity.
    We on an annual basis conduct an exercise called Panamax, 
which is an international exercise--17 nations participated 
last year--that supports the Government of Panama in defense of 
the Panama Canal. We will continue those efforts in the future 
as we look at that expansion as it happens within Panama. I 
don't see a direct change to the threat or to the concerns as 
we look into the future, but our Panamax exercise will remain 
critical to that effort.
    Senator Reed. Thank you.
    General Jacoby, there is another emerging corridor and 
that's the Arctic Ocean. Given your requirements and your day-
to-day coordination with the Canadian authorities, the Navy is 
predicting, I think, in some cases at least 1 or 2 months of 
transit by 2020 of commercial ships through the Arctic, which 
opens up questions of security, of search and rescue, of 
environmental response.
    Where are we in that endeavor?
    General Jacoby. Thank you, Senator. The Arctic is a unique 
domain and it's changing every day for us. We work closely with 
the Canadians on how they think about the Arctic and how they 
are planning for it. They really are working in three 5-year 
blocks towards some of the same things we are considering.
    Today, Admiral Papp and I are going to sign a white paper 
that we've done, a capabilities gap assessment, principally in 
the areas of communications, domain awareness, infrastructure, 
and presence, and what we will recommend for the future that 
might lead to prudent investments to position us for that 
eventual opening of the Arctic.
    Traffic has already increased over 61 percent in the Arctic 
since 2008. There'll be drilling starting in the Beaufort Sea 
prior to the close of the spring. So security interests follow 
closely behind economic interests, and we will be participating 
in a number of venues to help lead that for DOD.
    Senator Reed. Many of my colleagues have touched on the 
issue of cyber security. NORTHCOM has assets within your area 
of operations--missile silos, I presume, bases, et cetera. You 
have the NORAD system, your assets. Have you and SOUTHCOM 
together or separately done a vulnerability analysis relative 
to your dependence upon civilian utilities, civilian systems 
that are less secure than the military systems?
    General Jacoby. Senator, yes, we have, and we've also 
exercised those extensively and red-teamed ourselves with that 
regard.
    Senator Reed. You're confident that you can continue to 
respond to the National Command Authority in a situation, a 
cyber attack or any other that would go after, not directly 
your installations, but supporting utilities, supporting 
civilian complexes?
    General Jacoby. In particular, Senator, with regard to our 
national military command participation, I believe our network 
is secure.
    Senator Reed. Can it operate if the civilian networks are 
compromised and go down?
    General Jacoby. I believe so, Senator. But as you know, 
there's great interconnectedness across the country and across 
from the energy system and the transportation system. So there 
will inevitably be second- and third-order effects of any kind 
of wholesale attack on the cyber system.
    But in terms of our core mission area, I believe that we 
are adequately defended. But once again, vigilance is going to 
be required, because the enemy, the cyber enemies, continue to 
advance in their capabilities and have demonstrated an intent 
to conduct malicious activity on our nets.
    Senator Reed. Just a final comment as my time has expired. 
Can you operate in an environment in which the worst case 
environment is that all of these civilian support or networks 
have gone down and you have to go back to getting on the 
telephone, if maybe that's still working, if it is, like a land 
line, or sending a messenger? I don't want to be too facetious, 
but I think sometimes we have become so dependent upon Global 
Positioning Systems, cellphones, on automatic computer 
technology, et cetera. Do you exercise to the point of truly 
the worst case, where you might even have to rely upon old-
fashioned technologies like people driving a car and getting an 
order out?
    General Jacoby. Senator, it's a great question. That's 
exactly what we exercised in November, and I will tell you that 
it is very painful, but doable, and it takes a long time to 
recover your network. We purposely took it down. It takes a 
long time to put it back up.
    Senator Reed. Thank you, General.
    Chairman Levin. Thank you very much, Senator Reed.
    Senator Ayotte.
    Senator Ayotte. Thank you, Mr. Chairman.
    Thank you, General Fraser and General Jacoby, for your 
service. General Fraser, thank you for all that you've done for 
our country. We certainly will miss having you around here and 
testifying before our committee.
    General Fraser, in your written testimony, you describe the 
role of Russia in the SOUTHCOM region. In fact, you said that 
Russia's outreach to the region is centered primarily on arms 
sales; is that right?
    General Fraser. Yes, ma'am, it is.
    Senator Ayotte. As I understand it, their arms sales are 
actually to Venezuela, is that right?
    General Fraser. The principal purchaser of Russian 
equipment is Venezuela, but they are also selling equipment to 
other nations.
    Senator Ayotte. Is it accurate that the Chavez regime in 
Venezuela is the largest importer of Russian arms in the world?
    General Fraser. For last year, yes, ma'am.
    Senator Ayotte. They're also, as I understand it, selling 
arms to Castro's Cuba?
    General Fraser. Yes, ma'am.
    Senator Ayotte. Selling arms to Ortega's Nicaragua?
    General Fraser. Yes, ma'am.
    Senator Ayotte. Not exactly the most democratic and 
enlightened rulers in that area of your jurisdiction, are they?
    General Fraser. Ma'am, they've been putting the pressure on 
the traditional checks-and-balances in democratic institutions.
    Senator Ayotte. Unfortunately, this is part of the pattern 
for Russia. This is something we had before the committee last 
week, I'm deeply concerned about this--as are others on this 
committee--as well as Russia's role in selling arms to Syria, 
even as the bloodshed continues there. In fact, the state-
controlled Russian company Rosoboronexport continues to provide 
the Syrian Government with weapons. I just want to take this 
opportunity, if you look at the pattern here in addition with 
Russian obstructionism with respect to our efforts of 
sanctioning Iran, that this is a troubling, troubling pattern.
    When it comes to Syria, I want to say this, that I was 
proud to join my colleagues, Senator Cornyn, Senator Durbin, 
and Senator Gillibrand, in writing a letter to Secretary 
Panetta to express our outrage regarding the Russian arms 
sales, in fact, to Syria. Yesterday our Secretary of State, 
Secretary Clinton, sparred with a representative from the 
Russian Government and she said, rightly so, and I stand by our 
Secretary of State in saying this, that Russia was standing 
silent as Assad kills his own people.
    I'd go further. In my old profession when I was attorney 
general of the State of New Hampshire, if you know someone is 
killing someone and committing murder, like the Assad regime is 
doing with their own people, and you knowingly provide them 
with arms, you are not just standing silent; you are actually 
an accomplice to those killings.
    So I think this is a pattern we're seeing from Russia. I 
want to take this opportunity, even though it's not in your 
command, to express again my outrage that Russia is not only 
providing arms to some of the most despotic regimes in the 
world, but one right now that is killing its own people. I 
would hope that the Russians would stop this and stop trying to 
spar with Secretary Clinton over what is obvious, and that they 
should come forward and be a member of the international 
community to support sanctions against Syria.
    So thank you for giving me the opportunity to do that. 
Again, I would hope they would stop selling arms to people like 
Chavez as well as their interactions with Cuba.
    I wanted to ask you both about the National Guard and in 
particular, our State Partnership Program (SPP). General 
Fraser, the Guard in New Hampshire has had a very strong SPP in 
SOUTHCOM with El Salvador. Can you let us know what you think 
is the value of the SPP and also what your view is on, in 
particular, the partnership between the Guard in New Hampshire 
and the program in El Salvador? How does that help our national 
interests?
    General Fraser. Senator, I'm a strong supporter of the SPP. 
One of the values the SPP brings is the fact that Guard members 
stay in their units longer than Active Duty personnel do, and 
that provides an opportunity to build an enduring relationship 
with that country that they're working with.
    We have SPP with 22 different countries within the region 
and it is a critical long-term partnership-building capacity 
that we see. New Hampshire, working with El Salvador, who is a 
great partner of the United States also, is a very, very close 
connection and really helps build their routine tactical 
capacity, their budgeting capacity, just a good relationship 
back and forth between the two partners.
    Senator Ayotte. Is this an effective use of our resources 
in terms of building partnerships in our own national security 
interests?
    General Fraser. Ma'am, I think it's a very effective tool.
    The other benefit we gain from the State partners is 
because of their civilian jobs they have some opportunities to 
share experience that goes beyond military experience when that 
can be authorized.
    Senator Ayotte. General Jacoby, did you want to add your 
opinion to that?
    General Jacoby. Senator, thank you. No, just from my career 
experience it's tremendous, very effective, very efficient use 
of resources. It's consistency over time. It helps us broaden 
and deepen our military-to-military relationships around the 
world.
    Senator Ayotte. I was struck in your testimony, your 
written testimony, General Jacoby, how you talked about that 
the Guard, ``The National Guard is a natural partner in all 
that we do'' is the language that you used. As we look at this 
challenging time in terms of the prospect of, unfortunately, 
not only the cuts that DOD is facing now, but on top of it 
sequestration, how important is it that we not only maintain a 
robust Active Duty and resources for that in terms of training, 
but also for our Guard as well?
    General Jacoby. Senator, the Guard is our natural partner, 
and our most important partner. They function in all of my 
mission sets.
    Senator Ayotte. I should include the Reserves as I'm 
talking about this.
    General Jacoby. They function in all of our mission sets 
and, thanks to Congress now, the Reserves can also function in 
defense support of civil authorities. It makes sense. We saw 
problems locally and the Guard is available, fast, and 
efficient in that way. So from defending the Homeland to 
supporting civil authorities to actually helping us with some 
of our engagements with the countries in this AOR, the Guard is 
an important partner to us.
    Senator Ayotte. Did you want to add anything further, 
General Fraser?
    General Fraser. I think we're in violent agreement here 
that SPP is a natural ally. We work and depend very heavily 
upon the National Guard in our engagement, not only with our 
partners, but as we work within our headquarters and within our 
capacity to provide exercise support and other capacities. So 
across the board we rely very heavily on the National Guard as 
well as the Reserves to conduct our mission.
    Senator Ayotte. I thank you both.
    Chairman Levin. Thank you, Senator Ayotte.
    Senator Begich.
    Senator Begich. Thank you very much, Mr. Chairman.
    General Fraser, General Jacoby, good to see you. I feel 
like I'm in Alaska right now, as both of you were up there and 
commanding operations. So thank you for being here. It's great 
to be back in a forum where we're all three here. So thank you 
very much.
    Let me first start if I can, General Jacoby. We had a brief 
meeting last week in regards to Alaska Command (ALCOM) and 
what's going on up there, and I want to lead a little bit into 
the Arctic. But first, before I do that, the general 
description or discussion is: Can you tell me from your 
perspective the value of ALCOM in regards to the connection 
with NORTHCOM? Can you give me your sense of how that plays and 
what the role and responsibility is?
    General Jacoby. Thank you, Senator.
    Senator Begich. Of course I'm biased, and I hope it's a 
good answer. Please, go ahead.
    General Jacoby. When I was Commander of U.S. Army Alaska, 
of course, my Commander of ALCOM was Doug Fraser.
    Senator Begich. That's right.
    General Jacoby. He commanded brilliantly. So ALCOM was very 
valuable.
    Senator, Alaska is unique in strategic significance to the 
country and now even more so as our gaze turns towards the 
Arctic. I believe it requires a three-star command. I believe 
it requires a joint command. So I think that ALCOM remains 
relevant and important to the defense of the Homeland.
    Many, many tasks that take place in Alaska are tasks that 
support NORTHCOM and NORAD in our Homeland defense role, to 
include defense support of civil authorities through JTF 
Alaska. So very important to NORAD and NORTHCOM, and I think 
you have the right command structure up there right now.
    Senator Begich. Let me add a little bit more to that, 
because not only NORTHCOM but U.S. Pacific Command (PACOM), 
too, it has another unique role in its operations. Either one 
of you--I know, even though you're SOUTHCOM, General Fraser, 
you've had a lot of experience up there. But, General Jacoby, 
maybe you could respond.
    General Jacoby. We've had a good working relationship with 
PACOM and they have important equities in the strategic 
significance of Alaska. However, as both the NORAD Commander 
and the NORTHCOM Commander, I believe that I probably occupy--
--
    Senator Begich. You want the assets.
    General Jacoby.--80 to 85 percent of the ALCOM commander's 
time.
    Senator Begich. Excellent.
    Let me ask you, from the Arctic perspective--and Senator 
Reed was leading into that and you indicated that today you'll 
be, I think you said today, that Admiral Papp and you are 
signing a document indicating some of the gap analysis or 
resources that may be needed. First of all, is the analysis--
I'm assuming it's a long-term analysis--of what really will be 
needed there to make our presence known there, and my sense is 
by your signing that agreement you believe--I'm putting these 
words in your mouth, but you can correct me--that this kind of 
agreement in the future of the Arctic is going to be another 
piece of the equation to our military positioning? Is that a 
fair statement?
    General Jacoby. Senator, yes, it is. Admiral Papp and I 
share great interests in the Arctic. Of course, we need to move 
forward with some consensus of what are the capabilities that 
will be required and the implications for what are the prudent 
investments that should be made. So we have an opportunity 
while we watch the Arctic begin to open up to get ahead of 
potential security requirements. To that end, working closely 
with the Coast Guard, the U.S. Navy, other partners in DOD, and 
the DHS, and also staying tied closely to the Canadians, is the 
right strategic framework to begin working on now.
    Senator Begich. One statistic I'll use, and I think it came 
from the Coast Guard in Alaska, and that is a few years ago 
you'd maybe see 50 ships moving through the Bering Sea; now 
close to 1,000, to give you a sense. In the Arctic, I think it 
was 7 last year; now 34 in 1 year alone. So it's moving in a 
rapid pace of activity up there, and we know our friends from 
China and Russia are very interested, China in our land, as I 
would say, curious about their efforts.
    So again, your gap analysis, will that also then be 
utilized as you move forward in your long-term budget planning 
of how will these pieces fit in and where you need to allocate 
assets?
    General Jacoby. Yes, Senator, I think that's an important 
first step with our closest partners, to look at the gaps and 
particularly in how you communicate, how you see and 
understand, what infrastructure we may need, and what kind of 
continued presence you might require in the Arctic. We come to 
a consensus on that, and then we help inform our Integrated 
Priority List and our Scientific Integrated Priority List so 
that we can influence budgets over time through our components 
to the Services.
    So that's the start of the process. We received this 
responsibility in the latest Unified Command Plan (UCP) update. 
I'm happy to say we're moving out on it.
    Senator Begich. Thank you very much.
    Let me if I can, General Fraser, first of all, thank you 
for your long-term service in your career. I know you'll be 
missed, but I know you have been an incredible asset for this 
country.
    Let me ask you a couple questions about SOUTHCOM. The first 
is a general comment. As we move down the path with the Panama 
Canal going into--out of our control to a certain extent and 
predominantly out of total control, do we have any worry as we 
worry about commercial lanes in Somalia with piracy? Do we have 
any worry over the long haul what might happen in that region? 
Give me your sense?
    I know this is an odd question, but when you're from Alaska 
and you deal with fisheries, we hate pirates. So when you're 
thinking of Somalia, we hate pirates. So I'm thinking of 
Panama; what's their ability to manage that?
    General Fraser. The Government of Panama and the Panama 
Canal Authority are doing a great job of managing the Panama 
Canal. It's efficient, it's effective, and it's a big income 
provider for the Government of Panama.
    We don't see any indications right now of any piracy on 
either end of the Panama Canal. It is an area that we continue 
to watch.
    Senator Begich. Also, we had great conversations when the 
hurricane went through Haiti. I know we talked on the phone. 
Tell me how SOUTHCOM is continuing to prepare and be ready for 
those kinds of responses for natural disasters. Give me a sense 
of--that was the first one that's pretty significant that I as 
a Member of the Senate was seeing SOUTHCOM respond to. Give me 
your thoughts on that and how we're prepared for other natural 
disasters in the region?
    General Fraser. We remain very deliberately prepared. The 
hurricane season is obviously our number one concern because 
that happens on an annual basis and we can predict that. We 
have a deliberate plan that we've developed post-Haiti 
exercise, revised our disaster response plan. It's a graduated 
plan depending on what the needs of any request would be. We 
continue to exercise that on an annual basis. As we look at the 
hurricane season, we prepare for that, not only within our 
headquarters, but with our partners in the region, and we work 
directly associated with Haiti, with the United Nations 
Stabilization Mission in Haiti, and the Government of Haiti, to 
be able to respond should a hurricane impact them during the 
hurricane season.
    Senator Begich. This is my last comment because my time has 
expired. You have designed, after going through that 
experience, you've seen some areas of improvement and some 
areas that were successful in trying to work off of that and 
expanding the kind of preparation at different levels, 
depending on the severity of the natural disaster. Is that a 
fair statement?
    General Fraser. Senator, it is a fair statement, to include 
that normally we don't have the authority to spend DOD dollars 
outside of a 72-hour emergency response capacity. Associated 
with Haiti specifically, we have requested and received 
authority from DOD for up to $3 million just so that we can 
start that process and respond on a rapid basis.
    Senator Begich. Very good. Thank you very much.
    Thanks to both of you and, like I said, it's good to see--I 
consider you Alaskans. So thank you both for your service.
    Chairman Levin. Thank you, Senator Begich.
    Senator Brown.
    Senator Brown. Thank you, Mr. Chairman.
    I had the honor of meeting both of you. I appreciate your 
taking the time to come to the office and address a lot of my 
questions.
    I just had a follow-up. Obviously, what Senator Ayotte said 
about the SPP, I participated. We went to Paraguay and find, 
not only with our relationship with Morocco, Paraguay, other 
places where we don't have a lot of money, but through the SPP 
we can get a good value for our dollar. It's something that I 
know that the State has an interest in. I want to keep it right 
where it is so we can continue to train and use it as an asset. 
So thank you for that support.
    Obviously, General Fraser, thank you for your service and 
your support as well.
    General Jacoby, I was wondering if you could expand for a 
minute on your comments regarding defense support to civil 
authorities, with respect to counterdrug operations network, 
and with respect to natural and manmade disasters, could you 
just expand on that just a touch?
    General Jacoby. Thank you, Senator. We had a great 
initiative last year with the dual-status commander. I 
mentioned it in my opening statement. We had an opportunity to 
test that in a way that we haven't done in the past this year 
with Hurricane Irene. I'm really proud to report, as a team, 
that the very first opportunity we had to employ dual-status 
commanders we did, and put four dual-status commanders in 
position with their Title 10 deputies, just as was the intent 
of Congress and the Council of Governors.
    So that program is alive and well. It made a lot of sense 
and now we're going to continue to grow that and look at ways 
to employ dual-status commanders in both the regional and the 
chemical, biological, radiological, and nuclear (CBRN) event, 
so big progress.
    I'm also working with the Reserve Forces of both the Air 
Force and the Army to take advantage of the authorization that 
we now have for involuntary activation of the Reserves to 
support civil authorities. It makes tremendous sense. There is 
huge capacity in the Reserves distributed around the country 
and that was a great move that we are continuing to work on.
    Senator Brown. I know there was an instance where there was 
a tornado or a hurricane and the Reserve unit was right there 
and they couldn't respond, and it made really no sense 
whatsoever.
    General Jacoby. I think we fixed that one, Senator. Thank 
you.
    Senator Brown. Great. Then talking about the dual-status 
commanders, how is that training going? So you're satisfied 
we're on track, it's going to be something that's viable for 
the future?
    General Jacoby. Senator, with the April class, we will have 
trained at least two dual-status commanders for every State, 
and that's huge. So there's always one in the queue, and we'll 
keep that training course going.
    Senator Brown. How long is that course?
    General Jacoby. It's about a 2-week course, but it 
dovetails with another course, the Joint Task Force Commander's 
Course. So that actually builds on previous programs. It gives 
you not just a certified dual-status commander; it gives you a 
team of guardsmen and NORTHCOM folks that have worked together 
and studied the problem and have pushed out the horizons on how 
we use dual-status commanders.
    Senator Brown. It may not be a bad idea to put in command 
and general staff and actually start it in the lower levels, 
the lower ranks, as just something to keep their eye on as 
we're going along, and integrate it earlier in the training 
cycle.
    General Fraser, foreign influence in your AOR and how this 
affects your operation. I noted Senator Ayotte's comments on 
Russia. What about the role of China? Can you comment on that 
based on your experience?
    General Fraser. Senator, China is very engaged in the 
region as well. They're primarily from a diplomatic and a 
commercial and economic standpoint is where they're very much 
engaged. They're now the leading trade partner with Brazil, 
with Chile, with Peru. They're also expanding into military-to-
military relations. They've had over the last 2 years over 20 
high-level visits to various countries within the region. They 
are selling some military equipment, from light aircraft to 
medium transports to radar capacity. They also provide 
education and training in China for military personnel.
    Senator Brown. Very similar to what we do at the War 
College and the like.
    General Fraser. Very similar, yes, Senator.
    Senator Brown. It was interesting, I remember and have had 
personal experience with countries--when I was in Paraguay, for 
example, they would say: ``Well, if you guys don't do it, China 
will.'' That's what I think we're seeing around the region. If 
you don't provide us with that X, then we'll get it from China. 
If you don't, we'll get it from China. So we're seeing that 
more and more just in the last 3, 4, 5 years. Is that an 
accurate statement?
    General Fraser. Senator, we see an increasing interest by 
China in the region. I don't see it as a zero-sum game, though. 
It's not China or the United States. I see both of us very much 
engaged in the region. I would state that there's an 
opportunity for both of us as we engage with our partners in 
the region to help ensure the security and stability of the 
region.
    Senator Brown. That's another reason for the SPP, I 
believe, in those smaller countries. You get that value for the 
dollars, so they can see the interaction and basically hang out 
with our soldiers and learn and grow and develop that 
relationship, which is critically important. Is that a fair 
statement?
    General Fraser. The relationships we build through training 
and education programs are critical to the future. We see it 
all the time around the world. We don't know when a crisis is 
coming. To have an awareness and an understanding and a shared 
experience with one of our partners is critical to our success.
    Senator Brown. I think we saw that in Egypt, actually, when 
we were able to pick up the phone and say: ``Hey, stand down 
and let this thing play out a little bit.'' General Jacoby, a 
fair statement as well?
    General Jacoby. Yes, Senator, very much so.
    Senator Brown. General Jacoby, I'm deeply concerned about 
the cuts in the Air National Guard and how it may affect the 
mission. I think the Army's done it really well in terms of 
trying to be very strategic with the cuts. I'm deeply 
concerned, especially about the air sovereignty alert mission, 
which we have one at Barnes Air National Guard Base, as you're 
aware of.
    Do you share those same concerns? Because I'm hearing from 
my folks back home that they had no knowledge that any of these 
cuts were coming. There was absolutely no communication 
whatsoever and out of left field, here we go. I'm looking at 
strategically Massachusetts and the eastern seaboard, the 
ability to respond all over our part of the world. It doesn't 
make any sense.
    General Jacoby. Senator, thanks for the question. The Air 
Force had some really tough choices to make, tough decisions. 
The Secretary asked us to turn over every rock as we sought to 
find the $487 billion that was mandated in the Budget Control 
Act (BCA). I believe the Homeland was treated fairly and is 
treated as job number one.
    However, we really need to be vigilant and ensure that we 
continue the programs necessary to defend the country, and that 
includes the ACA mission. In terms of defense support of civil 
authorities, the Guard, the Air Guard specifically, is very 
good at that mission. I'm going to count on the U.S. Air Force, 
the Total Air Force, to support our requirement. But all of us 
had to make tough choices and hated to see some of these cuts 
happen.
    Senator Brown. They're not there yet, and I'm hopeful that 
we'll be able to have a conversation, because when you're 
talking about the best value for the dollar and the Air Guard 
versus the regular Air Force, and the Reserves as well, the 
Reserve component, it doesn't make sense when you're talking 
about protecting the Homeland. We're not just talking about 
protecting the Homeland. There's a One-Army, One-Military 
concept now, and a lot of these folks are backfilling regular 
Air Force and Army units.
    Like I said, the Army seems to have kind of got it right. 
They are being thoughtful, judicious. The Air Force, with all 
due respect, it's not over. I haven't really seen evidence that 
these cuts make sense. So I just wanted to bring that to your 
attention. I appreciate your input on that.
    Thank you.
    Chairman Levin. Thank you very much, Senator Brown.
    Senator Udall.
    Senator Udall. Thank you, Mr. Chairman.
    Good morning, gentlemen. Thank you for being here today.
    General Jacoby, if I could follow up on Senator Brown's 
question. So what I hear you saying is that the proposed 
reduction to the Army and Air Guard will not affect your 
mission, you believe you can deliver on that mission?
    General Jacoby. Senator, that's correct.
    Senator Udall. Let me turn to a specific element in the 
change that's under way in this area. There has been a decision 
to end the 24-hour-alert requirement at Duluth and Langley. Did 
you have a say in that matter and what factors and assumptions 
went into that decision, and again will it affect the ACA 
mission?
    General Jacoby. Thanks, Senator. A very tough decision; it 
was part of the process across every combatant command, across 
every Service, to find the savings required by the BCA. I 
believe that we did adequately address the strategic 
requirements of the Homeland. But in the analysis, as a team 
effort, there was a decision taken to reduce by two.
    The command took responsibility for identifying those two 
bases. So we did two independent studies, one in my 
headquarters and one in First Air Force, which is my Air Force 
Component Command under Lieutenant General Sid Clarke. Both 
commands came up with the same answer--Duluth and Langley.
    Now, no bases are closed and this doesn't reflect on 
numbers of fighter squadrons. I specifically felt that in the 
case of those two bases that I had the authorities and the 
capabilities already resident under my authority as the NORAD 
commander to mitigate on short notice the loss of those two 
bases. In fact, I can change on my own authority the alert 
conditions and could in case of a threat, stand that back up.
    Senator Udall. If that changes, I'm going to ask you to 
take the time to notify the committee and notify me, if you 
would.
    General Jacoby. Senator, I'm passionate about the ACA 
mission. There's a high standard, and high expectations of the 
American public that we're going to defend the country's air 
space, and I will make sure my views are known.
    Senator Udall. Thank you.
    Let's turn to critical infrastructure, if we might, and the 
vulnerability that our infrastructure has to either cyber or 
physical attack. What do you see--and this is a series of 
questions--as vulnerable pieces of our infrastructure? What 
steps need to be taken to protect those valuable components? 
What role does NORTHCOM have in facilitating those protective 
measures?
    General Fraser. Thanks, Senator. There's a number of 
critical infrastructure protection requirements. Principally 
those lie within other sectors of the government, and so 
NORTHCOM's principal responsibility is to provide defense 
support to civil authorities in the consequence management of 
disasters within certain sectors, particularly a cyber attack, 
as I mentioned earlier. We would roll in and, if requested, 
provide defense support in recovering from that.
    Critical infrastructure, though, we know we're more 
concerned now about systems than we are places. So things like 
the national energy grid, the transportation system, those are 
being looked at hard, and we are in support of our partners, 
particularly in DHS, in determining ways that we can help.
    Senator Udall. Of course, we have a lot of work left to do, 
and I'm optimistic we're going to work on the floor of the 
Senate to put in place a cyber security policy. You know that 
you'll play a key role in advising us, given your perspective 
and your responsibilities in this area.
    General Jacoby. Yes, Senator.
    Senator Udall. General Fraser, if I could, I'd like to turn 
to the reports that Islamist groups are recruiting in your AOR. 
What are the conditions that are facilitating Islamist 
recruiting and fundraising in the most troubling areas, and 
what can we do, as well as our partners, to address these 
conditions?
    General Fraser. Senator, there are groups, violent 
extremist groups, who are advocating and proselytizing in 
largely Muslim communities within Latin America. The Muslim 
community is fairly small within the region. It makes about 1 
percent of the total inhabitants of the region. But they are 
still very deliberately advocating.
    The situations and the conditions that enable that are ones 
that you see in many of the countries in the region, and that's 
poverty rates, it's income inequality, it's the corruption 
that's there. It is, in some of those cases, an anti-U.S. 
perspective.
    Senator Udall. It bears watching, obviously, and hopefully 
the lessons we've learned in other parts of the world we can 
apply. Thank you for drawing our attention to this.
    South America, as I understand it, has certainly had its 
violent intervals in its history, but it has very little 
history of, of course, Islamist or terrorism of any kind. So it 
just shows this is a worldwide phenomenon that we have to be 
able to respond to wherever it may surface.
    General Fraser. Senator, we're paying very close attention 
to this issue. We're seeing measured success. We don't see 
great success in their efforts along these lines.
    Senator Udall. General Jacoby, if I could turn back to you, 
our good friend, General Renuart, when he relinquished command 
in 2010 he talked about his concerns about our aging air 
defense systems. We know that he talked about temporary fixes 
to take us forward. What's your current assessment of the 
modernization efforts in this important area?
    General Jacoby. Of course, we're very eager to have the F-
35 come on line. We're eager to continue the service life 
extension programs for the F-16s. Senator, the most important 
thing we do as a combatant commander, though, is we conduct 
frequent periodic inspections of our ACA squadrons. They 
continue to do well in these and we'll maintain vigilance. But 
of course, we're a stakeholder in capable aircraft stretching 
out into the future.
    Senator Udall. If you had more resources, though, in this 
area, you could put them to work, I assume?
    General Jacoby. Senator, I think any combatant command that 
you had before you would know what to do with additional 
resources.
    Senator Udall. General Fraser, before my time expires, talk 
a little bit more about Iran's outreach efforts in South 
America. We know that Chavez and Ahmadinejad have close ties, 
but have the Iranians been making inroads with any other South 
American countries?
    General Fraser. President Ahmadinejad has made six visits 
to the region in the last 7 years. This last trip that he took, 
he visited Venezuela, Cuba, Nicaragua, and Ecuador. We saw it 
largely as a diplomatic effort and the estimate that we have 
and throughout the government is that he didn't really get the 
reception or the support that he was looking for.
    Senator Udall. We need to be vigilant there. It almost 
feels like it's a throwback to the Cold War, when the Soviet 
Union was traveling the world looking for allies. But this is 
serious and thank you again for your leadership in this area.
    My time has expired. I want to do two final things. I want 
to thank General Fraser for your phenomenal service, and I know 
you and General Jacoby go way back. You've worked together in a 
series of commands. Senator Begich reminded me of your 
connection to Alaska. So godspeed and thank you again for your 
service.
    General Jacoby, I did want to put on the record that the 
flow of drugs into our country is significant and substantial 
and worrisome, but it's a symptom of the demand that exists in 
our country. I know you're going to go to the ends of the Earth 
to cut off the flow, but we as a country have to have a 
continued discussion about what we do to dampen that demand 
down. I just want you to know that I'm a Senator that 
understands that that's a real challenge that you face.
    Thanks for your service.
    Chairman Levin. Thank you, Senator Udall.
    Senator Hagan.
    Senator Hagan. Thank you, Mr. Chairman.
    General Fraser and General Jacoby, thanks very much for 
your service. I couldn't agree more with what Senator Udall 
just said about trying to ramp down the desire in our country 
for narcotics.
    I wanted to ask a question about Ecuador. The 2009 closing 
of the cooperative security location at the Air Force Base in 
Manta, Ecuador, and the ejection of the U.S. Ambassador in 
April of last year, has really stressed the U.S.-Ecuadorian 
bilateral ties. General Fraser, how would you characterize the 
current status of the counternarcotics cooperation between the 
United States and the Government of Ecuador? Then what needs to 
be done to strengthen our cooperation with regard to both 
counterterrorism and counternarcotics?
    General Fraser. We continue to engage with the military in 
Ecuador. We have good military-to-military relations with them. 
They are working closely with their neighbors as well. We have 
seen an impact, especially from the maritime traffic that now 
is able and uses Ecuador to depart. So we have seen an increase 
in that activity.
    We continue to have discussions with them and work with 
them to adjust and address this problem.
    Senator Hagan. DOD support to the U.S. law enforcement 
agencies and the Mexican military supports the broader counter-
TCO fight. NORTHCOM provides DOD support to both U.S. and 
foreign law enforcement agencies against this common enemy. 
General Jacoby, what type of mutually beneficial DOD support is 
provided towards this end, and are we doing enough to foster 
the important relationships with law enforcement agencies, 
State, and the National Guard counterdrug task forces?
    General Jacoby. Thank you, Senator. In NORTHCOM, 
partnerships are our center of gravity. In the Homeland, we do 
things in support of our partners across DHS and DOJ. So along 
the border that's where you find our efforts, in support of 
those lead agencies along the border.
    What we do is we provide them operational support, analytic 
support, technical support, all of it with the checkmark of 
mutually beneficial. Mainly for us that means that it's a good 
training opportunity for the military forces that are partnered 
up, primarily with U.S. Customs and Border Protection (CBP).
    It is a great relationship. It's grown stronger and 
stronger over time. Just this month, we've conducted OPNIMBUS 2 
in the Tucson sector, where 1st Armored Division soldiers feel 
they got better training than they've gotten prior to a 
deployment at any time in the past 10 years. So it's a complex 
environment with a thinking, noncooperative enemy, and it's a 
great training experience. It also provides some good support 
to CBP, which they are very happy with.
    So I think we have a good relationship. I think it's 
critical to continue to expand and strengthen our partnerships. 
In the NORTHCOM headquarters we have over 32 agencies 
represented there and 8 law enforcement agencies. We've never 
had better sharing of information across the interagency. So 
I'm pretty proud of that, and I appreciate the question.
    Senator Hagan. Thank you. That's a lot of agencies to 
coordinate together, so thank you.
    I think it's very important for us to counter the TCOs and 
their illicit trafficking activities. Central to that is 
building the effective partnership capacity that I know that 
you're working on each and every day with the key governments 
and security establishments, to prevent them from operating in 
these permissive environments.
    I do chair a subcommittee of this committee, the Emerging 
Threats and Capabilities Subcommittee, and I'm concerned that 
Central America has become the preferred transit zone for the 
TCOs, which seem to have diversified their portfolios to 
include not only drugs, but also precursor chemicals from India 
and China and Bangladesh, commercial weapons from the United 
States, and then obviously the trafficking of people.
    The limited capabilities of the Central American states 
have allowed the Mexican transnational, the TCOs, to establish 
points of entry for illegal drugs coming from South America, 
and then the Mexico-Guatemala-Belize border area is 
particularly vulnerable. I understand that SOUTHCOM is working 
with NORTHCOM and the interagency community to develop a 
regional operations capability among these nations.
    For both of you, what types of resources does this regional 
operational capability require, and what are the objectives?
    General Fraser. Senator, it's a broad, whole-of-government 
effort, and international community, with a group of friends 
and international donors who also support this effort. From a 
DOD standpoint, we're a supporting organization because this is 
criminal activity; it's not military activity. But we have a 
role to support those militaries who have been asked by their 
governments to support law enforcement to help address this 
question.
    So we're continuing training and equipping with our partner 
militaries, working with them to help them work better with 
their law enforcement partners. But the real solutions are in 
the rest of our foreign affairs support. It is really in the 
U.S. Agency for International Development programs, it is in 
law enforcement programs, it is in judiciary programs. It is 
all of us working together with those governments to solve this 
problem.
    Senator Hagan. General Jacoby?
    General Jacoby. Yes, Senator, I concur with General Fraser. 
I think truly we understand this as a whole-of-government 
requirement. But the participation of the militaries from 
Belize, Guatemala, and Mexico is very good and improving, and 
there are efforts and a consciousness on the Mexican side of 
the importance of that southern border, and I see them taking 
action.
    Senator Hagan. Together, Colombia, Peru, and Bolivia, I 
understand produce most of the world's supply of cocaine. In 
recent years progress in controlling cocaine production in 
Colombia seems to have resulted in an increase in cocaine 
production in Peru and in Bolivia. I don't know if you agree 
with that, but I'd like to know, and what would be your plan to 
prevent further cocaine production increases in Peru and 
Bolivia without losing the progress made in Colombia?
    General Fraser. Senator, I do agree with that effort. We 
have seen a reduction in the cocaine production in Colombia. As 
traffickers have worked other places, they've gone into Peru 
and Bolivia. Most of the cocaine coming into the United States, 
though, still comes from Colombia. That other cocaine heads to 
other parts of the world.
    We're working with the Colombians to support their effort, 
and again this is an inter-governmental effort because really 
the reduction and eradication of cocaine is other parts of our 
government, DOS who really supports those efforts. But we are 
working with the Government of Peru, their military, especially 
when you look at the narcoterrorist group, the Sindero Luminosa 
in Peru, to help reduce their impact in that country.
    We're just seeing, as you watch, Brazil, the United States, 
and Bolivia just signed a tripartite agreement to address TOC 
in Bolivia, and that's an ongoing effort.
    Senator Hagan. Thank you, Mr. Chairman.
    Chairman Levin. Thank you, Senator Hagan.
    Before I recognize Senator Blumenthal and ask him to take 
the gavel to wind up, because I'm going to have to leave, I 
just had one additional question if I could of General Jacoby. 
That has to do with the anti-terrorism joint exercise with 
Russia that we conduct annually, I believe, called Vigilant 
Eagle. You indicated, General, that the benefits that we 
realized from this sort of exercise are invaluable. This is 
what your prepared statement tells us, and that you hope over 
time it will lead to even greater levels of openness and 
cooperation among our nations, referring to us and Russia.
    Are you hoping that we can enhance the cooperation 
militarily? For instance, do you plan to have direct 
interaction with your Russian counterpart as part of that 
effort?
    General Jacoby. Senator, yes, I do. Vigilant Eagle last 
year was a very successful exercise among Russia, the United 
States, and Canada. We exercised a counterterrorist scenario 
where we shared an air picture that was required to deal with 
the threat adequately. So I think it was an important step 
forward in creating trust and confidence on all sides and to 
ensure that there's transparency in what our military 
activities are, particularly in the Alaska region.
    So we're going to do Vigilant Eagle again this year. I'm 
hoping to meet with my Russian counterpart to discuss the 
tactics, techniques, and procedures that will help us do that 
better. We have areas of cooperation with the Russians that I 
think are important and should be sustained. I think, as we've 
discussed earlier in the testimony, we have to keep our eyes 
wide open, but I think there is good potential for cooperation 
here.
    Chairman Levin. Thank you both. Thank you for your great 
service and leadership. General Fraser, again, all of us wish 
you all the best as you take on other chapters and 
responsibilities in your life. We wish you and your family all 
the best.
    General Fraser. Thank you, Mr. Chairman. It's been a great 
honor.
    Chairman Levin. Senator Blumenthal, thank you for taking 
over here.
    Senator Blumenthal [presiding]. Thank you.
    I'm honored to take over from Chairman Levin for the final 
questioning. I think that's the good news; and very honored to 
be with you and thank you, as others have, for your 
extraordinary service, both General Fraser and General Jacoby. 
I will try to avoid repeating some of the questions. I think I 
know about most of them. But I do have a number that may elicit 
some of the same testimony.
    I want to come back to the aircraft that are being drawn 
down from the Air National Guard, a decision that affects 
particularly Connecticut because we will lose the lift capacity 
of the C-27J and 136 aircraft will be lost to the Air National 
Guard, which I regard as important because Connecticut is one 
of the 27 States that is affected by it. I wonder if you have 
done an analysis of what the effects will be of that drawdown?
    General Jacoby. Senator, thank you for the question. The 
Air National Guard is an important partner of NORTHCOM and to 
NORAD, so in both hats, they're important partners to us. The 
Guard has done invaluable service, both in defending the 
Homeland and support of civil authorities.
    The Air Force had some really tough decisions to make, 
tough choices that all the combatant commanders had and all of 
the Services had in order to meet the significant budget 
reduction. What I do as a combatant commander is I put 
requirements on the table, and there is a requirement to 
support civil authorities and there's a requirement to defend 
the Homeland. I trust the Air Force to meet that requirement 
with their total force, whether it's Active, Reserve, or Guard. 
But the loss of Guard aircraft will, I'm sure, be felt, and 
they're a tremendous asset. So it's part of the pain that all 
the combatant commanders will feel as a result of this very 
important round of budget decisions.
    Senator Blumenthal. Can you be more precise about how it 
will be felt, what the effects will be?
    General Jacoby. I can only speak to the ACA mission. We 
will be able to mitigate the loss. I felt the loss of the 
standing alert on those two bases was a loss that within my 
authorities and within the capability of the NORAD commander I 
could mitigate that. It wasn't a loss of aircraft and it wasn't 
a loss of bases, just sitting alert at those two locations 24/
7.
    Senator Blumenthal. Any other effects that you've analyzed 
or foreseen?
    General Jacoby. Senator, no.
    Senator Blumenthal. Let me go to cyber, if I may. You 
answered one of the questions earlier about the task of 
defining criteria that would constitute an act of war in case 
of a cyber attack. My understanding is that those attacks are 
ongoing even as we speak, not only against the defense 
industrial base, certain private sector elements, but also our 
actual defense capabilities.
    I wonder if you could be somewhat more precise about where 
you think we are in defining those criteria. You said there 
was--and I'm using your word--``momentum'' toward that 
definition.
    General Jacoby. Yes, Senator. As recently as yesterday, I 
had a conversation with General Alexander. He's walking point 
with General Kehler in STRATCOM in terms of developing 
criteria. We'll address that in a collaborative fashion, I 
believe, in the very near future.
    But part of the momentum is not just in DOD; it's within 
the broader community of agencies and organizations that are 
concerned about cyber security, both commercial and 
specifically in the lead element for defending our Nation's 
networks, the DHS.
    So I would concur as a military professional. I know that 
we are undergoing malicious activity on the net. The challenge 
is how do we define that as an attack on our country. I think 
this is a serious discussion that needs to be had, and it ends 
up being really a policy question on where are the red lines, 
because that's essentially what we're talking about. Where are 
the red lines where malicious activity transitions into an 
attack on the Homeland, and then what else could it be 
connected to that might otherwise define previously considered 
malicious activity now a serious threat or an attack on the 
country?
    Senator Blumenthal. Would you agree that part of the 
defense against that attack and part of defining the criteria 
has to be deciding what the offense should be, what the 
deterrent should be?
    General Jacoby. Senator, I believe that the country 
requires and DOD requires full-spectrum computer network 
operations, exploitation, defense, and attack.
    Senator Blumenthal. Thank you.
    I want to ask you a question that I don't believe has been 
covered, and it may be a little beyond the normal purview of 
what you do. But obviously over the time that you've been in 
this job, over the time that we've been aware of conditions in 
the Arctic, there have been changes to the topography and other 
environmental aspects. I'm not going to go into detail because 
you're much closer to it actually than we could be sitting 
here. But I wonder whether those so-called climate change 
issues, for lack of a better word, affect your strategic 
thinking, your practical approach to that part of the world?
    General Jacoby. Senator, the opening of the Arctic has 
driven us to a new imperative within the Command to consider 
the Arctic in a different way. So starting with the UCP's most 
recent change, which gave us Arctic geographic 
responsibilities, as well as directing that we become the 
advocate for Arctic capabilities, we have opened our aperture 
and now work differently at the Arctic.
    I believe that it's not just a geographic location, but 
it's a specific domain that requires special capabilities and 
capacities to operate effectively. With the opening of the 
Arctic, there are sure to be commercial and economic interests. 
Historically those are followed closely by security interests, 
and we will seek to stay ahead of the challenge and not behind 
it and make sure that the Arctic is explored and the resources 
exploited in a collaborative, peaceful way.
    Senator Blumenthal. This is a burgeoning AOR.
    General Jacoby. I believe so, Senator. We're working 
closely with Canada. Canada has it as a top priority. I'm in a 
unique position as the NORAD Commander with my relationship 
with Canada, and so I can tell you that we're joined at the hip 
with not just Canada, but all eight of the northern region 
countries.
    Senator Blumenthal. Do submarines play a part in that 
thinking?
    General Jacoby. Submarines are still active up there and I 
know that our Navy operates in the Arctic region and will, I 
presume, continue to do so.
    Senator Blumenthal. They are important to both economic and 
national security in that area?
    General Jacoby. The Arctic will, as it opens up as a 
domain, I'm sure we'll find all types of commercial, economic, 
and military activity in the Arctic.
    Senator Blumenthal. Thank you.
    My time has expired, which means that your time has 
expired, thankfully, I'm sure from your standpoint. I want to 
thank you again on behalf of the entire committee for your 
service and for your sacrifice, your families' service and 
sacrifice, and for being with us today. Thank you very much, 
gentlemen.
    This hearing is adjourned. Thank you.
    [Questions for the record with answers supplied follow:]

               Questions Submitted by Senator Carl Levin

                      GMD RELIABILITY IMPROVEMENTS

    1. Senator Levin. General Jacoby, according to Deputy Under 
Secretary of Defense Jim Miller, the Department of Defense (DOD) has 
``an aggressive Ground-based Interceptor (GBI) reliability improvement 
program in order to reduce the number of GBIs required per intercept, 
which will increase the number of intercontinental ballistic missiles 
(ICBM) that can be defeated by the Ground-based Midcourse Defense (GMD) 
system.'' As the operational combatant commander responsible for 
determining the number of GBIs required per intercept, do you support 
this reliability improvement program, and do you agree that it would be 
operationally important if this program can ``increase the number of 
ICBMs that can be defeated by the GMD system?''
    General Jacoby. [Deleted.]

                  SM-3 IIB TO AUGMENT HOMELAND DEFENSE

    2. Senator Levin. General Jacoby, as you are aware, DOD is 
developing the Standard Missile-3, Block IIB interceptor for Phase 4 of 
the European Phased Adaptive Approach (PAA) to missile defense. The SM-
3 Block IIB is designed to defeat a possible future Iranian long-range 
missile capable of reaching the United States; so that system would 
augment our existing Homeland defense capability provided by the GMD 
system. Do you support development of the SM-3 IIB as a cost-effective, 
mobile, and forward-based augmentation of our Homeland defense, in case 
an Iranian ICBM threat develops?
    General Jacoby. Yes. Though the SM-3 Block IIB is still a 
conceptual program, it may contribute to the ability to defend the 
Homeland from an Iranian ICBM. The forward-based nature of this system 
may allow possible multiple engagement opportunities against these 
threats, thus augmenting our Homeland defense by conserving GBIs.

               RADAR IN TURKEY AUGMENTS HOMELAND DEFENSE

    3. Senator Levin. General Jacoby, as part of Phase 1 of the 
European PAA to missile defense, the United States has deployed an X-
band radar (designated AN/TPY-2) to Turkey, and the radar is now 
operational. In addition to providing early and accurate tracking 
information about Iranian missiles launched toward North Atlantic 
Treaty Organization (NATO) Europe, this radar also augments our GMD 
system with respect to defense against potential future long-range 
Iranian missiles that could be launched at the United States. Could you 
please describe the contribution of the AN/TPY-2 radar in Turkey to the 
capability of the GMD system?
    General Jacoby. [Deleted.]

                    PRECISION TRACKING SPACE SYSTEM

    4. Senator Levin. General Jacoby, your prepared statement describes 
a number of planned improvements to our GMD system to stay ahead of 
potential future missile threats to the Homeland from nations such as 
Iran and North Korea. You noted that ``we must be better prepared to 
respond to threats that give us little to no advance warning,'' and 
conclude that this ``requires pursuing future sensor capability, such 
as the space-based Precision Tracking Space System (PTSS), ensuring we 
have the highest level of GMD for the Homeland.'' Could you please 
describe the benefit to Homeland missile defense that you see from 
deploying the PTSS?
    General Jacoby. [Deleted.]
                                 ______
                                 
           Questions Submitted by Senator Joseph I. Lieberman

                            MISSILE DEFENSE

    5. Senator Lieberman. General Jacoby, you noted in response to 
Senator Levin that today's threats do not require GBI sites on the east 
coast of the United States. Understanding that there is no requirement, 
would such a site on the east coast provide additional capability and 
greater probability of successfully intercepting an ICBM launched from 
the east?
    General Jacoby. There is no current requirement. However, as we 
better understand current and future threats that our GMD system may 
have to account for, we should look at a full range of potential 
solutions that could include additional missile fields to outpace the 
threat.

                   JOINT INTERAGENCY TASK FORCE-SOUTH

    6. Senator Lieberman. General Fraser, the Counter-Threat Finance 
section at the Joint Interagency Task Force-South (JIATF-South) has 
recently begun several new initiatives related to bulk cash smuggling 
in the Western Hemisphere. Is improved tracking of bulk cash smuggling 
important to your command's efforts to interdict illegal trafficking?
    General Fraser. The JIATF-South Counter-Threat Finance cell has 
embarked on a concerted and multifaceted effort to document, track, 
disrupt, and seize bulk cash being moved by narco-traffickers in the 
Western Hemisphere. This holistic effort to enhance awareness and 
disrupt this illicit financial activity is an important part of U.S. 
Southern Command's (SOUTHCOM) support to the overall strategy of 
countering transnational organized crime (TOC). Over the past year, we 
have seen several successes, working with and through our interagency 
and international partners, to disrupt several million dollars in 
smuggled bulk cash. Simultaneously, we have enhanced our understanding 
of the networks engaged in this activity. Countering transnational bulk 
cash smuggling presents many challenges, to include coordinating with a 
myriad of interagency and international agencies and the difficulty of 
effectively targeting a commodity which is easy to hide and inherently 
legal. As with other aspects of the counter illicit trafficking 
mission, SOUTHCOM will continue to support interagency efforts to 
confront these problems. We will also do our part to enhance the 
targeting of bulk cash smugglers as part of an integral U.S. and 
international strategy to combat TOC.

    7. Senator Lieberman. General Fraser, how valuable does your 
command find regular analysis of bulk cash smuggling in the Western 
Hemisphere?
    General Fraser. With the standup of the JIATF-South Counter-Threat 
Finance cell, involving interagency information and personnel, the 
command analyzes bulk cash smuggling associated with narco-trafficking 
in the Western Hemisphere. This analysis has been valuable in an 
enhanced awareness of illicit financial activity in the JIATF-South 
Joint Operating Area and contributed to the interagency and 
international seizure and disruption of bulk currency shipments. It has 
also enhanced our understanding of TOC networks. Bulk cash smuggling is 
a critical part of TOC's ability to sustain their activities. Regular 
analysis of bulk cash smuggling has emerged as a vital piece in the 
holistic approach to confronting TOC.
                                 ______
                                 
            Questions Submitted by Senator Claire McCaskill

                        AIR DEFENSE CAPABILITIES

    8. Senator McCaskill. General Jacoby, in your testimony you stated 
that an effective air defense and a strong air sovereignty capability 
are critical components of Homeland defense. Since the September 11 
attacks, North American Aerospace Defense Command (NORAD) has defended 
the airspace of the United States and Canada through airspace 
surveillance, a ready alert force, air patrols, and the National 
Capital Region Integrated Air Defense System. For the air defense 
mission, armed fighters are positioned across the United States and 
Canada on alert to intercept and identify suspect aircraft, which 
allows NORAD to be postured to defend against strategic airborne 
threats to the United States and Canada. The Air National Guard 
provides the majority of NORAD's operational force for Aerospace 
Control Alert (ACA) missions. According to your testimony, providing 
the National Guard with capable equipment is key to the ACA mission. 
You also state that modernization of NORAD airframes is a requirement. 
How does the Air Force's recent decision to significantly downsize the 
Air National Guard in terms of equipment and personnel affect NORAD's 
ACA missions?
    General Jacoby. The Air National Guard is a key partner in 
conducting NORAD operations. As such, NORAD will continue to advocate 
for maintaining and increasing both NORAD and the Air National Guard 
air defense capabilities wherever possible. Additionally, we are 
working closely with our Joint Staff, Air Force, and Air National Guard 
partners to ensure current and future requirements are met. Due to the 
historically excellent stewardship NORAD has provided for air defense 
assets and the firm commitment of the Air Force to support this 
mission, I am confident that the Air Force will continue to support 
NORAD with Total Force solutions we need to meet mission requirements.

    9. Senator McCaskill. General Jacoby, what commitment has been made 
by the Air Force to ensure that the aging airframes that support this 
mission will be replaced in a timely manner in order to meet NORAD's 
requirements?
    General Jacoby. The Air Force is committed to the Service Life 
Extension Program, which will allow NORAD assets to be effectively 
utilized through the next decade while new airframes are added to the 
Air Force inventory. We will continue to work closely with our Total 
Force partners to ensure current and future mission requirements will 
be met.

                     INTERNATIONAL TERRORIST GROUPS

    10. Senator McCaskill. General Fraser, you stated in your testimony 
that the routes controlled by transnational criminal organizations 
(TCO) operating in the region represent potential access points that 
could be leveraged by other groups, including international terrorist 
groups. This is particularly concerning, as many of these routes lead 
directly into the United States. The recently foiled attempt by Iran to 
utilize unconventional resources in Central America to attempt an 
attack on U.S. soil highlights a disturbing potential for further 
terrorist activity in the region. Has U.S. Southern Command (SOUTHCOM) 
conducted an analysis of the vulnerabilities of these routes?
    General Fraser. SOUTHCOM continually conducts assessments of the 
routes that TCOs use in our area of responsibility (AOR). We work with 
the interagency and partner nations to determine vulnerabilities. 
Identified vulnerabilities to date include porous borders and poorly 
funded border control stations.

    11. Senator McCaskill. General Fraser, can you point to 
characteristics of these routes that make them potentially attractive 
assets to terrorist activities?
    General Fraser. SOUTHCOM studies the strengths and vulnerabilities 
of illicit trafficking routes. The characteristics that make these 
routes attractive to terrorist organizations are the same 
characteristics that make them difficult to disrupt--they run through 
undergoverned areas and across porous borders; they have illicitly 
organized logistical support including refueling capacity at sea; they 
are well-resourced, decentralized, and flexible, enabling traffickers 
to adapt quickly to changes in the operational environment; and they 
exploit our partner nations' lack of capabilities to develop 
comprehensive land, air, and maritime awareness and conduct 
intelligence-driven operations.

    12. Senator McCaskill. General Fraser, are you confident that our 
intelligence is sufficient to identify potential attempts by 
international terrorist groups to exploit the transnational drug 
routes?
    General Fraser. SOUTHCOM is focused on this potential nexus. 
However, identifying the intent and capability of terrorists and 
illicit networks to cooperate presents a formidable challenge. We work 
to mitigate this challenge by leveraging interagency capabilities and 
through continued engagement with our partner nations.

    13. Senator McCaskill. General Fraser, has SOUTHCOM identified any 
gaps in intelligence or resources needed to identify attempts by 
international terrorist groups to utilize these routes?
    General Fraser. Identification and monitoring of illicit 
trafficking networks, which could be exploited by terrorist groups, is 
a resource-intensive endeavor. Development of human intelligence 
networks and enhanced signals intelligence capabilities are 
particularly important in this effort, as well as collaborating with 
our U.S. interagency partners, building partner-nation capabilities, 
and sharing information.
    SOUTHCOM relies on dozens of all-source intelligence collection 
requirements to detect and monitor illicit trafficking routes. Most of 
these requirements are shared by the intelligence and law enforcement 
communities. Despite the submission of requirements, reporting on these 
illegal networks remains inadequate.

    14. Senator McCaskill. General Fraser, are regional governments 
engaged on this particular issue through specific SOUTHCOM programs and 
operations?
    General Fraser. SOUTHCOM provides limited intelligence, 
surveillance, and reconnaissance assets to support regional partners 
faced with the threat of terrorist groups. In addition, SOUTHCOM has 
several Memorandums of Understanding with select partner nations that 
provide for information exchange in support of our partners' and 
SOUTHCOM's regional objectives.
    Outside of the intelligence realm, SOUTHCOM conducts various 
training activities aimed at building partner-nation capacity to 
control their maritime domain. These activities, although mostly aimed 
at countering the illicit narcotics trade, are broadly applicable to 
assist our partner nations in disrupting the maritime routes through 
their sovereign territories.
    Through our special operations component command, U.S. Special 
Operations Command South, we are also training some of our partner-
nation tier-one forces in counterterrorism through Joint Combined 
Exchange Training (JCET).

    15. Senator McCaskill. General Fraser, are there joint security 
measures and programs in place to prevent terrorists from exploiting 
these routes?
    General Fraser. SOUTHCOM works across the interagency and with our 
partner nations every day in an effort to disrupt these routes and 
disrupt illicit trafficking, whether it is by drug trafficking 
organizations or international terrorist groups. JIATF-South is our key 
component in detection and monitoring of illicit traffic, and it 
exemplifies this unity of effort. Considered the linchpin in U.S. 
counterdrug efforts, JIATF-South capitalizes on the unique 
capabilities, authorities, and strengths of interagency partners such 
as the Federal Bureau of Investigation, Drug Enforcement 
Administration, and Department of Homeland Security (DHS). The 
collaborative, interagency taskforce make-up allows for the quick 
sharing and dissemination of any terrorism intelligence threads to 
proper authorities. Operationally, JIATF-South's capital assets are 
arrayed in the principal maritime and air trafficking routes through 
the Caribbean and eastern Pacific and would, if intelligence suggested, 
direct all its efforts to stopping a terrorist event.
    We do see evidence of international terrorist groups benefitting 
from the intertwined systems of illicit trafficking and money 
laundering in our AOR; in South America, funding for Hizballah is 
raised through licit avenues, such as charitable donations, and illicit 
means, including trafficking in drugs, counterfeit, and pirated goods. 
Understanding the complex financial flows of these networks can help 
the law enforcement, intelligence, and defense communities focus our 
efforts on groups engaging in activities that most directly threaten 
U.S. national security. To this end, SOUTHCOM supports the U.S. 
interagency through our network analysis and information sharing 
capabilities.

    16. Senator McCaskill. General Fraser, which countries in the 
region have been cooperative on counterterrorism planning and 
prevention on a security cooperation level?
    General Fraser. The following partner nations cooperate with DOD on 
counterterrorism planning and prevention at the security cooperation 
level: Guatemala, El Salvador, Nicaragua, Honduras, Costa Rica, Panama, 
Guyana, Costa Rica, Dominican Republic, Jamaica, Trinidad & Tobago, 
Belize, Colombia, Peru, Brazil, and Paraguay.
    That said, most of the countries in the region do not share our 
concern over international terrorism threats; instead, they are 
concerned with criminal problems and frame their threats as such. The 
main exceptions are the Governments of Colombia and Peru, which are 
combating the Fuerzas Armadas Revolucionarias de Colombia and Sendero 
Luminoso, respectively. Regardless, law enforcement and 
counterterrorism efforts are inextricably linked. In our AOR, these 
duties are carried out by a combination of domestic law enforcement and 
militaries. Therefore, we measure partner-nation cooperation through 
the lenses of both our engagement efforts to counter TOC as well as 
terrorism.
    Our cooperation activities are guided by Title 10, U.S.C., and by 
the counterdrug and counterterrorism sections of the National Defense 
Authorization Act. Statutory requirements include detection and 
monitoring of illicit narcotics trafficking (Sec. 124 U.S.C. 10); and 
authorized activities include training, education, and resourcing host 
nations' security forces; providing planning support to U.S. country 
teams as they assist host-nation defense and security establishments; 
and engaging key leaders in the region.

                               HEZBOLLAH

    17. Senator McCaskill. General Fraser, of particular concern to me 
are reports of activity in South America by Hezbollah, including the 
raising of funds through both licit and illicit means in the region. 
Does SOUTHCOM have an assessment of how much funding has been raised by 
Hezbollah in the region?
    General Fraser. Determining exact amount of funds raised by 
Hizballah in South America is difficult considering the permissive 
environment and furtive manner in which funds are moved. 
Notwithstanding, we assess Hizballah likely generates tens of millions 
of dollars annually in South America.

    18. Senator McCaskill. General Fraser, how are these funds 
logistically transferred back to finance Hezbollah's activities in the 
Middle East?
    General Fraser. Funds generated within the SOUTHCOM AOR in support 
of Hizballah are transferred back to the Middle East in a variety of 
ways. Specific transfer methods include bulk cash transfers via human 
couriers, Hawaladars, electronic bank transfers, and the use of global 
money laundering networks.

    19. Senator McCaskill. General Fraser, is there any evidence that a 
portion of this funding is being used by Hezbollah for recruitment in 
SOUTHCOM's AOR?
    General Fraser. No. There is no evidence that this funding is used 
to recruit in the region.

                                 BRAZIL

    20. Senator McCaskill. General Fraser, the threats that fall under 
SOUTHCOM's purview are particularly concerning because they are 
transnational in nature. This increasingly complex security environment 
will require invigorated partnerships that, likewise, span the region. 
The U.S.-Brazil bilateral relationship is especially critical to 
stability in the region and to the fight against the transnational 
threats that the world faces today. As Brazil continues to grow as a 
global leader, its role as a stabilizer in the region will become 
increasingly important. What opportunities has SOUTHCOM identified for 
enhanced security cooperation between the United States and Brazil?
    General Fraser. Brazil is an increasingly developed country focused 
on attaining regional and international leadership roles. With a robust 
economy, the world's sixth largest, Brazil desires to be recognized as 
a world leader. Their defense and security policies center on 
maintaining a well-trained and professional military, and developing a 
national defense industry base for foreign military sales and internal 
use. A stable and capable Brazil promotes regional stability and is a 
partner able to export and support military missions in response to 
international crisis. SOUTHCOM continues to engage Brazil in mutually 
beneficial areas such as humanitarian assistance and disaster relief, 
counter TOC, consequence management, counterproliferation, and science 
and technology cooperation initiatives. SOUTHCOM also supports and 
encourages Brazilian leadership and participation in regional and 
global activities. This year, for the first time for any partner 
military, Brazil has accepted the role as the Combined Force Maritime 
Component Commander (CFMCC) for SOUTHCOM's Panamax 2012 exercise. The 
Brazilian Government has also demonstrated willingness to deploy its 
Armed Forces to conduct peacekeeping and stability operations in 
support of the United Nations (U.N.) around the globe, including the 
work they continue to do leading the U.N. Stabilization Mission in 
Haiti.
    Cybersecurity cooperation is another area that offers beneficial 
engagement opportunities, especially with upcoming international 
sporting events in Brazil (World Cup 2014, Olympics 2016). The 
Brazilian Army, the strategic lead for cyber, has expressed mutual 
interest in cyber engagements, particularly in the establishment of a 
Joint Cyber Defense Center. Areas for cooperation include development 
of joint cyber doctrine, joint cyber operations, and development of 
cyber professionals.

    21. Senator McCaskill. General Fraser, in what ways is Brazil 
uniquely positioned to increase security and stability in the region?
    General Fraser. Brazil, the sixth largest economy in the world with 
over 192 million people, increasingly focuses on attaining a regional 
and international leadership role. Defense and security policies, 
captured in their 2008 National Defense Strategy, provide strategic 
guidance on maintaining a well-trained and professional military, 
developing a national defense industrial base, and protecting natural 
resources.
    Brazilian Armed Forces are capable, well-funded, and willing to 
export capacity to conduct regional and global peacekeeping and 
stability operations. They have led the U.N. Stabilization Mission in 
Haiti since 2004 and its significant contribution of Brazilian troops 
reflects its global aspirations. They are also the leading maritime 
component of the U.N. Interim Force in Lebanon's Maritime Task Force 
with the deployment of a Brazilian Navy frigate.
    Brazil's foreign policy emphasizes regional integration and 
cooperation. They are members of Union of South American Nations and 
its South American Defense Council; the participation of serious 
partners such as Brazil in this organization can support our own 
initiatives such as combating illicit trafficking, border security, et 
cetera. They carry significant regional influence and their regional 
strategic objectives usually align with U.S. interests.

                   CENTRAL AMERICA AND THE CARIBBEAN

    22. Senator McCaskill. General Fraser, the rise of illicit 
trafficking through Central America and the Caribbean coupled with the 
vast resources available to traffickers have presented significant 
challenges to the region. Some of the Caribbean and Central American 
States' available resources are eclipsed by those available to 
trafficking networks. SOUTHCOM has played an invaluable role in 
partnering with these countries and acting as a capability multiplier 
in the fight against these threats. Additionally, SOUTHCOM has worked 
to bolster the capabilities of these governments by providing equipment 
needed to counter trafficking. It is critical that this type of 
assistance is sustainable and that the recipient governments have the 
financial resources and the technical capabilities to use and maintain 
these tools. What are you doing to ensure that governments that receive 
assistance from SOUTHCOM are able to use and maintain equipment or 
systems that we have provided to aid in the fight against trafficking?
    General Fraser. SOUTHCOM's focus is on developing specific partner-
nation operational capabilities that can contribute to a regional 
strategy to counter TOC. The ability of individual partner nations to 
maintain and sustain the capabilities the United States provides is a 
critical consideration in the type and scope of support provided. 
SOUTHCOM works diligently with our partner nations to ensure that they 
are able to manage and maintain the equipment and systems they are 
provided to build their capacity to execute counter TOC missions. To 
facilitate both the near- and long-term maintenance and sustainment of 
equipment purchased for our partner nations, we use a variety of 
methods, such as: vendor contracted training, mobile training teams 
(MTT), and individual Service specific training in the United States. A 
specific example of contracted training is the Maintenance Operational 
Support Teams that support a variety of programs such as the Harris 
Radio sustainment for the interdiction boats provided to our partner 
nations, the Jeep J8 vehicles provided to our partner nations to 
support border security operations, and the Boston Whaler engine and 
hull maintenance training which also support maritime interdiction 
efforts. MTTs and individual training at U.S. Service schools also 
serve to provide specific training for the use and maintenance of a 
variety of equipment in the maritime, air, land, and border security 
areas. The desired end state of our multifaceted training and 
maintenance efforts is to provide our partner nations the ability to 
operate independently against the threat, as an interoperable partner 
in joint efforts with their regional neighbors, and as an integrated 
element of the JIATF-South operational framework providing synergy to 
United States/partner-nation regional counter TOC efforts.

    23. Senator McCaskill. General Fraser, in these cases, how has the 
U.S. Government worked to help fill these capability gaps?
    General Fraser. To fully implement our regional strategy to counter 
TOC we are focused on multiple domains, to include maritime, air, land, 
and border security/checkpoints. Our main focus is in the maritime 
arena because that is the primary mode of transportation by which drugs 
flow from the source zone to the United States. To develop capability 
in the maritime domain, we are working closely with our partner nations 
to emplace the basic infrastructure needed for sustainment of their 
maritime assets, to establish an integrated command and control system, 
and to provide the boats, spare parts, and trained crews needed. 
Similarly, in the air domain, we are working with our partner nations 
to provide a modest integrated Maritime Patrol Aircraft (MPA) 
capability through the procurement and installation of Forward Looking 
Infrared Radars and surface search radars for their available aircraft. 
Guatemala's MPA should be operational this fiscal year; and Honduras 
and Belize are programmed for similar capability in the out-years. In 
the land and border security areas, we are training and providing newly 
formed border units with the mobility, infrastructure, and command and 
control needed to better manage and control their border areas. 
Additionally, we continue to cooperate with U.S. Northern Command 
(NORTHCOM) to ensure synchronization and coordination of the efforts of 
the Guatemalan, Belizean, and Mexican Governments along their shared 
borders. We also continue to work with partner nations in and outside 
of our AOR, such as Colombia, Chile, and Canada, to coordinate their 
security cooperation efforts aimed at improving the counter TOC 
capabilities of our Central American partner nations.

    24. Senator McCaskill. General Fraser, has the U.S. Government 
provided services or funding in support of these systems when the host 
government could not?
    General Fraser. Yes, however, I must caveat my response with the 
fact that in most instances it is not due to a lack of will or desire 
from our partner nations to address what they have come to increasingly 
accept as regional challenges. Resources are provided primarily to 
those countries that demonstrate a willingness to execute operations to 
counter TOC within their sovereign spaces, but may lack the ability to 
maintain systems on their own. For example, Nicaragua is our most 
responsive maritime partner in Central America. When JIATF-South 
requests assistance against an intelligence-cued target, the Nicaraguan 
Navy responds with what limited capability it has. Guatemala, at 
significant cost, has refurbished the engines on a seized B-200 
aircraft that, with U.S. assistance and additional equipment, will now 
be employed as a MPA providing dedicated support to JIATF-South 
requirements. Honduras is one of the poorest countries in the region, 
yet continues to provide direct support to ongoing JIATF-South and JTF-
Bravo-led operations in their country. In cases like these, SOUTHCOM 
attempts to capitalize on partner-nation willingness by supplementing 
their limitations in order to maintain a viable regional counter TOC 
strategy.
                                 ______
                                 
             Questions Submitted by Senator James M. Inhofe

                                 MEXICO

    25. Senator Inhofe. General Jacoby, over 50,000 people have been 
killed since the start of the drug war in 2007. In 2010 alone 15,237 
people have died and 2011 is reported to be another recordsetting year 
in deaths. The United States contributes $1.4 billion through the 
Merida Initiative, DHS is operating unmanned aerial vehicles over the 
border to stop smugglers, the United States has sold Black Hawk 
helicopters to help in the fight, and NORTHCOM has used their Avenger 
systems to detect low-flying aircraft on the border. NORTHCOM is also 
expanding military-to-military training, which has been nonexistent in 
the past. On the U.S. side of the border, NORTHCOM works with the 
Department of Justice (DOJ), DHS, and many others to secure the borders 
and reduce criminal/terrorist activities. How would you gauge our 
military-to-military training and what is your assessment of 
capabilities of the Mexican military?
    General Jacoby. In October 2002, NORTHCOM inherited a limited 
existing military training program from SOUTHCOM that we have grown 
considerably, given the expansion of the security challenge in Mexico 
and the increase in requests for our training. To provide an 
illustration of this growth, in 2003, NORTHCOM provided $2.75 million 
in counternarcotics training, professional military education and 
training, and technical training. In 2011, we provided $16.774 million 
in training and the forecast for fiscal year 2012 is $24.087 million, 
all at the request of the Mexican military. This includes a broad 
spectrum of courses such as extensive flight training for aircrew and 
maintenance personnel, attendance at our war colleges and staff 
colleges, counterterrorism training for senior members, and training in 
Human Rights, Rule of Law, Civil-Military Relations, Force Protection, 
Counter Improvised Explosive Device, Counter Narcotics Planning, 
Specialized Skills, Public Affairs, Military Operations in Urban 
Terrain, English Language, Maritime Boarding Operations, Small Craft 
Operations, Combat Life Saving, Search and Rescue, Command and Control, 
and many other areas.
    My assessment is that this training has greatly strengthened our 
bilateral relationship by opening new doors in the areas of 
information-sharing and exercise participation. It is also providing 
the Mexican military with valuable tools that have significantly 
contributed to record seizures of illicit narcotics, weapons, 
contraband, and helped fortify the Mexican northern, southern, and 
maritime border regions.

    26. Senator Inhofe. General Jacoby, with the upcoming presidential 
election in Mexico, do you foresee any changes to the way in which the 
war on drugs is being waged?
    General Jacoby. The political campaign season is currently underway 
in Mexico, the outcome of which will be a new administration. I believe 
any new Mexican Government will continue to partner with us in the 
shared interest of countering threats posed by TCOs.

    27. Senator Inhofe. General Jacoby, do you have adequate funding 
for a layered defense or have we cut our capacity too far to secure our 
Nation?
    General Jacoby. NORAD and NORTHCOM are adequately funded to 
successfully provide an active, layered defense of the Homeland. Our 
Service partners have had to make some very tough decisions as DOD 
sought to meet the $487 billion reduction in spending mandated by the 
Budget Control Act. I believe the Homeland was treated fairly and 
treated as job number one. However, an important aspect of defense in 
depth is the strength of our key partners. We defend in depth in many 
ways through our partnerships. DHS, the Department of State, and their 
funding are also critical to providing the means by which our Homeland 
is secured.

                      GROUND-BASED MISSILE DEFENSE

    28. Senator Inhofe. General Jacoby, I remember during the Clinton 
administration, the then-Joint Chiefs of Staff Chairman, General Henry 
Shelton, reaffirmed that U.S. intelligence would know at least 3 years 
before North Korea posed an ICBM threat. Homeland defense is listed as 
the first policy priority in the 2010 Ballistic Missile Defense Review 
(BMDR). The GMD system in Alaska and California is currently the only 
missile defense system that protects the U.S. Homeland from long-range 
ballistic missile attacks. On April 5, 2009, North Korea launched a 
three-stage Taepodong-2 missile. The missile travelled 3,200 km before 
crashing in the Pacific Ocean. The TPD-2 is designed to have a range 
over 4,000 miles which would be far enough to reach the United States. 
One week later, North Korea surprised the world by testing a missile 
with intercontinental range. Intelligence has estimated that North 
Korea may have the capability to successfully launch a Taepodong-2 
missile with a 200 kg warhead by 2015 with a range of 6,000 to 7,500 
miles . . . putting a majority of the United States within range of 
this missile. On May 25, 2009, North Korea conducted a second nuclear 
test. North Korea is not only pursuing their own nuclear and ballistic 
missile capabilities, but they also are potentially selling missiles, 
material, and technology to other countries to include Iran. GBIs are 
being refurbished currently at Fort Greely, AK. You have stated that as 
North Korea and other states develop their missile technology, we 
cannot sit idly by without improving our own systems. What is your 
command doing to ensure that our missile defense can meet all future 
threats?
    General Jacoby. I'm closely assessing the evolving development of 
regional threats and if ever I believe our efforts may be falling 
behind those threats, I will strongly advocate for increased funding 
and oppose cuts that would negatively impact my ability to protect the 
Homeland. I continue to work closely with the Missile Defense Agency 
(MDA) and other partners across the ballistic missile community in 
developing capabilities to outpace the threat. Furthermore, I continue 
to advocate for a more robust testing program to validate both current 
and future capabilities that comprise the GMD system and to baseline 
models and simulations used in training and certification of our GMD 
(operational) personnel.

    29. Senator Inhofe. General Jacoby, how confident are you in the 
GMD program to protect our east coast and intercept missiles 
originating from the Middle East?
    General Jacoby. Against current threats from the Middle East, I am 
confident we are well-postured. As with North Korea, we must ensure we 
have agile programs and good intelligence that allow us to stay ahead 
of the threat.

    30. Senator Inhofe. General Jacoby, can you discuss how your 
command is testing our assets to ensure reliability?
    General Jacoby. The MDA conducts the actual testing, though 
NORTHCOM provides operational participation in the testing program, 
from flight tests to ground tests. We also review and provide inputs 
into MDA's test campaign plan. I am comfortable with the current 
Integrated Master Test Plan (IMTP) schedule for testing of the GMD 
system. A robust testing regime must be sustained.

    31. Senator Inhofe. General Jacoby, do you have enough assets to 
conduct this testing?
    General Jacoby. I am confident there are sufficient GMD test assets 
to support the latest IMTP.

             HOMELAND DEFENSE AND NATURAL DISASTER RESPONSE

    32. Senator Inhofe. General Jacoby, the integration of Active, 
Reserve, Guard, and interagency elements into your headquarters and the 
makeup of your subordinate units makes NORTHCOM one of the most diverse 
agencies this government has. As we all know, without our Guard and 
Reserve Forces, it would be impossible to conduct operations abroad 
while ensuring that our Homeland is secure and safe. Like you, I am 
also concerned about the impact the slip in the F-35 program and aging 
F-16 fleet are going to have on our air sovereignty sites and our Air 
National Guard. As we both know, seven of our air sovereignty alert 
sites are flying F-16s which are currently scheduled to reach the end 
of their service life between 2020 and 2023. The dual status commander 
role was approved for a National Guard officer to be in command of both 
National Guard and Reserve component forces when reacting to natural 
disasters within the United States. Will we be able to maintain our air 
sovereignty alert sites given the slip in the F-35 programs and 
scheduled retirement of our oldest F-16s?
    General Jacoby. Yes, we are working diligently with our Total Force 
partners to ensure current and future mission requirements are met. In 
addition to being an advocate for NORAD and Air National Guard air 
defense capabilities, I am closely monitoring force provider programs 
to make certain that NORAD has the assets we require to accomplish all 
mission taskings. For example, 24/7 alert operations reductions at two 
air sovereignty alert sites for fiscal year 2013 will not affect 
aircraft retention at those sites. NORAD will retain the ability to 
conduct operations at these sites as required, to include operations at 
higher levels of readiness. Additionally, any future reduction at air 
sovereignty alert sites will not be initiated without a thorough 
analysis of its effect on air defense operations and an accompanying 
risk mitigation strategy. This will allow NORAD to evolve operations 
and meet all of the threats posed by our adversaries.

    33. Senator Inhofe. General Jacoby, do you believe that you have 
the right mix of Active Duty, Reserve, and National Guard present 
within your command?
    General Jacoby. Yes. We have met all mission taskings with the 
current mix of Active Duty and Reserve component support provided by 
the Services. We will continue to work hand-in-hand with our Total 
Force partners to ensure current and future mission requirements are 
met.

    34. Senator Inhofe. General Jacoby, what is your perspective on the 
state of our National Guard and Reserves and their ability to provide 
support in times of crisis?
    General Jacoby. The National Guard has a long and distinguished 
history of responding to our Nation's crises. As a combatant commander 
advocate for the Reserve component, I work to ensure that they have the 
appropriate resources necessary to be able to respond to NORAD and 
NORTHCOM mission requirements when needed. I am proud of NORTHCOM's 
current collaborations with the National Guard Bureau in areas like the 
Dual-Status Commander and the CBRN Enterprise and expect these and 
other programs to continue to mature in the near future.
    I have the same level of confidence in the capabilities of our 
Reserve Forces and the critical roles they can play in responding to a 
crisis in NORTHCOM's AOR. The authorities Congress recently granted the 
President to mobilize Reserves for significant domestic emergencies 
will greatly enhance the ability of the Nation to leverage the robust 
capacity within the Reserve Force. NORTHCOM is actively engaged with 
the Office of the Secretary of Defense, the Joint Staff, the Services 
and their Reserve Commands, and our Subordinate Commands to develop 
plans and procedures to take full advantage of the updated law to allow 
timely, total-force support to civil authorities in a disaster.

    35. Senator Inhofe. General Jacoby, what has NORTHCOM done to 
ensure disaster relief operations are run smoothly and efficiently now 
that the dual status commander has become law?
    General Jacoby. NORTHCOM has established a cadre of both potential 
Dual Status Commanders and Title 10 Deputy Commanders. In addition, we 
have developed procedures that focus on the training, planning, and 
execution of duties during pre-planned and no-notice events. These 
procedures were first implemented during the initial response to 
Hurricane Irene and have been further refined during State-level 
exercises in California and Arizona last fall.
    Our Defense Coordinating Officers and their elements continue to 
engage with DHS and the Federal Emergency Management Agency (FEMA) and 
at the regional planning and execution level. This ensures that current 
and future efforts are focused on the integration of National Guard and 
Title 10 forces that will respond to an event at a State's request.

                      JOINT TASK FORCE GUANTANAMO

    36. Senator Inhofe. General Fraser, the prosecution of terrorist 
detainees belongs in a military tribunal not because it ensures a 
particular result, but because it is the best way to present classified 
information and present evidence that has been taken from the 
battlefield. SOUTHCOM is principally responsible for operating 
facilities at Guantanamo Bay, some of which are used to detain 
individuals and have been used to adjudicate them. The budget request 
for Overseas Contingency Operations (OCO) includes money to finance all 
aspects of detainee operations at Guantanamo Bay. What is your 
impression of the operations, quality of our personal, and treatment of 
detainees at Guantanamo Bay?
    General Fraser. Joint Task Force Guantanamo (JTF-GTMO) conducts 
safe, humane, legal, and transparent care and custody of detainees. 
Eighty percent of the detainee population resides in a communal setting 
which has reduced the number of assaults and incidents that have 
occurred against the guard force. Those in a communal setting can eat, 
pray, and recreate together. We also employ a Strategic Cultural 
Consultant, who has been at Guantanamo since 2005. The Cultural 
Consultant, along with our Muslim interpreters, ensures we are 
culturally aware and religiously sensitive when conducting detainee 
operations.
    We continue to work very closely with the International Committee 
of the Red Cross which sends delegations to observe our detention 
conditions and medical care six times a year. They have access to, and 
conduct interviews with, all detainees.
    Detainees have access to news and watch worldwide events. Despite 
the dynamic international environment, there have been fairly few 
incidents within the camps because of strong leadership oversight and 
the professionalism of the Joint Task Force's personnel.

    37. Senator Inhofe. General Fraser, can you explain why we are 
using taxpayers' money to develop a soccer field that costs $774,000 at 
Guantanamo Bay?
    General Fraser. Under Common Article III to the Geneva Conventions 
(GC) and DOD policy, the U.S. Government has an obligation to treat 
persons detained at Guantanamo humanely. One element of humane 
treatment is to provide opportunities for detainees to participate in 
recreation, study, sports, and games. In analyzing this issue, the 2009 
Walsh Report applied Article 38 of the GC III (Treatment of Prisoners 
of War) and Article 94 of GC IV (Protection of Civilian Persons); these 
Articles ``provide that detainees are encouraged to participate in 
intellectual, educational, and recreational pursuits, as well as sports 
and games. In addition, all possible facilities and equipment are to be 
provided for this purpose, including sufficient space for outdoor 
exercise and sports. Detainees in a disciplinary status are to be 
allowed to exercise and stay in the open air at least 2 hours daily.'' 
Additionally, the International Committee of the Red Cross regularly 
visits JTF-GTMO to observe conditions of detention, which includes how 
JTF-GTMO accommodates and improves recreation over the course of longer 
term ``Law of War'' detention.
    In early 2011, Camp 4 closed and the remaining detainees were moved 
into Camp 6. As a result of this consolidation, JTF-GTMO has been able 
to reduce its guard requirement by roughly 150 troops, for a total 
reduction of roughly 200 personnel, saving more than $4 million per 
year.
    The Camp 6 Recreation Yard was built as part of the consolidations 
to replicate a similar recreation yard to the one that was in Camp 4. 
The recreation yard required security features such as dual containment 
fences and two-vehicle access gates; all managed from three climate 
controlled guard towers. Security fenced walkways from the camp 
building to the yard have several electronic locking gates to 
selectively control the movement of detainees from eight different cell 
blocks, reducing guard escort requirements and physical interaction. 
The field, path, and security fenced walk-ways are constructed of dirt 
and gravel and are lighted with full security lights. These 
requirements enhance security and safety for both guards and detainees.
    All construction costs for JTF-GTMO carry an additional cost factor 
of approximately 55 percent because of the unique nature of operating 
an isolated base. Construction projects are more expensive due to the 
costs to support all labor, shipping costs, and energy costs. Unlike 
other overseas bases, the company that did the construction is a U.S.-
owned company and all materials were shipped to Guantanamo from U.S. 
suppliers. Once completed, the project will cost $744,000.
                                 ______
                                 
              Questions Submitted by Senator Kelly Ayotte

                              NORTH KOREA

    38. Senator Ayotte. General Jacoby, in your written statement you 
stated that we must not allow regional actors, such as North Korea, to 
hold U.S. policy hostage by making our citizens vulnerable to a nuclear 
ICBM attack. As Senator McCain noted in the world wide threat briefing 
earlier this year, North Korea is developing ever-more sophisticated 
ballistic missiles. Based on North Korea's development of ICBMs, do you 
believe that North Korea is becoming a direct threat to the United 
States?
    General Jacoby. [Deleted.]

    39. Senator Ayotte. General Jacoby, do you believe North Korea will 
likely possess an ICBM ballistic missile capable of targeting the 
continental United States within the next 5 years?
    General Jacoby. [Deleted.]

    40. Senator Ayotte. General Jacoby, what more should be done to 
ensure the people of the United States are protected now and in the 
future from North Korean missile attacks?
    General Jacoby. [Deleted.]

                MISSILE DEFENSE--SEA-BASED X-BAND RADAR

    41. Senator Ayotte. General Jacoby, you write in your prepared 
testimony that, ``we must be better prepared to respond to threats that 
give us little to no advance warning, which places a tremendous burden 
on the low-density, high-demand sensors we have available today to 
detect these threats and places a greater emphasis on our requirements 
for tracking through all phases of flight. This requires pursuing 
future sensor capability, such as the space-based PTSS, ensuring we 
have the highest level of GMD for the Homeland.'' Yet, the MDA has 
chosen to place the sea-based x-band radar (SBX) in a limited test and 
contingency operations status. Doesn't removing SBX from day-to-day 
operational readiness run counter to your recommendation to be better 
prepared to respond to threats that give us little to no advance 
warning?
    General Jacoby. [Deleted.]

    42. Senator Ayotte. General Jacoby, how long would it take to get 
SBX prepared for operations assuming you had warnings of a threat?
    General Jacoby. [Deleted.]

    43. Senator Ayotte. General Jacoby, can we count on being warned in 
time to activate SBX?
    General Jacoby. [Deleted.]

    44. Senator Ayotte. General Jacoby, why was this decision made to 
remove the SBX from day-to-day operational readiness?
    General Jacoby. Until recently, the primary function of SBX has 
been to support research, development, test, and evaluation (RDT&E) of 
the GMD system. Due to concerns about where best to base it, the high 
cost of operation, and the associated risk of the SBX not being 
available when needed, it has not been the key contributor we once 
expected it to be operationally.

    45. Senator Ayotte. General Jacoby, what was the rationale for this 
decision?
    General Jacoby. Until recently, the primary function of SBX has 
been to support RDT&E of the GMD system. Due to concerns about where 
best to base it, the high cost of operation, and the associated risk of 
the SBX not being available when needed, it has not been the key 
contributor we once expected it to be operationally.

    46. Senator Ayotte. General Jacoby, are we doing all we can to 
defend the Homeland against long-range missile threats?
    General Jacoby. Yes. I am confident in my ability to successfully 
defend the Homeland from the current set of limited long-range 
ballistic missile threats. However, we must remain vigilant because of 
the uncertainty of threat intentions and capabilities, and we must also 
continue our efforts to develop, refine, and adapt the capabilities of 
our defense against a ballistic missile attack.
                                 ______
                                 
               Questions Submitted by Senator John Cornyn

                     C-130 TRANSFER FROM FORT WORTH

    47. Senator Cornyn. General Jacoby, one of NORTHCOM's primary civil 
support missions is to conduct domestic disaster relief operations. The 
Gulf Coast has seen its fair share of natural disasters over the last 
decade. Certain assets are extremely valuable--even critical--in 
responding to these disasters. What is your assessment of the value the 
C-130 capability brings to disaster response efforts?
    General Jacoby. While the C-130 has proven its worth in peace and 
war, typically there are a number of equipment systems that can provide 
capabilities to support DOD civil support requests. As such, we do not 
request specific aircraft platforms, but rather capabilities. In turn, 
the Joint Staff and uniformed Services prioritize needs and provide 
available DOD assets that best meet the needs of the support we 
request. The bottom line is that I trust the Total Force to meet 
NORTHCOM's requirements needed for disaster response.

    48. Senator Cornyn. General Jacoby, the U.S. Air Force recently 
announced a decision to transfer all eight Texas Air National Guard C-
130s from the 136th Airlift Wing in Texas out of the Gulf region 
entirely, sending them to Montana. Were you consulted on this decision 
prior to its release?
    General Jacoby. We were fully aware of and tracked Air Force 
aircraft basing decisions throughout the duration of the budget 
process. If there had been any impact to our missions, we would have 
provided input to the Air Force.

    49. Senator Cornyn. General Jacoby, it is my understanding that 
there are no other Air National Guard C-130s currently stationed in the 
other Gulf States: Louisiana, Mississippi, Alabama, or Florida. On 
March 5, all five Gulf Coast Governors sent a letter to President Obama 
strongly advising against the relocation of the 136th Airlift Wing's C-
130s, arguing that, ``losing the C-130s takes away a powerful airlift 
asset for saving the lives of Gulf Coast States citizens.'' These 
governors have relied heavily on these eight C-130s in recent years, 
including in the aftermath of Hurricane Katrina. The 136th has flown 
423 sorties in response to storms, safely evacuated 3,143 passengers, 
and delivered 939 tons of emergency aid. Removing these eight C-130s 
from Texas and eliminating their proximity to the Gulf Coast seems like 
a profound mistake. What is your assessment of the impact on disaster 
recovery efforts along the Gulf Coast if these eight aircraft are moved 
from Texas to Montana?
    General Jacoby. As is the case with all natural disasters, local 
and State authorities work together to address, respond, and provide 
disaster response and recovery. When local and State resources are 
exhausted, civilian officials/agencies request Federal assistance 
through the Request For Assistance (RFA) process. NORTHCOM provides the 
command and control for DOD assets deployed in support of disaster 
relief to fill local and State capability gaps. Because NORTHCOM has 
access to several DOD force providers, we are able to respond to these 
requests and meet the needs through several options without having 
ready-alert forces for a specific need.

    50. Senator Cornyn. General Jacoby, as NORTHCOM commander, what is 
your preference in these disaster situations--for governors to employ 
the Air Guard or for NORTHCOM to wait for assigned Active or Reserve 
component C-130s when necessary to execute missions as ordered by the 
President?
    General Jacoby. The basis of our National Response Framework is to 
employ local and State capabilities prior to a Federal response.

    51. Senator Cornyn. General Jacoby, which force is more capable, 
historically, of responding in the shortest amount of time?
    General Jacoby. Response time is dependent on the situation, 
location of an incident, and the capability required. We do not have 
data to suggest one force is quicker to respond than another, but have 
identified capabilities that meet requirements for any given situation. 
When disaster strikes, we assess and plan in concert with myriad 
stakeholders to be ready to provide relief assistance when and where 
needed.

    52. Senator Cornyn. General Jacoby, would you agree that a governor 
can mobilize Air National Guard assets within hours, while the 
execution of a Federal response could take days?
    General Jacoby. Local and State authorities have regulated 
processes that enable them to respond to need, as required. Likewise, 
NORTHCOM has regulated processes that facilitate DOD assistance to 
local and State authorities, when requested. NORTHCOM also has the 
capability to rapidly employ DOD forces, if needed, and also has 
options for decreasing response time, if needed. For instance, a State 
can verbally request Federal assistance and NORTHCOM can in turn 
receive and execute verbal orders to respond in order to meet the need 
of the local and State authorities.
    In addition, recent enhancements to Federal procedures have 
facilitated an expedited Federal response. For Hurricane Irene, in 
August 2011, these enhancements enabled a pre-event mission assignment 
and funds from FEMA that allowed deliberate, prudent pre-staging of 
Title 10 assets in New England, poised for any regional need.
    Speed of Federal response is a factor of speed of request and 
priority of effort.

                                 MEXICO

    53. Senator Cornyn. General Jacoby, General Burgess recently 
testified before this committee that Mexican President Felipe 
Calderon's aggressive campaign against TCOs has resulted in Mexican 
security forces having captured or killed 21 of Mexico's 37 most wanted 
traffickers. What is your assessment of the progress that has been made 
since Calderon took office in December 2006?
    General Jacoby. [Deleted.]

    54. Senator Cornyn. General Jacoby, Mexico will hold presidential 
elections this summer. In your opinion, if the next President of Mexico 
loses focus on combating the drug cartels and strengthening the rule of 
law, what would the likely impact be?
    General Jacoby. [Deleted.]

    55. Senator Cornyn. General Jacoby, can the progress that has been 
made since 2006 be sustained if the Mexican Government's attention is 
focused elsewhere?
    General Jacoby. [Deleted.]

    56. Senator Cornyn. General Jacoby, how would an increased level of 
threat most likely impact the United States?
    General Jacoby. [Deleted.]

    57. Senator Cornyn. General Jacoby, in your prepared testimony you 
highlight the Combatant Commander's Exercise Engagement (CE2) program 
which supports all aspects of the mission-critical NORAD and NORTHCOM 
Exercise and Engagement program. You note the CE2 program helps to 
build partner capacity and readiness across your AOR. Can you elaborate 
on this program's scope and success in Mexico?
    General Jacoby. [Deleted.]

    58. Senator Cornyn. General Jacoby, your prepared testimony states, 
``As requested by Mexico, NORTHCOM cooperates with the Mexican military 
in support of their efforts to build capabilities and capacities to 
employ against TCOs. Above all, we will continue to respect Mexico's 
sovereignty and we stand ready to increase coordination and 
collaboration to the extent Mexico desires and in accordance with U.S. 
Government policies.'' Please elaborate on what type of increased 
coordination NORTHCOM could provide, if requested to do so by the 
Mexican Government?
    General Jacoby. NORTHCOM is prepared to increase the scale and 
scope of coordination across the operational spectrum as requested by 
the Mexican Government and within the authorities we are allowed as a 
geographic combatant command. I believe that counter threat finance is 
an area we could better exploit to disrupt the funding streams fueling 
TCOs. I also believe that our activities in supporting human rights and 
rule of law training could be further expanded in the areas of laws, 
transparency, enforcement, prosecution, and incarceration.

            INTERAGENCY COOPERATION ON THE SOUTHWEST BORDER

    59. Senator Cornyn. General Jacoby, you state that DOD is exploring 
its spectrum of authorities to improve support to law enforcement 
agencies and its ability to interdict transnational threats. To date, 
what potential modifications have you identified that could enhance 
DOD's ability to support its interagency partners or cooperation with 
Mexican partners?
    General Jacoby. In the short-term, I believe that there are 
procedural and policy changes that we can effect within my command, and 
within DOD, that will result in more efficient and operationally 
flexible support to our law enforcement agencies and international 
partners. My staff is working with the Office of the Secretary of 
Defense to realize these policy revisions in order to achieve the 
desired end state. From a long-term perspective, we are reviewing 
existing legislation with DOD to see if there are modifications that 
would facilitate better support to our interagency and international 
partners, from a detection and monitoring standpoint.

    60. Senator Cornyn. General Jacoby, General Fraser's prepared 
testimony highlighted the continued success of JIATF-South, noting 
that, ``In 2011, JIATF-South operations resulted in the disruption of 
117 metric tons of cocaine, denying illicit traffickers approximately 
$3 billion in revenue. Our return on investment is substantial; in 
2010, JIATF-South supported the interdiction of eight times the amount 
of cocaine than was interdicted on the southwest border, at a third of 
the cost and in an operating area that covers 42 million square 
miles.'' In your opinion, what factors can you point to that account 
for this disparity in cocaine interdiction and cost of operations 
between JIATF-South's AOR and the southwest border region?
    General Jacoby. The first movement of cocaine from the source zone 
typically occurs in large movements via non-commercial air and maritime 
trafficking. TCOs are in the money-making business, therefore, many of 
the routes they transit not only exploit weakness in our visibility of 
their movements, but they are also the most cost-effective routes. The 
JIATF-South area of operation and focus remains on interdicting these 
large loads shortly after departure--by design, each interdiction does 
result in a large return on investment. As the drugs move closer to the 
U.S. market, though, the TCOs generally break the narcotics into many 
smaller packages to reduce the visibility and risk of interdiction by 
law enforcement agencies.
    By contrast, the NORTHCOM supporting effort along the southwest 
border consists of merely $10 million through the Counternarcotics 
Central Transfer Account, which is executed by NORTHCOM's Joint Task 
Force North (JTF-N) annually. DOD's Uniformed Services do not receive 
specific counternarcotics funding to support domestic law enforcement 
agencies. This NORTHCOM effort supports a larger U.S. Government 
interagency effort to maintain the North American Free Trade Agreement, 
while stemming the flow of all illicit trafficking across our Nation's 
border. The fiscal year 2011 NORTHCOM domestic support resulted in the 
interdiction of over $52 million of marijuana and various smaller 
values of narcotics and undocumented aliens that were seized 
principally along the southwest border.

    61. Senator Cornyn. General Jacoby, you note that, ``NORTHCOM's 
role in the border security mission is to provide DOD support to U.S. 
and foreign law enforcement agencies. Through our subordinate unit, 
JTF-N, we provide mutually-beneficial DOD support in a broad range of 
unique military categories. Our vision is for JTF-N to be the most 
effective integrator of DOD support to law enforcement agencies.'' One 
improvement you highlight is the new DHS comprehensive campaign 
planning process, which you state will help support the development of 
DHS and DOJ strategic guidance, increase interagency planner 
cooperation, and ultimately improve unity of effort and synchronization 
of resources for countering illegal drugs and other transnational 
threats. Another improvement you cite is the military intelligence 
training support provided to the DHS-led Border Intelligence Fusion 
Section (BIFS) within the DOJ-led El Paso Intelligence Center (EPIC). 
As I understand it, the BIFS develops operational intelligence products 
to share with interagency partners for their use in early cueing, 
warning, and interdiction operations. Although JTF-N and EPIC are both 
located in El Paso, they are separate entities. What is your assessment 
of the value of potentially fully integrating the structure and 
functions of JTF-N and EPIC, or potentially standing up a new 
interagency coordination entity, based on the JIATF-South model, that 
would focus solely on the southwest border?
    General Jacoby. I support any integration arrangement that provides 
greater unity of effort. Since TCOs swiftly adapt to changes in the 
operational environment, an integrated interagency entity would 
facilitate an agile decisionmaking process to outpace changing threat 
vectors. Additionally, there are synergies to be gained by drawing on 
the authorities and core competencies of multiple agencies and 
departments. Experience has taught us that interagency operations on 
the southwest border benefit from tighter integration and more 
comprehensive, intelligence-driven operations. The JTF-N partnership 
with BIFS that you mention has enhanced intelligence fusing and 
produced an improved common intelligence picture. The blending of law 
enforcement agency and DOD structures and functions effectively bridges 
gaps between Homeland security and Homeland defense missions to protect 
our Nation.

                            MISSILE DEFENSE

    62. Senator Cornyn. General Jacoby, please describe in detail what 
metrics you will use to agree to reduce the shot doctrine for 
protection of the contiguous United States (CONUS) against long-range 
missile threats?
    General Jacoby. We continue to work with the MDA and will evaluate 
their proposal to reduce shot doctrine as part of the IMTP process. As 
we assess improvements to the 2018-2020 architecture and evaluate 
potential threats, a reduced NORTHCOM shot doctrine may be possible.

    63. Senator Cornyn. General Jacoby, when was the last drill or 
exercise conducted by NORTHCOM against a theoretical or hypothetical 
unauthorized or accidental launch by a Russian or Chinese ICBM directed 
at CONUS?
    General Jacoby. NORTHCOM conducted exercises against similar launch 
events during Vigilant Shield 12.

    64. Senator Cornyn. General Jacoby, are you comfortable that there 
will not be an intercept test of the GMD system involving an ICBM 
target until 2015, yet a mobile ICBM threat against CONUS may develop 
sooner than that?
    General Jacoby. We are confident the available GMD interceptors are 
capable of defending the Homeland against a regional threat and are 
therefore comfortable with the current IMTP schedule for a test against 
an ICBM target.

    65. Senator Cornyn. General Jacoby, what were the findings of the 
NORTHCOM GBI study conducted before the 2010 BMDR?
    General Jacoby. The classified findings are contained in the July 
2008 GBI study, which we delivered to the Senate Armed Services 
Committee in August 2010. As stated in the transmittal memo that was 
signed by my predecessor, ``we believe the GBI study commissioned by 
NORTHCOM, which was narrowly focused on the homeland defense challenge, 
has been superseded by a more robust global approach.''

    66. Senator Cornyn. General Jacoby, please describe whether and why 
the Cobra Dane radar is an important capability for CONUS defense.
    General Jacoby. [Deleted.]

    67. Senator Cornyn. General Jacoby, how does the decision to remove 
the SBX from day-to-day operational readiness affect the capability of 
the GMD system?
    General Jacoby. Removal of SBX from the operational architecture 
will not negatively affect the capability of the GMD system.

    68. Senator Cornyn. General Jacoby, how much warning time is 
necessary to make SBX operational, in the event of a threat to the 
United States?
    General Jacoby. Until recently, the primary function of SBX has 
been to support RDT&E of the GMD system. Due to concerns about where 
best to base it, the high cost of operation, and the associated risk of 
the SBX not being available when needed, it has not been the key 
contributor we once expected it to be operationally.

    69. Senator Cornyn. General Jacoby, how much lead time would 
NORTHCOM need to ensure all available GBI silos would be outfitted with 
available GBIs?
    General Jacoby. MDA is the organization that would emplace GBIs 
into silos. Currently, all available GBIs are emplaced in silos, with 
the exception of testing designated GBIs.

    70. Senator Cornyn. General Jacoby, what is the maximum number of 
GBIs the United States could deploy each year through 2024?
    General Jacoby. The maximum number of GBIs deployed is predicated 
on the amount of funding allocated to the production of GBIs. The 
current program of record calls for a buy of 57 GBIs. According to MDA, 
the rough order of magnitude projection for the production and delivery 
rate is about two GBIs per year.

    71. Senator Cornyn. General Jacoby, if there were 10 ICBMs deployed 
by North Korea by the end of 2012, would we have enough GBIs to defend 
CONUS under current shot doctrine?
    General Jacoby. [Deleted.]

    72. Senator Cornyn. General Jacoby, how about 20 North Korean ICBMs 
by 2020, under current and proposed MDA shot doctrine in 2020?
    General Jacoby. [Deleted.]

    73. Senator Cornyn. General Jacoby, what are the plans to deploy 
SM-3 IIB by 2020 to defend CONUS from North Korean ICBMs?
    General Jacoby. [Deleted.]

    [Whereupon, at 11:31 a.m., the committee adjourned.]


DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR 
               2013 AND THE FUTURE YEARS DEFENSE PROGRAM

                              ----------                              


                        THURSDAY, MARCH 15, 2012

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

                         DEPARTMENT OF THE NAVY

    The committee met, pursuant to notice, at 9:33 a.m. in room 
SD-G50, Dirksen Senate Office Building, Senator Carl Levin 
(chairman) presiding.
    Committee members present: Senators Levin, Lieberman, Reed, 
Akaka, Nelson, Webb, Hagan, Begich, Shaheen, Blumenthal, 
McCain, Inhofe, Sessions, Chambliss, Wicker, Brown, Ayotte, and 
Vitter.
    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; Peter K. Levine, 
general counsel; Jason W. Maroney, counsel; John H. Quirk V, 
professional staff member; and Russell L. Shaffer, counsel.
    Minority staff members present: Ann E. Sauer, minority 
staff director; Lucian L. Niemeyer, professional staff member; 
Bryan D. Parker, minority investigative counsel; and 
Christopher J. Paul, professional staff member.
    Staff assistants present: Jennifer R. Knowles, Mariah K. 
McNamara, and Brian F. Sebold.
    Committee members' assistants present: Brian Burton, 
assistant to Senator Lieberman; Carolyn Chuhta, assistant to 
Senator Reed; Nick Ikeda, assistant to Senator Akaka; Gordon 
Peterson, assistant to Senator Webb; Lindsay Kavanaugh, 
assistant to Senator Begich; Chad Kreikemeier, assistant to 
Senator Shaheen; Kevin Fink, assistant to Senator Gillibrand; 
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; 
Brad Bowman, assistant to Senator Ayotte; and Charles 
Brittingham, assistant to Senator Vitter.

       OPENING STATEMENT OF SENATOR CARL LEVIN, CHAIRMAN

    Chairman Levin. Good morning, everybody. We want to welcome 
Secretary Mabus, Admiral Greenert, 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 
2013 annual budget and overseas contingency operations (OCO) 
request.
    We greet Admiral Greenert as he makes his first appearance 
before the committee as Chief of Naval Operations (CNO). We 
want to wish General Amos good health as he recovers from a 
visit to the flight surgeon. You look terrific, General, you 
really do; and we all know about what you've come through with 
flying colors and we're just delighted you're here and looking 
so fit.
    We are grateful to each of you for your service to our 
Nation and for the valorous and truly professional service of 
the men and women with whom you serve. We are also very 
grateful to their families, knowing the vital role that 
families play in the success of careers and missions of our 
armed forces.
    Two recent changes make the defense budget situation 
challenging for the Services in particular. First is the Budget 
Control Act passed by Congress last summer, which places 
limitations on funding for our national security; and second is 
adapting to its changing role in the new strategic guidance 
announced by the President last January. Each of our Services 
has that challenge.
    The Department of Defense's (DOD) most recent defense 
strategic guidance, issued in January, refocuses the U.S. 
military on the Asia-Pacific and, consistent with that 
strategy, DOD has been working to realign U.S. military forces 
in countries like South Korea and Japan, and also plans to 
position Navy and Marine Corps forces further to the south in 
countries like Australia, Singapore, and possibly others.
    As we rebalance and realign our presence in the Asia 
Pacific, it is important that we not only get strategy right, 
but also get sustainability right. This is particularly true 
for the Marine Corps. With respect to the realignment of the 
marines on Okinawa, for instance, Senator McCain, Senator Webb, 
and I have advocated changes to the current plan in ways that 
support the strategic goals of the U.S. military posture in the 
region, while also accounting for the fiscal, political, and 
diplomatic realities associated with long-term sustainability.
    Last month, the United States and Japan announced that they 
intend to amend certain elements of the plan, including the 
delinking of the movement of marines off Okinawa from the 
progress on the Futenma Replacement Facility and adjusting the 
unit composition and number of marines that will move to Guam. 
As the details of these changes are finalized, it is important 
that any changes be jointly agreed upon and jointly announced 
with Japan, with the goal of achieving a more viable and 
sustainable U.S. presence in Japan and on Guam.
    As we discuss the budget issues here at home, our thoughts 
are principally focused on places far from here. Nearly 20,000 
marines are partnered with an approximately equal number of Air 
Force security forces in Afghanistan in the effort to bring 
security and stability to the people of that country. In 
addition, our Navy forces at sea in the U.S. Central Command 
area of responsibility (AOR) are joined by another 10,000 
sailors on the ground, most supporting our combat forces in 
Afghanistan.
    We all deeply regret the tragic loss of civilian life in 
Afghanistan apparently caused by one of our soldiers last week. 
The investigation of that incident needs to go forward 
expeditiously and transparently, with the due process that is 
also one of those core values that we hold dear as Americans. 
We should not lose sight of the fact that our goals remain 
clear: to train indigenous Afghan forces; to provide for the 
security of the Afghan people; and to support them while they 
get larger, stronger, and more capable.
    The Taliban's goals are just as clear. They regularly 
engage in terrorist acts against Afghan civilians in an attempt 
to achieve their political aims. We should not let one tragic 
incident which violates our laws and values to muddy the 
difference between the Taliban and most of the rest of the 
world.
    Last year we saw how naval forces could support national 
goals on short notice in Libya. Among those forces we had: 
first, missile-launching ships that struck Libyan targets; 
second, military aircraft supporting coalition operations; and 
third, unmanned aerial vehicles providing intelligence, 
surveillance, and reconnaissance support.
    Navy and Marine Corps forces also played a significant role 
in aiding the Japanese tsunami relief effort. On our visit to 
Japan, the people, still stunned, were most grateful to the 
United States for the assistance that we provided.
    The use and the possible use of our forces overseas makes 
it even more important that our budget provide for their 
success and their wellbeing.
    Our witnesses this morning are faced with a number of large 
challenges that confront the Navy in the budget, such as 
balancing modernization needs against the costs of supporting 
ongoing operations. Indeed, we face a number of issues that 
will need our attention as we review the DOD authorization 
request. Making reductions to the shipbuilding plan and 
retiring ships earlier than planned, the result will be that 
the fleet will not grow to the previously stated goal of 313 
ships, but fall from its current level of 288 and only return 
to the level of 288 at the end of the Future Years Defense 
Program (FYDP). The Navy had made modest progress in increasing 
the size of the Navy fleet from a low of 274 ships in March 
2007, but that progress would be suspended with this budget.
    Another challenge, retiring seven Aegis cruisers earlier 
than planned rather than modernizing them; delaying the Ohio 
replacement program or the SSBNX by 2 years, although the Navy 
testified just last year that we needed to maintain the 
original SSBNX schedule to ensure that we meet our strategic 
deterrent patrol requirements.
    Other challenges are reducing the end strength of the 
Active component of the Marine Corps from 202,000 beginning 
this year to 182,000 by the end of fiscal year 2016 and 
modernizing the amphibious tractor fleet with programs for the 
Amphibious Combat Vehicle (ACV) and the Marine Personnel 
Carrier (MPC) that would replace the Expeditionary Fighting 
Vehicle cancelled last year.
    In this authorization request, we are also being asked to 
commit future Congresses to several multi-year procurement 
programs, including ones for the Virginia-class submarine, the 
DDG-51 Arleigh Burke-class Aegis destroyers, and the V-22 
tactical lift aircraft.
    If we approve these proposals we will be monitoring these 
very closely to ensure that DOD actually achieves the proposed 
savings and gets costs under control in other acquisition 
programs. The future strength of the Navy depends on holding 
firm on its cost reduction efforts and expanding them across 
the whole acquisition portfolio.
    The Weapons Systems Acquisition Reform Act of 2009 requires 
that DOD make significant changes in its regulations and 
procedures governing the acquisition system. While the 
legislation should help correct past problems, I also know that 
we will succeed only through concerted efforts within the 
executive branch to implement that legislation, and I look 
forward to hearing how the Navy is proceeding to implement the 
provisions of that act.
    In addition to concern about future force levels, naval 
aviation's force levels are under pressure. The Navy's planning 
to conduct a service life extension program on some 150 F-18 
aircraft already in the inventory. Also the Navy budget would 
continue to buy additional F-18 aircraft, as was planned 
before, but the budget would buy fewer Marine Corps and Navy 
versions of the F-35 Joint Strike Fighter (JSF) aircraft than 
we had planned at this time last year.
    On that point, we saw Secretary Panetta remove the F-35B 
short takeoff-vertical landing (STOVL) variant of the F-35 from 
a probationary status a year earlier than planned. Senator 
McCain and I questioned that action, particularly since the 
fixes to the problems that caused Secretary Gates to put the F-
35B on probation in the first place have not completed testing.
    When we asked the Secretary about this, the answer was in 
effect that the F-35B has made progress in testing and is in no 
worse shape than the other F-35 variants. We're pleased that 
the F-35B has improved testing performance in the past year, 
but it seems that it is too early to declare any victories.
    I want to commend the Secretary for fully funding this 
year's ship depot maintenance account. It is the first time 
that the budget request of an administration has done that in 
recent history. While our submarine fleet has benefited from 
100 percent-funded requirement for many years, and necessarily 
so, it is noteworthy that the surface fleet will receive 
similar treatment in the fiscal year 2013 budget. The reduction 
of the Navy's fleet is an essential element to our national 
security and I believe that a fully funded maintenance 
requirement is our best chance of ensuring that our fleet 
reaches its expected service life. As much of an advance that 
it is, and we commend the Navy for it, there still is a backlog 
of ship and aircraft depot maintenance that remains.
    With the decision to fund naval aircraft depot maintenance 
at 94 percent of the requirement, my understanding is that we 
now face a $160 million backlog for aircraft and a $217 million 
backlog for ship maintenance. We'll be interested in hearing 
from the witnesses how the Navy plans to address and fund those 
backlogs to mitigate risk across the fleet.
    Finally, I want to commend you, Secretary Mabus, for your 
effort to lead DOD in making energy efficiency and self-
reliance such a priority. You have correctly placed a very 
strong emphasis on an area where, as strong as our military 
forces may be, we remain subject to the tyranny of energy 
supplies. We thank you for your commitment to a more 
sustainable and a stronger Navy.
    Senator McCain.

                STATEMENT OF SENATOR JOHN McCAIN

    Senator McCain. Mr. Chairman, I join you in welcoming our 
witnesses today to discuss the President's budget request for 
fiscal year 2013 for the Navy. I know I speak for all members 
of our committee when I praise the men and women who serve in 
the U.S. Navy and Marine Corps for their outstanding and 
dedicated service and sacrifice.
    While recruiting and retention in the Navy and Marine Corps 
remain strong, we should carefully consider plans for 15,100 
fewer Active and Reserve members of the Navy and 20,000 fewer 
marines, as DOD is currently proposing under its budget plan 
covering the next 5 years.
    The administration is proposing a reduced defense budget at 
a time when the challenges to our security are arguably more 
daunting than at any time in recent memory. In particular, the 
U.S. Pacific Command AOR is predominantly a maritime theater 
and our presence and power projection will continue to depend 
on the Navy and Marine Corps.
    The Navy remains short of its goal of 313 ships and it 
proposes under its current budget request to retire 7 Aegis-
class cruisers earlier than planned, placing to reduced 
operating status 2 amphibious lift ships needed by the Marine 
Corps. Cuts to our naval capabilities without a plan to 
compensate for them puts our goals in the Asia-Pacific region 
at greater risk.
    First, on the F-35 JSF program. About 50 percent of the 
work needed to build all 32 jets under the fourth lot of early 
production aircraft is completed. Including the cost of design 
changes driven by discoveries late in the development, the 
total cost of finishing lot 4 is estimated at about $500 
million over the target cost. The high likelihood that 
concurrency costs, which was strongly objected to by this 
committee and me in particular at the time that it was decided 
upon, although stoutly defended by the Navy and the Marine 
Corps at the time, will continue to grow, now acknowledged by 
the head of acquisition in the Pentagon as acquisition 
malpractice. In my view, preventing further cost growth in the 
F-35 program is absolutely imperative.
    Because of delays in the program, the Navy has decided to 
buy more F/A-18s, the Marine Corps is buying ex-British AV-8 
Harriers for spare parts, and the Air Force is investing in 
refurbished F-16s to fill the gap created by unfulfilled F-35 
deliveries. I'd be interested again to hear from the witnesses 
as to how we can make some progress in bringing these costs 
under control.
    The cost of acquisition of the USS Gerald Ford aircraft 
carrier has grown over the original estimate by over $1 
billion. I repeat: It has grown over cost by $1 billion. I'd be 
very curious, Mr. Secretary, what you've been doing on your 
watch to try to bring those costs under control, bringing the 
total cost of the carrier to over $12 billion and at least $600 
million over the legislative cost cap. We do have a legislative 
cost cap. The likelihood of future growth in the cost to 
complete construction is high.
    I expect the Navy will soon ask for legislative relief from 
the cost cap. Before I'll support such a request, I need to 
understand why the Navy has been unable to control costs on 
this program. I'm also reluctant to support additional funding 
for the second carrier, CVN-79, until the Navy and the 
shipbuilder get Ford-class carrier costs under control.
    There are many other programs that are under stress and 
duress and are subject to cost overruns, and I won't take the 
time of the committee at this time to go over things like the 
Littoral Combat Ship (LCS), the Ohio-class replacement 
submarines, et cetera.
    I'd like our witnesses to elaborate on the strategy for 
modernization of the Marine Corps' Ground Combat Vehicle 
capabilities, including the ACV, the Joint Light Tactical 
Vehicle, and the MPC. How does the Marine Corps plan to 
accomplish all of this within current and projected budget 
constraints in a way that maintains operational capabilities 
and readiness?
    Secretary Mabus, I understand that your second highest 
priority is ``treating energy as a strategic national security 
issue.'' Even with the very real threat of sequestration and 
the dramatic cuts in end strength and investment and all that 
would entail, the Navy has pledged $170 million as its share of 
a $510 million effort to create a commercially viable biofuel 
market. You've directed the Navy to produce or consume one 
gigawatt of new renewable energy by 2020 to power naval 
installations across the country.
    Using defense dollars to subsidize new energy technologies 
is not the Navy's responsibility, nor is it sufficiently 
related to the Service's core mission to justify such 
expenditures. I hope you will address this issue in your 
comments, including where you got the authorization to spend 
this money on energy.
    Finally, the committee will carefully consider the three 
multi-year procurement proposals included with the budget 
submission. To be approved, the proposals must meet the 
criteria in law, including the requirement for substantive 
savings, considered 10 percent, and stability in design.
    I thank you, Mr. Chairman.
    Chairman Levin. Thank you, Senator McCain.
    Mr. Secretary.

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

    Mr. Mabus. Thank you, Mr. Chairman. Chairman Levin, Ranking 
Member McCain, members of the committee, I want to start by 
thanking you all for the support that you give to our sailors, 
marines, civilians, and their families in the Navy, and 
ensuring that they get what they need to do their mission.
    The pride that General Amos, the Commandant of the Marine 
Corps, and Admiral Greenert, CNO, and I take in leading these 
dedicated sailors, marines, civilians of the Navy, who 
selflessly serve the United States is exceeded only by the 
accomplishments of these brave and completely selfless 
individuals.
    Whatever is asked of them by the American people through 
their Commander in Chief, from Afghan to Libya, from assisting 
the stricken people of Japan, to assuring open sea lanes around 
the world, from bringing Osama bin Laden to final justice, to 
bringing hostages out of wherever they may be hidden by 
terrorists or pirates, they answer the call. They get the job 
done.
    The CNO, the Commandant, and I are confident that the U.S. 
Navy, and the U.S. Marine Corps, are well prepared to meet the 
requirements of the new defense strategy and maintain their 
status as the most formidable expeditionary fighting force the 
world has ever known. No one should ever doubt the ability, 
capability, or superiority of the Navy-Marine Corps team.
    As we reposition after two long ground wars, it was 
essential to review our basic strategic posture. The new 
guidance, developed under the leadership of the President and 
the Secretary of Defense, and with the full involvement of 
every Service Secretary and Service Chief, responds to changes 
in global security. The budget presented to implement this 
strategy, which was also arrived at through full collaboration 
of all the Services, ensures that the Navy and Marine Corps 
will be able to fully execute this strategy while meeting the 
constraints imposed under the Budget Control Act passed by 
Congress.
    This new strategy has an understandable focus on the 
western Pacific and Arabian Gulf regions, while maintaining our 
worldwide partnerships and our global presence using 
innovative, low-cost, light footprint engagements. It requires 
a Navy-Marine Corps team that is built and ready for any 
eventuality on land, in the air, on and under the world's 
oceans, or in the vast cyber seas, and operated forward to 
protect American interests, respond to crises, and to deter and 
if necessary win wars.
    The impact of these two ground wars in the last decade on 
our Navy fleet and force is unmistakable. As you pointed out, 
Mr. Chairman, a fleet that stood at 316 ships and an end 
strength of 377,000 sailors on September 11, 2001 dropped to 
283 ships and close to 49,000 fewer sailors just 8 years later 
when I took office. This administration has made it a priority 
to rebuild our fleet. Despite the budget constraints imposed 
under the Budget Control Act, our plan assures that we will 
have no fewer ships at the end of the 5-year budget cycle than 
we have today, although the fleet of 2017 will include more 
capable ships, equipped with state of the art technology and 
manned, as always, by highly skilled people.
    Although we are presenting one 5-year budget plan and one 
FYDP, this is not a one-FYDP issue. As the defense strategy 
states, we are building the force for 2020. In the years beyond 
the current FYDP we have a plan to grow our fleet and ensure 
capacity continues to match missions.
    Our plan will have us again cross the threshold of 300 
ships by 2019. Overall, we will fully meet the requirements of 
the new strategy and maintain the industrial base we need.
    The Marine Corps will also return to its maritime roots and 
resume its traditional role as the Nation's expeditionary force 
in readiness. Our marines will retain the lessons of a decade 
of hard and effective fighting in Iraq and Afghanistan as they 
transition back to a middleweight amphibious force, optimized 
for forward presence, engagement, and rapid crisis response. We 
will carefully manage the reduction in Active Duty end strength 
from 202,000 to 182,100 by the end of fiscal year 2016 in order 
to keep faith with our marines and their families to the 
maximum extent possible.
    This restructured Marine Corps, developed under a plan 
arrived at after a year and a half of very careful study, will 
be smaller, but it will be fast, it will be agile, and it will 
be lethal. The number of marines in certain critical jobs, like 
special forces and cyber, will be increased and unit manning 
levels and therefore readiness will go up.
    Both the Navy and Marine Corps will continue to decrease 
operational vulnerabilities in ways that are cost efficient. 
That means we will maintain our effort to reduce our dependence 
on foreign oil and to use energy more efficiently. These 
efforts have already made us better warfighters. By deploying 
to Afghanistan with solar blankets to charge radios and other 
electrical items, the marine patrol dropped 700 pounds in 
batteries from their packs and decreased the need for risky 
resupply missions.
    Using less fuel in theater can mean fewer fuel convoys and 
that will save lives. For every 50 convoys we bring in, a 
marine is killed or wounded. That is too high a price to pay.
    We all know the reality of a volatile global oil market. 
Every time the cost of a barrel of oil goes up a dollar, it 
costs the Navy $31 million in extra fuel costs. These price 
spikes have to be paid for out of our operational funds. That 
means that our sailors and marines are forced to steam less, 
fly less, and train less. It's for these reasons that we have 
to be relentless in the pursuit of energy goals that will 
continue to make us a more effective fighting force and our 
military and our Nation more energy independent.
    As much as we have focused on our fleets' assets of ships, 
aircraft, vehicles, and submarines, they don't sail, fly, 
drive, or dive without the men and women who wear the uniform 
and their families. They have taken care of us. They have kept 
the faith with us. We owe them no less. The commitment to 
sailors, marines, and their families is there whether they 
serve 4 years or 40. It begins the moment they raise their hand 
and take the oath to defend our country. It continues through 
the training and education that spans their career. It reaches 
out to their loved ones, because it's not just an individual 
who serves, but the entire family. It supports our wounded 
warriors with recovery, rehabilitation, and reintegration. It 
continues with transition services for our veterans to locate 
new jobs and the GI Bill for their continued education or to 
transfer for a family member's education. The list goes on and 
on and on, as it should. Our commitment to our sailors and 
marines can never waver, it can never end.
    For 236 years, from sail to steam to nuclear, from the USS 
Constitution to the USS Carl Vinson, from Tripoli to Tripoli, 
our maritime warriors have upheld a proud heritage, protected 
our Nation, projected our power, and provided freedom of the 
seas. In the coming years, this new strategy and our plans to 
execute that strategy will assure that our naval heritage not 
only perseveres but that our Navy and Marine Corps continue to 
prevail.
    Thank you.
    [The prepared statement of Secretary Mabus follows:]

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

    Chairman Levin and Senator McCain, I have the privilege of 
appearing today on behalf of the sailors, marines, and civilians who 
make up the Department of the Navy (``DON'' or ``Department''). This is 
the fourth year that I have been honored to report on the readiness, 
posture, progress, and budgetary requests of the Department. The pride 
the Commandant of the Marine Corps, General James Amos, the Chief of 
Naval Operations (CNO), Admiral Jonathan Greenert, and I take in 
leading the dedicated men and women of the Department who selflessly 
serve the United States in the air, on land, and at sea is exceeded 
only by the accomplishments of these brave and selfless individuals.
    Whatever is asked of them by the American people through their 
commander in chief--from Afghanistan to Libya, from assisting the 
stricken people of Japan to assuring open sea lanes around the world, 
from bringing Osama bin Laden to final justice to bringing hostages out 
of wherever they may be hidden by terrorists or pirates--they answer 
the call and get the mission done.
    As we pivot away from a decade of war on two fronts in two separate 
nations, the Commandant, CNO, and I are confident that the U.S. Navy 
and Marine Corps are well prepared to meet the requirements of the new 
defense strategy, and maintain their status as the most formidable 
expeditionary fighting force the world has ever known. No one should 
doubt the ability, capability, or superiority of the Navy-Marine Corps 
team.
    The administration's defense strategic guidance, with its 
understandable focus on the Western Pacific and Arabian Gulf region; 
its requirement to maintain our worldwide partnerships; and its call 
for a global presence using innovative, low-cost, light footprint 
engagements requires a Navy-Marine Corps team that is built and ready 
for war--on land, in the air, on and under the world's oceans, or in 
the vast ``cyberspace''--and operated forward to protect American 
interests, respond to crises, and deter and prevent war.
    This new strategy, developed under the leadership of the President 
and the Secretary of Defense, with the full involvement of every 
Service Secretary and Service Chief, responds to the dynamic global 
security environment, while meeting the constraints imposed under the 
Budget Control Act (BCA) passed by Congress.
    Our ability to meet the demands of this new strategy depends on the 
improvements we have begun and objectives we have set regarding how we 
design, purchase, and build new platforms, combat systems, and 
equipment; increase the development and deployment of unmanned systems 
to provide increased presence and enhanced persistence at lower cost 
and less danger; and how we use, produce and procure energy. Most 
importantly, our efforts and this new strategic guidance and the budget 
that guidance informs, will assure that we continue to keep faith with 
those who serve our country so selflessly and heroically, our sailors 
and marines, civilians, and their families.

                   FISCAL YEAR 2013 BUDGET SUBMISSION

Fleet Size
    On September 11, 2001, the Navy's battle force stood at 316 ships 
and 377,000 sailors. Eight years later when I took office, the battle 
force had fallen by 49,000 sailors, and to 283 ships. Today, 3 years 
into the Obama administration, the fleet increased to 285 ships of all 
types.
    Many have noted that we have the lowest number of battle force 
ships since 1917. But today's ``Fleet'' is best thought of as an fully 
integrated battle network comprised of sensors, manned and unmanned 
platforms, modular payload bays, open architecture combat systems, and 
smart, tech-savvy people. Thus, making comparisons between today's 
``total force battle network'' with the battle force of 1917 is like 
comparing a smart phone to the telegraph. Still, even though the ships 
coming into service today are vastly more capable than their 1917 
predecessors, at some point quantity has a quality of its own. This is 
why building up the number of ships in our Fleet has been a priority 
for this administration from day one.
    The topline reductions mandated by the BCA made holding to current 
Fleet numbers a difficult challenge. However, I am pleased to report to 
you that we have developed a plan that delivers a Fleet with the same 
number of ships by the end of the Future Years Defense Program (FYDP), 
as we have today--all while still meeting our fiscal obligation to 
support a responsible end to our ground combat mission in Afghanistan. 
The fiscal year 2013-2017 shipbuilding plan maintains a flexible, 
balanced naval battle force that will be able to prevail in any combat 
situation, including in the most stressing anti-access/area-denial (A2/
AD) environments.
    While our ship count stabilizes in this FYDP, our shipbuilding 
plans aim to build a Fleet designed to support the new defense strategy 
and the joint force for 2020 and beyond. The specific requirements for 
this future Fleet will be determined by an ongoing Force Structure 
Assessment (FSA), which should be concluded later this year. Regardless 
of the final battle force objective, however, you can expect to see the 
Fleet's ship count to begin to rise as the Littoral Combat Ship (LCS) 
and Joint High Speed Vessels (JHSVs) built during the next 5 years 
begin to enter fleet service beyond this FYDP, and as we sustain our 
major combatant and submarine building profiles. As a result, even 
under the fiscal constraints imposed by the BCA, the battle force is 
projected to reach 300 ships by 2019.
    While the final ship count will be determined by the FSA, the 
decisions made during the recent PB-13 budget deliberations will result 
in a battle force consisting of:

         Nuclear-powered Aircraft Carriers and Air Wings. With 
        delivery of USS Gerald R. Ford, the first of a new class of 
        nuclear-powered aircraft carriers, in 2015, we will have 11 
        CVNs in commission, and will sustain that number at least 
        through 2040. Our future carriers will be even more powerful, 
        with new combat capabilities resident in the F-35C Lightning II 
        Joint Strike Fighter, F/A-18E/F Super Hornet, EA-18G Growler 
        electronic attack aircraft, E-2D Advanced Hawkeye airborne 
        early warning aircraft, and new unmanned air combat systems.
         Nuclear-powered Attack Submarines. SSNs are the key to 
        sustaining our dominant lead in undersea warfare. While the 
        procurement of one Virginia-class submarine was delayed from 
        2014 to 2018 to help free up budget resources in the FYDP, the 
        planned fiscal year 2014-2018 Multi-Year Procurement (MYP) of 
        nine submarines remains intact. To mitigate the loss of large 
        undersea strike capability when SSGNs retire in 2026-2028, we 
        invested Research and Development for the Virginia Payload 
        Module (VPM). VPM could provide future Virginia-class SSNs with 
        an additional 4 SSGN-like large diameter payload tubes, 
        increasing each SSN's Tomahawk cruise missile capability from 
        12 to 40. While we are committed to a long-term force goal of 
        48 SSNs, low submarine build rates during the 1990s will cause 
        us to fall below that number for some time starting in the late 
        2020s. We continue to explore ways to limit the submarine 
        shortfall by increasing the near-term submarine build rate, 
        improving affordability, and maintaining the health of this 
        critical industrial base.
         Guided Missile Cruisers and Destroyers. The Arleigh 
        Burke-class DDGs remain in serial production, with funding in 
        place for a nine-ship fiscal year 2013-2017 MYP. The next 
        flight of DDG 51s will introduce a more powerful and capable 
        Air and Missile Defense Radar in fiscal year 2016. We project 
        that the new defense strategy will require slightly fewer large 
        surface combatants so we will retire seven Ticonderoga-class 
        CGs in this FYDP--all but one before a planned mid-life 
        ballistic missile defense upgrade, and that one had serious 
        structural issues--achieving considerable cost savings at 
        relatively low risk. The long-term inventory of guided missile 
        cruisers and destroyers is projected to come down as combatants 
        built at the rate of three to five per year during the Cold War 
        begin to retire in the 2020s. We are exploring a variety of 
        ways to mitigate these losses.
         Littoral Combat Ships. With their flexible payload 
        bays, open combat systems, ability to control unmanned systems, 
        and superb aviation and boat handling capabilities, LCSs will 
        be an important part of a more agile future Fleet. New crew 
        rotation plans, built on a modified version of the highly 
        successful SSBN two-crew model, will allow for substantially 
        more LCS forward presence than the frigates, Mine Counter-
        Measures ships, and coastal patrol craft they will replace, and 
        will free our more capable multi-mission destroyers for more 
        complex missions. Although forced to shift 2 LCSs outside the 
        current FYDP to achieve cost savings, we remain fully committed 
        to our plan to ultimately purchase 55 of these warships.
         Amphibious Ships. 30 amphibious landing ships can 
        support a two-Marine Expeditionary Brigade (MEB) forcible entry 
        operation, with some risk. To generate 30 operationally 
        available ships, the strategic review envisions an amphibious 
        force consisting of 32 total ships, or 5 ships more than we 
        have in commission today. The ultimate fleet will consist of 11 
        big deck amphibious ships, Amphibious Transport Dock LPD-17s, 
        and 10 Landing Ship, Dock ships (LSDs). To support routine 
        forward deployments of Marine Expeditionary Units (MEUs), the 
        amphibious force will be organized into nine, three-ship 
        Amphibious Ready Groups (ARGs) and one four-ship ARG in Japan, 
        plus an additional big-deck Amphibious ship available to 
        support contingency operations worldwide. We will place two 
        LSDs into reduced operations status, allowing us to 
        reconstitute an 11th ARG in the future, or to build up the 
        number of ships in the active inventory, if necessary. 
        Consistent with these changes, we have deferred procurement of 
        a new LSD, aligning it with LSD-42's planned retirement. We 
        also intend to disband the third Maritime Prepositioning Force 
        (MPF) squadron that we placed in reserve last year due to 
        fiscal restraints, and reorganize the two remaining active 
        squadrons with more capable ships, making them more effective.
         New Afloat Forward Staging Bases (AFSBs). Navy is 
        proposing to procure a fourth Mobile Landing Platform (MLP) in 
        fiscal year 2014, configured to serve as an Afloat Forward 
        Staging Base (AFSB). This AFSB will fulfill an urgent combatant 
        commander request for sea-based support for mine warfare, 
        Special Operations Forces (SOF), Intelligence, Surveillance and 
        Reconnaissance (ISR), and other operations. To speed this 
        capability into the fleet, and to ultimately provide for 
        continuous AFSB support anywhere in the world, we also intend 
        to request congressional approval to convert the fiscal year 
        2012 MLP into the AFSB configuration, resulting in a final 
        force of two MLPs and two AFSBs. This mix will alleviate the 
        demands on an already stressed surface combatant and amphibious 
        fleet while reducing our reliance on shore-based 
        infrastructure.

    Most of the ship reductions in the President's fiscal year 2013 
budget submission--16 fewer than the comparable years' in the fiscal 
year 2012 budget--are combat logistics and Fleet support ships and 
reflect prudent adjustments to our new strategy and a lower defense 
topline. For example, 8 of the 16 ships cut from our 5-year plan were 
JHSVs. These cuts reflect the new 10-ship JHSV requirement developed 
during our strategy review.
    In addition, we simply delayed purchasing three new oilers, which 
were part of an early changeover from single-hulled to more 
environmentally safe and internationally accepted double-hulled ships. 
Our current Fleet of oilers will not start to retire until the 2020s, 
so there is no impact on the number of available oilers for Fleet 
operations. Finally, an ocean surveillance ship was added to the Navy's 
plan last year to provide greater operational depth to our current 
Fleet of five ships; however, after careful consideration, we concluded 
we could meet our operational needs with five ships and could cut the 
sixth ship with manageable risk.
    Ships are not the only platforms in our ``total force battle 
network.'' Accordingly, the new defense strategic guidance also 
required us to review and evaluate the needs of our naval aviation 
community going forward into the 21st century. We plan to complete our 
purchases of both the F/A-18 Super Hornet and the EA-18 Growler within 
the next 2 years. The Department recently completed a review of our 
aviation requirements for the F-35 that validates our decision to 
purchase for the Navy and Marine Corps 680 F-35s over the life of the 
program. While we plan to slow procurement over the next 5 years to 
address program risks, especially concurrency, we remain committed to 
procuring 680 aircraft. The F-35B, the short-take-off-vertical-landing 
(STOVL) variant, completed successful at-sea trials onboard the USS 
Wasp and overall testing is proceeding very well. For the carrier 
version, the F-35C, testing exceeded the plan by 30 percent last year. 
In light of this encouraging testing performance, we are even more 
confident that this multirole, cutting-edge platform will more than 
meet our tactical requirements in the future security environment.
    The Navy and the Marine Corps continues to carefully monitor strike 
fighter capacity requirements as well. Changes in the Marine's force 
structure, accelerated transition from the legacy Hornet aircraft to 
the Super Hornets, and a reduction in use resulted in an appropriately-
sized strike fighter aircraft inventory. Based on current assumptions 
and plans, our strike fighter aircraft shortfall is predicted to remain 
below a manageable 65 aircraft through 2028, with some risk.
    In the far term, the Navy will need to replace its F/A-18E/F Fleet. 
Pre-Milestone A activities are underway to define the follow-on F/A-XX 
aircraft. Options include additional F-35s, a variant of the Unmanned 
Carrier-Launched Airborne Surveillance and Strike System (UCLASS), a 
new manned/unmanned platform, or some combination of these. While we 
remain committed to the first-generation UCLASS, which will provide a 
low-observable, long-range, unmanned ISR-strike capability that will 
enhance the carrier's future ability to project power in anticipated 
A2/AD threat environments, the target date for a limited operational 
capability has shifted by 2 years from 2018 to 2020 to reduce schedule 
and technical risk, as well as to meet the savings targets mandated by 
the BCA.
    The planned reduction in our cruiser inventory has decreased 
requirements for MH-60R Seahawk helicopters, allowing us to reduce 
procurement in this program by nine aircraft. Fiscal constraints have 
also led us to reduce E-2D Hawkeye and P-8 Neptune procurement over the 
FYDP. We still intend to procure all the aircraft originally planned, 
but at a slower rate.

Future Force Structure Assessment and Re-designation of Primary Mission 
        Platforms
    Given the broad refocus of the Department of Defense (DOD) program 
objectives reflected in the new defense strategy, the Navy has 
undertaken analysis of the existing Force Structure Requirements and, 
in conjunction with ongoing internal DOD studies and planning efforts, 
is reworking an updated FSA against which future requirements will be 
measured. The new FSA will consider the types of ships included in the 
final ship count based on changes in mission, requirements, deployment 
status, or capabilities. For example, classes of ships previously not 
part of the Battle Force such as AFSBs developed to support SOF/
nontraditional missions, Patrol Combatant craft forward deployed to 
areas requiring that capability, and Comfort-class hospital ships 
deployed to provide humanitarian assistance, an expanded core Navy 
mission, may be counted as primary mission platforms. Any changes in 
ship counting rules will be reported and publicized. Any comments on 
total ship numbers in this statement are based on current counting 
rules.
    As noted earlier, in the years beyond the current FYDP, we have a 
plan that puts us back on track to increase our Fleet and ensure 
capacity matches the demands of the mission. However, with the Fleet 
and force we have today, we will meet the requirements of the new 
strategy, continue to protect our national interests, preserve our 
ability to deter or defeat aggressors, and maintain the industrial base 
needed.

Marine Corps
    After a decade of hard fighting in Iraq and Afghanistan, the Marine 
Corps will return to its maritime roots and resume its traditional role 
as the Nation's naval expeditionary force-in-readiness. We will 
carefully manage reduction in active duty end strength from 202,000 to 
182,100 by the end of fiscal year 2016. Drawing upon its long history 
of aligning its training and structure with areas of operations, the 
marines will continue to provide tailored security force assistance and 
to build partnership capacity missions with allies and other regional 
partners. Along these same lines, the Marine Corps will continue to 
leverage the experience gained over the past decade of non-traditional 
warfare to strengthen its ties to the special operations community. The 
resulting middleweight force will be optimized for forward presence, 
engagement, and rapid crisis response through strategic positioning at 
forward bases in the western Pacific and Indian Oceans, as well as 
renewed participation in traditional Amphibious Ready Group/Marine 
Expeditionary Unit (ARG/MEU) exercises. The Marine Corps shall maintain 
required readiness levels throughout the transition process. Most 
importantly, we will drawdown without breaking faith with marines and 
their families.
    In summary, the Department's strategy calls for a world class Navy-
Marine Corps team, and our plan delivers one that is fully ready to 
meet the current and emerging challenges. We will maintain a strong 
naval presence in the western Pacific, Indian Ocean and the Middle 
East. This will be accomplished by adjusting basing assignments for 
some units from the Atlantic to the Pacific, as well as by increasing 
the number of units operating from ports located in theaters of 
interest. We are still committed to strategic dispersal. The Department 
will, for example, operate four LCSs from Singapore. Similarly, we will 
continue to expand our usage of AFSB and coastal patrol boats around 
Africa and in the Arabian Gulf to counter the growth of piracy and the 
growing threat of swarming small boats, as well as to help partner 
nations build their own maritime capacity while upholding our national 
interests. We also received two high-speed ferries from the Maritime 
Administration, which will most likely operate in the Western Pacific 
supporting the peacetime transport of U.S. Marine Corps forces deployed 
to Okinawa and Australia.

                      SEAPOWER AND NAVAL PRESENCE

    Since the end of World War II, the Navy-Marine Corps Team has acted 
as the guarantor of the global maritime commons, upholding a 
sophisticated set of international rules that rest upon two 
inextricably linked principles: free trade and freedom of navigation. 
These principles have supported an era of unprecedented economic 
stability and growth, not just for the United States, but for the world 
at large.
    This period of growth has resulted in a truly ``globalized'' 
economy which owes much to the unique scalability and flexibility of 
our naval forces. We can reroute Navy ships and Marine Corps units to 
create appropriate responses as actions unfold. We can shift force 
concentrations from the Atlantic to the Pacific or from the southern 
oceans to northern seas with ease. From a single JHSV to a Carrier 
Strike Group and from a Marine Fleet Anti-terrorism Security Team 
(FAST) to an Expeditionary Unit, combatant commanders can scale naval 
forces and their responses appropriately to emerging challenges across 
the spectrum of engagement. Our forces are flexible enough to shift 
from supporting combat air patrols over Afghanistan to providing 
humanitarian assistance and disaster relief in Japan at a moment's 
notice. Much of their flexibility derives from the use of the high seas 
as a vast, unencumbered maneuver space. This freedom of navigation 
allows our naval forces to gather information, perform surveillance and 
reconnaissance of seaborne and airborne threats, defend regional 
partners, interdict weapons of mass destruction, disrupt terrorist 
networks, deter, and, if necessary, defeat prospective adversaries.

                             LAW OF THE SEA

    The traditional freedom of the seas for all nations developed over 
centuries, mostly by custom, have been encoded within the United 
Nations Convention on the Law of the Sea (UNCLOS). This important 
treaty continues to enjoy the strong support of the DOD and the DON. 
The UNCLOS treaty guarantees rights such as innocent passage through 
territorial seas; transit passage through, under and over international 
straits; and the laying and maintaining of submarine cables. The 
convention has been approved by nearly every maritime power and all the 
permanent members of the U.N. Security Council, except the United 
States. Our notable absence as a signatory weakens our position with 
other nations, allowing the introduction of expansive definitions of 
sovereignty on the high seas that undermine our ability to defend our 
mineral rights along our own continental shelf and in the Arctic. The 
Department strongly supports the accession to UNCLOS, an action 
consistently recommended by my predecessors of both parties.

                        NAVAL OPERATIONS IN 2011

    Naval presence serves as a deterrent against those who would 
threaten the national interests of the United States even as it assures 
allies and partners of our consistent commitment. Our enduring national 
security interests require our continued presence to provide the 
President and our Nation with credible response options to deter 
conflict and, if necessary, defend the United States' national security 
interests from the sea. From counter-insurgency and security force 
assistance operations in Afghanistan to ballistic missile defense and 
humanitarian assistance missions in Europe and the Western Pacific and 
naval engagement in South America and Africa, our sailors and marines 
are making a difference around the globe every day. On any given day, 
more than 72,000 sailors and marines are deployed and almost half of 
our 285 ships are underway, responding to tasking where needed by the 
combatant commanders.
    Visiting our forward deployed forces and meeting with allies and 
partners, commanders and staffs, and our marines and sailors on the 
ground provides insights as to how we can better support all of their 
critical efforts. In June, September, and again in December, I 
travelled to Helmand province in Afghanistan on behalf of the 
Department, and visited forward operating bases. These were my fifth, 
sixth and seventh trips to theater in Afghanistan. In each area, 
Taliban offenses and infiltration had been forcefully rebuffed. 
Critical relations had been built with local Afghan leaders and 
significant progress has been made towards the goal of creating 
effective Afghan security forces that will be able to build on these 
efforts. I also visited Camp Leatherneck and, among other things, 
toured the Concussion Restoration Care Center where I met with Wounded 
Warriors. At all of my stops, I expressed the appreciation of the 
American people for the courage and sacrifices of our marines and 
sailors who serve alongside them on the field of battle.
    For more than 6 decades, our Navy-Marine Corps team has been the 
strongest naval force afloat and we are committed to maintaining this 
position of influence. Our strength, versatility, and efficacy derive 
from our unique capacity for global reach, our focus on warfighting 
excellence and our commitment to maintaining naval presence in regions 
vital to our national interests. We cannot predict the exact nature of 
the challenges facing the Department in the 21st century, but a glimpse 
back at operations in 2011 illustrate the increasing variability of 
events that required a flexible naval response.
    Special Operations
    U.S. Navy SEALS remain decisively engaged throughout the globe 
conducting the Nation's most sensitive and important counterterrorism 
operations. They served with great distinction in Iraq and continue to 
serve in Afghanistan with telling effect. From the killing or capturing 
of the most wanted terrorists to the rescue and recovery of captured 
American citizens abroad we ask them to do the most daunting of 
missions.
    Operations in Iraq, Afghanistan, and Libya
    Having completed operations in Iraq, the Department has maintained 
over 23,000 marines and sailors in Afghanistan, largely associated with 
Regional Command-Southwest based in Helmand province. This force 
provides security and seeks to build the self defense capacity of our 
Afghan partners. Currently the Navy has deployed just over 8,000 
sailors on the ground, 2,920 of whom are reservists, across the Central 
Command supporting joint and coalition efforts. Another 10,000 sailors 
are in the Arabian Gulf and the Indian Ocean supporting combat 
operations from destroyers, submarines, supply vessels and aircraft 
carriers, which launch around 30 percent of the aircraft conducting 
combat air patrols over Afghanistan. On the first day during the 
opening moments of Operation Odyssey Dawn in Libya, the U.S. Navy 
launched 122 Tomahawk Cruise Missiles from two surface ships and three 
submarines, including the guided missile submarine USS Florida, the 
first time one of these converted ballistic missile submarines has 
fired ordnance in live operations. Ground based Navy E/A-18G Growlers 
flying combat missions in Iraq were repositioned to support Odyssey 
Dawn, and within 44 hours engaged hostile forces in Libya. When 
violence erupted across northern Africa and the Middle East, 
significant portions of the Kearsarge ARG and 26th MEU, then off the 
coast of Pakistan, were directed to take station off the coast of 
Libya.
    Ballistic Missile Defense
    Another newly emergent mission centers on the Ballistic Missile 
Defense (BMD) capable Ticonderoga-class cruisers and Arleigh Burke-
class destroyers that provide homeland defense-in-depth, as well as the 
protection of U.S. and allied forces in distant theaters. As ballistic 
missile capabilities have proliferated around the globe, the demand for 
BMD capable ships has increased dramatically. For example, over the 
past year, BMD ships like the USS Ramage, USS Monterey and USS Stout 
took up station in the eastern Mediterranean to provide BMD for both 
Europe and Israel. Elsewhere, elements of Destroyer Squadron Fifteen 
provided similar support in the waters surrounding Japan.
    Humanitarian Assistance and Disaster Relief
    Following the devastating earthquake and tsunami last year that 
resulted in the deaths of over 15,000 Japanese citizens, the 
displacement of thousands, and the worst nuclear accident since 
Chernobyl, the Ronald Reagan Strike Group, en route to support combat 
operations missions in Afghanistan, was diverted to Japan to provide 
humanitarian assistance. Upon arrival, instead of combat, the crews 
were employed to shuttle tons of water, food, and blankets to displaced 
victims ashore, while the Strike Group's ships simultaneously served as 
landing and refueling stations for Japanese Self Defense Force (JSDF) 
rescue helicopters operating in the region. The Reagan Strike Group 
supplemented units of the USS Essex ARG with its embarked 31st MEU, 
which is forward deployed in Japan, in what became known as Operation 
Tomodachi--``Friendship'' in Japanese. Elements of the Essex ARG 
airlifted over 300 JSDF personnel and 90 vehicles from Hokkaido to 
disaster areas while USNS Safeguard and Mobile Dive and Salvage Unit 
One transported relief supplies to Yokosuka for distribution throughout 
the affected areas. Additionally, the Navy transported the equipment 
and personnel of the Pearl Harbor Naval Shipyard's Radiological Control 
Team as well as the Marine Corps' Chemical Biological Incident Response 
Force to Japan to assist with nuclear monitoring efforts.
    Anti-Piracy
    Throughout the year the Navy performed the critical mission of 
combating piracy and supporting the anti-piracy efforts of our allies 
and partners in the region. Ships operated in conjunction with allies 
and partners in the vicinity of the Horn of Africa to prevent the 
disruption of the free flow of trade in the Gulf of Aden. More recently 
elements of the Stennis Strike Group freed Iranian citizens who were 
being held hostage by pirates in the Arabian Sea. Their actions 
directly resulted in the capture or killing of 21 pirates and the 
freeing of 38 hostages.
    Partnership Stations and Maritime Exercises
    The Navy remains committed to building our partner nations' 
capacities to provide for their own maritime security. This year we 
once again created ``partnership stations'' in the Pacific Ocean and 
Caribbean Sea, off the coast of South America and around the continent 
of Africa to work with local navies to educate their leaders, train 
their sailors, strengthen their material infrastructure, increase their 
maritime domain awareness, and raise their response capacity. USS 
Cleveland, USS Oak Hill, USS Robert G Bradley, the hospital ship USNS 
Comfort and High Speed Vessel Swift were strategically deployed to work 
with the maximum number of partner navies to provide medical care and 
security training while building local naval capacity to plan and 
conduct operations in the maritime environment.
    Lastly, with an eye to the future of naval and maritime operations 
in an increasingly ice-free Arctic, the Virginia-class submarine USS 
New Hampshire and the Seawolf-class submarine USS Connecticut conducted 
Ice Exercise (ICEX) 2011 with Canadian and United Kingdom counterparts 
in the Arctic Ocean.

                             AIR-SEA BATTLE

    The Navy and Marine Corps are working with the Air Force to 
implement the Air-Sea Battle concept which seeks to improve integration 
of air, land, maritime, space, and cyberspace forces in order to 
provide combatant commanders the range of military capabilities 
necessary to maintain operational access and deter, and if necessary 
defeat, an adversary employing sophisticated A2/AD capabilities and 
strategies.
    The Air-Sea Battle concept leverages the military and technological 
capabilities, as well as unprecedented Naval and Air Force 
collaboration, cooperation, integration, and resource investments 
within the Services' purview to organize, train, and equip.
    The jointly manned Air-Sea Battle Office has defined a series of 
initiatives to achieve the capabilities and integration required in 
future naval and air forces so that combatant commanders have the tools 
necessary to ensure U.S. freedom of action in future years.
    As we work to implement and enhance the Air-Sea Battle concept, the 
Navy continues to invest in capabilities to counter advanced A2/AD 
challenges, including:

         BMD enhancements both in the Aegis Combat System and 
        the Standard Missile, as well as myriad ``soft-kill'' 
        initiatives;
         Integration of advanced air and cruise missile defense 
        capabilities;
         Harpoon missile replacement, which will increase the 
        range (and speed) at which we can engage enemy surface 
        combatants armed with advanced anti-ship cruise missiles 
        (ASCMs);
         Virginia-class submarines and the VPM, which has the 
        potential to mitigate the loss of the SSGN undersea strike 
        capacity when they retire in the mid-2020s;
         Improvements in Joint Force Command, Control, 
        Communications, Computers and ISR capabilities which will 
        significantly increase our information gathering and 
        warfighting coverage in access-challenged areas, as well as 
        provide counters to adversary capabilities; and
         Cyberspace capabilities.

                        DEPARTMENTAL PRIORITIES

    The Department must adhere to four key priorities with strategic, 
tactical, operational and management elements if we are to maintain our 
position as the world's most formidable expeditionary fighting force 
while continuously evolving our Navy and Marine Corps as a strategic 
asset that provides our Commander in Chief with the broadest range of 
options in a highly dynamic international security environment. These 
priorities remain:

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

    These principles guide the direction of the Department, from 
training our recruits at Great Lakes, Parris Island, and San Diego, to 
our ongoing operations in central Asia and the Western Pacific, to 
acquiring the Navy and Marine Corps of the future.
    In the end it all comes down to stewardship; the careful management 
of our people, platforms, infrastructure and energy to guarantee that 
your Navy and Marine Corps are ready to defend our Nation's interests.
Taking Care of Sailors, Marines, Civilians, and their Families
    As we move forward, the Department is committed to our most 
important asset--our sailors, marines, civilians, and their families. A 
large part of our commitment is the careful attention to pay and 
benefits. No one's pay will be cut; only the growth of pay is slowed in 
the later years of our 5-year plan. Specifically, we are proposing 
continued pay raises at 1.7 percent for military personnel in fiscal 
year 2013 and fiscal year 2014, in line with the private sector, 
recognizing the continued stress on our forces and their families, and 
providing time for families to adjust.
    We support asking Congress to establish a commission with authority 
to conduct a comprehensive review of military retirement in the context 
of overall compensation. The Commission should seek ways to identify 
improvements in the military retirement system, ensuring any proposed 
change to military retirement supports required force profiles of the 
Department of the Navy in a cost effective manner. We believe that the 
Commission should protect, through grandfathering, the retirement 
benefits of those currently serving.
    With so much of our defense strategy dependent upon our Navy and 
Marine Corps, we must ensure that our resources support the most combat 
effective and the most resilient force in our history. We must set high 
standards, but at the same time we must provide individuals with the 
services needed to meet those standards. The Department will soon 
announce the 21st Century Sailor and Marine Initiative, which is a set 
of objectives and policies across a spectrum of wellness that maximizes 
sailor and marine personal readiness. The program consists of five 
``pillars:'' readiness, safety, physical fitness, inclusion, and the 
continuum of service.
    Readiness will ensure sailors, marines, and their families are 
prepared to handle the mental and emotional rigors of Military Service. 
Both Services are introducing campaigns this year to deglamorize, 
treat, and track alcohol use. We will also develop new means to reduce 
suicides, and increase our family and personal preparedness programs. 
This includes zero tolerance for sexual assault. The DON Sexual Assault 
Prevention and Response Office (SAPRO) was created and made part of the 
secretarial staff to keep the issue at the front of the discussion, to 
strengthen the lines of communication with the Navy Judge Advocate 
General (JAG) and Naval Criminal Investigative Service (NCIS), and to 
make sure the Secretariat received frequent updates about the incidents 
of sexual assault and our progress towards reducing the number of 
attacks. We are continually working to improve the reporting, 
investigation and disposition of sexual assault cases ensuring 
commanders, investigators, and prosecutors receive sufficient training 
and appropriate resources. Last year, JAG finalized a complete revision 
of the advanced trial advocacy courses that train litigators involved 
in sexual assault cases as well as filled the Deputy Director of the 
Trial Counsel Assistance Program position with a senior civilian sexual 
assault litigator. The JAG and NCIS are working aggressively to educate 
lawyers and agents on the unique aspects of sexual assault cases. NCIS 
has hired personnel to provide assistance and support to NCIS special 
agents; this will enable special agents to focus on conducting 
investigative activities, trial preparation and prosecutorial testimony 
relative to adult sexual assaults.
    Our efforts to ensure the safest and most secure force in the 
Department's history extend to encouraging the safe use of motor 
vehicles and motorcycles.
    Physical fitness is an important central pillar that resonates 
throughout the 21st Century Sailor and Marine Program. Personal fitness 
standards throughout the force will be emphasized. We will also improve 
nutrition standards at our dining facilities with the introduction of 
``Fueled to Fight.'' Fueled to Fight ensures that healthy food items 
will be available and emphasized at every meal.
    The Department will be inclusive, and consist of a force that 
reflects the Nation it defends in a manner consistent with military 
efficiency and effectiveness. The Department will also reduce 
restrictions to military assignments for personnel to the greatest 
extent possible, consistent with our mission and military requirements. 
We must ensure that all who want to serve have opportunities to succeed 
and barriers that deny success are removed. Nothing reflects our core 
values of honor, courage, and commitment better than having an 
organization characterized by fairness and dedication. Last year for 
the first time ever, 16 women were assigned to submarines. This will 
expand command-at-sea opportunities and eventually increase the chances 
for more women to be promoted to admiral. Additionally, we need an 
officer corps that is representative of the enlisted force it leads. 
Through increased minority applications from diverse markets, the U.S. 
Naval Academy and Naval Reserve Officers' Training Corps (NROTC) 
programs are achieving historical racial and ethnic diversity rates. 
The U.S. Naval Academy received nearly 7,000 minority applications for 
its class of 2014, nearly double that of the class of 2010. Along with 
recent NROTC additions at Harvard, Yale, Columbia, and Arizona State 
University (with the largest undergraduate population in the country), 
next we are establishing an NROTC unit at Rutgers University. Not only 
is it one of the Nation's top engineering schools, but more than half 
of its class of 2014 identify themselves as minority.
    The final pillar, continuum of service, will provide the most 
robust transition support in the Department's history. Individuals 
choosing or selected for either separation or retirement will be 
afforded a myriad of assistance programs and benefits that are 
available to them as they transition to civilian life. These programs, 
which include education benefits, transition assistance, career 
management training, counseling, life-work balance programs, and 
morale, welfare, and recreation programs have been recognized by human 
resource experts as some of the best corporate level personnel support 
mechanisms in the Nation.
    Because Navy and Marine Corps were highly successful in meeting 
their recruiting goals, we have been able to be very selective, 
accepting only the very best candidates who are morally, mentally and 
physically ready to serve. Historically high retention rates have put 
us below our active duty manning ceiling of 322,700 sailors and 202,100 
marines. Our recruiting classes have gotten smaller, as have our ``A'' 
school classes, and promotion rates from E-4 to E-6 have fallen as 
well. More officers in the O-5 and O-6 pay grades are choosing to 
remain on active duty rather than retire, leading to smaller promotion 
selection groups and repeated adjustments to promotion zones.
    We have attempted to deal with this challenge within the enlisted 
ranks by instituting the ``Perform to Serve'' program that used a 
detailed algorithm to advise personnel specialists on who should be 
allowed to re-enlist, but this approach did not fully address either 
the systemic manning challenge confronting us or the unsustainable 
overmanning in certain enlisted ratings. This past year, given fiscal 
constraints and manpower draw-downs, we decided to confront the problem 
head on and convened special administrative Enlisted Retention Boards, 
Senior Enlisted Continuation boards and officer Selective Early 
Retirement Boards to pare back overmanned enlisted ratings and officer 
ranks. It was a difficult decision to use these force management tools, 
but the future of the Department requires us to fix the problem now 
rather than further delaying a decision.
    Another vital support program that we remain committed to is the 
support we provide to our Wounded Warriors. Since 2001, over 900 
sailors and nearly 13,000 marines have been wounded as a result of 
combat operations in Iraq and Afghanistan. This year we completed the 
alignment of the Army's Walter Reed Medical Center with our own 
National Naval Medical Center in Bethesda and we continued to invest in 
the doctors, techniques, and technologies to care for the injuries that 
have become representative of modern warfare: traumatic brain injury, 
amputations, burns, and post traumatic stress disorder. The 
requirements for the Purple Heart were updated to include the immediate 
and lasting damage associated with brain injuries.
    Part of our commitment centers around the families and caregivers 
that support our Wounded Warriors as they endure the challenges of 
recovery, rehabilitation, and reintegration. The 2010 National Defense 
Authorization Act provided a Special Compensation for Assistance with 
Activities in Daily Living to help offset income lost by those who 
provide non-medical care and support to servicemembers who have 
incurred a permanent catastrophic injury or illness.
    Driven by the moral obligation to assist our injured heroes, the 
Department has set a goal of being able to offer every combat wounded 
sailor or marine an opportunity to continue their service as a civilian 
on the Navy/Marine Corps team. Our Wounded Warrior Hiring and Support 
Initiative aims to increase the number of veterans with a 30 percent 
and above service-connected disability into our workforce. Through this 
initiative, we have hired over 1,000 veterans with 30 percent and above 
service-connected disability rating in fiscal year 2010 and fiscal year 
2011. Our Naval Sea Systems Command alone hired 509 service-disabled 
veterans for fiscal year 2011, exceeding its goal of hiring one veteran 
for each day of the fiscal year. We recently held our second annual 
Wounded Warrior Hiring and Support Conference to provide prospective 
employers and human resource professionals with the tools and resources 
to enable them to hire, train, and retain our Wounded Warriors in the 
civilian workplace.
    This past August, the President announced his Veteran's Employment 
Initiative that extends tax credits to businesses that hire Veterans. 
We work with the Departments of Veterans Affairs and Labor to establish 
programs that ease the transition of Veterans into the civilian world. 
We are also heavily engaged through the Yellow Ribbon Program in 
supporting the reintegration efforts of our Reserve Forces.
    I want to address the Defense budget proposals regarding health 
care costs. The DON and DOD on the whole continues to face rapidly 
rising costs in health care. In 2001, DOD health care costs were 
approximately $19 billion. By 2010 that amount had risen to $51 billion 
and as a percentage of our budget is approaching 10 percent. This rate 
of rise cannot be sustained. We continue to streamline our staffs and 
standard operating procedures in an ongoing effort to manage costs 
while retaining quality patient care and overall customer satisfaction. 
One area where we continue to be challenged is system accessibility for 
our retiree community, especially in areas where bases have been closed 
due to the BRAC process, leaving behind a large retiree population with 
no local access to military treatment facilities. Increasing use of the 
affordable Mail Order Pharmacy Program and implementing modest fee 
increases, where appropriate, would go far towards ensuring the long 
term fiscal viability of the system while preserving equity in benefits 
for our retirees.
    I consider my obligations to the well-being of every sailor and 
marine, and every family member under their care to be sacrosanct. We 
worked carefully to develop these proposals, with all participants--the 
government, the providers of health care, and the beneficiaries-sharing 
in the responsibility to better manage our health care costs. I have 
previously asserted that as a former Governor, I well know that the 
growth in health care costs is an issue for the country, not just the 
military. But, we all have to do our part. The TRICARE benefit remains 
one of the best benefits in the country. I hope you will support our 
proposed changes.
    Also this past year the Department, along with the other military 
departments, worked with the U.S. Chamber of Commerce and over 70 
employers to launch a program targeted at expanding the career 
opportunities for military spouses. The Military Spouse Employment 
Partnership seeks to help the business community recognize the skills 
and talents that military spouses bring to the workforce, but are 
unable to fully leverage due to frequent moves of the servicemember in 
the family. This partnership between the military and the business 
community promises to tap into the energy of one of the most hard-
working, highly skilled, educated, and yet under-utilized segments of 
our population.
    Overall, the fiscal year 2013 budget reflects a responsible request 
for the fiscal support and resources required to support our marines, 
sailors, their families, and our retirees in the face of increasing 
operational pressures and financial demands upon them. Thank you for 
your continuing support.

Energy Security and Sustained Leadership
    We must reform how the Navy and Marine Corps use, produce, and 
procure energy, especially in this fiscally constrained environment. We 
must use energy more efficiently; however, the Department must also 
lead on alternative energy, or we will leave a critical military 
vulnerability unaddressed, further straining the readiness of our 
sailors and marines to be able to respond wherever and whenever called 
to defend and protect America's interests.
    Fuel is a tactical and operational vulnerability in theater; 
guarding fuel convoys puts our sailors and marine's lives at risk and 
takes them away from what we sent them there to do: to fight, to 
engage, and to rebuild. The Department is also exposed to price shocks 
in the global market because too much fuel comes from volatile regions, 
places that are vulnerable to instability and ruled by regimes that do 
not support our interests. Every time the cost of a barrel of oil goes 
up a dollar, it costs the Department $30 million in extra fuel costs. 
In fiscal year 2012 alone, in large part due to political unrest in oil 
producing regions, the price per barrel of oil is $38 more than was 
budgeted increasing the Navy's fuel bill by over $1 billion. These 
price spikes must be paid for out of our operations funds. That means 
that our sailors and marines are forced to steam less, fly less, and 
train less. The threat of price spikes is increased by the 
vulnerability of choke points. Energy analyst have speculated that if 
Iran ever succeeded in closing the Strait of Hormuz, the price of oil 
could rise by 50 percent or more in global markets within days.
    We would never let the countries we buy oil from build our ships or 
our aircraft or our ground vehicles, but we give them a say on whether 
those ships sail, whether those aircraft fly, whether those ground 
vehicles operate because we buy their oil. As a nation we use over 22 
percent of the world's fuel but only possess less than 2 percent of the 
world's oil reserves. Even if we tap every domestic resource we do not 
have enough to meet all of our needs over time, and as a minority 
producer of fuel we will never control the price.
    That is why in the fall of 2009, I established five goals for the 
Department the broadest of which is that by no later than 2020, 50 
percent of the Department's energy will come from alternative sources. 
These goals drive the Navy and Marine Corps to use energy more 
efficiently, to explore wider use of alternative energy and to make 
energy a factor in the acquisition of our next ships, tactical vehicles 
and aircraft.
    As one example of our success, the Marine Corps continues to 
aggressively pursue technologies that will help achieve greater energy 
efficiency while increasing combat effectiveness in the theater. The 
Third Battalion, Fifth Marines, deployed to the Helmand Province in 
Afghanistan with solar blankets to power radios, LED lights to 
illuminate tents, and solar generators to provide power. One 3-week 
patrol was able to reduce their carrying weight by 700 pounds, reducing 
the number of dangerous resupply missions needed. Even in a tough fight 
in Sangin, the marines managed to cut fuel use and logistical support 
requirements by 25 percent at main operating bases and up to 90 percent 
at combat outposts by relying on these alternative energy technologies. 
The Marine Corps is committed to finding more innovative solutions to 
decreasing dependence on convoys by conducting two Experimental Forward 
Operating Bases (ExFOB) per year (one in Twentynine Palms and one in 
Camp Lejeune).
    Another initiative to increase alternative energy supply is using 
advanced, drop-in biofuel in aircraft and ships. Our criteria for this 
fuel are straight forward. It must be ``drop in'' fuel requiring no 
changes to our aircraft or our ship or our infrastructure; it must be 
derived from non-food sources; and, its production should not increase 
our carbon footprint as required by law. In 2011, the Department 
completed testing on 50/50 blends of drop-in biofuel and jet fuel on 
all manned and unmanned aircraft, including an F/A-18 Hornet at MACH 
1.7 and all six Blue Angels during an air show. The Department has also 
tested and experimental Riverine Command Boat (RCB-X), a self defense 
test ship, a ridged hull inflatable boat (RHIB), and a Landing Craft 
Air Cushion (LCAC) that traveled at more than 50 knots.
    In March of this past year, the President directed the Departments 
of Agriculture, Energy and the Navy to partner with the private sector 
to catalyze a domestic, geographically dispersed, advanced biofuel 
industry for the United States. In response to this directive, Energy 
Secretary Dr. Steven Chu, Agriculture Secretary Tom Vilsack, and I 
signed a memorandum of understanding (MOU) committing our departments 
to jointly partner with industry to construct or retrofit multiple 
domestic commercial or pre-commercial scale advanced drop-in biofuel 
refineries capable of producing cost competitive fuels. Under the MOU 
we issued a request for information in August, which drew over 100 
responses in 30 days from companies ranging from major oil companies 
and large defense contractors to small businesses.
    In December, DLA Energy awarded a contract on our behalf to 
purchase 450,000 gallons of biofuel; the single largest purchase of 
biofuel in government history. The Department will use fuel from this 
purchase--awarded to the most competitive bidder under full and open 
competition--to demonstrate the capability of a carrier Strike Group 
and its air wing to burn alternative fuels in a full operational 
environment including UNREPs for destroyers and refueling of helos and 
jets on the deck of an aircraft carrier. The demonstration will take 
place as part of the Rim of the Pacific (RIMPAC) Naval Exercise.
    We are also pursuing efficiencies measures in our fleet. The USS 
Makin Island, the Navy's first hybrid electric-drive ship, saved $2 
million on its maiden voyage from Pascagoula, MS to its homeport in San 
Diego, CA. It is estimated to save approximately $250 million in fuel 
costs over the course of its lifetime--approximately 40 years--at 
current energy prices.
    A hybrid electric drive system will also be installed as a retrofit 
proof of concept on the USS Truxtun (DDG 103)--an existing Navy 
destroyer. We estimate that successful testing will result in fuel 
savings of up to 8,500 barrels per year. If these tests are successful 
we will continue to install hybrid electric drives as a retrofit on 
other DDGs in the fleet. The U.S. Navy has been installing stern flaps 
to reduce drag and energy on amphibious ships in an effort to make them 
more fuel-efficient, which could save up to $450,000 annually in fuel 
costs per ship.
    Whether it is the procurement of new ships and aircraft or the 
retrofit of existing platforms we are making energy a consideration in 
the acquisition process. In addition to traditional performance 
parameters such as speed, range, and payload, the Department is 
institutionalizing energy initiatives that will save lives, money and 
increase warfighting capability. Analyzing energy costs during the 
``analysis of alternatives'' phase of major defense acquisition 
programs will ensure warfighters get the speed, range, and power they 
require, as well as help the department manage the life-cycle costs of 
its systems. The Marine Corps pioneered this approach last year by 
including system energy performance parameters in developing a new 
surveillance system and the Navy has included energy criteria as part 
of the procurement of the LSD-X.
    All across our shore installations, Navy and Marine Corps are also 
undertaking energy efficiency initiatives and installing alternative 
energy wherever practical. As just one example, at China Lake Naval Air 
Weapons Station we are a net contributor to the local power grid, 
creating more than 270 megawatts (MW) of clean, affordable geothermal 
power in partnership with the private sector.
    In January, we tapped the vast renewable energy resources available 
at China Lake again breaking ground on a 13.8MW solar array, offsetting 
30 percent of the base's electric load. The contract is a 20-year power 
purchase agreement (PPA) having no upfront costs to the Navy and saving 
the Navy $13 million over its term.
    To meet the energy goal of 50 percent alternative energy ashore, I 
have directed the Navy and Marine Corps to produce or consume one 
gigawatt of new, renewable energy to power naval installations across 
the country using existing authorities such as PPAs, enhanced use 
leases, and joint ventures. One gigawatt of renewable energy could 
power 250,000 homes, or a city the size of Orlando. This will be a 
broad and dynamic project that, over the life of the contract, will not 
cost the taxpayer any additional money, and will create domestic 
private sector jobs. This will be our path to unlocking our Nation's 
clean energy potential that leaves our military more secure, agile, 
flexible and ready.
    To further facilitate our partnerships with industry, the 
Department is trying to make our contracting opportunities more 
accessible. Two years ago we introduced a website called Green Biz Ops 
which aggregates our energy and efficiency opportunities for 
procurement. This site helps all companies interested in doing business 
with the Navy--and especially small businesses--find opportunities in 
one place. In partnership with the Small Business Administration last 
year our agencies launched a ``2.0'' version of Green Biz Ops called 
the Green Procurement Portal which expands the site to include more 
features as well as energy opportunities across DOD and the Federal 
Government.
    To prepare our leadership to achieve our energy goals, this fall 
the Naval Postgraduate School began offering a dedicated energy 
graduate degree program, the first military educational institution to 
do so. Later this year, NPS will launch an Executive Energy Series to 
bring our senior leadership together to discuss specific energy 
challenges that confront the Navy and Marine Corps. This energy-focused 
Masters Degree program and the executive energy series will target both 
the current and future civilian and military leadership of the Navy and 
Marine Corps.
    Further, promotion boards have been directed to specifically 
consider the background and experience in energy some of our men and 
women in uniform are gaining today. Energy is not just an issue for the 
future, or just the young officers and policy experts that attend NPS. 
It is an issue for all of us.
    Those who question why the Navy should be leading on energy should 
study their history. The Navy has always led in new forms of energy: 
shifting from wind to coal-powered steam in the middle of the 19th 
century, from coal to oil in the early 20th century, and pioneering 
nuclear power in the middle of the 20th century.

Promoting Acquisition Excellence and Integrity
    Especially given the fiscal reality of our budget deficit, we are 
fully cognizant of our responsibility to the President, Congress, and 
the American people to spend this money wisely. What history shows us 
is that when budgets are tight we should get smarter about the way we 
spend our money. As noted earlier, rebuilding our fleet has been and 
will continue to be a top priority of this administration. Achieving 
this lies at the heart of the acquisition excellence initiative that 
has been a priority for the Department for almost 2 years now, because 
if we do not get smarter about how we buy, in addition to what we buy, 
we are not going to be able to afford the Navy and Marine Corps that 
the Nation needs in the future.
    Improving how we buy means that we have take actions against fraud 
and shoddy contractors. The Department's General Counsel and the 
Assistant Secretary of the Navy for Research, Development, and 
Acquisition (ASN(RDA)) are authorized to take the swiftest and 
strongest action in any case where bribery or attempts to gain 
preferential contracting treatment are substantiated. When a violation 
occurs, RDA may terminate the contract and assess damages immediately, 
in addition to pursuing suspension and debarment. The Department's 
Acquisition Integrity Program was recently recognized by the Government 
Accountability Office (GAO) as one of the more effective at using 
suspension and debarment practices.
    The Department's role in the President's new defense strategy is 
clear and will drive acquisition programs underway or in development. 
We will carefully define program requirements and then drive 
affordability through aggressive ``should cost'' oversight and 
competition where possible, such as the fixed price contracts we 
negotiated for the LCS or the multi-year procurements that we 
negotiated for Virginia-class submarines. Innovative funding strategies 
and stable industrial base workload further allow for efficiencies that 
provide opportunities to acquire more ships more affordably.
    To keep our technological advantage, we plan to invest in science 
and technology and research and development to maintain the knowledge 
base and keep it moving forward. This is the lesson of the 1920s and 
1930s when so much of the technologies that became critical to our 
victory in World War II were kept alive in military, academic, and 
industrial laboratories. Times and technologies change, and we need to 
preserve the capability to change with them. Proper funding of our labs 
and research centers is key to incubating the next ``game-changing'' 
breakthroughs that will sustain the United States' military advantage 
over time.
    The acquisition workforce was downsized over the past 15 years and, 
in truth, was stretched too thin. Accordingly, and with your strong 
support, we are increasing the number of acquisition professionals and 
restoring to the government the core competencies inherent to their 
profession and to our responsibilities in the Department to organize, 
train and equip the Navy and Marine Corps. The Department has grown its 
acquisition work force by 4,400 personnel since starting the effort 2 
years ago, increasing its technical authority and business skill sets.
    Additionally the Department is keeping program managers in place 
longer to build up their experience, expertise and oversight on 
individual programs. We are also investing in education for our program 
managers. As an example, we send all of our program managers to an 
intensive short course at the graduate business school at the 
University of North Carolina, specifically targeting a better 
understanding of our defense contractors: what motivates them; what are 
their financial situations; and how can we work with them to achieve a 
win-win contract award for both the taxpayer and the stockholder. We 
are also changing the way in which we evaluate our program leaders to 
incentivize them to work with their industry counterparts to manage 
costs.
    Over the FYDP, affordability will continue to be a central concern 
of this Department. As resources are tight, cost has to be one of the 
primary considerations of every program, and it ought to be driven by 
``should cost, will cost,'' methods. ``Should cost'' scrutinizes each 
contributing ingredient of program cost and seeks to justify it. The 
``will cost'' method represents an effort to budget and plan weapons 
acquisition programs using realistic independent cost estimates rather 
than relying on those supplied by the manufacturer. Make no mistake, 
our focus will remain on the security of our primary customer, the 
American people, for whom we will build the best possible Fleet for the 
future.
    Shipbuilding/Industrial Base
    A healthy industrial base is critical to supporting the 
Department's top priorities. The dangerous downward trend in our ship 
inventory has been and must stay reversed. Even though we face 
increased fiscal constraints, we still plan, as we noted earlier, to 
grow the Fleet to 300 ships by 2019. We want to increase the number of 
our highly capable large surface combatants to meet the President's 
directive that we confront the growing ballistic missile threat to the 
United States and its allies, while strengthening our small combatant 
inventory to provide the presence needed to maintain freedom of 
navigation. We have to make significant investments in support vessels 
while continuing our investment in our nuclear submarine force and 
maintaining the viability of our last yard capable of building nuclear 
powered aircraft carriers.
    What all this means is that we will need to closely monitor the 
shipbuilding industrial base as we move forward. Much as with energy, 
we need to ensure diversity in supply moving forward. We need to 
strengthen our relationship with traditional shipbuilders, but we need 
to reach beyond them to small and mid-tier shipbuilders to develop 
innovative designs and new construction techniques to meet emerging 
threats.

Developing and Deploying Unmanned Systems
    When I took office in 2009, unmanned systems were already at work 
within the Department. To assist our troops on the ground in Iraq and 
in Afghanistan we had either purchased or contracted for thousands of 
unmanned aerial vehicles that flew hundreds of thousands of hours in 
support of our mission. Despite their demonstrated utility, there was 
no vision of where unmanned systems belonged in the Navy and Marine 
Corps future force structure or coherent plan to achieve that vision. 
Over the past 2 years, the Services have worked hard to develop a plan 
and the presence and reach of our unmanned systems have expanded, 
including the first expeditionary deployment of a Firescout vertical 
takeoff and landing unmanned aerial vehicle (UAV), and the first 
successful flight of the unmanned combat air system, (UCAS), which will 
begin carrier demonstrations later this year. In total, nearly 1,500 
unmanned aerial systems deployed into theater.
    In the Fleet, unmanned systems need to be integrated into 
established operational communities. The marines have been out in front 
on this effort, having established four unmanned aerial system 
squadrons over the past quarter century, and the Navy is working on 
these capabilities as well. This past year a detachment of Helicopter 
AntiSubmarine Squadron 42 deployed with a SH-60B Helicopter and a MQ-8B 
Firescout and supported combat operations in Libya and counter piracy 
operations in the Gulf of Aden. In both environments, they leveraged 
the operational flexibility and low signature characteristics of 
unmanned systems to support local commanders while keeping sailors and 
marines safe from danger. Additionally, our Tactical Air Control 
Community took possession of their first Small Tactical Unmanned Aerial 
System (STUAS) this past year and began to integrate it into the 
Surface Warfare community's day-to-day operations. In the future, the 
Maritime Patrol and Reconnaissance Aviation community, soon to take 
delivery of the P-8A Poseidon, will add the MQ-4C Broad Area Maritime 
Surveillance unmanned aerial system to their squadrons and hangars, 
extending the reach and persistence of maritime reconnaissance 
capabilities.
    We will test and field mine hunting and then mine sweeping 
capability of the Mine Countermeasures (MCM) Mission Module in LCS, 
employing airborne and remotely operated vehicles to reduce the risk to 
sailors and the cost. Current developmental testing of the Increment I 
mine warfare mission package is underway in USS Independence (LCS 2), 
demonstrating mine hunting capability with the AN/AQS 20A mine hunting 
sonar set, towed by the remotely operated vehicle RMMV. Future 
increments will incorporate autonomous mine sweeping and the ability to 
find buried mines using unmanned surface and underwater vehicles.
    The Unmanned Carrier Launched Airborne Surveillance and Strike 
(UCLASS) system is changing the way we plan to deliver reconnaissance 
and strike capabilities from our venerable aircraft carrier platforms. 
Designed to operate in contested airspace and conduct ISR or strike 
missions over extended periods of time, the UCLASS at sea will differ 
fundamentally from the standard operating procedures of both manned 
carrier aircraft or land based unmanned aircraft. Unlike with a manned 
carrier aircraft that is mostly used to maintain the qualifications of 
its pilot, a UCLASS airframe will be employed only for operational 
missions and pilots will maintain qualifications in the simulator, 
extending its useful life expectancy considerably. Its airborne mission 
time will not be limited by human physiology but rather will be 
determined by the availability of tankers to refuel it, ordnance 
expenditure, or the need to change the oil after many hours of flight 
time. This will allow us to launch from greater distances, effectively 
negating emergent A2/AD technologies. We have only just begun to 
understand the potential of this unmanned system and the capabilities 
that will spiral from it.

                               CONCLUSION

    Our Constitution requires that Congress ``Maintain a Navy.'' We do 
so with the world's most advanced platforms, equipped with cutting edge 
weapons systems and manned by crews who receive the best training 
possible is a credit to our Nation. The Navy that fought and defeated a 
more advanced British Navy in the War of 1812 looked very different 
from the Navy of 2012. But our sailors and marines continue to live up 
to that legacy forged 200 years ago. Today your Navy and Marine Corps 
are deployed across the spectrum of engagement from rendering 
humanitarian assistance to combat. They often seem to be everywhere 
except at home. They bring to these efforts skills, training and 
dedication unmatched anywhere else in the world. The enduring support 
of this committee for our key programs and our people enables us to 
fulfill the ancient charge of the founders that we should sail as the 
Shield of the Republic, and we thank you.
    The goals and programs discussed today will determine our future as 
a global force. At the direction of the President, we have worked to 
streamline our processes, to eliminate programs that no longer fit in 
the current strategic environment and to construct new approaches to 
the challenges of the modern world while retaining the ability to deter 
regional conflict and respond rapidly and decisively to emerging 
crises. Our specific requests are reflected in the President's fiscal 
year 2013 budget submission.
    The process by which we arrived at these requests was both 
deliberate and determined. We are fully aware of the economic 
environment and the fiscal constraints that our government faces today. 
We have attempted to balance these considerations with the President's 
requirement that we maintain a ready and agile force capable of 
conducting the full range of military operations. We want to assure you 
that the Department has considered the risks and applied our available 
resources efficiently and carefully. This year's request aligns with 
the Defense Strategic Guidance and the priorities and missions 
contained within it while balancing trade-offs that you and the 
American taxpayer expect of us.
    For 236 years, from sail to steam to nuclear; from the USS 
Constitution to the USS Carl Vinson; from Tripoli to Tripoli; our 
maritime warriors have upheld a proud heritage, protected our Nation, 
projected our power, and provided freedom of the seas. In the coming 
years, this new strategy and our plans to execute that strategy will 
assure that our naval heritage not only perseveres, but that our Navy 
and Marine Corps continue to prevail.
    Thank you and Godspeed.

    Chairman Levin. Thank you very much, Mr. Secretary.
    We will now call on Admiral Greenert.

  STATEMENT OF ADM JONATHAN W. GREENERT, USN, CHIEF OF NAVAL 
                           OPERATIONS

    Admiral Greenert. Thank you, Mr. Chairman. Chairman Levin, 
Ranking Member McCain, distinguished members of the committee, 
I'm honored to appear before you for the first time to discuss 
the Navy's budget submission.
    Because of the dedication of our 625,000 Active and Reserve 
sailors and civilians and their families, the Navy and our 
primary joint partner the Marine Corps remain a vital part of 
our national security. I'm honored to serve and lead the Navy 
in these challenging times and I thank this committee for your 
continued support.
    This morning I'd like to address three points: the Navy's 
importance to the Nation's security, our enduring tenets and 
priorities that guided our budget decisions, and how these 
tenets and how these decisions shaped the budget submission.
    Today our Navy is the world's preeminent maritime force. 
Our global fleet operates forward from U.S. bases and partner 
nation places around the world to deter aggression, respond to 
crises, and when needed and when called upon to win our 
Nation's wars.
    If you will refer to a chartlet (see Figure 1) that I've 
provided in front of you, you can see that on any given day we 
have about 50,000 sailors and 145 ships underway, with about 
100 of those ships deployed overseas. These ships and sailors 
allow us to influence events abroad because they ensure access 
to what I will refer to as the maritime crossroads. These are 
areas where our shipping lanes and our security interests 
intersect, and they're indicated in orange on the chartlet. We 
can remain forward in these areas because of the facilities and 
the support from nearby allies and partners.
    [The chart referred to follows:]
      
    
    
      
    For example, in the Middle East we have 30 ships and more 
than 22,000 sailors at sea and ashore. They are combatting 
piracy, supporting operations in Afghanistan, assuring our 
allies, and maintaining a presence in the region to deter or 
counter destabilizing activities. These forces rely on 
facilities in Bahrain, who's been a U.S. partner for 6 decades.
    In the Asia-Pacific, we have about 50 ships, supported by 
our base on Guam and our facilities or places in Singapore, the 
Republic of Korea, and Japan. They will be joined next spring 
by our first LCS, the Freedom, which will deploy to Singapore 
for several months to evaluate the operational concepts 
associated with forward stationing a LCS. The lessons learned 
from this deployment will help stabilize design and we'll 
understand better the operational concepts of our mission 
packages.
    We are also collaborating with the Marine Corps to 
determine the support and the lift that they need in order to 
support rotational deployments to Darwin, Australia.
    In the Indian Ocean, we depend on Diego Garcia and the 
fleet tender and the airfield there for ship repair and 
logistics support.
    Around the Horn of Africa, we depend on the airfield and 
the port in Djibouti to support our forces conducting 
counterterrorism and counterpiracy operations.
    In Europe, we rely on places in Spain, in Italy, and in 
Greece to sustain our forces forward in support of our North 
Atlantic Treaty Organization allies.
    In our own hemisphere, our port and airfield at Guantanamo 
Bay will grow more important in the next several years as the 
Panama Canal is widened and traffic through this crossroad 
increases.
    When I assumed the watch as the CNO, I established three 
key tenets for our decisionmaking. To me they are the clear, 
unambiguous directions for our Navy leadership, and they are: 
warfighting is first, operate forward, and to be ready.
    Warfighting first, that means the Navy has to be ready to 
fight and prevail today, while building the ability to win 
tomorrow. This is our primary mission and all our efforts must 
be grounded in this fundamental responsibility. Iran's recent 
provocative rhetoric highlights the need for us to have forward 
deployed warfighting capability. In our 2013 budget submission 
we directed funding toward weapons, systems, sensors, and 
tactical training that can be more rapidly fielded to the 
fleet, particularly in this area. This includes demonstrators 
and prototypes that could quickly improve our forces' 
capability.
    Operate forward, that means we will provide the Nation an 
offshore option to deter, to influence, and to win in an era of 
uncertainty. Our 2013 budget submission supports several 
initiatives to establish our forward posture at the maritime 
crossroads. These include placing forward-deployed naval force 
destroyers in Rota, Spain, and forward stationing LCSs in 
Singapore, and patrol coastal ships in Bahrain. One ship that 
is operating from an overseas location can provide the same 
presence as about four ships rotationally deployed from the 
continental United States.
    Be ready, that means we will harness the teamwork, the 
talent, and the imagination of our diverse force to be ready to 
fight and responsibly use our resources. This is more than 
completing required maintenance and ensuring that parts and 
supplies are available. Being ready also means being proficient 
and confident with our weapons, with our sensors, our command 
and control, our communications, and our engineering systems as 
well.
    Applying these tenets to meet the defense strategic 
guidance, we've built a 2013 budget submission to implement 
three main investment priorities. Number one, we will remain 
ready to meet our current challenges today. Consistent with the 
defense strategic guidance, we will continue to prioritize 
readiness over capacity and to focus our warfighting presence 
on the Asia-Pacific and the Middle East. We will also sustain 
the Nation's most survivable strategic deterrent in our SSBNs.
    Number two, we will build a relevant and capable future 
force. Our Navy will evolve to remain the world's preeminent 
maritime force and our shipbuilding and aircraft construction 
investments will form the foundation of the future fleet.
    In developing our aircraft and ship procurement plans, we 
really focused on three approaches: to sustain serial 
production of today's proven platforms, including the Arleigh 
Burke-class destroyers, Virginia-class submarines, and our 
Super Hornets. We have moved new platforms to the fleet, such 
as the LCS, the JSF, the Ford-class carrier, the P-8A Poseidon 
aircraft, and the America-class amphibious assault ship.
    To improve the capability of today's platforms through new 
weapons, sensors, and unmanned vehicles, including the Advanced 
Missile Defense Radar, Firescout, and the follow-on to 
Firescout, the Fire-X. New payloads like these will help ensure 
we can project power despite threats to access, as described in 
the new defense strategic guidance. They will also enable our 
continued dominance in the undersea domain environment and 
support our goal to operate effectively in cyber space and 
fully exploit the electromagnetic spectrum.
    In developing the future force, we will continue to 
emphasize jointness, as described in our air-sea battle 
concept, and we will emphasize affordability by controlling 
requirements creep and making costs the entering argument for 
new systems.
    We will enable and support our sailors, civilians, and 
their families. I'm extremely proud of our people. We have a 
professional and moral obligation to lead, train, equip, and 
motivate them. Our personnel programs deliver a high return on 
investment in readiness. We fully fund our programs to address 
operational stress, support our families, eliminate the use of 
synthetic drugs such as spice, and aggressively prevent 
suicides and sexual assaults.
    I support the compensation reforms included in the DOD's 
2013 budget submission, which I believe are appropriate changes 
to manage the costs of the All-Volunteer Force.
    In closing, your Navy will continue to be critical to our 
Nation's security and prosperity by ensuring access to the 
global commons and being at the front line of our Nation's 
efforts in war and peace. I assure the committee, Congress, and 
the American people that we will focus on warfighting first, we 
will operate forward, and we will be ready.
    I want to thank the committee staff, those that sit behind 
you, Mr. Chairman, for their assistance with our budget 
articulation as we worked through the submission. I thank the 
committee again for their support to our sailors and families.
    [The prepared statement of Admiral Greenert follows:]

            Prepared Statement by ADM Jonathan Greenert, USN

    Chairman Levin, Ranking Member McCain, and distinguished members of 
the committee, it is my honor and pleasure to appear before you to 
submit my first budget as Chief of Naval Operations. Thanks to our 
625,000 Active and Reserve sailors and civilians and your continued 
support, the Navy-Marine Corps team remains vital to our national 
security and economic prosperity. Operating globally at the front line 
of our Nation's efforts in war and peace, our Fleet protects the 
interconnected systems of trade, information, and security that 
underpin our own economy and those of our friends and allies. Our Navy 
and Marine Corps are the first responders to international crises 
through combat operations or humanitarian assistance. After U.S. ground 
forces have drawn down in the Middle East, the naval services will 
remain on watch with offshore options to deter aggression and--when 
necessary--fight and win on, over, and under the sea. Despite the 
economic and military challenges facing our Nation, your Navy will 
evolve and adapt to fight and win our Nation's wars, remain forward, 
and be ready. I appreciate your continued support and look forward to 
working together in pursuing our national security objectives.

  THE NAVY HAS BEEN IMPORTANT TO OUR NATION'S SECURITY AND PROSPERITY

    Today our Navy is the world's preeminent maritime force--but that 
has not always been the case. Leading up to the War of 1812, Britain's 
Royal Navy held that distinction. Our own Fleet, lacking warfighting 
capability, forward posture and readiness, was bottled up in port early 
in the war. It was unable to break the British blockade of the Atlantic 
Coast or stop the Royal Navy from wreaking havoc along the mid-Atlantic 
seaboard and burning parts of Washington, DC, in 1814. Our nation's 
economy suffered as shipping costs soared and imports from Europe and 
the Caribbean grew scarce. Soon, however, the Fleet developed a 
warfighting focus and engaged the British, winning victories on Lake 
Erie, at New Orleans, and in the Atlantic that, combined with concerns 
about France, brought Britain to the negotiating table. However, 
outside of a determined effort from privateers, the U.S. Navy still 
could not project power away from home, could not control the sea, and 
could not deter aggression against our interests. We needed these key 
capabilities--outlined in our Maritime Strategy--then, just as much as 
now. The War of 1812 offered a number of hard lessons, and for the next 
century our Navy focused on preventing an aggressor from restricting 
our trade or isolating us from the sea as our Nation expanded across 
the North American continent.
    Our Navy operated farther forward as our Nation's economy grew and, 
by necessity, became more integrated with Eurasia. In the midst of the 
world's first wave of globalization, the Great White Fleet from 1907 to 
1909 demonstrated to the world America's emerging power and capability 
to project it globally. These episodes of ``operating forward'' became 
sustained during World War I as our Fleet convoyed supplies and forces 
to Europe and combated German submarines across the Atlantic Ocean. In 
World War II, our Navy established dominance in the air, sea, and 
undersea domains, going forward around the world to protect sea lanes 
and project power to Europe and Africa, and take the fight across the 
Pacific to Asia. We sustained our maritime dominance and remained 
forward and global throughout the Cold War to contain Soviet expansion 
and provide tangible support to allies and partners with whom we were 
highly interdependent diplomatically, economically and militarily.
    Our Navy today remains global, operating forward from U.S. bases 
and international ``places'' around the world. From these ``places'' we 
continue to support and operate with allies and partners who face a 
range of challenges, from piracy and terrorism to aggressive neighbors 
and natural disasters. ``Places,'' from Guantanamo Bay to Singapore, 
enable us to remain present or have access to the world's strategic 
maritime crossroads--areas where shipping lanes, energy resources, 
information networks and security interests intersect. On any given day 
over the last year, more than 50,000 sailors were underway or deployed 
on 145 of the Navy's 285 ships and submarines, 100 of them deployed 
overseas (see Figure 1). They were joined by more than 125 land-based 
patrol aircraft and helicopters, 1,000 information dominance personnel, 
and over 4,000 Naval Expeditionary Combat Command sailors on the ground 
and in the littorals, building the ability of partners to protect their 
people, resources, and territory.
      
    
    
      
    The security and prosperity of our Nation, and that of our friends 
and allies, depends on the freedom of the seas, particularly at the 
strategic maritime crossroads. Twenty percent of the world's oil flows 
through the Strait of Hormuz, the center of a region where more than 
12,000 sailors on 30 ships combat piracy, smuggling and terrorism, 
deter Iranian aggression, and fly about 30 percent of the close air 
support missions in Operation Enduring Freedom. These sailors directly 
supported the special operations forces mission that resulted in the 
death of Osama Bin Laden, provided ballistic missile defense to our 
Arabian Gulf partners, and just last month rescued the crew of the 
Iranian dhow, Al Morai, from Somali pirates. Our forces there depend on 
facilities in Bahrain, a U.S partner for more than 60 years, for 
supplies, communications, and repairs, while our maritime patrol and 
reconnaissance aircraft, patrol craft, and minesweepers in the region 
are based on the island. Our forces at sea are joined by another 10,000 
sailors on the ground, most supporting our combat forces in Afghanistan 
as we continue to transition that effort to the Afghan Government.
    In the Asia-Pacific, about 40 percent of the world's trade passes 
through the 1.7-mile wide Strait of Malacca, while the broader region 
is home to five of our seven treaty alliances and many of the world's 
largest economies. About 50 U.S. ships are deployed in the Asia-Pacific 
region every day, supported by facilities (or ``places'') in Singapore, 
the Republic of Korea, and Japan in addition to our bases on Guam. Our 
forward posture and ready and available capability proved invaluable to 
our allies in Japan following the Great East Japan Earthquake and 
Tsunami last March. Twenty four ships, 140 aircraft and more than 
15,000 sailors and marines delivered over 280 tons of relief supplies 
to beleaguered survivors as part of Operation Tomodachi. Working from 
offshore and unhindered by road and rail damage, Navy efforts helped 
save lives and fostered a stronger alliance.
    Our combined readiness with our Pacific allies and partners is a 
result of the nearly 170 exercises and training events we conduct in 
the region each year. Our Talisman Sabre exercise with Australia last 
year brought together 18 ships and more than 22,500 sailors and marines 
to practice operations from maritime security to amphibious assault. 
Our Malabar series of exercises continues to expand our 
interoperability with India, a key partner in an important part of the 
world. From simple maneuvers and replenishment-at-sea in 2002, Malabar 
has gone on to include dual carrier flight operations, gunnery 
practice, anti-submarine warfare (ASW) training, and maritime 
interdiction exercises. This year, the U.S. Navy will host Rim of the 
Pacific (RIMPAC), the world's largest maritime exercise, bringing 
together more than 20,000 sailors from 14 nations to practice the 
entire range of maritime missions from counter-piracy to missile 
defense and ASW.
    Africa is adjacent to several key strategic crossroads--Bab El 
Mandeb on the southern end of the Red Sea, the Suez Canal at its 
northern end, and the Strait of Gibraltar at the western edge of the 
Mediterranean. Events at each of these crossroads can significantly 
impact the global economy and regional security. Supported by our air 
and port facilities in Djibouti (Camp Lemonier), our ships form the 
backbone of multinational forces from more than 20 nations that combat 
pirates and terrorists around East Africa and the Arabian Peninsula. In 
the Mediterranean and Northern Africa our forward forces enabled a 
rapid response to the Libyan civil war. During NATO Operations Odyssey 
Dawn and Unified Protector, our ships and submarines fired 221 Tomahawk 
Land Attack Missiles and Growler electronic attack aircraft (EA-18G) 
redeployed from Iraq in less than 48 hours to suppress and destroy 
Libya's air defense network. The Navy-Marine Corps team aboard USS 
Kearsarge supported NATO forces with air strikes and personnel 
recovery, while on USS Mount Whitney, NATO leaders managed and 
coordinated the fight.
    We continue our commitment to our NATO allies in the Mediterranean 
and other waters around Europe. Supported by facilities in Rota, Spain, 
Souda Bay, Greece, and Naples, Italy, our destroyers and cruisers 
conducted, among other critical U.S. and NATO missions, continuous 
ballistic missile defense patrols in the Mediterranean to counter the 
growing Iranian ballistic missile threat. Europe also continues to be a 
source of security. Our Fleet trains routinely with allied navies from 
the Mediterranean to the Baltic in security cooperation exercises such 
as Proud Manta, NATO's largest ASW exercise. Outside the continent, we 
operate with our European allies and partners to address our shared 
concerns around the world, such as maintaining freedom of navigation 
through the Strait of Hormuz, countering piracy around the Horn of 
Africa, supporting our African partners with training and assistance, 
and responding to crises such as the conflict in Libya.
    In Latin America, the ongoing expansion of the Panama Canal will 
increase the importance of that strategic maritime crossroad. Today the 
waters around Central America already experience a high level of 
illegal trafficking, which could adversely affect the increasing volume 
of shipping through an expanded canal. Our first Littoral Combat Ship 
(LCS), USS Freedom, made its first operational deployment to the region 
in 2011, preventing more than three tons of cocaine from entering the 
United States as part of Joint Interagency Task Force--South. We 
leveraged our port and airfield in Guantanamo Bay, Cuba, to continue 
supporting operations in the Gulf of Mexico and Caribbean. As the 
capability of our Latin American partners has grown, so has the 
sophistication of our cooperation. In 2011 we conducted ASW training 
with Brazil, Peru, Colombia and Chile, where their diesel submarines 
helped to train our surface and submarine crews and our crews exchanged 
lessons learned on effective undersea operations.

                     ESTABLISHING FIRST PRINCIPLES

    These are challenging and dynamic times for the U.S. military 
services and the U.S. national security enterprise. We need to remain 
focused on our enduring principles and contributions that hold true 
regardless of funding, force structure size or day-to-day world events. 
Upon taking office as Chief of Naval Operations, I established these 
first principles for Navy leaders to follow in my ``Sailing 
Directions.''
    I believe historical and current events demonstrate that the Navy 
is most effective and best able to support our national security 
objectives when Fleet leaders and sailors are focused on three tenets:

         Warfighting first
         Operate forward
         Be ready

    I incorporated these tenets into ``Sailing Directions.'' Similar to 
their nautical counterpart, my directions describe in general terms 
where the Navy needs to go in the next 10-15 years, and the approach we 
will take to get there. We applied ``Sailing Directions'' to the final 
decisions we made in building our fiscal year 2013 budget submission 
and I believe they are consistent with the Defense Strategic Guidance 
that emerged from our collaborative efforts with the Chairman of the 
Joint Chiefs of Staff, the Secretary of Defense and the President. I am 
in the process of drafting a ``Navigation Plan'' to define our course 
and speed now that our defense strategy is established and our budget 
request submitted.

              MY GUIDANCE FOR THE NAVY AND WHAT WE BELIEVE

    We use these three tenets--Warfighting First, Operate Forward, and 
Be Ready--as ``lenses'' through which we view each decision as we 
organize, train and equip the Navy.

Warfighting First
    The Navy must be ready to fight and win today, while building the 
ability to win tomorrow. This is our primary mission and all our 
efforts from the ``wardroom to the boardroom'' must be grounded in this 
fundamental responsibility. The recent posturing and rhetoric from Iran 
highlight the importance of our ability to deter aggression, promptly 
respond to crisis, and deny any aggressors' objectives. This requires 
getting relevant and effective warfighting capability to the Fleet 
today, not waiting for perfect solutions on paper that may not arrive 
for 10 years. We can no longer afford, strategically or fiscally, to 
let the perfect be the enemy of the good--or the good enough--when it 
comes to critical warfighting capability. Our history and the 
contemporary cases of Iran, North Korea, violent extremists, and 
pirates show that conflict is unlikely to appear in the form of the 
scenarios for which we traditionally plan. Therefore, our ships, 
aircraft and sailors that operate forward must be able to decisively 
act and defeat an adversary's actions in situ to deter continued 
aggression and preclude escalation. To that end, in our fiscal year 
2013 budget submission we shifted procurement, research and 
development, and readiness funds toward weapons, systems, sensors and 
tactical training that can be rapidly fielded to the Fleet, including 
demonstrators and prototypes that can quickly improve our forces' 
capability. I request that you support those investments.

Operate Forward
    The Navy-Marine Corps team provides the Nation offshore options to 
deter, influence, and win in an era of uncertainty. Our naval forces 
are at their best when they are forward, assuring allies and building 
partnerships, deterring aggression without escalation, defusing threats 
without fanfare, and containing conflict without regional disruption. 
We keep the Fleet forward through a combination of rotational 
deployments from the United States, Forward Deployed Naval Forces 
(FDNF) in Japan, Guam and Italy, and forward stationing ships in places 
such as Bahrain or Diego Garcia. Our ability to operate forward depends 
on our U.S. bases and strategic partnerships overseas that provide 
``places'' where the Navy-Marine Corps team can rest, repair, refuel, 
and resupply.
    Our fiscal year 2013 budget submission supports several initiatives 
to establish our forward posture including placing FDNF destroyers in 
Rota, Spain, and forward stationing Littoral Combat Ships (LCS) in 
Singapore and Patrol Coastal ships (PC) in Bahrain. We are also now 
collaborating with Headquarters Marine Corps to determine the support 
and lift needed for marines to effectively operate forward in Darwin, 
Australia. In the FDNF construct, the ships, crews and families all 
reside in the host nation. This is in contrast to forward stationing, 
where the ship's families reside in the United States and the crew 
rotates to the ship's overseas location for deployment. We will rely on 
both of these basing constructs and the ``places'' that support them to 
remain forward without increases to the Fleet's size. I request you 
support funding for these initiatives so our Navy-Marine Corps team can 
continue delivering the rapid response our Nation requires of us. We 
will continue to pursue innovative concepts for operating forward such 
as rotational crewing and employing new classes of ships such as Joint 
High Speed Vessels (JHSV), Mobile Landing Platforms (MLP), and Afloat 
Forward Staging Bases (AFSB).

Be Ready
    We will harness the teamwork, talent, and imagination of our 
diverse force to be ready to fight and responsibly use our resources. 
This is more than simply completing required maintenance and ensuring 
parts and supplies are available. Those things are essential, but 
``being ready'' also means being proficient and confident in our 
ability to use our weapons, employ and rely on our sensors, and operate 
our command and control, communication and engineering systems. This 
requires practice, so in our fiscal year 2013 budget submission we 
increased readiness and procurement funding for training deploying 
personnel and for exercise ordnance--funding that I request you 
support. Further, we are employing simulation and adjusting our Fleet 
Readiness and Training Plan (FRTP) to afford more time to train prior 
to deployment. Our fiscal year 2013 budget submission provides the 
opportunity to build on events such as this year's Bold Alligator, our 
largest amphibious assault exercise in more than a decade, which 
brought together more than 20,000 sailors and marines and 25 ships from 
5 nations. Fundamentally, being ready depends on our ability to train, 
lead and motivate our sailors and marines through events such as Bold 
Alligator. As we continue to move through challenging times 
strategically and fiscally, we will increasingly depend on their 
resolve and imagination.

            PB13 SHAPED BY THREE MAIN PRIORITIES OF THE CNO

    The Budget Control Act of 2011 placed new constraints on our 
budget, which required hard choices and prioritization to address. I 
applied our tenets to my three main investment priorities as we built 
our fiscal year 2013 budget submission to support the new Defense 
Strategic Guidance.
Priority 1: Remain Ready to Meet Current Challenges, Today
    Readiness means operational capability where it needs to be to 
deter aggression, respond to crises, and win our Nation's wars. I will 
continue to prioritize readiness over capacity and focus our 
warfighting presence on the Asia Pacific and Middle East. Our fiscal 
year 2013 decision to decommission seven Ticonderoga-class guided 
missile cruisers (CG) and two dock landing ships (LSD) exemplify our 
resolve to provide a more ready and sustainable Fleet within our budget 
constraints. The resources made available by these retirements will 
allow increased funding for training and maintenance. To ensure these 
investments improve readiness, we adjusted the FRTP to be more 
sustainable and provide units adequate time to train, maintain and 
achieve the needed ``fit'' and ``fill'' in their manning between 
deployments. The FRTP is aligned to and supports the fiscal year 2013 
Global Force Management Allocation Plan (GFMAP), which is the 
authoritative, Secretary of Defense-approved plan for supporting 
Combatant Commander presence requirements.
    A ready Fleet requires proper maintenance of our ships and 
aircraft, and our long-term force structure inventory plans require 
each of them to affordably reach expected service life. Our fiscal year 
2013 budget submission fully funds ship maintenance and midlife 
modernization periods. We are also continuing a series of actions to 
address surface ship material condition. We increased the number of 
sailors in select surface ships and established Integrated Material 
Assistance Teams to ensure adequate personnel for preventive 
maintenance and at-sea repairs. To improve maintenance planning and 
budgeting, the new surface ship life cycle engineering and support 
organization develops comprehensive plans for maintenance and 
modernization of non-nuclear ships. These plans will allow us to refine 
our assessments of ship material condition, improve our ability to 
estimate maintenance costs, and identify actions needed to achieve 
expected service life. These initiatives, supported in this budget 
submission, have tangibly improved ship readiness and enable more 
efficient maintenance periods. Our fiscal year 2013 budget submission 
also funds aircraft depot maintenance requirements to 94 percent, 
meeting our goal for available airframes and engines.
    Readiness involves more than material condition. Our capabilities 
must also be ``whole,'' meaning our weapons, combat systems, and 
sensors must be able to interface with one another, are available in 
adequate numbers, and our sailors are proficient and confident in their 
use. We emphasized training in our fiscal year 2013 budget submission--
allocating time, ordnance and targets for increased live-fire training 
as well as funds to improve the fidelity, capacity and interoperability 
of our Fleet simulators. Our fiscal year 2013 budget submission also 
funds improved data links and radar reliability to enhance the 
interoperability and availability of weapons and sensors. In aviation, 
we fully funded the Flying Hour Program and invested in F/A-18 A-F life 
cycle sustainment and system capability upgrades to ensure these 
``workhorses'' of the carrier air wing remain ready and relevant. F/A-
18 A-F sustainment helps ensure our strike fighters reach their 
expected service lives and our strike fighter inventory remains 
sufficient to meet anticipated needs. Ashore, we fully funded air and 
port operations and nuclear weapons infrastructure and security. Our 
fiscal year 2013 budget submission accepts some risk in facilities 
sustainment and recapitalization, but we anticipate minimal impact on 
Fleet readiness. We will continue to closely monitor our shore 
infrastructure to ensure it remains capable of supporting the needed 
level of Fleet operations. Our fiscal year 2013 budget submission 
maintains funding for Homeport Ashore to provide quality housing for 
our single sailors and increases funding for family readiness programs 
such as child development centers.
    We must continue improving our fuel efficiency to sustain a ready 
and relevant Fleet and our goal remains to reduce our tactical energy 
use 15 percent by 2020. We will combine modernization, research and 
development, acquisition, and efficient behavior by operators at sea 
and on the waterfront to achieve that goal. Our fiscal year 2013 budget 
submission continues to incorporate technological advances 
incrementally, but steadily. Our Lewis and Clark class supply ships now 
employ all-electric propulsion, as will our new Zumwalt-class 
destroyers (DDG). Our new hybrid-electric powered amphibious assault 
ship USS Makin Island saved more than $2 million in fuel costs on its 
maiden voyage from the Gulf Coast to its San Diego homeport. The 
insights we gain from these efforts will be applied in developing 
requirements for future ships, where energy usage was established last 
year as a key performance parameter.

Priority 2: Build a Relevant and Capable Future Force
    Our Navy will evolve to remain the world's preeminent maritime 
force in the face of emerging threats and our shipbuilding and aircraft 
construction investments form the foundation of the future Fleet. In 
developing our aircraft and ship procurement plans, we focused on three 
approaches: Sustaining serial production of today's proven platforms, 
rapidly fielding new platforms in development, and improving the 
capability of today's platforms through new payloads of weapons, 
sensors and unmanned vehicles.
    First, sustained production of today's platforms maintains the 
Fleet's capacity, improves the affordability of ships and aircraft, and 
fosters the health of the industrial base. Examples of this serial 
investment in our fiscal year 2013 budget submission include Arleigh 
Burke DDG, MH-60R/S Seahawk helicopters, F/A-18 E/F Super Hornet and 
Virginia-class submarines (SSN). These proven ships and aircraft 
represent a known quantity to both the government and contractor and 
provide opportunities for cost savings through multi-year procurement. 
Our fiscal year 2013 budget submission requests multi-year procurement 
of nine Arleigh Burke DDGs and nine Virginia SSNs. Your support for 
continued block purchases of DDGs and SSNs is essential to our Fleet's 
capacity over the next decade when decommissionings and the procurement 
of the new ballistic missile submarine (SSBN) combine to reduce the 
number of these Fleet workhorses. In addition to the capacity they 
bring, our experience with proven platforms also allows us to 
incrementally improve their capabilities with new weapons, sensors and 
unmanned vehicles, such as we are doing with Arleigh Burke DDG by 
adding the Surface Electronic Warfare Improvement Program (SEWIP), SM-6 
missile, Advanced Missile Defense Radar (AMDR), and MQ-8 Firescout 
unmanned air vehicles.
    Second, we will rapidly field the classes of ships and aircraft in 
development which are needed to recapitalize the Fleet and pace 
emerging threats. Each of these platforms are nearing completion or are 
in initial production and offer a significant return on our research 
and development investment over the past two decades. We will harvest 
this return and focus on capability improvement via new weapons, 
sensors and unmanned systems before we begin our next generation of 
platforms. Our fiscal year 2013 budget submission prudently moves into 
sustained production of Freedom and Independence class LCS, MQ-4C Broad 
Area Maritime Surveillance (BAMS) unmanned air system (UAS), Poseidon 
maritime patrol and reconnaissance aircraft (P-8A) and Lightning II 
strike fighter (F-35C). We slowed production of the F-35C to allow 
lessons from testing to be better incorporated into the aircraft and it 
will be a key element of the future carrier air wing. The fiscal year 
2013 budget submission continues funding for Gerald R. Ford aircraft 
carriers (CVN), although the delivery of CVN-79 was delayed to most 
cost effectively maintain our Fleet of 11 CVNs by not delivering the 
ship ahead of need. Our budget submission continues funding for the 
Zumwalt-class DDG, which will provide an exceptional improvement in 
littoral and land-attack capability while also proving several new 
technologies to be incorporated into future ships. To sustain our 
capacity for amphibious operations, our fiscal year 2013 budget 
submission funds continued production of the America class amphibious 
assault ships (LHA), the first of which (LHA-6) is nearing completion. 
Each of these new platforms is designed to be adaptable and allow 
future capability evolution through new payloads. The physical and 
electronic open architecture of LCS, for example, will allow it to 
change missions in a short refit, but will also allow it to be widely 
adaptable over its lifetime. The P-8A has a similar reserve capacity 
for adaptation, as well as an operating profile which will allow it to 
do a wide range of missions, depending on the weapons and sensors 
placed aboard.
    Third, we will evolve the force to maintain our warfighting edge by 
exploiting the ability of new payloads to dramatically change what our 
existing ships and aircraft can do. A focus on what our platforms carry 
will be increasingly important as anti-access/area-denial (A2/AD) 
threats including new radars and more sophisticated surface-to-air and 
anti-ship missiles limit the ability of manned platforms to get close 
to an adversary in wartime. Our Air-Sea Battle Concept, developed with 
the Marine Corps and the Air Force, describes our response to these 
growing A2/AD threats. This concept emphasizes the ability of new 
weapons, sensors, and unmanned systems to expand the reach, capability, 
and persistence of our current manned ships and aircraft. Our focus on 
payloads also allows more rapid evolution of our capabilities compared 
to changing the platform itself. This approach is exemplified by our 
fiscal year 2013 investment in LCS, which will carry an adaptable 
portfolio of unmanned vehicles, weapons, manned helicopters, and 
personnel. In aviation, new weapons such as the Small Diameter Bomb, 
Joint Standoff Weapon and Mark-54 torpedo will give our legacy aircraft 
the stand-off range, penetration, and lethality to defeat adversaries 
even if they employ advanced A2/AD capabilities.
    Our focus on payloads includes unmanned systems such as the 
Firescout UAS (MQ-8B), which already demonstrated in Libya and the 
Middle East how it can add significant capability to our legacy 
frigates (FFG) and amphibious transport dock (LPD) ships. Our fiscal 
year 2013 budget submission continues production of the MQ-8B and adds 
the longer-range, higher-payload MQ-8C. The submission also continues 
our investment in the Unmanned Combat Air System (UCAS) demonstrator 
and the follow-on Unmanned Carrier Launched Air Surveillance and Strike 
system (UCLASS), which will expand the reach and persistence of our 
current carrier-based air wings.
    Improved sensors and new unmanned systems are essential to our 
continued domination of the undersea environment. Our fiscal year 2013 
budget submission funds the development of Virginia SSN payload modules 
that will be able to carry a mix of missiles, sensors and unmanned 
undersea vehicles (UUV) such as the new Large Displacement UUV. These 
undersea systems are joined by investments in the P-8A and Arleigh 
Burke DDG to improve cueing and close-in ASW operations. Our undersea 
superiority provides U.S. forces an asymmetric advantage in being able 
to project power or impose unacceptable costs on adversaries. Our 
fiscal year 2013 budget submission funds continued development of a new 
SSBN to begin replacing the Ohio-class late in the next decade and 
sustain the most survivable element of the Nation's nuclear triad. Our 
fiscal year 2013 budget submission also includes funding to study the 
possible use of Ohio-class guided missile submarine (SSGN) and 
Virginia-class SSN as platforms for a future conventional prompt strike 
capability.
    While we currently dominate the undersea domain, cyberspace and the 
electromagnetic spectrum present a different set of challenges and a 
lower barrier to entry for our potential adversaries. Our fiscal year 
2013 budget submission furthers our goal to operate effectively in 
cyberspace and fully exploit the electromagnetic spectrum. Investments 
including the SEWIP, EA-18G, Consolidated Afloat Network Enterprise 
System (CANES), Hawkeye (E-2D) early warning aircraft, Next-Generation 
Enterprise Network (NGEN) and Mobile User Objective System support 
development of a common operational picture of cyberspace and the 
electromagnetic spectrum. They also support robust defense of our 
networks and improve our ability to use non-kinetic effects to defend 
our ships from attack, conduct offensive operations, and conduct 
superior command and control.
    It is imperative as we pursue these three approaches to the future 
force that we consider both affordability and ``jointness.'' Our fiscal 
situation makes affordability essential to sustaining the fleet's 
capacity and improving its capability. Working with the Secretary of 
the Navy's staff, we are ensuring cost is considered as an entering 
assumption in developing requirements for new systems, while 
controlling the ``requirements creep'' that impacts the cost of our 
programs already in development. Joint capabilities may also be a way 
to improve affordability, although we are primarily concerned with how 
they can improve our warfighting effectiveness. Our Air-Sea Battle 
Concept describes how naval and air forces will develop and field 
capabilities in a more integrated manner to allow them to defeat 
improving A2/AD threats through tightly coordinated operations across 
warfighting domains. Using the Air-Sea Battle Concept and Joint 
Operational Access Concept (JOAC) as the starting point, the Navy-
Marine Corps team will continue to expand our integration with the Air 
Force and Army in doctrine, systems, training, and exercises to sustain 
the ability of U.S. forces to project power.

Priority 3: Enable and Support our Sailors, Navy Civilians, and Their 
        Families
    Today's Active and Reserve sailors and Navy civilians are the most 
highly trained, motivated, and educated force we have ever employed. 
Our people are the source of our warfighting capability and our fiscal 
year 2013 budget submission continues the investments needed to ably 
lead, equip, train and motivate them.
    Our personnel programs deliver a high return on investment in the 
readiness of our sailors and civilians. We fully funded our programs to 
address operational stress, support families, prevent suicides, 
eliminate the use of synthetic drugs like Spice and aggressively reduce 
the number of sexual assaults. I view each of these challenges as 
safety and readiness concerns that can be just as damaging to our 
warfighting capability as operational accidents and mishaps. To ensure 
sailors and their families have a quality environment in which to live, 
we sustained our support for quality housing, including Homeport Ashore 
for Sailors, and expanded our child development and youth programs.
    Our wounded warriors are a top priority. Our fiscal year 2013 
budget submission fully funds programs that support the mental, 
emotional and financial well-being of our returning warriors and their 
families.
    The Navy continues to face a unique manpower challenge. Retention 
is high, attrition remains steady at a very low level and highly 
qualified people continue to want to join the service. To continue 
bringing in new sailors with new and diverse backgrounds and ideas, we 
must have turnover in the force. To manage our end strength, sustain 
upward mobility and address overmanning in some specialties, we 
selected 2,947 sailors for separation in 2012 by conducting an Enlisted 
Retention Board (ERB). These sailors served honorably and we are now 
focused on providing the best transition possible for them, including 
early retirement for sailors selected for ERB who will have completed 
at least 15 years of Active service as of September 1, 2012. Thank you 
for providing this Temporary Early Retirement Authority (TERA) in the 
National Defense Authorization Act (NDAA) for Fiscal Year 2012. We do 
not plan another ERB for fiscal year 2013. Nor do we plan to offer 
early retirement more broadly, but we will evaluate this option if 
overmanning in individual specialty ratings/warfare communities again 
becomes a concern.
    We will continue to use a range of force shaping tools to ensure we 
keep our best performers and align our people with needed skills and 
specialties. Perform-to-Serve (PTS), our centralized reenlistment 
program, will remain the principal method to shape the force. While in 
some cases we will be unable to offer reenlistment for sailors due to 
high retention and overmanning, PTS also offers sailors the opportunity 
to change specialties or enter the Reserves when they come up for 
reenlistment if their current specialty is overmanned. We will continue 
to offer and regularly adjust Selective Reenlistment Bonuses and 
incentive pays for critical specialties to ensure we properly sustain 
the skills required in the force.
    By managing the size and composition of the force, we are able to 
bring in new sailors and civilians. Our fiscal year 2013 budget 
submission continues to invest in recruiting quality people, including 
diversity outreach and programs to develop science, technology, 
engineering and mathematics candidates for the service. Our future 
depends on the innovation and creativity that people with diverse 
backgrounds, experience and ideas can bring to the Navy.

     DOD AND NAVY'S TURNING POINT--AND THE NEED FOR A NEW STRATEGY

    We built our fiscal year 2013 budget submission by applying the 
tenets of Warfighting First, Operate Forward, and Be Ready to our three 
enduring priorities. This approach focused our resources on investments 
that are most important to the Navy's ability to be relevant to the 
challenges we face as a nation. Today, three main trends place America 
and our Navy at a turning point. First, the Federal Government has to 
get its fiscal house in order by reducing deficits and putting the 
Federal budget on a path toward balance. Second, the security 
environment around the world is becoming more dynamic as exemplified by 
the ``Arab Awakening,'' ongoing piracy and terrorism, and the continued 
threat of aggression from countries including Iran and North Korea. 
Third, after a decade of war in the Middle East, we are completing 
ground operations and stabilization efforts in Iraq and Afghanistan.
    This confluence of factors was emerging when I wrote my Sailing 
Directions and, as they clarified, were the drivers behind the Defense 
Strategic Guidance Sustaining U.S. Global Leadership: Priorities for 
21st Century Defense issued by the President and Secretary of Defense. 
The Defense Strategic Guidance was developed in a collaborative and 
transparent process and I believe it is aligned with Sailing 
Directions. The guidance calls for a more agile, lethal and flexible 
force to address the challenges and opportunities facing our Nation and 
has clear implications for the Navy as a force provider, including:
Emphasize Readiness Over Capacity
    We will not let the force become ``hollow'' by having more force 
structure than we can afford to maintain, equip and man. Our fiscal 
year 2013 budget submission inactivates seven Ticonderoga CGs and two 
LSDs. These ships were in need of significant maintenance investment 
and six of the seven cruisers required further investment to install 
ballistic missile defense capability. Inactivating these ships allowed 
almost $2 billion in readiness funding to be shifted to other portions 
of the Fleet. This reduction in capacity and our shift to a more 
sustainable deployment model will result in some reductions to the 
amount of presence we provide overseas in some select areas, or a 
change in the nature of that presence to favor innovative and lower-
cost approaches.
Invest in Current Warfighting Capability
    Our ability to deter aggression rests on our current warfighting 
capability. During the final stages of developing our fiscal year 2013 
budget submission, we worked closely with the Office of the Secretary 
of Defense to shift more than $700 million into procurement, operations 
and maintenance, and research and development to rapidly improve the 
readiness of warfighting capabilities being deployed to the Middle East 
and Asia-Pacific. These changes focused on countering A2/AD threats 
through mine warfare (MIW), integrated air and missile defense (IAMD), 
anti-surface warfare (ASuW) against fast attack craft and ASW. Our 
investments included training targets and ordnance, mine warfare 
maintenance and prototype systems, anti-surface and ASW sensors and 
weapons, and kinetic and non-kinetic systems for self-defense against 
torpedoes, cruise missiles and ballistic missiles.
Maintain Middle East Presence and Rebalance our Focus toward Asia-
        Pacific
    The Asia-Pacific and Middle East are the most consequential regions 
for our future security and prosperity. Two factors drive the Navy's 
ability to provide presence: The size of the Fleet and the amount of 
time ships can remain deployed. Our fiscal year 2013 budget submission 
reduces the size of the Fleet in the next year by decommissioning some 
ships, but the Fleet returns to its current size by 2017 and grows to 
about 300 ships by 2019. We will work with the Joint Staff and 
Secretary of Defense's office to focus our presence on the Middle East 
and Asia-Pacific as part of the GFMAP. The mix of ships in the Fleet 
between now and 2020 will evolve to include more small combatants and 
support vessels that can provide innovative, low-cost platforms for 
security cooperation and partnership building activities in Latin 
America and Africa. This will enable our carriers, large surface 
combatants, submarines, and amphibious ships to focus on the Middle 
East, Asia-Pacific, and Europe.
    As described above, we are fostering a series of bases and 
``places'' with our allies and partners around the world to provide 
access and support forward operations at the strategic maritime 
crossroads. Some of these facilities will host FDNF or forward 
stationed ships and aircraft, while others will extend the range and 
duration of deployments by providing places to rest, repair, refuel and 
resupply. Our fiscal year 2013 budget submission includes funding to 
support these facilities, while we are studying options for rotational 
crewing which may allow overseas ``places'' to host crew exchanges for 
additional classes of ships such as we plan to do for LCSs and 
currently conduct for PCs, SSGNs, and mine countermeasures ships 
(MCMs).
Develop Innovative, Low-Cost and Small Footprint Approaches to 
        Partnerships
    The United States will continue to be the security partner of 
choice, and the Navy will tailor our partnership efforts to be both 
affordable and appropriate. The evolution of the Fleet's mix over the 
next 8 years will provide ships suited to cooperative operations such 
as maritime security; building partner capacity; countering terrorism, 
illegal trafficking and proliferation; and providing humanitarian 
assistance/disaster response (HA/DR). Ships including LCS (with ASuW 
mission packages), JHSV, MLP, AFSB, Hospital Ships (T-AH) and Combat 
Logistics Force ships will provide platforms to conduct the low-cost, 
small footprint missions called for in the Defense Strategic Guidance. 
These ships will free up higher-end combatants for other missions and 
will employ innovative crewing concepts such as civilian mariners and 
rotational military crews that will provide more time forward per ship.

    OUR FISCAL YEAR 2013 INVESTMENTS SUPPORT THE DEPARTMENT'S MOST 
                           IMPORTANT MISSIONS

    Within the fiscal constraints of the Budget Control Act of 2011, we 
applied our priorities and tenets to develop our fiscal year 2013 
budget submission, which strongly supports the missions described the 
new Defense Strategic Guidance.
Counterterrorism and Irregular Warfare
    We will support the Joint Force in an active approach to countering 
terrorist and extremist threats. With the drawdown in Afghanistan and 
sensitivity to U.S. forces ashore, these efforts will increasingly be 
conducted from the sea. The Navy's fiscal year 2013 budget submission 
increases our ability to support these operations through investments 
including the sea-based MQ-8B and longer range, higher payload MQ-8C 
UAS, MLP, AFSB, LCS, BAMS, tailored language and culture training, and 
increases in SEAL manning. Places including Djibouti, Singapore, 
Bahrain and Guantanamo Bay, Cuba will continue to support small-
footprint, long-duration operations to counter illegal activities--
including terrorism, piracy and trafficking--from the Horn of Africa 
and Arabian Gulf to the South China Sea and the Caribbean.
Deter and Defeat Aggression
    The Navy-Marine Corps team is the Nation's front line to deny an 
aggressor's objectives or promptly impose costs on the aggressor. Naval 
forces bring two essential qualities to this mission: Presence or 
prompt access forward where conflict occurs, and credible warfighting 
capability to counter the aggressor. Our fiscal year 2013 budget 
submission supports forward operations at the places where conflict is 
most likely or consequential--the strategic maritime crossroads. In 
addition to the readiness and operations funding that allow our forces 
to operate forward, our fiscal year 2013 budget submission also invests 
in establishing FDNF DDGs in Rota, Spain, forward stationed LCSs in 
Singapore, additional forward stationed PCs in Bahrain and a 
sustainable tempo of rotational deployments.
    Our fiscal year 2013 budget submission improves the warfighting 
capability of the forces we send forward. The centerpieces of naval 
capability remain the Carrier Strike Group and Amphibious Ready Group. 
Our fiscal year 2013 budget submission sustains funding for CVNs and 
the strike fighters (F-35C and F/A-18 E/F), E-2Ds, and EA-18Gs they 
deliver to the fight, as well as the unmanned NUCAS and UCLASS aircraft 
that will expand the reach and persistence of the future air wing. To 
complement our aviation capabilities, our fiscal year 2013 submission 
funds a ``big deck'' LHA in fiscal year 2017 to support power 
projection by Marine Air-Ground Task Forces. These ships, aircraft, 
sailors and marines have deterred and defeated aggression since World 
War II and will continue to do so well into the future.
    Our fiscal year 2013 budget submission invests in capabilities to 
counter specific types of aggression, such as Iranian threats to deny 
access to the Strait of Hormuz through mine warfare. While we develop 
the LCS as the future host of MIW capabilities, our fiscal year 2013 
budget submission invests in sonar upgrades and maintenance for our 
current MCMs, new mine detection and neutralization UUVs, establishment 
of an AFSB in the Arabian Gulf to support air and surface MIW 
operations, and sea-based intelligence, surveillance and reconnaissance 
(ISR). Our fiscal year 2013 budget submission also funds ASW 
improvements geared toward the Iranian threat such as air-launched 
Mark-54 torpedoes and torpedo defense systems, as well as ASuW weapons 
to counter fast attack craft such as Griffin and Spike missiles for PCs 
and rockets for helicopters.
Project Power Despite A2/AD Challenges
    Potential adversaries are mounting strategies to prevent U.S. 
forces from entering their theater (anti-access) or operating 
effectively once within the theater (area-denial). These adversaries 
intend to prevent U.S. forces from defeating their aggression or coming 
to the aid of allies and partners. Both state and non-state actors are 
undertaking these strategies using capabilities including mines, 
submarines, anti-ship cruise and ballistic missiles, anti-satellite 
weapons, cyber attack, and communications jamming. The Navy fiscal year 
2013 budget submission addresses these threats through a wide range of 
investments that support the multi-service Air-Sea Battle concept and 
the JOAC. In addition to the MIW, ASuW and ASW investments identified 
above, our fiscal year 2013 budget submission funds upgrades in 
electronic warfare (EW), integrated fire control, cyber operations, 
networks, Virginia SSN and payload modules, and the F-35C.
    The Navy's ability to retain access to international waters and 
airspace as well as critical chokepoints throughout the world would be 
enhanced by accession to the United Nations Convention on the Law of 
the Sea (UNCLOS). As the world's preeminent maritime power, the United 
States has much to gain from the legal certainty and global order 
brought by UNCLOS. The United States should not rely on customs and 
traditions for the legal basis of our military and commercial activity 
when we can instead use a formal mechanism such as UNCLOS. As a party 
to UNCLOS, we will be in a better position to counter the efforts of 
coastal nations to restrict freedom of the seas.
Counter Weapons of Mass Destruction (WMD)
    The Navy's primary contribution to countering WMD is interdicting 
WMD and their precursors through the international Proliferation 
Security Initiative (PSI). Our fiscal year 2013 budget submission funds 
the readiness and force structure necessary to maintain forces forward 
at the strategic maritime crossroads where these interdictions are most 
common, while continuing to enable PSI by sustaining the command and 
control and sensors needed to find and track WMD transporters.
Operate Effectively in Space and Cyberspace
    As a forward deployed force, our Fleet is highly dependent upon 
space-based systems, cyberspace and the electromagnetic spectrum. Naval 
forces rely on long-haul communications for command and control, 
positioning, navigation and timing and administration. Given the 
growing A2/AD threat from communications jamming and anti-satellite 
weapons, our fiscal year 2013 budget submission includes investment in 
the maritime portion of the Joint Airborne Layer Network, a UAV-based 
system to assure our ability to communicate and conduct command and 
control.
    Cyberspace and the electromagnetic spectrum are a key area of 
emphasis for our future force development. In the past 2 years, we made 
significant investments in personnel for Navy Cyber Command/Tenth Fleet 
as well as U.S. Cyber Command, which continue in our fiscal year 2013 
budget submission. These highly-skilled operators are developing a 
``common operational picture'' of cyberspace and the tools to 
effectively defend our interests within it. Cyberspace and the 
electromagnetic spectrum are inextricably linked, and in our fiscal 
year 2013 budget submission, we fund a range of EW and electronic 
support systems including EA-18G, SEWIP, Next-Generation Jammer, 
shipboard prototype and demonstrator systems, Ship Signal Exploitation 
Equipment, and the E-2D. These systems sustain our ability exploit the 
electromagnetic spectrum for sensing and communication, while denying 
our adversaries accurate or effective information. We are also 
developing the conceptual and doctrinal framework to fully exploit the 
electromagnetic spectrum as a warfighting domain.
Maintain a Safe, Secure, and Effective Nuclear Deterrent
    The Navy provides the most survivable leg of the U.S. nuclear triad 
with the SSBN and associated nuclear command and control, maintenance, 
and support infrastructure. Our fiscal year 2013 program continues to 
fund the recapitalization of our Ohio-class submarines and the safe 
handling of Trident D-5 missiles through investment in an additional 
explosive handling wharf at Naval Base Kitsap. Consistent with the 
Defense Strategic Guidance, we delayed the Ohio replacement program by 
2 years. This delay will result in an SSBN force of 10 ships in the 
2030s and will require a high state of readiness to meet the Nation's 
strategic deterrence needs. Our fiscal year 2013 budget submission 
fully funds the maintenance and support to today's Ohio-class SSBNs to 
help maximize their operational availability throughout their service 
lives.
Homeland Defense and Support to Civil Authorities
    We maintain approximately 45 ships underway around the United 
States and another 50 available within days to meet U.S. Northern 
Command's homeland defense requirements through our FRTP. The Navy's 
fiscal year 2013 budget submission also funds DDG modernization that 
can support homeland ballistic and cruise missile defense missions.
Provide a Stabilizing Presence; Conduct Counterinsurgency, HA/DR and 
        Other Operations
    Although our warfighting capability will be focused on the Middle 
East and Asia-Pacific, other regions will retain naval presence. The 
nature of that presence, however, will change over the next several 
years. While today DDGs and amphibious ships conduct security 
cooperation operations with partners in Latin America and Africa, our 
fiscal year 2013 budget submission funds procurement of JHSV, AFSB, 
MLP, and LCS and sustainment of PCs and T-AHs to take on these missions 
in the future. To support an expanding range of partnership missions, 
they will increasingly carry tailored force packages of marines to 
conduct security cooperation activities with partner armies and 
marines.
    These same ships will support humanitarian assistance operations 
and rapid response by U.S. forces to crisis or disaster. They can 
embark a wide range of interagency and nongovernmental personnel, 
allowing them to support the whole range of development, defense and 
diplomacy activities and contribute to non-military efforts to counter 
insurgencies and conduct stabilization operations. As naval forces, 
they can be backed up by the robust multi-mission capability and 
transportation capacity of amphibious ships and embarked marines.
        evaluating impacts of the new defense strategic guidance
    The new Defense Strategic Guidance is not without risk. In 
particular, we will need to assess the impacts of capacity reductions 
on the force's ability to address highly likely or highly consequential 
security challenges. Senior defense leaders are conducting this 
assessment in a series of seminars over the next several months. Within 
the Navy, we are also reevaluating our force structure requirements in 
light of the Defense Strategic Guidance. We are assessing the 
capabilities needed to implement the strategy, what force structure 
could deliver those capabilities, and the resulting inventory of ships 
and aircraft that will be required. The results of this assessment will 
indicate the risk in the ability of the Navy's investment plans to 
implement the Defense Strategic Guidance. The force structure 
assessment will also indicate what ships should be counted as part of 
the battle force, and the extent to which the Navy will need to 
implement innovative concepts such as rotational crewing to deliver the 
needed level of forward presence.
    We will also evaluate the impact of our investment plans on our 
industrial base, including ship and aircraft builders, depot 
maintenance facilities, equipment and weapons manufacturers, and 
science and technology researchers. Some of our suppliers, especially 
in specialized areas such as nuclear power, have the government as 
their only customer. Our fiscal year 2013 budget submission addresses 
the health of the industrial base, and we will work closely with our 
industry partners to manage the risk of any further budget reductions.
    Ship inactivations in the fiscal year 2013 budget submission, when 
combined with those of previous budgets, may cause an imbalance in the 
Fleet's overall distribution. We are assessing what will be affordable 
and appropriate in homeporting new ships or moving existing ships to 
ensure we efficiently employ our shore infrastructure, balance our port 
loading, and take advantage of collocating ships with common 
configurations and equipment.
    The health care proposals in the President's budget are consistent 
with our efforts over the last several years to pursue a multi-pronged 
strategy to control the rate of growth in defense health costs--
identifying more efficient processes internally; incentivizing healthy 
behaviors and wellness; and keeping our sailors and marines fit and 
ready to deploy. This budget maintains our commitment to those who 
serve and have served, and responsibly meets the demands dictated by 
Federal budget constraints. I hope you will agree, and support our 
efforts. I also support the establishment of a commission to study 
changes to the structure and benefits of our retirement program for 
those who have not yet entered the service. That assessment must 
include an evaluation of the combined impact to our future recruiting 
and retention of changes to retirement benefits, pay, and health care.

                               CONCLUSION

    I believe the risks of the new Defense Strategic Guidance are 
manageable and can be mitigated with good management of the Joint 
Force. Our Navy will continue to be critical to our Nation's security 
and prosperity by assuring access to the global commons and being at 
the front line of our Nation's efforts in war and peace. I assure 
Congress, the American people, and those who would seek to do our 
Nation harm, that we will be focused on warfighting, operating forward, 
and being ready.

    Chairman Levin. Thank you so much, Admiral.
    General Amos.

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

    General Amos. Chairman Levin, Ranking Member McCain, 
members of the committee, I'm pleased to speak today on behalf 
of your Marine Corps. As we sit today in this chamber, more 
than 27,000 marines are forward deployed around the world, 
defending our Nation's liberty, shaping strategic environments, 
engaging with our partners and our allies, ensuring freedom of 
the seas, and deterring aggression abroad.
    Over the past year the forward presence and crisis response 
of America's marines, working in concert with our most 
important joint partner, the U.S. Navy, has created 
opportunities and provided decision space for our Nation's 
leaders. Your marines were first on the scene to provide 
humanitarian assistance and disaster relief, and the first to 
fly air strikes over Libya. They evacuated noncombatants from 
Tunisia and reinforced our embassies in Egypt, Yemen, and 
Bahrain.
    While accomplishing all of that, your Marine Corps 
continued to conduct sustained combat and counterinsurgency 
missions and operations in Afghanistan. Having just returned 
last month from visiting many of the nearly 19,000 marines and 
sailors currently deployed there, I can tell you firsthand that 
their professionalism and morale remain notably strong. There 
is an indomitable spirit displayed in all that they do. Their 
best interests and the needs of all of our joint forces in 
combat remain my number one priority.
    History has shown that it is impossible to predict where, 
when, and how America's interests will be threatened. 
Regardless of the global economic strain placed on governments 
and their ability to produce forces today, crises requiring 
military intervention will undoubtedly continue tomorrow and in 
the years to come. As a maritime nation dependent on the sea 
for the free exchange of ideas and trade, America requires 
security both at home and abroad to maintain a strong economy, 
to access overseas markets, and to assure our allies.
    In an era of fiscal constraint, the Marine Corps is our 
Nation's risk mitigator, a certain force during uncertain 
times, one that will be the most ready when the Nation is the 
least ready.
    There is a cost to maintaining this capability, but it is 
nominal in the context of the total defense budget and provides 
true value to the American taxpayer. This fiscal year I am 
asking Congress for $30.8 billion, a combination of both base 
and OCO money. Your continued support will fund ongoing 
operations around the world, provide quality resources for our 
marines, sailors, and their families. It will reset equipment 
that is worn out from more than 10 years of war. Lastly, it 
will posture our forces for the future.
    When the Nation pays the sticker price for its marines, it 
buys the ability to be able to respond to crises anywhere in 
the world through forward-deployed and forward-engaged forces. 
This same force can be reinforced quickly to project power and 
contribute to joint assured access anywhere in the world in the 
event of a major contingency. No other force possesses the 
flexibility and the organic sustainment to provide such 
capabilities.
    As our Nation begins to direct its attention to the 
challenges and opportunities of a post-Afghanistan world, a 
world where the Middle East and Pacific take center stage, the 
Marine Corps will be ever mindful of the traditional friction 
points in other regions and prepared to respond to them there 
as needed.
    The strategic guidance directs that we rebalance and reset 
for the future. We have a solid plan to do so and have begun 
our execution already. We will train and educate our marines to 
succeed in the increasingly complex and challenging world of 
the 21st century. In doing so, we will not deviate from 
consistency in the five principles so critically important to 
the continued success of your Nation's Marine Corps:

          one, we will recruit high-quality people;
          two, we will maintain a high state of unit readiness;
          three, we will balance capacity with strategic 
        requirements;
          four, we will ensure that our infrastructure is 
        properly cared for; and
          five, we will be responsible stewards of our 
        equipment modernization efforts.

    As we execute a strategic pivot, I have made it a priority 
to keep faith with those who have served during the past 10 
years of war. Through judicious choices and forward planning, 
ever mindful of the economy in which we live, we have built a 
quality force that meets the needs of our Nation. By the end of 
fiscal year 2016, your Marine Corps will be streamlined to 
182,100 marines. This Active-Duty Force will be complemented by 
the diverse depth of our operational Reserve component that 
remains a strong 39,600.
    Our emerging Marine Corps will be optimized for forward 
presence, engagement, and rapid crisis response. It will be 
enhanced by critical enablers, special operators, and cyber 
warfare marines, all necessary on the modern battlefield.
    To build down the Marine Corps from its current end 
strength of 202,000, I will need the assistance of Congress for 
the fiscal resources necessary to execute the drawdown at a 
measured and responsible rate of approximately 5,000 marines 
each year, a rate that guards against a precipitous reduction 
that would be harmful to our force.
    As we continue to work with our Nation's leadership and my 
fellow joint partners, you have my assurance that your Marine 
Corps will be ever faithful in meeting our Nation's need for an 
expeditionary force in readiness, a force that can respond to 
today's crisis with today's force today.
    Thank you for the opportunity to appear before you today 
and I look forward to your questions.
    [The prepared statement of General Amos follows:]

             Prepared Statement by Gen. James F. Amos, USMC

               THE INDOMITABLE SPIRIT OF THE U.S. MARINE

Your Marines are Ready Today
    We remain a Nation at war. Currently, nearly 20,000 marines are 
conducting combat operations in Afghanistan. Operation Enduring Freedom 
(OEF) remains our top priority. Having recently returned from visiting 
marines and sailors currently deployed throughout Central Command, I am 
pleased to report their professionalism and morale remains notably 
strong. Whether patrolling in Afghanistan or planning at the Pentagon, 
serving on Navy amphibious warships or engaging our partners around the 
world, the indomitable spirit of our greatest asset--the individual 
Marine--stands ready: ready to safeguard our Nation's liberty, to 
ensure freedom of the seas and to protect our Nation's interests 
abroad. With your assistance, we will continue to resource this 
national treasure . . . the U.S. Marine.
2011 Operational Highlights
    During the past year, marines have conducted counterinsurgency 
operations in Afghanistan, and have responded to a rapid succession of 
unpredicted political upheavals, natural disasters, social unrest, 
piracy, and emerging threats in various unstable areas of the world's 
littoral regions.

         Operation Enduring Freedom: We are seeing measurable 
        progress along all lines of operation in the Helmand Province: 
        security, reintegration, rule of law, governance, development, 
        education and health. Over the past year, violence and the 
        level of collateral damage have decreased significantly. 
        Throughout 2012, Marines in Regional Command-Southwest [RC(SW)] 
        will continue transitioning to partnership training missions as 
        we transfer even greater security responsibility to the 
        maturing Afghan National Security Forces; police and army 
        forces in Helmand province have progressed in training and 
        capability. There is a strong sense of optimism among our 
        forces in Helmand.
         Operation Tomodachi: Following a devastating 
        earthquake and tsunami in Japan last spring, 3,600 marines and 
        sailors from our amphibious forces in the Pacific responded 
        within 24 hours notice. They served as the lead element of the 
        Joint Force, delivered humanitarian aid (i.e. 500 tons of food 
        and supplies; 2,150,000 gallons of water; and 51,000 gallons of 
        fuel), rescued those in danger, provided consequence management 
        and facilitated the evacuation of almost 8,000 American 
        citizens. For weeks following this disaster, Marine aircrews 
        flew through a radioactive environment to save lives, deliver 
        aid and assist the afflicted.
         Operation Unified Protector/Odyssey Dawn: Amidst a 
        wave of civil turmoil spreading across Northern Africa, two 
        amphibious warships with embarked marines sped to the 
        Mediterranean, and took up station off the coast of Libya. The 
        26th Marine Expeditionary Unit (MEU), an air-ground-logistics 
        task force, provided our Nation's leaders invaluable decision 
        time that allowed the determination of a way ahead and later 
        integration with the Joint Force with the North Atlantic Treaty 
        Organization to enforce a no-fly zone. Marine Aviation assets 
        were an important component of the Joint Force. Short take-off 
        and vertical landing (STOVL) Harriers, operating from USS 
        Kearsarge, conducted the first precision airstrikes and 
        provided airborne command and control. Our KC-130Js evacuated 
        non-combatant foreign nationals repatriating them to their 
        homeland, and our MV-22B Ospreys rescued a downed American 
        aviator using unprecedented operational reach.\1\
---------------------------------------------------------------------------
    \1\ The MV-22B Osprey rescue of an American combat aviator on March 
22, 2011, was conducted within 95 minutes over a distance of 300 
nautical miles (from launch aboard amphibious shipping to recovery of 
pilot and then back to shipping).
---------------------------------------------------------------------------
         Security Cooperation: In 2011, we supported all six 
        geographic combatant commands with task-organized forces of 
        marines who conducted hundreds of security cooperation (SC) 
        activities with the armed forces of more than 75 countries. 
        Aligned with Defense Strategic Guidance to ``develop 
        innovative, low-cost, and small-footprint approaches to achieve 
        our security objectives, relying on exercises, rotational 
        presence and advisory capabilities,'' our SC missions focus on 
        internal defense and participation in coalition operations.\2\
---------------------------------------------------------------------------
    \2\ Sustaining U.S. Global Leadership: Priorities for 21st Century 
Defense January 2012, pg. 3.
---------------------------------------------------------------------------
         Embassy Reinforcement: We continue providing security 
        for 154 U.S. Embassies and consulates in 137 countries around 
        the world through the Marine Corps Embassy Security Group. To 
        augment this mission, marines from our Fleet Anti-Terrorism 
        Security Teams rapidly deployed to reinforce embassies. This 
        past year they deployed to protect American lives and property 
        in Bahrain, Egypt and Yemen as crisis events unfolded across 
        the Middle East.

The New Strategic Guidance; How Your Marine Corps is Changing
    New strategic guidance issued by the President and the Secretary of 
Defense provides the framework by which the Marine Corps will balance 
the demands of the future security environment with the realities of 
our current budget. The guidance calls for a future force that will 
``remain capable across the spectrum of missions, fully prepared to 
deter and defeat aggression and to defend the homeland and our allies 
in a complex security environment.'' \3\
---------------------------------------------------------------------------
    \3\ Sustaining U.S. Global Leadership: Priorities for 21st Century 
Defense Fact Sheet January 5, 2012, pg. 2.
---------------------------------------------------------------------------
    We have built a quality force that is fully capable of executing 
its assigned missions. Our strategic guidance rightfully focuses our 
attention on the Pacific and Central Command regions. Navy-Marine Corps 
forward basing, response capabilities and plans are already positioned 
to support that strategy, yet we will remain vigilant and capable to 
respond on short notice in other areas of the world as the Nation 
requires. Marines continually stand ready to contribute decisively to a 
joint force, and can help provide access for that force wherever 
needed.
    Though the fiscal choices made over the past year were difficult, 
we are confident that we are managing risk by balancing capacity and 
capabilities across our forces while maintaining the high levels of 
readiness for which the Nation relies on its marines. The Corps of 
today and tomorrow will maintain its high standards of training, 
education, leadership and discipline, while contributing vital 
capabilities to the Joint Force across the spectrum of military 
operations. The emerging strategy revalidates our role as America's 
Expeditionary Force in Readiness. Our partnership with the Navy enables 
a forward-deployed and engaged force that shapes, deters, responds and 
projects power well into the future.
    During our force structure assessment, we cross-checked 
recommendations against approved DOD Operations and Contingency Plans, 
and incorporated lessons learned from 10 years of combat. The resulting 
force structure decisions to support the new strategy are:

         Reduced the end strength of the Active component of 
        the Marine Corps from 202,100 beginning this fiscal year to 
        182,100 by the end of fiscal year 2016.
         Designed a force with capabilities optimized for 
        forward-presence, engagement and rapid crisis response.
         Funded readiness levels required for immediate 
        deployment and crisis response.
         Properly reshaped organizations, capabilities and 
        capacities to increase aggregate utility and flexibility across 
        the range of military operations; also enhancing support 
        provided to U.S. Special Operations and Cyber Commands.
         Properly balanced critical capabilities and enablers 
        across our air-ground-logistics task forces, ensuring that 
        identified low-density/high-demand assets became right density/
        high demand assets.
         Incorporated the lessons learned from 10 years of 
        war--in particular, the requirements to field a force that is 
        manned, trained and equipped to conduct distributed operations.
         Created an operational Reserve component capability 
        without any reductions in Reserve Force structure.
         Designed the force for more closely integrated 
        operations with our Navy, special operations, and interagency 
        partners.

    Throughout this period of adjustment, we will ``keep faith with our 
marines, sailors, and their families.'' Our approach to caring for them 
is based on our recognition and appreciation for their unwavering 
loyalty and unfailing service through a decade of combat operations. 
This strong commitment will not change.

Maintaining a High State of Readiness
    The Navy and Marine Corps Team is the Nation's resource for 
mitigating risk. Given likely future operations set forth in the 
Defense Strategic Guidance ranging from defeating rogue actors to 
responding to natural disasters, the Nation can afford and should 
invest in the small premium it pays for high readiness levels within 
its naval amphibious forces. Because our Nation cannot afford to hold 
the entire Joint Force at such high rates of readiness, it has 
historically ensured that marines remain ready; and has used us often 
to plug gaps, buy time for decision makers, ensure access or respond 
when and where needed.
    In order for the Marine Corps to achieve institutional readiness 
for crisis and contingency response, we must maintain balance in the 
following five pillars:

         High Quality People (Recruiting and retaining high 
        quality people plays a key role in maintaining our high state 
        of readiness): Recruiting quality youth ultimately translates 
        into higher performance, reduced attrition, increased retention 
        and improved readiness for the operating forces. By retaining 
        the highest quality people, the Marine Corps will continue to 
        achieve success in today's dynamic environment and meet the 
        challenges posed to our Nation. We will not lower our 
        standards.
         Unit Readiness (Maintaining readiness of the operating 
        forces, including appropriate operations and maintenance 
        funding to train to core missions and maintain equipment): The 
        Marine Corps deploys units at high levels of readiness for 
        assigned missions. We source our best trained, most ready 
        forces to meet geographic combatant commander requirements. One 
        hundred percent of deployed units report the highest levels of 
        readiness for their assigned mission. We will be ready to 
        deploy on a moment's notice.
         Capacity versus Requirements (Force-sizing to meet 
        geographic combatant commander requirements with the right mix 
        of capacity and capability): The Marine Corps must maintain a 
        force that meets our ongoing operational requirements to 
        include our commitment to OEF, our rotational presence abroad, 
        our many security cooperation and engagement activities, along 
        with anticipated missions as we reorient to the Pacific.
         Infrastructure Sustainment (Investing in real 
        property, maintenance, and infrastructure): We must adequately 
        resource the sustainment of our bases and stations to maintain 
        our physical infrastructure and the means to train and deploy 
        our forces. As resources become more constrained, we will 
        become even better stewards of our installations to maintain 
        our facilities for the next generation of marines.
         Equipment Modernization (Ensuring ground and aviation 
        equipment matches the needs of the emerging security 
        environment): As we explore options to adjust to changing 
        fiscal realities, there is a clear imperative for our Corps to 
        reset portions of our legacy equipment used in OEF and 
        Operation Iraqi Freedom while we modernize what we must to 
        guarantee our dominance and relevance against future threats.

                   FISCAL YEAR 2013 BUDGET HIGHLIGHTS

The Frugal Force
    The Marine Corps is fully aware of the fiscal challenges facing our 
Nation and has critically examined and streamlined our force needs for 
the future. We continually strive to be good stewards of the public 
trust by maintaining the very best financial management practices. The 
Marine Corps has undergone an independent audit in fiscal year 2010, 
and our fiscal year 2011 audit is still ongoing. We plan to pursue an 
independent audit again for fiscal year 2012, and fully expect an audit 
opinion for fiscal year 2011 and fiscal year 2012. To date, we are the 
only service to undertake such independent scrutiny. By the end of 
2012, we will complete initial service wide implementation of our 
Enterprise Resource Planning System-Global Combat Support System-Marine 
Corps (GCSS-MC). GCSS-MC will significantly improve our inventory 
accountability and contribute to clean audit requirements. We are proud 
of our reputation for frugality, and remain one of the best values for 
the defense dollar.
    We have four major accounts governing our operations: Investment, 
Operations and Maintenance, MILCON and Family Housing and Manpower. 
These are our priorities:

         Investment

                 Enhancing programs vital to our ground combat 
                elements

                         Light Armored Vehicles (LAV), High 
                        Mobility Artillery Rocket System (HIMARS), 
                        Small Tactical Unmanned Aerial System (STUAS)

                 Maintaining the same investment levels in 
                other enabling programs

                         Ground Aviation Task Oriented Radar 
                        (G/ATOR), Next Generation Enterprise Network 
                        (NGEN), Command and Control Situational 
                        Awareness (C2/SA)

                 Fully funding critical research and 
                development efforts

                         Joint Light Tactical Vehicle (JLTV), 
                        Amphibious Combat Vehicle (ACV)

                 Sustaining other ground and tactical vehicles 
                until their replacements can be procured

                         High Mobility Multi-Purpose Wheeled 
                        Vehicle (HMMWV) and Amphibious Assault Vehicle 
                        (AAV)

                 Procuring full programs of record critical to 
                aviation modernization

                         F-35B, H-1 Upgrades, MV-22B, KC-130J, 
                        CH-53K

         Operations & Maintenance

                 Fully funding our education, training and 
                readiness accounts
                 Resourcing civilian workforce at fiscal year 
                2010 end-of-year levels
                 Enhancing support of Marine Special Operations 
                Command (MARSOC) and Marine Forces Cyber Command 
                (MARFORCYBER)
                 Providing continued support to family 
                readiness and Wounded Warrior programs
                 Supporting transition from the Navy Marine 
                Corps Intranet to NGEN
                 Maintaining energy mandates

         Military Construction and Family Housing

                 Maintaining facility sustainment at 90 percent 
                of required funding
                 Increasing facilities demolition funds
                 Preserving essential MILCON funding

                         Aviation: Joint Strike Fighter, MV-22B 
                        Osprey
                         Ground: Marine Corps Security Forces, 
                        Marine Corps University

                 Preserving environmental restoration funding, 
                family housing operations and construction

         Manpower

                 Reducing end strength from 202,100 marines to 
                182,100 marines by the end of fiscal year 2016 in a 
                responsible and measured way to keep faith with all who 
                have served
                 Realigning force structure across the entire 
                Marine Corps
                 Maintaining our Reserve component at 39,600 
                marines

    During these times of constrained resources, we remain committed to 
refining operations, identifying efficiencies, and reinvesting savings 
to conserve scarce public funds. We have met or exceeded all DOD 
efficiency measures to date. This fiscal year, we are seeking $30.8 
billion ($23.9 billion baseline + $6.9 billion Overseas Contingency 
Operations) to fund our operations, provide quality resources for our 
marines, sailors, and their families, conduct reset of equipment worn 
from more than 10 years at war and posture our forces for the future. 
Marines account for only 8.2 percent \4\ of the total Department of 
Defense (DOD) budget. With that, our Nation gains the ability to 
respond to unexpected crises, from humanitarian assistance and disaster 
relief efforts to non combatant evacuation operations, to counter-
piracy operations, to full-scale combat. When the Nation pays the 
``sticker price'' for its marines, it buys the ability to remain 
forward deployed and forward engaged, to reinforce alliances and build 
partner capacity.
---------------------------------------------------------------------------
    \4\ This percentage is based on the enacted fiscal year 2012 
Defense budget authorization and is slightly larger than the 7.8 
percent sum cited in the past. This percentage includes $3 billion in 
fiscal year 2012 funding for amphibious warship new construction as 
well as Navy funding for chaplains, medical personnel, amphibious 
warships (operations and maintenance) and Marine Corps aircraft.
---------------------------------------------------------------------------
         THE ROLE OF MARINES IN THE FUTURE SECURITY ENVIRONMENT

The Future Security Environment
    The rapidly evolving events of the past year alone indicate a new 
constant. Competition for resources; natural disasters; social unrest; 
hostile cyber activity, violent extremism (criminal, terrorist, 
religious); regional conflict; proliferation of weapons of mass 
destruction and advanced weaponry in the hands of the irresponsible are 
becoming all too common. Marine Corps intelligence estimates rightfully 
point out that ``more than half of the world's population lives in 
fragile states, vulnerable to ruinous economic, ideological, and 
environmental stresses. In these unstable regions, ever-present local 
instability and crises will erupt, prompting U.S. responses in the form 
of humanitarian assistance and disaster relief operations, actions to 
curtail piracy, stability operations and the rescue and evacuation of 
U.S. citizens and diplomats.'' \5\ These and other sources of stress 
are challenging industrialized nations just as they do emerging and 
failed ones. Further increased fragility of the global systems impacts 
both international markets and our Nation's economic stability. These 
challenges are harbingers of potential crisis around the world, and 
more specifically for naval forces in the littoral regions.
---------------------------------------------------------------------------
    \5\ Five-Year Forecast: 2012-2017 Assessment of International 
Challenges and Opportunities That May Affect Marine Expeditionary 
Forces January 2012, pg 1.
---------------------------------------------------------------------------
    History has shown that crises usually come with little or no 
warning; stemming from the same conditions of uncertainty, complexity 
and chaos we observe across the world today. Regardless of the 
financial pressures placed on governments and markets today, crises 
requiring military intervention undoubtedly will continue tomorrow. In 
this environment, physical presence and readiness matter significantly. 
Since the 1990s, America has been reducing its foreign basing and 
presence, bringing forces back home. This trend is not likely to change 
in the face of the strategic and budget realities we currently face. 
There remains an enduring requirement to balance presence with cost. In 
the past, the Nation has chosen to depend on the Navy and Marine Corps 
to provide a lean and economical force of an expeditionary nature, 
operating forward and in close proximity to potential trouble spots. 
Investing in naval forces that can respond to a wide range of crisis 
situations, creates options and decision space for our Nation's 
leaders, and protects our citizens and interests is a prudent measure 
in today's world.

The Navy and Marine Corps Team
    Partnered with the U.S. Navy in a state of persistent forward 
presence aboard amphibious warships, your U.S. Navy and Marine Corps 
Team remains the most economical, agile and ready force immediately 
available to deter aggression and respond to crises. Such a flexible 
and multi-capable force that maintains high readiness levels can 
mitigate risk, satisfy the standing strategic need for crisis response 
and, when necessary, spearhead entry and access for the Joint Force. 
More than 60 years ago and arising out of the lessons learned from the 
Korean War, the 82nd Congress envisioned the need for a force that ``is 
highly mobile, always at a high state of combat readiness . . . in a 
position to hold a full-scale aggression at bay while the American 
Nation mobilizes its vast defense machinery.'' \6\ This statement 
continues to describe your Navy and Marine Corps Team today. It is 
these qualities that allow your Marine Corps to protect our Nation's 
interests, reassure our allies and demonstrate America's resolve.
---------------------------------------------------------------------------
    \6\ Committee Report accompanying S. 677 and H.R. 666 of 30 June 
1951.
---------------------------------------------------------------------------
Reorienting to the Pacific
    As our security strategy looks increasingly toward the Pacific, 
forward deployed naval forces will become increasingly vital. The 
``geographic realities'' of the Pacific theater demand naval 
responsiveness. The genesis of the amphibious and power projection 
capabilities of the Navy and Marine Corps traces back more than 70 
years to operations in the Pacific--where today key terrain and 
strategic chokepoints are separated by large expanses of ocean. The 
Pacific theater is where 30 percent of the world's population and the 
same percentage of our primary trading partners reside; where five 
major defense treaties are focused; \7\ where 50 percent of the world's 
megacities are situated; and where natural disasters over the past 
decade have required the greatest attention from the international 
community.\8\ The geography of the Pacific has not changed, though our 
tactics and operations continually evolve with the changing character 
and lethality of modern warfare. Approximately 24,000 marines already 
in the Pacific conduct an ambitious, annual training cycle of more than 
80 exercises, engagements and initiatives, in addition to the crises we 
respond to such as Operation Tomodachi in Japan last year.
---------------------------------------------------------------------------
    \7\ Philippines-U.S. Mutual Defense Treaty (1951); Australia, New 
Zealand, U.S. (ANZUS) Treaty; U.S. Alliance with South Korea (1954); 
Thailand (Manila Pact of 1954); U.S. Japan Security Treaty (1960)
    \8\ According to the United Nations Economic and Social Commission 
for Asia and the Pacific, during the period 2001 to 2010 in the Asia-
Pacific region over 200 million people per year were affected by 
natural disasters. This total amounts to 95 percent of the total people 
affected by natural disasters annually. Approximately 70,000 people per 
year were killed due to natural disasters (65 percent of the world's 
total that died of such causes). An average of $35 billion of economic 
damage occurred per year to the region due to natural disasters.
---------------------------------------------------------------------------
    Forward presence involves a combination of land and sea-based naval 
forces. Our enduring bases and presence have served U.S. National 
Security interests well for decades. Our rotational presence in 
locations such as Japan, Korea, Australia, the Philippines, Thailand 
and Singapore reassures our allies and partners. Sea-basing, the act of 
using amphibious warships with support from maritime prepositioned 
ships with various types of connectors, is uniquely suited to provide 
the geographic combatant commander with the flexibility to deploy 
forces anywhere in the Pacific region without having to rely on 
multiple bases ashore or imposing our presence on a sovereign nation. 
Sea-basing enables forward deployed presence at an affordable cost. 
Forward-deployed naval forces serve as a deterrent and provide a 
flexible, agile response capability for crises or contingencies. 
Maritime prepositioning offers the ability to rapidly support and 
sustain Marine forces in the Pacific during training, exercises, or 
emerging crises, and delivers the full range of logistical support 
those forces require.

A Middleweight Force from the Sea
    As a ``middleweight force,'' marines do not seek to supplant any 
Service or ``own'' any domain. Rather, Marine forces operate in a 
``lane'' that passes through all domains--land, sea, air, space and 
cyber--operating capably and freely throughout the spectrum of threats, 
whether they be conventional, hybrid, irregular or the uncertain areas 
where they overlap. Whereas other forces are optimized for a particular 
mission and domain, the Marine Corps is optimized for rapid deployment, 
versatile employment, and self-sustainment via Marine Air-Ground Task 
Forces (MAGTF), which are balanced, combined-arms formations under a 
single commander. All MAGTFs consist of four core elements: a Command 
Element, Ground Combat Element, Aviation Combat Element, and Logistics 
Combat Element. MAGTFs are scalable in size and capability.
    Bridging a seam in our Nation's defense between heavy conventional 
and special operations forces (SOF), the U.S. Marine Corps is light 
enough to arrive rapidly at the scene of a crisis, but heavy enough to 
carry the day and sustain itself upon arrival. The Marine Corps is not 
designed to be a second land army. That said, throughout the history of 
our Nation, its marines have been called to support sustained 
operations from time to time. We are proud of our ability to contribute 
to land campaigns when required by leveraging and rapidly aggregating 
our capabilities and capacities. Primarily though, the Corps is a 
critical portion of our integrated naval forces and designed to project 
power ashore from the sea. This capability does not currently reside in 
any other Service; a capability that has been called upon time and 
again to deter aggression and to respond quickly to threatening 
situations with appropriate military action.
    Marine Corps and SOF roles are complementary, not redundant. 
Special Forces contribute to the counterinsurgency and counterterrorism 
demands of the geographic combatant commanders in numerous and 
specialized ways, but they are not a substitute for conventional forces 
and they do not have a broader range of capabilities and 
sustainability. SOF lack the organic logistic capability and capacity 
to execute a non-combatant operation, serve as a ``fire brigade'' in a 
crisis or conduct combined amphibious and airborne assaults against a 
competent enemy. Middleweight naval forces, trained in combined arms 
warfare and knowledgeable in the art of maneuver warfare from the sea, 
are ideally trained and prepared for these types of operations.

The Littorals
    The United States remains a maritime nation that relies heavily on 
the oceans and waterways of the world for the free exchange of ideas 
and trade. The maritime commons are where 95 percent of the world's 
commerce flows, where more than 42,000 commercial ships are underway 
daily, where most of the world's digital information flows via undersea 
cables, and where half the world's oil travels through seven strategic 
chokepoints. To secure our way of life and ensure uninterrupted freedom 
of navigation, we must retain the ability to operate simultaneously and 
seamlessly while at sea, ashore, from the sea, in the air and, perhaps 
most importantly, where these domains converge--the littorals. These 
littoral areas exist not only in the Pacific, but throughout the world. 
Operating in the littoral environment demands the close integration of 
air, sea and land power. By using the sea as maneuver space, flexible 
naval forces can quickly respond to crises in the bordering environment 
of the littorals.
    In the context of the new strategy, the Navy and Marine Corps Team 
is increasingly relevant in meeting the exigent military needs of our 
Nation. Together, we provide the capability for massing potent forces 
close to a foreign shore, while maintaining a diplomatically sensitive 
profile. Additionally, when necessary, we are able to project this 
power ashore across the range of military operations at a time of our 
Nation's choosing. Amphibious capabilities provide the means to conduct 
littoral maneuver--the ability to maneuver combat ready forces from the 
sea to the shore and inland in order to achieve a positional advantage 
over the enemy. Working seamlessly as a single naval force, your Navy 
and Marine Corps Team provides the essential elements of access and 
forcible entry capabilities that are necessary components of a joint 
campaign.

Engagement
    In order to keep large crises from breaking out or spilling over to 
destabilize an entire region, 21st century security challenges also 
require expansion of global engagement with partner and allied 
nations--facilitated through persistent forward naval presence--to 
promote collective approaches to common security concerns. Our 
engagement contributions in support of the geographic combatant 
commanders minimize conditions for conflict and enable host nation 
forces to effectively address instability on their own as it occurs. 
They promote regional stability and the growth of democracy while also 
deterring regional aggression. History has shown that it is often far 
cheaper to prevent a conflict than to respond to one. This thrust will 
necessitate amphibious forces that are not only fighters, but who can 
also serve as trainers, mentors and advisers to host nation military 
forces.

Integration with the Joint Force
    In our new defense strategy, the Marine Corps will fill a unique 
lane in the capability range of America's Armed Forces. Whether first-
on-the scene, part of, or leading a joint force, marines instinctively 
understand the logic and synergy behind joint operations. Our ability 
to deploy rapidly and globally allows us to set the stage and enable 
the transition to follow-on Joint Forces in a timely manner. Our MAGTF 
structure--with organic logistics, aviation, intelligence, fires and 
other assets--enables us to seamlessly team with others and provides 
options for the Joint Force Commander to:

         Provide a visible deterrent to would-be threats, 
        without requiring a vulnerable presence ashore at fixed bases 
        or airfields;
         Swiftly respond to small-scale crises with a range of 
        options beyond precision strike, potentially containing crises 
        before they erupt into major contingencies;
         Partner with the Navy and U.S. Special Operations 
        Command (SOCOM) to shape the operational environment;
         Use the sea as maneuver space, avoiding enemy 
        strengths and striking his weaknesses;
         Directly seize or obtain operational objectives from 
        the sea, without the requirement for large force build-ups or 
        sustained presence ashore;
         Extend the operational reach of the Joint Force 
        hundreds of miles inland to achieve effects from the sea 
        through organic MAGTF assets; and
         Overcome anti-access and area denial threats in a 
        single-naval battle approach through the use of landing forces 
        aboard amphibious warships integrated with other capabilities 
        to include mine countermeasures and naval surface fires.

Day-to-Day Crisis Response
    Engagement and crisis response are the most frequent reasons to 
employ our amphibious forces. The same capabilities and flexibility 
that allow an amphibious task force to deliver and support a landing 
force on a hostile shore enable it to support forward engagement and 
crisis response. The geographic combatant commanders have increased 
their demand for forward-postured amphibious forces capable of 
conducting security cooperation, regional deterrence and crisis 
response.
    Marines have conducted amphibious operations and responded to 
crises throughout the world more than 100 times in the past two 
decades. The vast majority of our expeditionary service has involved 
crisis response and limited contingency operations, usually conducted 
in periods when the Nation has otherwise been at peace. Some of these 
were relatively short-term rescue or raid expeditions, while others 
evolved into contingencies that were limited in force size, but not 
limited in duration, complexity and level of integration with the other 
elements of national power. We will contribute to the missions of our 
Nation's security strategy in the same way.\9\ On a day-to-day basis, 
marines 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 requires.
---------------------------------------------------------------------------
    \9\ The Marine Corps is capable of performing 9 of the 10 stated 
missions in the Defense Strategic Guidance to include: Counterterrorism 
and Irregular Warfare; Deter and Defeat Aggression; Project Power 
Despite Anti-Access/Area Denial Challenges; Counter Weapons of Mass 
Destruction; Operate Effectively in Cyberspace and Space; Defend the 
Homeland and Provide Support to Civil Authorities; Provide a 
Stabilizing Presence; Conduct Stability and Counterinsurgency 
Operations; Conduct Humanitarian, Disaster Relief, and Other 
Operations.
---------------------------------------------------------------------------
America's Expeditionary Force in Readiness
    The new strategic guidance underscores the Marine Corps role as 
America's Expeditionary Force in Readiness. Reliant on a strategically 
relevant and appropriately resourced Navy fleet of amphibious warships 
and Maritime Prepositioned Force (MPF) vessels, we are forward deployed 
and forward engaged: shaping strategic environments; training partner 
nation and allied forces; deterring adversaries; and responding to all 
manner of crises contingencies.\10\ Alert and ready, we respond to 
today's crisis with today's force . . . today. Marines are ready to 
respond whenever the Nation calls and wherever and however the 
President may direct.
---------------------------------------------------------------------------
    \10\ As of January 2012, approximately 30,000 marines were forward 
deployed in operations supporting our Nation's defense. This number 
includes 19,500 marines in Afghanistan including those serving in 
external billets (transition teams, joint/interagency support, etc.), 
5,000 marines at sea on Marine Expeditionary Units, and 6,000 marines 
engaged in various other missions, operations, and exercises. The 
30,000 marine statistic does not include more than 18,000 marines 
permanently assigned to garrison locations outside the continental 
United States such as in Europe, the Middle East, the Pacific, etc.
---------------------------------------------------------------------------
          we have worked diligently to prepare for the future
Force Structure Review
    In an effort to ensure the Marine Corps is organized for the 
challenges of the emerging security environment, we conducted a 
capabilities-based Force Structure Review beginning in the fall of 2010 
to identify ways we could rebalance and posture for the future. The 
Force Structure Review incorporated the lessons learned from 10 years 
of combat and addressed 21st century challenges confronting our Nation 
and its Marine Corps. 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 have been shared with Congress over the past 
year. While affirming this strategy-driven effort, we have aligned our 
force based on the realities of constrained spending levels and 
Strategic Guidance.

End Strength
    During our comprehensive Force Structure Review, we tailored a 
force structure to ensure a sufficient type and quantity of force 
available to meet the forward presence, engagement and crisis response 
requirements of the geographic combatant commanders. The resulting 
force structure is intended to meet title 10 responsibilities, broaden 
capabilities, enhance speed and response options and foster the 
partnerships necessary to execute the range of military operations 
while providing the ``best value'' to the Nation. This force structure 
also accounted for the addition of enabling assets (e.g. combat 
engineers, information operations specialists, civil affairs personnel, 
specialized intelligence marines, cyber operators, special operators, 
etc.) necessary to meet the demands of the battlefields of today and 
tomorrow.
    As directed, we will draw-down our force in a measured way 
beginning in fiscal year 2013. Our fiscal year 2013 programmed end 
strength is 197,300 marines. In accordance with Defense Strategic 
Guidance, we are resisting the ``temptation to sacrifice readiness in 
order to retain force structure.'' \11\ Personnel costs account for 
about 60 cents of every Marine dollar; through our force structure 
efforts we balanced the requisite capabilities across a smaller force, 
in effect trading capacity for modernization and readiness.
---------------------------------------------------------------------------
    \11\ Sustaining U.S. Global Leadership: Priorities for 21st Century 
Defense January 2012, pg 7.
---------------------------------------------------------------------------
    The resulting 182,100 Marine Active-Duty Force, supported by our 
operational Reserve component, retains the capacity and capability to 
support steady state and crisis response operations through rotational 
deployments, and to rapidly surge in support of major contingency 
operations. Although reshaping the Marine Corps from 202,100 marines to 
a force of approximately 182,100 marines entails some risk to our 
ability to simultaneously respond to multiple large-scale 
contingencies, it is manageable. We intend to leverage the diverse 
depth and range of assets within our Reserve component both to mitigate 
risk and maximize opportunities where available.
    As we reduce end strength, we must manage the rate carefully so we 
reduce the force responsibly. We will draw-down our end strength by 
approximately 5,000 marines per year. The continued resourcing of this 
gradual ramp-down is vital to keeping faith with those who have already 
served in combat and for those with families who have experienced 
resulting extended separations. The pace of active component draw-down 
will account for completion of our mission in Afghanistan, ensuring 
proper resiliency in the force relative to dwell times. As our Nation 
continues to draw-down its Armed Forces, we must guard against the 
tendency to focus on pre-September 11 end strength levels that neither 
account for the lessons learned of 10 years at war nor address the 
irregular warfare needs of the modern battlefield. Our 182,100 Marine 
Corps represents fewer infantry battalions, artillery battalions, 
fixed-wing aviation squadrons, and general support combat logistics 
battalions than we had prior to September 11. However, it adds cyber 
operations capability, Marine special operators, wartime enablers and 
higher unit manning levels--all lessons gleaned from 10 years of combat 
operations; it is a very capable force.
    My promise to Congress is that at the end of the day, I will build 
and maintain the best Marine Corps our Nation can afford with the 
resources it is willing to invest. We are also committed to keeping 
faith with marines, sailors, and their families who have sacrificed so 
much over the past decade at war. Personnel reductions that become 
precipitous are among the worst measures that can be employed to save 
money. Our All-Volunteer Force is built upon a reasonable opportunity 
for retention and advancement; unplanned and unexpected wholesale cuts 
undermine the faith and confidence in service leadership and create 
long-term experience deficits with negative operational impacts. Such 
an approach would no doubt do significant long-term damage to our 
ability to recruit and maintain a quality force.

Civilian Marines
    Our Civilian Marines support the mission and daily functions of the 
Marine Corps and are an integral part of our Total Force. In 
recognition of the need to study and clearly define our civilian 
workforce requirements to ensure we had the right workforce in the 
right location, at a cost that aligned with our budget, I directed a 
full review of the Total Force in late 2010. This measure necessitated 
a hiring freeze but resulted in prioritized requirements within 
affordable levels and the alignment of resources with capabilities. It 
also ensured the civilian labor force was shaped to support the mission 
of the Corps today and that projected for the future.
    During the fiscal year 2012 budget cycle, there was no growth in 
our fiscal year 2011 civilian workforce levels due to necessary 
efficiency measures. Consequently, our civilian workforce went from a 
planned level of 21,000 personnel in direct funded full-time 
equivalencies (FTEs) to 17,501 personnel. This number of FTE personnel 
will remain constant in each year of the current Future Year's Defense 
Program (FYDP)--there is no growth planned. The end result is a 17 
percent reduction in planned growth between fiscal year 2011 and fiscal 
year 2012 budget requests.
    Our fiscal year 2013 civilian personnel budget reflects efforts to 
restrain growth in direct funded personnel. By establishing budgetary 
targets consistent with current fiscal realities, we will be able to 
hold our civilian labor force at fiscal year 2010 end-of-year levels, 
except for limited growth in critical areas such as the acquisition 
workforce, the intelligence community, the information technology 
community (i.e. conversion from NMCI to NGEN), in-sourcing of security 
personnel (i.e. Marine Corps Civilian Law Enforcement Personnel) and 
personnel in our cyber community. Our Civilian Marine workforce remains 
the leanest among DOD with only 1 civilian for every 10 marines.

                             OUR PRIORITIES

Commandant's Four Priorities
    To best meet the demands of the future and the many types of 
missions marines will be expected to perform now and beyond the post-
OEF security environment, I established four enduring priorities in 
2010. To that end, we will:

         Provide the best trained and equipped Marine units to 
        Afghanistan. This will not change and remains our top priority;
         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.

    We are making significant progress within each of these four 
critical areas; however, there are pressing issues facing our Corps 
today that require the special attention and assistance of Congress. 
These include specific programs and initiatives within the command, 
ground, logistics and aviation portfolios of the MAGTF.

Reset
    The Marine Corps is conducting a comprehensive review of its 
equipment inventory to validate reset strategies, future acquisition 
plans, and depot maintenance programming and modernization initiatives. 
As already stated, after 10 years of constant combat operations, the 
Marine Corps must reset the force coming out of Afghanistan. The reset 
of equipment retrograded to home station from Iraq (approximately 
64,000 principal items) is complete. However, the equipment density 
list currently supporting combat operations in Afghanistan totals 
approximately 95,000 principal items, of which approximately 42 percent 
was retransferred directly from Iraq to support the surge of 2009. The 
bulk of this transferred equipment included high demand items such as 
communications equipment and vehicles to include the majority of our 
Mine Resistant Ambush Protected vehicles and 100 percent of our medium 
tactical vehicle fleet.
    Sustaining current combat operations has reduced the aggregate 
readiness of the non-deployed force. Non-deployed unit readiness is 
degraded and has been the ``bill payer'' for deployed unit readiness. 
We sacrificed readiness levels of our home station units to ensure 
marines in combat had the very best equipment. Through the support of 
Congress over the past few years, we have received a good portion of 
the required funding for reset and have made significant progress at 
our depots in restoring and procuring required materiel. But there is 
more to do at our home stations. Thirty-three percent of nondeployed 
units report the highest readiness levels for their designed mission, 
which leaves 67 percent of nondeployed units in a degraded state of 
readiness. The largest contributing factor to degraded readiness within 
non-deployed units is equipment supply. The non-deployed force provides 
the Nation depth in responsiveness and options when confronted with the 
unexpected. Our marines at home must be ``geared up'' and ready to be 
called at a moment's notice. Low levels of readiness within the 
nondeployed force increases risk in the timely and successful execution 
of a military response to crises or contingencies. Therefore, it is 
critical that the Marine Corps continues to receive congressional 
assistance on required funding to reset our equipment from the 
conflicts of the past decade.
    In January 2012, I signed the Marine Corps OEF Ground Equipment 
Reset Strategy, rooted in the lessons learned from our successful 
redeployment and retrograde from Iraq. This strategy is helping to 
identify what equipment we will reset and what we will divest. It 
prioritizes investment and modernization decisions in accordance with 
the capabilities of our middleweight force construct, defining unit-
level mission essential tasks and equipment requirements to support the 
range of military operations, and equips to core capabilities for 
immediate crisis response deployment and building strategic depth. We 
have issued disposition instructions on 8,400 principal items 
associated with the initial draw-down of forces that will occur this 
fall. In Afghanistan, 35 percent of that equipment has entered the 
redeployment and retrograde pipeline. Initial shipments of equipment 
have arrived at home stations and depots, and are being entered into 
the maintenance cycle. We currently expect divestment of approximately 
21 percent of the total Afghanistan equipment density list as obsolete, 
combat loss or otherwise beyond economical repair. These are combat 
capability items that must be replaced.
    The reset of our equipment after more than a decade of combat 
requires an unprecedented level of effort. Our Marine Corps depots will 
be asked to do more once again; they stand ready to do so. As our 
Nation looks to efficiencies in its Armed Forces, we must maintain a 
keen awareness of the role that depots play in keeping our country 
strong. The continued availability of our depot capacity both at 
Barstow, CA, and Albany, GA, is essential to our ability to self-
generate readiness and to respond when we must surge in response to 
wartime demand. Acknowledging fiscal realities, I directed, with the 
Secretary of the Navy's approval, the consolidation of the two Marine 
Corps depots under a single command with two operating plant locations. 
Consolidating our depots under a single commander is the right balance 
between fiscal efficiency and meeting the unique requirements of the 
Marine Corps. This consolidation will reduce costs, standardize 
processes between industrial plants and increase efficiency.

Modernization
    In conjunction with our reset efforts, we are undertaking several 
initiatives to conduct only essential modernization of the Marine Corps 
Total Force. This will place us on a sustainable course to achieve 
institutional balance. We are doing so by judiciously developing and 
procuring the right equipment needed for success in the conflicts of 
tomorrow, especially in those areas that underpin our core 
competencies. As such, I ask for continued congressional support to 
modernize equipment and maintain a high state of readiness that will 
place us on solid footing in a post-Afghanistan security environment. 
While budgetary pressures will likely constrain modernization 
initiatives, we will mitigate pressure by continuing to prioritize and 
sequence both our modernization and sustainment programs to ensure that 
our equipment is always ready and that we are proceeding in a fiscally 
responsible manner. Modernization programs that require significant 
additional funding above current levels will be evaluated for continued 
operational requirement and capability/capacity modification.
    We recognize that our planned, force structure reduction following 
our commitment in Afghanistan will accommodate a level of decreased 
modernization investment due to a requirement for a smaller quantity of 
modernized equipment. However, any qualitative modernization reductions 
will impact our ability to respond to future adversaries and threats. 
The current baseline budget allows for equipment modernization on a 
reasonable timeline across the FYDP. Possible future reductions in the 
baseline budget will result in delays, modification or elimination of 
key modernization programs. Modernization in the following areas is 
critical to maintaining operational capabilities and readiness:

         Ground Combat Tactical Vehicles
         Aviation
         Preparing for Future Battlefields
         Amphibious and Pre-positioning Ships
         Expeditionary Energy
         Intelligence, Surveillance and Reconnaissance.

Ground Combat Tactical Vehicle Strategy
    The programmatic priority for our ground forces is the seamless 
maneuver of marines from the sea to conduct operations ashore whether 
for training, humanitarian assistance or combat. Our Ground Combat 
Tactical Vehicle (GCTV) Strategy is focused on achieving the right mix 
of assets, while balancing performance, payload, survivability, fuel 
efficiency, transportability and cost. Vehicles comprising our GCTV 
strategy include our entire inventory of wheeled and tracked vehicles 
and planned future capabilities including the Joint Light Tactical 
Vehicle (JLTV), Amphibious Combat Vehicle (ACV) and the Marine 
Personnel Carrier (MPC). Throughout 2011 and informed by cost, we 
conducted a comprehensive systems engineering review of amphibious 
vehicle operational requirements. The review evaluated the requirements 
for water mobility, land mobility, lethality and force protection of 
the future environment. The identification of essential requirements 
helped to drive down both the production and the sustainment costs for 
the amphibious vehicles of the future.
    We are conducting an Analysis of Alternatives on six ACV options, 
the results of which will help to inform the direction and scope of the 
ACV program. The MPC program is maturing as a wheeled armored personnel 
carrier and complements the ACV as a possible solution to the general 
support lift capacity requirements of Marine forces operating in the 
littorals.
    We are firmly partnered with the U.S. Army in fielding a JLTV to 
replace a portion of our legacy medium lift utility vehicles. Our long-
term participation in this program remains predicated on development of 
a cost-effective vehicle, whose payload integrates seamlessly with our 
expeditionary operations and likely amphibious and strategic lift 
profiles.\12\ The Joint Requirements Oversight Council has approved the 
JLTV Capability Development Document, and our Combat Development 
Command in Quantico is leading the Army and Marine Corps effort to 
establish a program of record at Milestone B in the third quarter of 
fiscal year 2012. Our approach to JLTV is as an incremental 
acquisition, and our objective for Increment I currently stands at more 
than 5,000 vehicles. Factoring all the above considerations, the 
current pathway for our GCTV Strategy includes the following actions:
---------------------------------------------------------------------------
    \12\ For two axle combat vehicles, this equates to combat weights 
in the 18,000 to 19,000 lbs range, translating to empty vehicle weights 
in the range of 12,000 to 13,000 lbs.

         Develop a modern ACV.
         Develop and procure JLTV.
         Sustain High Mobility Multipurpose Wheeled Vehicles 
        (HMMWVs) through 2030 by utilizing an Inspect and Repair Only 
        As Necessary Depot Maintenance Program and a HMMWV Modification 
        Line.\13\
---------------------------------------------------------------------------
    \13\ HMMWV recapitalization does not meet Marine Corps requirements 
for those light vehicles with the most demanding missions. They cannot 
deliver reliability, payload, service life, mobility, the ability to 
fit on MPF shipping and growth potential. The JLTV is the most cost-
effective program to meet capability gaps for those light combat 
vehicles with the most demanding missions.
---------------------------------------------------------------------------
         Initiate a legacy Amphibious Assault Vehicle upgrade 
        as a bridge to ACV
         Continue research and development in MPC through 
        fiscal year 2014 to identify the most effective portfolio mix 
        of vehicles.
         Limit procurement of vehicles to reduced Approved 
        Acquisition Objective estimates as identified.

Marine Corps Aviation
    Marine Corps Aviation is proud to celebrate its centennial of 
service to our Nation this year. Our priority for aviation is support 
of marines in Afghanistan and wherever marines are deployed. On 
average, more than 40 percent of our aviation force is deployed at any 
time, with an additional 25 percent preparing to deploy. All told, this 
equates to two-thirds of Marine Aviation forces currently deployed or 
preparing to deploy. We are continuing a modernization effort that 
began more than a decade ago. Today, the Marine Corps is challenged to 
replace aging platforms that have reached the end of their service 
lives or suffered accelerated wear in harsh operating environments, 
thus reducing service life and resulting in the loss of critical 
warfighting capabilities. Our Aviation Plan is a phased multi-year 
approach to modernization that encompasses aircraft transitions, 
readiness, aircraft inventory shortfalls, manpower challenges, safety 
and fiscal requirements.
    In an era of budgetary constraint and amidst calls for reductions 
in the collective aviation assets within DOD, it is important to 
understand that Marine Air is not redundant with other services' 
capabilities. The U.S. Air Force is not designed to operate from the 
sea, nor are most of its aircraft suited for operations in the types of 
austere environments often associated with expeditionary missions. The 
Navy currently does not possess sufficient capability to operate their 
aircraft ashore once deployed forward on carriers--and yet history has 
shown that our Nation often needs an expeditionary aviation capability 
in support of both naval and land campaigns. The following programs 
form the backbone of our aviation modernization effort:

         F-35B: As we modernize Marine fixed-wing aviation 
        assets for the future, 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 allows the Marine Corps to 
        operate in harsh conditions and from remote locations where few 
        airfields are available for conventional aircraft. It is also 
        specifically designed to operate from amphibious ships--a 
        capability that no other tactical aircraft possesses. The 
        ability to employ a fifth-generation aircraft from amphibious 
        ships doubles the number of ``carriers''--11 CVN and 11 LHD/
        LHAs--from which the United States can employ fixed wing 
        aviation. Once fully fielded, the F-35B will replace three 
        legacy aircraft--F/A-18, EA-6B and AV-8B--saving the DOD 
        approximately $1 billion in legacy operations and maintenance 
        costs.

    The F-35B program has been a success story over the past year. Due 
to the performance of F-35B prototypes in 2011, the program was 
recently removed 12 months early from a fixed period of scrutiny. The 
F-35B completed all planned test points, made a total of 260 vertical 
landings (versus 10 total in 2010) and successfully completed initial 
ship trials on USS Wasp. Delivery is still on track; the first three F-
35Bs arrived at Eglin Air Force Base in January of this year. Continued 
funding and support from Congress for this program is of utmost 
importance for the Marine Corps as we continue with a plan to 
``sundown'' three different legacy platforms.

         MV-22B: The MV-22B Osprey has performed exceedingly 
        well for the Corps and the Joint Force. To date, this 
        revolutionary tiltrotor aircraft has changed the way marines 
        operate on the battlefield, giving American and Coalition 
        forces the maneuver advantage and operational reach unmatched 
        by any other tactical aircraft. Since achieving Initial 
        Operating Capability (IOC) in 2008, the MV-22B has flown more 
        than 18,000 hours in combat and carried more than 129,000 
        personnel and 5.7 million pounds of cargo. The MV-22B has made 
        multiple combat deployments to Iraq, four deployments with MEUs 
        at sea, and it is currently on its fifth deployment to 
        Afghanistan. Our squadron fielding plan is well underway as we 
        continue to replace our 44 year old, Vietnam-era CH-46 
        helicopters. We must procure all required quantities of the MV-
        22B in accordance with the program of record. Continued calls 
        for cancellation of this program are ill-informed and rooted in 
        anachronisms when measured against the proven record of 
        performance and safety this force multiplier brings to today's 
        battlefields in support of marines and the Joint Force.
         CH-53K: We are transitioning our rotary-wing assets 
        for the future. The CH-53K is a new build heavy lift helicopter 
        that evolves the legacy CH-53E design to improve operational 
        capability, reliability, maintainability, survivability and 
        cost. The CH-53K will be capable of transporting 27,000 pounds 
        of external cargo under high altitude/hot conditions out to 110 
        nautical miles, nearly three times the lift capacity of the 
        legacy CH-53E. It is the only marinized rotorcraft \14\ able to 
        lift 100 percent of Marine Corps air-transportable equipment 
        from amphibious shipping (MPF included). Our Force Structure 
        Review validated the need for a CH-53K Program of Record of 
        nine CH-53K squadrons.
---------------------------------------------------------------------------
    \14\ The term ``marinized'' indicates that an aircraft meets naval 
aviation requirements for use and storage in a maritime environment. 
Aviation platforms used by the Navy and Marine Corps require special 
outfitting unique for use on and from naval vessels.
---------------------------------------------------------------------------
         UH-1/AH-1: The H-1 program, comprised of the UH-1Y 
        utility helicopter and the AH-1Z attack helicopter, is a single 
        acquisition program that leverages 84 percent commonality of 
        major components, thereby enhancing deployability and 
        maintainability, while reducing training requirements and 
        logistical footprints. Both aircraft are in full rate 
        production. The H-1 procurement objective is 160 UH-1Ys and 189 
        AH-1Zs for a total of 349 aircraft. Currently, 131 H-1 aircraft 
        are on contract, with 51 UH-1Ys and 21 AH-1Zs delivered to 
        date. The UH-1Y has already deployed with the 13th MEU and has 
        supported sustained combat operations in OEF since November 
        2009. The AH-1Z achieved IOC in February 2011 and saw its first 
        deployment alongside the UH-1Y in November 2011 as part of the 
        11th MEU. The continued procurement and rapid transition to 
        these two platforms from legacy UH-1N and AH-1W assets in our 
        rotary-wing squadrons remains a priority.
         KC-130J: The new KC-130J Hercules has been fielded 
        throughout our active component, bringing increased capability, 
        performance and survivability with lower operating and 
        sustainment costs to the Marine Air Ground Task Force. Using 
        the Harvest HAWK weapon mission kit, the KC-130J is providing 
        extended endurance close air support to our marines in harm's 
        way. Currently, we have procured 47 KC-130Js of the stated 
        program of record requirement totaling 79 aircraft. Continued 
        procurement of the program of record will allow us to fully 
        integrate our Active and Reserve Force with this unique, multi-
        mission assault support platform.

Preparing for Tomorrow's Fight
    The irregular battlefields of today, and those of tomorrow, dictate 
that operations be more distributed, command and control be 
decentralized and forces be more dispersed. Using our Force Structure 
Review as a guide, we are continuing to build the right capacity and 
capability to enable marines operate rapidly as befits the tempo of our 
role as a crisis response force. Several important areas to enable our 
operations are:

         Cyber: The Defense Strategic Guidance rightly informs 
        that ``modern armed forces cannot conduct high-tempo, effective 
        operations without reliable information and communications 
        networks and assured access to cyberspace and space.'' \15\ 
        Marines have been conducting cyber operations for more than a 
        decade, and we are in a multi-year effort to expand our 
        capacity via U.S. Marine Corps Forces Cyber Command as we 
        increase our cyber force by approximately 700 marines through 
        fiscal year 2016. Given the fiscally constrained environment 
        and complexity of cyberspace, our approach is strategically 
        focused on ensuring efficiency in operations and quality of 
        service. The Marine Corps will aggressively operate and defend 
        its networks in order to enable critical command and control 
        systems for marines forward deployed around the world. Recent 
        cyber accreditations and readiness inspections validate our 
        network operations command and control processes and 
        procedures. As we transition to a Government Owned/Operated 
        network environment, the Marine Corps will pursue efficiencies 
        through automation, consolidation and standardization to ensure 
        availability, reliability and security of cyber assets.
---------------------------------------------------------------------------
    \15\ Sustaining U.S. Global Leadership: Priorities for 21st Century 
Defense, January 2012, pg. 5.
---------------------------------------------------------------------------
         SOF: As the Marine Corps contribution to SOCOM, Marine 
        Special Operations Command (MARSOC) maintains a shared heritage 
        and correspondingly strong bond with its parent Service as 
        ``soldiers from the sea.'' MARSOC will provide a total of 32 
        employable Marine Special Operations Teams in fiscal year 2013 
        while establishing the staff of the Marine Special Operations 
        School, maintaining a targeted dwell ratio and continuing 
        creation of a robust language capability. Based on our Force 
        Structure Review of last year and a programmed end strength of 
        182,100 marines, I have authorized an increase of 821 marines 
        in MARSOC.
         Command & Control (C2): Technology and network-based 
        forces are an essential part of modern operations. Our C2 
        modernization efforts for the future build upon lessons learned 
        during combat operations in Afghanistan and Iraq. Recent 
        operations have shown that moving data to lower levels (i.e. 
        the digital divide) increases operational effectiveness. We are 
        mitigating the decision to cancel the Ground Mobile Radio by 
        building on investments already made in tactical communications 
        modernization. We will continue efforts to ensure C2 
        Situational Awareness convergence and interoperability with the 
        Joint Force.
         Advisers and Trainers: In recognition that preventing 
        conflict may be easier than responding to it and that we can 
        prevent it through selective engagement and employment of 
        advisers/trainers, we have invested in a new organization 
        called Marine Corps Security Cooperation Group that 
        consolidates advisers skills, training and assessment expertise 
        focused on building partnership capacity. We are investigating 
        how we can regionally focus the expertise of this organization.

Amphibious Warships and Maritime Prepositioning Shipping
    Our Service level requirement to deploy globally, respond 
regionally, and train locally necessitates a combination of tactical 
airlift, high-speed vessels, amphibious warships, maritime 
prepositioning shipping, organic tactical aviation, and strategic 
airlift. Significant contributions to U.S. security are made by our 
rotational forces embarked aboard amphibious warships. 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 and Marine 
Expeditionary Units form together to provide forward deployed naval 
forces in four geographic combatant command areas of responsibility. 
Not only do they provide the capability for crisis response, but they 
also present a means for day-to-day engagement with partner nations and 
a deterrent to conflict in key trouble spots.
    We maintain the requirement for an amphibious warship fleet for 
contingencies requiring our role in joint operational access. One 
Marine Expeditionary Brigade (MEB) assault echelon requires 17 
operationally available amphibious warships. The Nation's forcible 
entry requirement includes two simultaneously-employed MEBs supported 
by one or more Maritime Prepositioning Force (MPF)-MEB to fight as a 
Marine Expeditionary Force from a sea base.
    Amphibious warships and the requisite number of ship-to-shore 
connectors provides the base-line 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. As of January 2012, there were 29 ships in the 
Navy's amphibious fleet, with 3 scheduled for decommissioning and 4 new 
ships under construction in the yards. Within the coming FYDP, the 
inventory will decline in fiscal year 2014 before rising to an average 
of 30 amphibious warships over the next 30 years. The lack of 
amphibious warship lift capacity translates to risk for the Nation, 
particularly as it reorients to the Pacific.
    The continued procurement of scheduled amphibious warships and 
planning for MPF shipping is essential to ensure greater levels of risk 
are not incurred in coming years.

         San Antonio-class LPD: The San Antonio-class LPDs 
        continue to gain stability with overall warship performance 
        improving. Through the generosity of Congress, the final two 
        warships in this program are fully funded, and we expect 
        delivery of all 11 planned warships by fiscal year 2017.
         America-class LHA(R): A growing maritime threat 
        coupled with aircraft/ground combat equipment modernization 
        dictates the need for continued optimization of the LHA-6 hull 
        form, which is now 60 percent complete. As stated last year, 
        delivery of this amphibious assault warship is scheduled for 
        fiscal year 2014. The earliest reasonable deployment after 
        allowing time for sea trials, crew training and other factors 
        would be in fiscal year 2017. Construction of LHA-7 is 
        scheduled to commence in early fiscal year 2013, but is not yet 
        under contract. The Marine Corps is grateful for and firmly 
        supports the Navy's plan to reintroduce a well deck in our 
        large deck amphibious assault ships, beginning with LHA-8 in 
        fiscal year 2017 and fiscal year 2018 timeframe.
         2 x Maritime Prepositioned Squadrons (MPSRON): 
        Providing a significant contribution to global coverage, 
        forward presence and crisis response, the Maritime 
        Prepositioning Force (MPF) program exists to enable the rapid 
        deployment and engagement of a MAGTF anywhere in the world in 
        support of our National Military Strategy. This strategic 
        capability combines the capacity and endurance of sealift with 
        the speed of airlift. The current MPF program is comprised of 
        15 ships divided into three MPSRONs located in the 
        Mediterranean Sea, Indian Ocean (Diego Garcia) and Pacific 
        Ocean (Guam and Saipan). In fiscal year 2013, the DoN plans to 
        eliminate one of these squadrons as an efficiency measure. We 
        are currently reviewing options to develop a balanced MPF 
        posture and MPSRON composition that supports geographic 
        combatant commander requirements, achieves approximately $125 
        million in savings across the FYDP, attains a higher lift 
        capacity of the MEB requirement per MPSRON and retains critical 
        sea-basing enabling capabilities. The continued support of 
        Congress for the vital capabilities inherent in our MPF program 
        is essential to the overall warfighting readiness of the Corps.

Expeditionary Energy
    For marines, the term ``expeditionary'' is a mindset that 
determines how we man, train and equip our force. We know that resource 
efficiency aids in combat effectiveness, and that our investments in 
reset and modernization will provide a force that operates lighter, 
faster and at reduced risk. Likewise, our force will be more energy 
efficient to support the type of operations expected of us in the 
future. To do this, we are changing the way we think about, and use 
energy.
    Over the last 10 years of near continuous combat operations, our 
need for fuel and batteries on the battlefield has grown exponentially. 
Since 2001, we have increased the number of radios our infantry 
battalions use by 250 percent and the number of computers/information 
technology equipment by 300 percent. The number of vehicles has risen 
by 200 percent, with their associated weight increasing more than 75 
percent as a result of force protection requirements. In the end, our 
force today is more lethal, but we have become critically dependent on 
fuel and batteries, which has increased the risk to our logistics 
trains. Moreover, a 2010 study found that one Marine is wounded for 
every 50 fuel and water convoys.
    To reduce our risk and increase our combat effectiveness, in March 
2011, I issued the ``Marine Corps Expeditionary Energy Strategy and 
Implementation Plan'' to change the way we think about and value 
energy. This is a ``bases-to-battlefield'' strategy, which means all 
marines will be trained to understand the relationship between resource 
efficiency and combat effectiveness. We will consider energy 
performance in all our requirements and acquisitions decisions. We are 
creating the tools to provide commanders the information necessary to 
understand their energy consumption in real-time.
    Over the FYDP, I have directed $350 million to ``Expeditionary 
Energy'' initiatives. Fifty-eight percent of this investment is 
directed towards procuring renewable and energy efficient equipment. 
Some of this gear has already demonstrated effectiveness on the 
battlefield in Helmand Province. Twenty-one percent of this investment 
is directed towards research and development of new capabilities and 
the remaining investment is to support operations and maintenance. We 
expect this investment to improve the energy efficiency of our MEBs by 
9 percent. As such, we will enable ourselves to sustain longer and go 
further, incurring less risk. The MEB of 2017 will be able to operate 1 
month longer on the same amount of fuel that we plan to use today, and 
it will need 208 fewer fuel trucks, thereby saving seven million 
gallons of fuel per year. This translates to a lighter, more agile and 
more capable Marine Corps.
       providing capable bases, stations, and support facilities

Fiscal Year 2013 Military Construction
    The Marine Corps maintains a commitment to facilities and 
infrastructure supporting both operations and quality of life. Our 
military construction and family programs are important to sustain our 
force structure and maintaining readiness. This fiscal year we are 
proposing a $761 million Military Construction (MILCON) program to 
support warfighting, family housing and infrastructure improvements. 
The focus of our efforts this fiscal year is the construction of Joint 
Strike Fighter and MV-22B support facilities, infrastructure 
improvements, and training and education facility improvements. 
Additionally, this budget request includes replacement of inadequate 
and obsolete facilities at various locations.
    Through the support of Congress, between fiscal year 2008 and 
fiscal year 2012, we programmed 70 bachelor enlisted quarters (BEQ) 
projects resulting in 149 barracks buildings primarily located at Camp 
Lejeune, NC; Camp Pendleton and Twentynine Palms, CA; and Marine Corps 
Base, HI. These BEQ projects were typically completed in 2 years, with 
most at or below cost. These facilities, that incorporated energy 
efficiency measures, have significantly improved the quality of life of 
our single marines, who for many years, lived in substandard, World War 
II era barracks. Our fiscal year 2013 MILCON program includes a $49 
million request for barracks, a motor pool and other facilities to 
support the consolidation of Marine Corps Security Force Regiment 
assets at Naval Weapons Station, Yorktown, VA. This project was not a 
part of our original BEQ initiative, but is necessary as the current 
facilities used by the Regiment at Naval Station Norfolk have been 
condemned.

Infrastructure Sustainment
    As resources and military construction funds become more 
constrained, the Marine Corps will continue to rely on the sound 
stewardship of existing facilities and infrastructure to support our 
needs. In fiscal year 2013, the Marine Corps will again program 
facilities sustainment funding at 90 percent of the DOD Facilities 
Sustainment Model, resulting in a facilities sustainment budget of $653 
million.

Installation Energy Initiatives
    The fiscal year 2013 budget provides $164 million in Operations & 
Maintenance funding to continue progress in achieving mandated energy 
goals by 2015. This funding will target energy efficiency goals 
established by the Energy Independence & Security Act of 2007 aimed at 
reducing energy intensity by 30 percent from a 2003 baseline. This 
progress will be made by replacing older heating, cooling, lighting and 
other energy-consuming building components with more efficient 
technologies. We will use this funding to achieve renewable energy 
goals established by the National Defense Authorization Act of 2007. 
Overall, the planned investments are intended to increase energy 
security on our installations while reducing the cost of purchased 
utilities.

          INVESTING IN THE EDUCATION & TRAINING OF OUR MARINES

Courses and Facilities
    A broadly-capable middleweight force will meet future requirements 
through the integration of newly acquired and traditional operational 
competencies. To remain America's Expeditionary Force in Readiness, the 
Marine Corps requires balanced, high-quality training and education at 
all levels. As history has repeatedly shown, wars are won by the 
better-trained force, not necessarily the larger one. In the midst of 
ongoing combat operations, we are realigning our education and training 
efforts to enable our marines and sailors to succeed in conducting 
distributed operations in increasingly complex environments against any 
threat. Training and education, with an emphasis on experimentation and 
innovation, will help our Nation maintain global relevance by 
developing solutions that continue to outpace emerging threats. These 
efforts include continued emphasis on our core values of honor, courage 
and commitment, and on building principled warriors who understand the 
value of being an ethical warrior. Moreover, in the post-Afghanistan 
security environment of reduced defense dollars, we will need to offset 
reductions in end strength with better educated and more capable 
marines and Marine units. The current and future fiscal environment 
requires a selective, strategic investment in training and education . 
. . put another way, ``When you're low on money, it's a good time to 
think.''
Training
    Our current training is focused on preparing Marine units for 
combat, counterinsurgency and stability operations in support of OEF. 
If anything, the past 10 years of combat have demonstrated that there 
is a positive correlation between quality training and education and 
individual/unit readiness; both directly translate to operational 
success. Therefore, as we draw-down from Afghanistan, our training will 
rebalance to support the execution of a wider range of operational 
capabilities. We will achieve this balance by leveraging competencies 
in entry-level and skills progression training and by re-emphasizing 
core competencies in combined arms and amphibious operations, to 
include MEB level core capabilities. Training will also feature 
significant attention to irregular warfare, humanitarian assistance, 
and inter-agency coordination. All our training programs will provide 
standardized, mission essential task based training that directly 
supports unit readiness in a cost-effective manner.
    Specifically, future training will center on the MAGTF Training 
Program. Through a standardized training approach, the MAGTF Training 
Program will develop the essential unit capabilities necessary to 
conduct integrated MAGTF operations. Building on lessons learned over 
the past 10 years, this approach includes focused battle staff training 
and a service assessment exercise modeled on the current exercise, 
Enhanced Mojave Viper. Additionally, we will continue conducting large 
scale exercises that integrate training and assessment of the MAGTF as 
a whole. The MAGTF Training Program facilitates the Marine Corps' 
ability to provide multi-capable MAGTFs prepared for operations in 
complex, joint and multi-national environments against hybrid threats.
Education
    We are making steady progress in implementing the recommendations 
of the 2006 Officer Professional Military Education (PME) Study (The 
Wilhelm Report) to transform the Marine Corps University (MCU) into a 
``World Class Institution.'' There are two primary resource components 
in doing so--funding for military construction, and for faculty and 
staff. These two components are not mutually exclusive. New facilities 
coupled with increases in resident student through-put require 
additional faculty and staff. We will remain engaged with Congress over 
the coming years on the approximately $330 million in necessary funding 
for facilities, faculty and staff as we continue the transformation of 
the MCU. This is a high priority for me. This year, I committed $125 
million to get this initiative moving.
    We are widening opportunities for resident professional education 
by doubling available school seats in courses such as the Marine Corps 
Command and Staff College beginning in the academic year 2014. We are 
making adjustments to triple through-put at the Expeditionary Warfare 
School for our company grade officers. We are increasing enlisted 
resident PME courses as well, and are adding more distance education 
learning opportunities and requirements, especially at the junior 
enlisted and non-commissioned officer level.
    As we look to ``whole-of-government approaches'' and the goal of 
improved integration in joint and combined operations, we are adding 
fellowships to allow more marines the opportunity to benefit from 
nontraditional education outside DOD institutions. In the past year, we 
have increased our number of marines assigned to the Department of 
State and the U.S. Agency for International Development through 
fellowships and the State-Defense Exchange Memorandum of Understanding. 
Later this year, we are adding fellowships at the Departments of 
Justice, Homeland Security, and Treasury, as well as at Yale 
University. We are expanding the scope of training at existing 
institutions like the Marine Corps Center for Advanced Operational 
Culture Learning and the Center for Irregular Warfare Integration 
Division that focus on readying marines for engagement, security 
cooperation and partner capacity building missions. Our goal is to 
develop a Corps of Marines that have the skills needed to operate and 
engage effectively in culturally-complex environments.
    Our education and training programs benefit from our relationships 
with allies and partners in the international community. Each year, 
hundreds of international military students attend Marine Corps 
training and education venues ranging from Marine Corps Command & Staff 
College to military occupation specialty producing schools. The 
International Military Education and Training (IMET) program and 
similar security assistance opportunities promote regional stability, 
maintain U.S. defense partnerships, and promote civilian control of the 
military in student home countries. Many military leaders from around 
the world have benefited from the IMET program. To better support DOD's 
goal of providing PME to international military students, we have 
created a blended seminar program where foreign officers participate in 
Marine Corps PME through a mix of non-resident online courses and 
resident instruction in the United States.
Training Enablers
    In order to fully realize these training and education 
enhancements, we will keep investing in the resources, technologies and 
innovations that enable them. This investment includes modernizing our 
training ranges, training devices, and infrastructure to ensure quality 
resources are available to support the training of marines, individual 
to MAGTF. We will also leverage advanced technologies and simulation 
systems to create realistic, fully-immersive training environments.
        keeping faith with marines, sailors, and their families
Mission First, Marines Always
    We expect and require extraordinary loyalty from our marines and 
sailors--loyalty to country, family, and Corps. Our Nation has been at 
war more than a decade, placing unprecedented burdens on marines, 
sailors, families, wounded warriors, and the families of the fallen. 
They have all made tremendous sacrifices, many in the face of danger; 
we owe our complete loyalty back to them all.
    We will work to ensure the critical needs of our families are met 
during times of deployment and in garrison by providing the services, 
facilities and programs to develop the strength and skills needed to 
thrive while facing the challenges of operational tempo. If wounded, 
injured or ill (WII), we will seek out every available resource to 
restore marines to health. We will enable the return to active duty for 
those seeking it. For those unable to do so, we will responsibly 
transition them to civilian life. We will support and protect the 
spouses and families of our wounded and those of our fallen marines. 
There are several areas and programs central to our tenet of ``keeping 
faith with marines, sailors, and their families.''
Recruiting and Retention
    As first stated, the individual marine is our greatest asset; we 
will continue to recruit and retain the best and brightest of America's 
sons and daughters. Recruiting is the lifeblood of our Corps, and is 
our bedrock to ``Make Marines, Win Battles, and Return Quality 
Citizens;'' citizens who, once transformed, will be marines for life. 
To operate and succeed in potentially volatile times, marines must be 
physically fit, morally strong, intelligent, and capable of operating 
advanced weapon systems using the latest technology. We will not 
compromise on these standards. Recruiting quality youth ultimately 
translates into higher performance, reduced attrition, increased 
retention, and improved readiness for the Operating Forces. We need 
your continued support in maintaining quality accessions.
    Our officer accessions mission has continued to decline over the 
past 2 years in light of a planned draw-down of forces. Our fiscal year 
2013 accession officer mission is 1,500 Active Duty and 125 Reserve 
officers. For enlisted marines, the accession figures include 28,500 
regular (Active component) and 5,700 reservists. We traditionally 
achieve 100-103 percent of our total accession goals, and expect to do 
so again in fiscal year 2013. We have continued to achieve 
unprecedented levels of enlisted and officer retention. This effort is 
critical to the proper grade shaping of the Marine Corps, regardless of 
force size. Combined officer, enlisted and Reserve retention efforts 
ensure the Marine Corps maintains essential operational experience and 
leadership. Although overall retention is excellent, shortages do exist 
in certain grades and skills within the officer and enlisted ranks, 
requiring careful management and innovative solutions. At a minimum, 
sustained congressional funding to incentivize retention is necessary 
to maintaining quality personnel in these critical skill sets.
Diversity
    Diversity, in both representation and assignment of marines, 
remains a strategic issue. The Marine Corps diversity effort is 
structured with the understanding that the objective of diversity is 
not merely to strive for a force that reflects a representational 
connectedness with the rich fabric of all the American people, but to 
raise total capability through leveraging the strengths and talents of 
all marines. We are near completion of a new comprehensive campaign 
plan to focus our diversity effort in areas where improvement is most 
needed and anticipate release of this roadmap this year. The accession 
and retention of minority officers is an enduring challenge for our 
Corps. Mentoring and career development of all minority officers has 
become increasingly important in order to change officer profile 
projections. Since 2010, we have conducted leadership seminars, 
introducing diverse college undergraduates to Marine leadership traits 
and leadership opportunities in the Marine Corps, at various locations 
throughout our country, and are actively seeking out new communities 
within which to continue this effort. Overall, we seek to communicate 
the Marine Corps diversity mission through community outreach and 
recruit marketing; to ensure continued opportunities for merit based 
development and advancement; and to optimize training and education to 
increase the understanding for all marines of the value that diversity 
brings to the Total Force.
Wounded Warrior Outreach Programs
    Through the Wounded Warrior Regiment (WWR) and our ever-expanding 
outreach programs, the Marine Corps keeps faith with wounded, ill, and 
injured (WII) marines and their families. This enduring commitment 
includes full spectrum care and support for WII marines from point of 
injury or illness through return to duty or reintegration to the 
civilian community. The WWR continues to enhance its capabilities to 
provide added care and support to WII marines. Whether WII marines are 
joined to the WWR or remain with their parent commands, they are 
provided non-medical support through the recovery phases. Congressional 
funding for our WII marines allows us to provide robust, interconnected 
support in the following areas: Administrative Support, Recovery Care 
Coordination, Transition Assistance, Warrior Athlete Reconditioning 
Programs, Integrated Disability Evaluation System Support, the Sergeant 
Merlin German Wounded Warrior 24/7 Call Center and our Hope and Care 
Centers.
    The challenging nature of the terrain in Afghanistan requires a 
greater level of dismounted operations than was the case in Iraq. This 
fact coupled with the prevalence of improvised explosive devices has 
caused a growing class of marines and soldiers to suffer catastrophic 
injuries--injuries involving multiple amputations that present 
significant quality of life challenges. Our Corps, the DoN, DOD, the 
Department of Veterans Affairs (VA) and Congress are concerned about 
this special group of Wounded Warriors must remain committed to 
supporting this special group of Wounded Warriors. To help the 
catastrophically injured (those who will likely transition to veteran 
status) and their families successfully meet these challenges, we must 
continue engaging in a high level of care coordination between our WWR 
advocates, the VA's Federal Recovery Coordinators, VA Liaisons for 
Healthcare stationed at DOD Military Treatment Facilities (MTFs), 
Operation Enduring Freedom/Operation Iraqi Freedom/Operation New Dawn 
Case Managers and medical providers to ensure all of our wounded 
marines' needs are met. This includes arranging for assistive 
technologies, adaptive housing, and all available health care and 
benefits (DOD and VA) they have earned. Additionally, WWR's Marine Corp 
Liaison assigned at the VA collaborates closely with VA Care Management 
team to resolve Marine Corp issues or care management needs.
Combat Health & Resiliency of the Force
    Marines, sailors, and their families have experienced significant 
stress from multiple deployment cycles, the rigors of combat, high 
operational tempos, the anxieties of separation and countless other 
sources from a decade at war. We remain engaged in developing ways to 
reduce the traditional stigmas associated with seeking mental health 
care, but perhaps more importantly, we continue to add resources and 
access to care to meet the mental health needs of marines, sailors, and 
their families.
    Post-traumatic stress (PTS) will be a long-term issue for all DOD 
leadership, requiring close attention and early identification of those 
affected in every Service. PTS is diagnosed as a disorder (PTSD) once 
the symptoms become distressful to a marine and his or her ability to 
function in the military environment is impacted.\16\ Although most 
marines with PTS symptoms will not develop PTSD, our leaders require 
the skills and training to identify and intervene earlier for those at 
the highest risk of developing PTSD, especially given that often there 
are long delays in the development of this condition. As such, we are 
empowering leaders to identify and intervene earlier through increased 
training and awareness using programs like our Marine Corps Combat 
Operational Stress Control Program and embedded Operational Stress 
Control and Readiness teams in our ground units. We are employing 
better screening practices in our standard health assessments, 
establishing deployment health clinics (i.e. facilities not labeled as 
mental health clinics nor associated with a Military Treatment Facility 
in an overall effort to reduce stigma) and tracking those with 
significant injuries often leading to PTSD via our Wounded Warrior 
Regiment.
---------------------------------------------------------------------------
    \16\ The current yearly rate of PTS diagnosis in Active Duty 
marines is less than 2 percent as compared to 3.5 percent in the 
civilian population. The percentage of marines who will be diagnosed 
over their lifetime with PTS is estimated to be 10-18 percent while the 
civilian population lifetime diagnosis is estimated to be 6.8 percent.
---------------------------------------------------------------------------
    We are engaged on multiple fronts to diagnose and treat those with 
a traumatic brain injury (TBI) including prevention, education, early 
identification, treatment, rehabilitation and reintegration. We are 
actively implementing the requirements of DOD Directive Type Memorandum 
09-033 regarding mild TBI/concussion. Moreover, the Marine Corps, with 
Navy support, has established a Concussion and Musculoskeletal 
Restoration Care Center 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. In concert with Navy Medicine, we are fielding a TBI module 
within the Medical Readiness Reporting System to track TBI exposures 
and diagnoses.
Suicide Prevention in the Force
    We continue to report a positive, steady decrease in the number of 
suicides within the Corps from high levels seen in 2009. While we 
cannot yet draw a conclusion between our prevention efforts and the 
reduced suicide rate, we are cautiously optimistic our programs are 
having a positive effect. However, reported suicide attempts have 
continued to increase. We suspect this increase in attempts may be due 
to improved surveillance--fellow marines recognizing the signs of 
suicide and intervening to stop attempts, and more marines reporting 
past attempts when coming forward for help.\17\ Regardless, we still 
need to do better because one suicide completed is one too many.
---------------------------------------------------------------------------
    \17\ There were 33 confirmed suicides and 175 attempts in the 
Marine Corps during calendar year 2011.
---------------------------------------------------------------------------
    Suicide is a preventable loss of life that diminishes readiness and 
deeply affects our Marine Corps family. We believe that suicide is 
preventable through engaged leadership, focused on efforts aimed at the 
total fitness of each marine to include physical, social, spiritual and 
psychological dimensions. The Marine Corps is involved with five major 
studies to better understand suicide risk among servicemembers, 
contributing factors and ways at prevention. This past year, we 
expanded our ``Never Leave a Marine Behind'' suicide prevention program 
for noncommissioned officers (NCO) and junior marines to the staff 
noncommissioned officer and commissioned officer ranks. Our DSTRESS 
hotline and website, implemented last year on the west coast as a pilot 
program, will be expanded to serve those across the Corps. We will 
remain engaged on multiple fronts to combat suicide in our ranks.
Sexual Assault Prevention & Response
    The key to preventing sexual assault is ensuring everyone 
understands his or her role and responsibilities in preventing it. A 
consistent, vigorous training and education element are crucial. 
Bystander intervention has been identified as a best practice for 
engaging marines in their role to prevent sexual assault and is being 
incorporated into our Sexual Assault Prevention and Response (SAPR) 
training. In January 2012, we launched the video-based NCO Bystander 
Intervention course, called ``Take A Stand.'' This course was modeled 
after our successful, award-wining Suicide Prevention Program awareness 
campaign entitled ``Never Leave A Marine Behind.''
    We have initiated aggressive actions to elevate and highlight the 
importance of our SAPR program. Our victim-centric SAPR program focuses 
on: preventing sexual assault, improving a victim's access to services, 
increasing the frequency and quality of information provided to the 
victim regarding all aspects of his or her case and expediting the 
proper handling and resolution of a sexual assault case. We are 
credentialing our Sexual Assault Response Coordinators and Victim 
Advocates on victim advocacy. We have standardized training protocols 
for our 24/7 hotline, in use at all major bases and stations to provide 
information, resources and advocacy of sexual assault. We have 
increased SAPR training at all levels for our judge advocates (JA). 
This year, mobile training teams from our Trial Counsel Assistance 
Program will continue to instruct Navy Criminal Investigative Service 
agents and JAs on sexual assault investigation and best practices at 
bases and stations in Japan, Hawaii, and on the east and west coasts.
Veteran Marines
    The concept of keeping faith also applies to our Veteran Marines. 
In 2011, the Marine Corps launched a comprehensive effort to anchor the 
legacy of our Montford Point Marines--20,000 African American men who 
underwent segregated training from 1942-1949 and ultimately integrated 
the Corps--into our training and education curricula. The Montford 
Point Marine legacy will be used to educate and inspire all men and 
women who enter the Marine Corps today regardless of race, religion or 
creed. We will teach the importance of varying perspectives, 
compassion, courage, perseverance and self sacrifice through the 
Montford Point Marine history. We are thankful to Congress for recently 
conferring the Congressional Gold Medal on the Montford Point Marines, 
a fitting tribute to a pioneering group of marines who fought valiantly 
in some of the bloodiest battles of the Pacific and later went on to 
serve in Korea and Vietnam.
Family Readiness Programs
    As directed in my Planning Guidance issued to the Corps in October 
2010, we are in the final stages of a review of all family readiness 
programs to identify ways we can better assist and provide services to 
our families. Over the past year, Marine Corps Community Services 
conducted dozens of focus groups at bases and stations throughout the 
Marine Corps with Active and Reserve component marines, commanders, 
senior enlisted advisers, and spouses. The focus groups, survey and 
prioritization results found that the top-rated programs conformed to 
the Commandant's Planning Guidance priorities or congressional 
mandates. These assessments revealed opportunities to increase program 
success in three areas: (1) defining future capabilities and 
sustainability standards that correlate to the Commandant's Planning 
Guidance priorities but also recognized unique installation or command 
missions, locations or market conditions; (2) balancing available 
resources to support priorities and defined capabilities; and (3) 
developing accountability and inspection processes to support 
capability sustainment. Efforts are currently underway to apply these 
results and develop actionable program plans and supporting resource 
requirements to provide and maintain capabilities at the appropriate 
level for the right duration.
    With at least 50 percent of our Corps composed of unmarried men and 
women, this year we mandated that every battalion and squadron have a 
representative from the Single Marine Program serving on its unit 
family readiness command team. This will provide an advocate on behalf 
of single marines to ensure information, normally communicated solely 
from leadership to Marine spouses and families, is shared with their 
parents and siblings.
Transition Assistance
    There are three things the Marine Corps does for our Nation: make 
marines; win our Nation's battles; and return quality citizens. We are 
conducting a wholesale revision of our Transition Assistance Management 
Program (TAMP) to better meet the needs of our transitioning marines in 
support of returning quality citizens. We are integrating TAMP, as part 
of the Professional and Personal Development Program, into the life-
cycle of a marine from recruitment, through separation or retirement, 
and through Veteran Marine status.
    We have transformed our Transition Readiness Seminar from a mass 
training event, in need of great improvement, into an individualized 
and practical learning experience with specific transition readiness 
standards that are effective and beneficial to marines. In January 
2012, we began holding a revised and improved Transition Readiness 
Seminar Pilot Program at four separate installations with full 
implementation scheduled for March 2012; early feedback on our pilot 
program has been very favorable. The revised 5-day Transition Readiness 
Seminar includes 2 days of mandatory standardized core curriculum with 
four well-defined military-civilian pathways:

         University/College
         Vocational/Technical training
         Employment
         Entrepreneurial Endeavors.

    In this new system, a marine will choose the pathway that best 
meets his or her future goals and will have access to individual 
counseling services related to each pathway. The enhanced TAMP program 
will support improved reach-back and outreach support for those who may 
require more localized support in their hometowns with information, 
opportunities or other specific needs. We are determined to make the 
Marine Corps TAMP program more value added for our departing marines.
Compensation
    The President's budget acknowledges the reality that military pay, 
allowances, and health care consume roughly one-third of the defense 
budget. These costs cannot be ignored in a comprehensive effort to 
achieve savings. In my judgment, this budget achieves the appropriate 
balance in compensation, force structure, and modernization. It 
sustains the recruitment, retention, and readiness of the talented 
personnel that defend our Nation.
    The proposed compensation reforms are sensible. Basic pay raises in 
fiscal years 2013 and 2014 will match increases in the private sector. 
We propose more modest raises in later years--but no reductions, no 
freezes. TRICARE enrollment fees and deductibles increase for retirees, 
but they are tiered based on retired pay and remain significantly below 
market rates. Pharmacy co-pays will trend towards market rates for 
retail purchases, but will be substantially lower for generic drugs and 
mail-order delivery.
    These changes are not intended to alter care services currently 
provided to our active duty personnel and their families. Those who 
have been medically retired as a result of their service, particularly 
our Wounded Warriors, are also exempted. So are our Gold Star Families. 
It is the right thing to do for those who have given so much.
    Finally, I endorse creating a commission to recommend reforms in 
retired pay. Any changes should grandfather benefits for those 
currently serving. We cannot break faith.

                                SUMMARY

    History has shown that it is impossible to predict where, when and 
how America's interests will be threatened. What is known, however, is 
America cannot maintain a strong economy, cannot have a strong 
industrial base, cannot have access to overseas markets and cannot 
assure its allies without security . . . at home and abroad. Looking 
ahead at the fiscal challenges we face as a Nation, our country will 
still need to respond to crisis and project power abroad, wherever and 
whenever needed. The optimum and most economical means to do so is 
through a multi-capable force afloat that can also come ashore rapidly.
    The Navy and Marine Corps Team is the Nation's risk mitigator for 
an unknown future and the crisis response force that will be ``the most 
ready when the Nation is least ready.'' There is a cost to maintaining 
this capability. But, with that cost, our Nation gains the ability to 
respond to unexpected crises, from humanitarian assistance and disaster 
relief efforts, to non-combatant evacuation operations, to the conduct 
of counter-piracy operations, raids or strikes. This same force can be 
reinforced quickly to contribute to assured access anywhere in the 
world in the event of a major contingency. It can be ``dialed up or 
dialed down'' like a rheostat to be relevant across the range of 
military operations. No other force possesses the flexibility to 
provide these capabilities, but yet can sustain itself logistically for 
significant periods of time, at a time and place of its choosing.
    Through the fidelity and support of Congress, our marines and 
sailors in the fight have received everything necessary to ensure 
success over the past decade of near constant combat operations. Our 
combat forces' best interests and needs remain my number one focus 
until our national objectives in the Long War have been achieved. 
However, as we rightfully begin to transition to the challenges and 
opportunities of the post-OEF world and reorient to the Pacific under 
our new Defense Strategic Guidance, the Marine Corps must begin to 
rebalance and modernize for the future.
    Through judicious choices, forward planning and wise investments--
ever mindful of the economy in which we live--we have worked diligently 
to determine the right size our Corps needs to be and to identify the 
resources we will require to respond to crises around the world, 
regardless of clime or place. As we continue to work with Congress, the 
Navy and the DOD in maintaining the institutional pillars of our high 
state of readiness, you have my assurance that your Corps will be 
``ever faithful'' in meeting our Nation's need for military crisis 
response.

    Chairman Levin. Thank you so much, General.
    Let's start with a 7-minute round for questioning.
    First let me ask each of you, starting with you, Mr. 
Secretary, then Admiral Greenert, and then General Amos. DOD 
created a new defense strategy to guide creation of the fiscal 
year 2013 defense budget request. Did each of you have an 
opportunity to provide input into the development of the new 
strategy and in your view does the budget request support the 
strategy, and do you support the budget request? Secretary 
Mabus.
    Mr. Mabus. Senator, the answer to all three of your 
questions is yes.
    Chairman Levin. Thank you.
    Admiral Greenert?
    Admiral Greenert. Yes, sir, to all questions.
    Chairman Levin. General Amos?
    General Amos. Yes, sir.
    Chairman Levin. Now, in terms of the marines on Okinawa, 
Guam, and in the Asia-Pacific, I think you're very much aware 
of the issues there. Senators McCain, Webb, and I have been 
voicing concerns, and others have as well, about some of the 
issues that are involved there, including the roadmap 
realignment agreement, the buildup on Guam, and some of the 
changes that are being considered in the current plan.
    The National Defense Authorization Act (NDAA) for Fiscal 
Year 2012 contains a statutory provision that would block the 
expenditure of funds for the buildup on Guam until a number of 
conditions are met. First would be submission to the committee 
of the Marine Corps Commandant's preferred force laydown and of 
a master plan for the construction of the facilities and 
infrastructure necessary to implement that preferred force 
laydown.
    Another one of the requirements is that the Secretary of 
Defense submit an independent assessment of the force, of our 
force posture in East Asia and in the Pacific region.
    Mr. Secretary, I assume you're familiar with that statutory 
requirement?
    Mr. Mabus. Yes, I am.
    Chairman Levin. Secretary Mabus, do you know if an 
independent entity has been selected yet to conduct that 
statutorily assessment?
    Mr. Mabus. Senator, my understanding is that DOD has 
selected someone. I don't know if the contract has been signed 
to do that. But my understanding is that the final date 
required by the NDAA for submission to this committee, the plan 
is to have that report to you by that date.
    Chairman Levin. If you could just let us know for the 
record if that contract has been signed and with whom, we'd 
appreciate it.
    [The information referred to follows:]

    A contract was awarded on March 23, 2012, to the Center for 
Strategic and International Studies to comply with the provisions of 
the 2012 National Defense Authorization Act, section 346. The Office of 
the Secretary of Defense (Policy) should be contacted if additional 
information is required.

    Chairman Levin. General, as the United States and Japan 
reconsider the plan for the marines on Okinawa, are you 
comfortable with the new plans for the laydown and the 
composition of marines that are being considered for Guam and 
Okinawa?
    General Amos. Mr. Chairman, I am, as much as we know today. 
As you're aware, both our Government and the Government of 
Japan at the very highest levels are still working through some 
of the issues, and as much as I know today and what I've heard, 
I am comfortable, sir.
    Chairman Levin. Thank you.
    General, do you need any special authorities or legislation 
to ensure that the reductions which you talked about, when 
they're made, that we're able to take care of our people?
    General Amos. Mr. Chairman, are you talking about the 
drawdown?
    Chairman Levin. I am.
    General Amos. Sir, I need your help.
    Chairman Levin. Any special authorities that you need?
    General Amos. Not authorities, sir.
    Chairman Levin. All right. Any help you may need, just let 
us know; would you?
    General Amos. Yes, sir, I will.
    Chairman Levin. If you know right now and you want to 
comment on that, you can. But if not, just let us know.
    General Amos. Sir, I was just going to make a comment. When 
the budget was submitted, it dropped 20,000 marines in 1 year. 
As I said in my opening statement, as we look back on this 
thing and planned a year and a half ago how we would draw the 
Marine Corps down responsibly that number is executable at 
about 5,000 a year without some precipitous action and drop, 
with some significant impact on our families. It sends the 
wrong signal. So I'll need some help financially to continue to 
maintain that ramp at 5,000 a year.
    Chairman Levin. All right. You just let us know as this 
proceeds as to how we can be helpful.
    On the F-35B probation, Secretary Panetta removed the F-
35B, the STOVL variant, from the probationary status a year 
earlier than was planned. I think both Senator McCain and I 
have indicated that we found that action troubling. The fixes 
to the problems that caused Secretary Gates to put the plane on 
probation in the first place; the testing has not been 
completed on those fixes.
    General, I assume you urged the removal of the F-35B from 
the probation list. Is that accurate?
    General Amos. Mr. Chairman, I think urged would probably be 
the wrong adjective. I tracked this, starting a year ago this 
last December. I tracked it very, very carefully. I've watched 
the six major thresholds, to include the weight of the 
aircraft, very, very carefully over this last year. So I was 
able to provide my best military advice to the Secretary.
    In light of those six major thresholds and looking at the 
program's progression, tests, and everything, I recommended 
that he consider removing it from probation.
    Chairman Levin. All right.
    Secretary Mabus, were you involved in that recommendation 
as well?
    Mr. Mabus. Yes, Mr. Chairman, I was.
    Chairman Levin. Did you recommend that it be removed from 
probation a year earlier, and if so why?
    Mr. Mabus. I did, because of the things that General Amos 
just mentioned. General Amos has followed this very carefully. 
I went out with General Amos to the USS Wasp to watch the first 
on-board ship testing of the aircraft and, given the gains that 
had been made in weight reduction, given the progress that has 
been made on engineering fixes to some issues that had been 
found earlier, given the fact that the plane was now either 
meeting or exceeding test points, both in terms of number of 
test flights or number of test points in each flight, I thought 
that it was performing at the level it should be to be treated 
as a normal acquisition program and not one that was on 
probation.
    Chairman Levin. Mr. Secretary, let me ask you a question 
about our Aegis ballistic missile defense (BMD) ships. BMD is 
still fairly new and it's a growing mission for the Navy. Much 
of the European Phased Adaptive Approach to missile defense is 
going to be based on the Aegis BMD capabilities, whether it's 
at sea or ashore.
    I think in your prepared statement you note that, ``over 
the past year, BMD ships took up position in the eastern 
Mediterranean to provide BMD for both Europe and Israel.'' Let 
me ask both you and the Admiral whether you are confident that 
the Navy's going to be able to continue providing the ships 
needed to fulfil missile defense missions such as the ones that 
you mentioned for Europe and Israel, given the situation with 
the ships and their ability to be present in the Eastern 
Mediterranean?
    Mr. Mabus. Mr. Chairman, I do remain confident that we will 
be able to meet this BMD mission with our Aegis ships, for a 
couple of reasons. One is that we are making more ships BMD 
capable. We have today I believe 24 ships that are that way. By 
the end of the FYDP that number will be close to 40.
    Second, as the CNO said in his remarks and also as he has 
said numerous times, by stationing four DDGs in Rota, Spain, we 
will be able to provide the coverage needed with far fewer 
ships than if those ships were stationed in the United States 
and had to transit back and forth.
    Chairman Levin. Admiral, do you want to add anything to 
that?
    Admiral Greenert. Yes, sir. Our demand signal is 15 BMD-
capable ships available by fiscal year 2015 for the European 
Phased Adaptive Approach. They have to have the right program 
with the right missile and proficient, and we are on that track 
with this budget submission.
    Chairman Levin. Thank you so much.
    Senator McCain.
    Senator McCain. Thank you, Mr. Chairman.
    Mr. Secretary, the reason why Senator Webb, Senator Levin, 
and I and others have been concerned about the issue of Guam is 
because the costs have escalated dramatically, at least in one 
area from $6 billion to $16 billion. There has been slow 
progress with the Japanese. So we decided, Senator Levin, 
Senator Webb, and others of us, that we needed some outside 
independent view of this situation.
    We passed the National Defense Authorization Bill in 
December. It's now been 2\1/2\ months. How long does it take 
for a contract to get an independent assessment, Mr. Secretary?
    Mr. Mabus. Senator, since this contract is not under my 
purview, since I don't let this contract----
    Senator McCain. I see, it's somebody else's responsibility. 
I want to tell you for sure that until we get that independent 
assessment there should be no concrete plans made by the 
Secretary of Defense or DOD until we have a chance to examine 
an independent assessment and then go through the authorization 
process for any expenditure of funds that need to be made in 
order to get this redeployment issue into some kind of sanity.
    Believe me, we acted, as is our responsibility, because of 
our intense frustration about the lack of progress on this 
issue. Now, 2\1/2\ months go by and they haven't even let a 
contract get an independent assessment, and we wanted it to be 
completed by April 1, which obviously cannot happen. I'm not 
going to let you continue to slow-walk us on this issue.
    Just to put things in perspective on the F-35 again, we 
started the program in 2001. The cost estimates for 2,456 
aircraft were going to be $238 billion. We've now had 
additional costs of $150 billion, 150 additional billion 
dollars in costs. As I understand it--please correct me if I'm 
wrong, General Amos--Block 4, 32 aircraft, which are 
approximately 50 percent complete, are now $500 million over 
originally estimated cost.
    Are those figures wrong?
    General Amos. Senator, I can't say whether the figures are 
wrong or not.
    Senator McCain. Do you know what the initial cost was 
supposed to be, General?
    General Amos. I do. I was the head of aviation.
    Senator McCain. Is that fact wrong?
    General Amos. That fact is pretty close, sir.
    Senator McCain. There's been a $150 billion additional cost 
overrun; is that fact true?
    General Amos. Sir, I can't comment on that. I don't know.
    Senator McCain. You don't even know what the cost overrun 
has been?
    General Amos. Sir, this is not a single point in time. I've 
noticed the program go. I went through the technical baseline 
review last year.
    Senator McCain. Let me interrupt you again. Do you argue 
the fact that there's been $150 billion additional cost to the 
aircraft since the original estimate of $238 billion?
    General Amos. Sir, I can't comment on that. I can't tell 
you whether it's $150 billion. I know it's significant.
    Senator McCain. So for the record, you don't know how much 
the cost overrun has been for the F-35?
    General Amos. Not precisely.
    Senator McCain. Roughly? Do you know roughly what the cost 
overrun has been?
    General Amos. Sir, I don't.
    Senator McCain. That's remarkable.
    So we continue to have $500 million cost overruns on the 
additional 32 aircraft that are 50 percent complete. Does that 
mean, Mr. Secretary, that we will have a billion dollar cost 
overrun since the aircraft are 50 percent complete on Block 4 
aircraft?
    Mr. Mabus. Senator, I don't know if you can make that 
extrapolation or not.
    Senator McCain. All I can say is that I have been watching 
this aircraft since 2001 and I've watched the cost overruns 
now, and I don't believe that it's inaccurate to state there's 
been roughly $150 billion in additional costs. We are now still 
in the early stages of what was planned to be 2,456 aircraft.
    What is your assessment, Mr. Secretary, of the situation as 
regards the F-35 now?
    Mr. Mabus. The situation for the Navy and Marine Corps as 
regards the F-35 is, because of some of the issues that you've 
identified with concurrency and with the readiness of the 
aircraft, we have reduced the number of planes that we are 
going to buy over the FYDP, but we have remained constant in 
the number of total aircraft that we will buy in the program, 
680 aircraft total for the Navy. That's 420 for the Marine 
Corps, including 360 Bs and 80 Cs for the marines; and the 
remainder C variant for the Navy.
    It's a capability that we need. It's a capability that the 
Marine Corps does not have a backup plan for.
    You correctly pointed out that we have bought the Harriers 
from the British when they retired their carrier. We did that 
to extend the life of the Harrier to make sure that we had the 
vertical takeoff and landing capabilities in place until the 
arrival in sufficient numbers of the F-35B.
    Senator McCain. Thank you.
    Mr. Secretary, the USS Gerald R. Ford cost overruns are a 
billion dollars. I'm not sure how complete it is. Will the Navy 
be asking for legislative relief from the cost cap of $600 
million?
    Mr. Mabus. Senator, not this year, but I'm certain we will 
be asking next year.
    Senator McCain. Is it accurate that there is at least $1 
billion cost overrun on the USS Gerald R. Ford?
    Mr. Mabus. I think it's accurate that it's at least a 
billion dollars over the original estimate, and I think it's 
important to note what we've done to contain these costs. Since 
I've taken office, we have recovered back the fee almost 
completely from the shipbuilder that is building this carrier, 
so whatever money they get from now on will simply cover their 
cost.
    Second, for some of the government-furnished equipment from 
other vendors we have capped the amounts that we're going to 
pay for those. The ship remains on track to be in the fleet in 
2015.
    But third and perhaps most importantly is one thing you 
mentioned in your opening statement. This is the lead ship of a 
class. You and I have discussed how much new technology was put 
on this previously and how the risk went up and how the down 
side of that risk came true. But the one thing that we are 
absolutely committed to and the one thing that we will not go 
forward with CVN-79 is that we will take the lessons learned 
here, we will have a firm price, and we will not come back to 
Congress to ask for raising the cost cap on the follow-on ship, 
the John F. Kennedy, CVN-79.
    Senator McCain. Mr. Secretary, you've pledged $179 million 
as the Navy's share of a $510 million effort to construct or 
retrofit biofuel refineries. Where's the authorization for that 
action?
    Mr. Mabus. It comes from the Defense Production Act and 
from an appropriation made----
    Senator McCain. Authorization? You may get an 
appropriation. I'd be glad to know where it is in that Act.
    By the way, if I could just mention, Mr. Chairman, in 2009 
the Navy paid $424 a gallon for 20,000 gallons of biodiesel 
made from algae, set a world record at the time for costs for 
fuel. According to the plan now, the Navy will need 330 million 
gallons per year of alternative fuels to meet the Secretary's 
stated goal of having 50 percent of the Navy's energy needs 
supplied from alternative sources by 2020 at no price, or cost 
there.
    I don't believe it's the job of the Navy to be involved in 
building and involved in new technologies. Maybe this will be a 
Solyndra situation. I don't believe that it's the job of the 
Navy to do that. I believe it's the Department of Energy who 
should be doing that, and obviously I will seek to act on 
amendments on the floor to try to prevent this kind of waste of 
the taxpayers' dollars, where they paid $424 a gallon for algae 
fuels. I don't think we can afford it.
    Chairman Levin. Do you want to just take a moment to 
comment if you wish?
    Mr. Mabus. Yes. The authority that's being used here is the 
Defense Production Act, which has been in place since the early 
1950s, which says that if there is an industry that Defense 
needs but does not exist in the United States, that Defense not 
only can but should invest in that industry. Energy is 
specifically mentioned in the Defense Production Act as 
something that Defense should look at.
    In terms of moving toward biofuels, the numbers that we 
bought, small test amounts, was high. It's come down 
dramatically since then, even with the small test amounts we've 
been buying. I think that we cannot afford not to do this. We 
can't afford to be dependent on foreign sources of fuel. We 
cannot afford to be dependent on a worldwide commodity that has 
the price spikes and the price shocks that we have.
    As I said in my opening statement, the only place I have to 
go to get money when the price of fuel goes up is out of 
operations accounts. I don't think that is something we can 
afford.
    Chairman Levin. Thank you.
    Senator Lieberman.
    Senator Lieberman. Thanks, Mr. Chairman.
    Thanks to the three of you for your service and leadership. 
I want to ask a few contemporary questions before I get to the 
budget, particularly to you, General Amos, about the marines in 
Afghanistan.
    The first is, we're going through a difficult time, 
beginning with some acts of violence by Afghan National 
Security Forces (ANSF) against our troops and now, obviously, 
we have had a couple bad situations involving our forces. Give 
us a sense, if you can, if what you're hearing from our marines 
in Afghanistan about their relationship with the ANSF and, if 
it's relevant, with the people of Afghanistan that they're 
interacting with? What kind of level of trust interaction do 
they have?
    General Amos. Senator, I can probably sum it up with just a 
recap of an email. I got two of them 2 days ago. We just turned 
over the leadership of the marines in the Helmand Province. 
Major General John Tulin gave up command to Major General Mark 
Reganis.
    ``The night before was a large dinner hosted by the 
Provincial Governor Mangal and Major General Maloof,'' who is 
the 215th Corps commander. I'm confident that you've met him on 
your many visits in there. ``At that dinner that night, with 
all the commanders and the leadership there, there was much 
discussion, almost to the point of tears, as General Maloof 
recanted the last 13 months of General Tulin's time in 
Afghanistan in the Helmand Province. They talked about how the 
marines saved the lives of his soldiers, how marines died 
saving the lives, trying to retrieve a drowning Afghan 
soldier.''
    We've not seen the level of violence in Helmand that we've 
seen in other places. My sense is that it's a result of strong 
relationships, a level of confidence. It doesn't mean there are 
not going to be things that are going to happen, Senator. You 
know this. But I will tell you that there is a great amount of 
confidence between the ANSF, the provincial governors, the 
district governors, the leadership, the Provincial 
Reconstruction Teams from the United Kingdom. There is a real 
sense of brotherhood and bonding there that gives me that sense 
of encouragement that I've talked to you about so many times.
    Senator Lieberman. Thanks, General. That has certainly been 
my impression. Obviously, when individuals on either side, 
Afghan or American--of course, we've been dealing with 
cumulatively hundreds of thousands of people in service in 
Afghanistan--go awry, that attracts the attention. But my 
impression is exactly what you've conveyed, that on the ground 
the relationship between the American and Afghan forces is 
deep, it's full of trust, and it should give us confidence as 
we go forward in our mission in Afghanistan and certainly 
discourage anybody from going into a panic mode about picking 
up and running.
    I want to ask you another very contemporary question since 
you happen to be here. Yesterday or this morning in the news 
there's much been made about the fact that the marines who met 
with Secretary Panetta yesterday were asked to leave their arms 
outside of the meeting area. Frankly, I don't know whether the 
media in writing about that think that's a good thing or a bad 
thing. But I wonder if you could just put it in some context 
and explain that decision?
    General Amos. Senator, it's my understanding--and I don't 
have any more facts than what you have--not because of that 
issue, but on another matter, I wanted to talk to the commander 
yesterday on the ground and I was unable to connect with him. 
But we were exactly in the seam of the turnover. General Tulin 
had left. Secretary Panetta arrived. We have a brand new 
commander on the ground. He's probably been on the ground less 
than 24 hours. He has the Secretary of Defense there.
    It's my understanding that the senior leadership, the 
sergeant major, made the decision. Okay, we don't have the 
Afghans in here with their weapons, so the marines can stack 
their arms. We don't typically do that. Sir, I wouldn't make 
any more out of it than that. I think it was just a decision 
was made. I don't think anything should be read into it.
    Senator Lieberman. Good. That's good enough. Thank you.
    Admiral Greenert, in your prepared testimony you have a 
part where you refer to the history which shows us that 
conflict is unlikely to appear in the form of the scenarios for 
which we traditionally plan, and you particularly make 
reference to the contemporary cases of Iran and North Korea. 
Then you say: ``In our fiscal year 2013 budget submission, we 
shifted procurement, research and development, and reduction 
funds towards weapons systems, sensors, and tactical training 
that can be rapidly fielded to the fleet, including 
demonstrators and prototypes that can quickly improve our 
force's capability.''
    Since we're so focused on Iran and the potential threats 
represented by Iran, particularly in the maritime context, I 
wonder if you could tell us in a bit more detail what the Navy 
is asking this committee to authorize for fiscal year 2013 that 
will specifically increase our capability to defend against any 
Iranian action?
    Admiral Greenert. Sure, Senator. After I took the watch, 1 
week into the job I went to Japan, Korea, and then I went to 
Bahrain to see my counterparts and to sit down in Bahrain and 
talk to Admiral Fox, and then I subsequently talked to General 
Mattis, and I assessed things to myself. I went through the 
Strait of Hormuz on the USS Stennis, and it was a nice clear 
day and I got a pretty nice view of Iranian naval units that 
come out and monitor it.
    So between all of those, I came to the conclusion we could 
do better setting the theater. I wanted to be sure, as I've 
said in my testimony, that we are ready, that our folks are 
proficient, they are confident, and they're good at what they 
do, in case called upon, and I wanted to be sure the theater 
was set.
    Having said that, I requested and we request to improve our 
mine warfare capabilities in the theater. We are moving four 
more minesweeps to the theater. That will make eight. We are 
moving airborne mine countermeasure helicopters. That will take 
us to eight in theater. Then those, working with the British 
minesweeps there, which we exercise with frequently, sets us up 
a little bit there.
    I want to improve underwater unmanned vehicle mine 
neutralization. There are some systems that were available and 
had proven subsequently to be good. I want to be sure we have 
counter-swarm capability, so that's improving the Gatling guns 
and electro-optical and infrared systems, so that as we go 
through, go at night, go during the day, we can see and we have 
a really good view of that.
    You go through the Strait of Hormuz with a carrier, you 
have like a hunting rifle and you also may need a sawed-off 
shotgun. Some people use that as a matter of context.
    There's anti-submarine warfare improvements, torpedo 
improvements, and things of that nature. I'll roll it up to 
about $250 million in fiscal year 2013 that I'm requesting, and 
it rotates out to about $750 million across the FYDP.
    Senator Lieberman. Thanks. That's a very encouraging 
report.
    My time is up. Since Senator McCain understandably and 
correctly questioned the panel about programs the Navy has that 
are over budget, just give me a quick response to one program 
I'm proud to say is not over budget, and that is the 
procurement of the Virginia-class attack submarines?
    Admiral Greenert. Yes, sir. We just took the California 3 
months ago, 8 months early and about $100 million under budget. 
That's the good partnership in my view, Senator, that we have 
with those two vendors.
    Senator Lieberman. Thank you.
    Thanks, Mr. Chairman.
    Chairman Levin. Thank you, Senator Lieberman.
    Senator Inhofe.
    Senator Inhofe. Thank you, Mr. Chairman.
    I wish I had had more time to calculate, getting into this 
thing that was brought up primarily by Senator McCain. On the 
mandated changes in your 50-50 program on the fuel that you 
would be purchasing, just a minute ago, Mr. Secretary, in your 
statement you said that every time the cost of a barrel of oil 
goes up a dollar it costs the Navy $30 million in extra fuel 
costs.
    Senator McCain mentioned the purchase of 20,000 gallons of 
the algae fuel that was $424 a gallon. I assume that's all 
behind us now and we're not doing any more. That was an 
experiment and that's gone.
    But what we are doing now is talking about the cost of the 
50-50 blend. The 50-50 blend as I understand it--and I'm taking 
the figures from you guys--would be $15 a gallon. Your JP5, as 
I know from my own purchases, is somewhere between $4 and $5 a 
gallon. You're talking about an increase of about $10 for each 
gallon.
    Is my math off here?
    Mr. Mabus. No, sir. That's exactly correct. It's again a 
test amount. It's 450,000 gallons of biofuel that we bought to 
do a demonstration at the Rim of the Pacific exercise in July 
off the coast of Hawaii using surface ships and aircraft off 
our carrier there.
    But the whole point of this is to establish a competitive 
industry, and the Navy will not be buying commercial quantities 
of biofuels or anything else that is not commercially 
competitive in price. But it takes a little while to get there, 
and one of the things the Navy can bring is a market for these 
fuels.
    Senator Inhofe. But the figure that I've heard, I thought 
it was a quote from you, that eventually you'll need 330 
million gallons per year of alternative fuels to meet your goal 
of 50 percent; is that correct?
    Mr. Mabus. Yes, sir.
    Senator Inhofe. All right. That means that that would be 50 
percent, so you'd be talking about 660 million gallons. You 
apply your $10 to that and this is a huge amount.
    Mr. Mabus. I'm not going to apply the $10 to that because 
when we get to that level the alternative fuel will have to be 
competitively priced with the fossil fuel that it's being 
blended with.
    Senator Inhofe. Okay. I want not to get into that right 
now, but for the record I want you to send me what you just now 
said and show the documentation. That's not the way I read it. 
But that's all right. Will you do that?
    Mr. Mabus. Yes, I'll be happy to do that.
    [The information referred to follows:]

    When the Navy is buying alternative fuels at operational quantities 
they must be competitive with the fuels they are replacing.
    The purchase of 450,000 gallons of neat biofuels, blended to 
900,000 gallons of 50/50 drop-in marine diesel and jet fuel, was 
purchased for the 2012 Rim of the Pacific (RIMPAC) exercise, at a total 
cost $11 million. $11 million is less than the total annual cost of a 
$0.01/gallon increase to our fuel and is roughly equivalent to a $.40 
increase in the price of a barrel of petroleum. The operational 
demonstration at RIMPAC will complete the Navy's testing and 
certification program of the hydrotreated esters or fatty acids 
alternative fuel pathway by allowing the fleet to utilize these fuels 
in operations such as UNREPs for our destroyers and refueling of helos 
and jets on the deck of our carrier.
    Over the last 3 years we have witnessed the price of alternative 
fuels drop dramatically as research and development efforts and 
purchase volumes have increased. The final step for these fuels to 
reach cost competitiveness is production at commercial scale. To 
accelerate this process the Department of Navy has partnered with 
Department of Energy and the Department of Agriculture under the 
Defense Production Act Title III Advanced Drop-in Biofuels Production 
Project. This effort is dedicated to working with industry towards the 
construction or retrofit of multiple commercial scale drop-in biofuels 
plants capable of producing alternative fuels at a price competitive 
with petroleum.

    Senator Inhofe. All right.
    On TRICARE, we had the Army in here last week and I kind of 
pursued this a little bit. I look at some of the changes that 
are taking place. I know during the Bush administration they 
were talking about making incremental changes in copay at that 
time for 2007, 2008, 2009, and 2010. We put a hold on it in 
Congress. Maybe we shouldn't have done that, because I know 
that the costs of health care have doubled since 2001.
    The budget that we're talking about right now seeks to save 
$1.8 billion in 2013 and $12.9 billion over the period of the 
FYDP. When you calculate this it's my understanding that the 
enrollment fees are going to be increased, depending on what 
rank you are, somewhere between 94 percent and 345 percent. I 
had sent some stuff in for the record when the Army was in 
here. The administration officials said that one goal of the 
increased fees is to force military retirees to reduce their 
involvement in TRICARE and eventually opt out of the program in 
favor of alternatives established by the 2010 Patients 
Protection and Affordable Care Act.
    Do you want to comment about that? Do you think that's 
somebody's goal here?
    Mr. Mabus. I will comment about what we've requested in the 
budget. As you correctly pointed out, health care costs are 
going up dramatically. Personnel costs are the fastest growing 
part of our budget. Something had to be done to get that under 
control.
    The item that's been recommended in terms of TRICARE is 
that for working age retirees from the military that their 
premiums for TRICARE do go up, because in most cases they have 
access to other health care. But even if they want to keep on 
TRICARE, the largest increase, which would be for senior 
officers, would go up to about $2,400 a year for health care. 
That represents less than half of what you would pay as a 
Federal employee or as a civilian out in the workforce for 
health care. So TRICARE would still be significantly less 
expensive than a competing commercial policy.
    Senator Inhofe. Have you done any kind of a study--and 
answer this for the record because it would be a long answer--
as to the number of people who are retiring who might not be 
able to afford this? Because that range that I mentioned I 
think is still accurate.
    [The information referred to follows:]

    The Department of the Navy has not conducted a study on how many 
beneficiaries will no longer be able to afford TRICARE in the out-years 
with the increased planned in the fiscal year 2013 proposal. I defer to 
Department of Defense for any associated analyses. With regards to 
total cost, TRICARE will still be much cheaper than commercial 
insurance. It should be noted, however, that when Congress passed 
TRICARE it was intended to be used only as a supplemental policy, not a 
primary one.

    Senator Inhofe. I wanted to get to one other thing and that 
is what's happening right now over in AFRICOM. I got back 
recently from the Horn of Africa and I talked to Admiral Losee 
and several others. We're concerned about the activity over 
there. We know about the increased activity in Somalia and 
along the east coast, but we also know that more recently the 
activity is on the west coast. I know that at times you've had 
64 incidents of piracy that were reported in 9 countries off 
the Gulf of Guinea. I was there and talking to some of the 
people, and they don't seem to have any resources over there.
    I wonder how thin you're getting spread down there. Are you 
able to do all the stuff that you had not anticipated would 
happen 2 years ago?
    Admiral Greenert. We're able to do what we're asked to do 
in the global force management plan. What we need to do in the 
future to get better is we need to coordinate and synchronize 
with our partners. We had an international seapower symposium 
last October, we got together with the Nigerian navy, the 
Guinea navy, the French navy, and all those of us that operate 
in the Gulf of Guinea.
    What's happening sometimes is we show up and there's two of 
us there, and then there's nobody there for a period of time. 
So I'm meeting in fact next week with the chief of the French 
navy and that's one of the things we're going to sit down and 
do, Senator. We need to synchronize what we're bringing 
forward.
    For us as we move into the future, when we bring on the 
Joint High Speed Vessel (JHSV) and the LCS we will actually 
have a better opportunity to patrol in that area with a ship 
that resonates better.
    Senator Inhofe. I'd direct this at both you and General 
Amos. I was in Liberia not long ago and met with the Navy and 
with the marines there, and a lot of what they're doing, the 
increased activity in the western part of Africa, the section 
1206 and the train and equip programs have been very helpful. 
Would you comment as to that?
    General Amos. Senator, it's been about a year and a half 
since I was over there in the Liberia side. But we put that 
detachment in there to train those two infantry battalions. The 
previous contractor was unsatisfactory with the government. My 
sense in talking with the President, the American ambassador, 
there and the chief of defense was at that time they'd been 
very happy. All my reports have been very favorable.
    Senator Inhofe. Admiral, do you agree with that?
    Admiral Greenert. I do agree. It's a very worthwhile fund.
    Senator Inhofe. All right. Thank you.
    Thank you, Mr. Chairman.
    Chairman Levin. Thank you, Senator Inhofe.
    Senator Hagan.
    Senator Hagan. Thank you, Mr. Chairman.
    General Amos, I just wanted to ask one question on the Camp 
Lejeune water situation. In a recent statement made immediately 
after the airing of the Semper Fi, Always Faithful, documentary 
about the water contamination issue at Camp Lejeune, Major 
General Kessler, the Commander of the Marine Corps 
Installations Command, stated that, ``We are committed to 
finding a responsible solution to this challenging and complex 
situation.''
    I understand that the Agency for Toxic Substance and 
Disease Registry (ATSDR) has the lead in studying the 
contamination issues at Camp Lejeune. Is there anything that 
Congress can do to expedite the care for the servicemembers and 
their families that may have been affected by the contaminated 
water? I know we have the bill that hasn't come forward yet. So 
that's just one question.
    Also, can you just talk a little bit about the progress the 
Marine Corps has made to find and notify those who have lived 
on the base during that period?
    General Amos. Senator, I read the same comment from General 
Kessler, and I agree with him. Since 1991, we have spent $30 
million in an effort to try to bring science into this. There 
are allegations out there. I've read them. We've spent an awful 
lot of time and effort. I'm committed as the Commandant of the 
Marine Corps to be faithful, to take care of my marines, and 
that means all the marines. That's not just the ones on Active 
Duty; all those that have gone before.
    The truth of the matter is today science has not proven 
precisely yea or nay with regards to the Camp Lejeune water and 
its affiliation with cancer. That's the job of the ATSDR and 
that's the job of the National Academy of Sciences.
    We have gone out and we've spent $30 million. We have a web 
site that I know you're familiar with. The Secretary of the 
Navy and I just published a new book and did put it back on the 
web site with facts and communication tips. We just in the last 
3 years have added another 25,000 people to the registry. We're 
sitting at about 179,000 folks that have registered now that we 
provide information to and that they can get it off the web 
site.
    The key is to give them as much information as soon as we 
know scientifically what the relationship is. We're committed 
to that, Senator. Short of Congress specifically going to a 
marine or a marine family and authorizing on a unique basis 
care for that individual, I can't think of anything else short 
of waiting for the science.
    Senator Hagan. I appreciate the efforts that you and 
Secretary Mabus are putting towards this.
    I also wanted to ask, General Amos, about the JSF, which we 
know is essential to the Marine Corps's ability to operate and 
move seamlessly from the sea ashore and in the air. I know I 
don't need to tell you about the aircraft capability of STOVL, 
because we know that that is key to preserving the strategic 
value of the amphibious capabilities.
    I'm pleased that Secretary Panetta has removed the JSF from 
probationary status. The F-35B is scheduled to replace three 
aircraft currently in use by the Marine Corps, which I 
understand is going to save approximately $1 billion in 
operations and maintenance costs. Additionally, the timely 
fielding of the F-35B will preserve the number of ships from 
which the United States can launch strike aircraft.
    Does the current production rate for the F-35 sufficiently 
address the projected strike fighter shortfall, and have the 
Navy and Marine Corps adequately addressed the issues relating 
to the tactical air (TACAIR) integration?
    General Amos. Senator, the very last point on TACAIR 
integration, I am a fan of it. The Secretary, the CNO, and I 
signed an agreement just a year and a half ago. Not that we 
needed to sign an agreement, but to show our Services and DOD 
the level of commitment between DOD and the two Services. I'm 
committed to it. I'm a fan of Marine Corps squadrons on Navy 
carriers and will continue to be that way.
    The amount of the production rate of six per year of my 
variant for the next 3 years is satisfactory to maintain, and 
we can maintain the strike fighter shortfall, we can maintain 
that at that production rate. If the production rates stay 
shallow beyond the next 3 years, then we'll probably have to go 
back to revisit and take a hard look at the strike fighter 
shortfall. We're managing it right now. It is manageable 
through just careful flying and management of the airplanes. 
The numbers are down well below 100 at this point. Anything 
below that is manageable.
    I'm convinced that we are probably in a good position right 
now.
    Senator Hagan. Thank you.
    I wanted to move to sexual assault. Both veterans and 
Active Duty servicemembers have cited that the Pentagon and 
military commanders are not doing enough to prosecute sexual 
assault cases. If it's true, the failure to provide just this 
basic guarantee of safety to women, who now represent over 15 
percent of our armed forces, is not just a moral issue but a 
defining statement about the condition and approach of our 
military. In the Navy and the Marine Corps today, what 
challenges do you face and how do you plan to overcome those 
challenges to create a culture where we can put sexual assault 
in the past? What further steps need to be taken to hold more 
of the perpetrators of these heinous crimes accountable for 
their actions?
    Mr. Mabus. Senator, you described what happens very 
accurately. It's a crime. It's an assault. It's an attack on a 
servicemember. The people who join the Navy and the Marine 
Corps swear to not only protect the United States, but also 
their fellow sailors and marines. This is an attack on one of 
their shipmates, and any amount of sexual assault is 
unacceptable.
    We've done a lot and we're continuing to do a lot. First, I 
established an Office of Sexual Assault Prevention in my 
office. It reports directly to me. I see the person in charge 
of that office on a very routine basis. As a result of that, 
we've undertaken a lot of programs, particularly in the most 
at-risk elements, the young sailors and marines, ages 18 to 
about 25.
    We have one program now that we require of every 
servicemember when they come out of boot camp and they go into 
their A school in the Navy, and every single one does, they 
have three 90-minute sessions on this. We have found that at 
Great Lakes, where boot camp and the A schools are, that sexual 
assaults have declined pretty dramatically when we started this 
program.
    Second, I announced last week that we're undertaking an 
initiative called 21st Century Sailor and Marine, to make sure 
that the Navy and Marine Corps and the sailors and marines that 
comprise it have the tools to be resilient. One of the things 
that we have found is not just in sexual assault, but also in 
domestic violence, in driving under the influence (DUI), in 
fitness, in child abuse, and in suicides, is the presence of 
alcohol. So we are undertaking programs to try to make sure 
that we catch a problem before it creates a life-altering or 
life-ending or career-altering or career-ending event for 
somebody.
    We have run two pilot programs on this, one with the 
Pacific submarine fleet in Washington State, one at the Naval 
Academy, where we have tested for alcohol, and all forms--
domestic violence, sexual assault, suicide, DUIs, fitness--all 
the issues have gone down between 40 and 50 percent as a result 
of this program. We're seeing some programs that work. They 
require very active command involvement. They require active 
leadership by the commanding officers, the sergeant majors, and 
the command master chiefs. But we are going to change the 
culture and make sure that these attacks cannot be perpetrated, 
and it's better to prevent one than it is to prosecute one, but 
if one occurs we will hold people accountable to the maximum 
extent we possibly can.
    Senator Hagan. I certainly do appreciate your efforts in 
this and the ongoing programs. I'm pleased to hear that.
    I also want to tell you that I'm pleased with the efforts 
that you're undertaking from the renewable energy source for 
the Navy.
    Thank you.
    Chairman Levin. Thank you, Senator Hagan.
    Senator Sessions.
    Senator Sessions. Thank you very much, and thank you all, 
gentlemen, for being here.
    As a member of the Budget Committee, I know that the cuts 
you're already undertaking are very significant, and I know 
that the sequester would be catastrophic to DOD. But it remains 
the law. The sequester is in law and will take effect unless 
Congress takes action.
    I don't know that it would be that easy to fix it. I just 
want to tell you, I think the President and the White House 
team and the DOD team need to be thinking about what we can do, 
because I for one do not intend to eliminate the sequester 
totally, as the President's budget basically does. I think 
we'll have to find cuts in other programs in the remaining 60-
plus percent of the budget that's been protected from any cuts. 
That's where we need to find some savings, too. It can't all 
come from DOD.
    That's a complex matter, but I just would warn you that 
we're heading to that time and it could be a problem if we 
don't have a real solid plan to get out of it.
    With regard to Navy shipbuilding, you have a force 
structure assessment coming up, I believe, Mr. Secretary, and 
you've stated you intend to reach an inventory of 300 ships by 
2019. With this force structure assessment, how confident are 
you that it will maintain that as a goal, based on the budget 
and other things? Do you expect that the assessment group could 
come back and recommend even less than 300 ships?
    Mr. Mabus. I don't know what the force structure 
assessment's going to come back at, Senator. But I feel 
confident that having a fleet of around 300 ships will meet 
whatever force structure assessment or whatever strategy that 
drives that force structure assessment.
    We do have that plan, as you pointed out, to get to 300 
ships by 2019.
    Senator Sessions. One thing about it, I may not be here and 
you may not be here in 2019. So plans when they get out too far 
don't have much reality to them, and that's what worries me. We 
had a plan to have 316 ships and did have that many in 2001. 
When you took office it had dropped to 283. As you noted from 
your remarks, we had gone down 49,000 sailors. Some of that is 
because we use better equipment, better ships that need fewer 
people to man them, and I give the Navy credit for that, 
Admiral. We have to, like everyone else, see how we can do 
these things better.
    With regard to the LCS, I'm concerned about the overall 
reductions in that budget in the FYDP. I understand it still 
remains a top Navy priority to have 55 ships produced through 
that program. Where are we in terms of cost and schedule for 
the LCS, Mr. Secretary or Admiral? How does the current 
contract, the execution of the program, compare with the 
initial purchase of the first ship in that program? How do you 
see that program developing?
    Mr. Mabus. Senator, I'm very proud of the LCS program. The 
first ships of both variants came in, as lead ships do, very 
expensive and very high priced.
    Senator Sessions. First in class is always more expensive.
    Mr. Mabus. First in class, it is.
    Senator Sessions. What does it look like now?
    Mr. Mabus. The price has come down from the bids on ships 
5, 6, and 7; the initial bids, the price has come down from 
that by 40 percent. The price is coming down for every ship in 
this contract. We have a block buy of 10 ships from each 
vendor, so a total of 20 ships. The 10th ship of each one will 
be significantly less expensive than the first ship.
    These are all fixed price contracts, so we're certain that 
we will reap these savings. We were able to get 20 ships 
instead of 19 as originally planned, and save $2.9 billion.
    Both shipyards are performing very well. The ships 
themselves, as the CNO has mentioned, are going to be one of 
the very important parts of the Navy going forward. We're 
planning to forward deploy LCSs to Singapore, the first one 
next year in a proof of concept and then on a more regular and 
permanent basis in the 2015 timeframe.
    So we remain absolutely committed, not only to the 
platform, but to buying out the entire 55. For purely budgetary 
reasons, we had to slide two at the end of this 5-year plan to 
make the budget. But we remain committed to buying the entire 
class of 55 ships as quickly as we can.
    Senator Sessions. Briefly, General Amos, does the LCS 
provide benefits for the Marine Corps?
    General Amos. Senator, it could. There's been discussion 
between the CNO and I about what we call a Marine Corps module. 
We have not done anything with that, but I think the 
possibilities are there, absolutely.
    Senator Sessions. Admiral Greenert, do you have any 
comments on that ship line?
    Admiral Greenert. Combined with the mission module, it will 
be a quantum leap in something like mine countermeasures. Now 
we kind of mow the grass, finding mines, locating them, and 
neutralizing them. What we'll be able to do with this is at the 
same time find them, localize them, and neutralize them with 
unmanned vehicles, and the volume will be three times the 
volume that we have today.
    So as we look at the challenges that we consider in the 
world today, the Strait of Hormuz and otherwise, imagine the 
capability enhancement.
    Senator Sessions. I know we're facing a lot of challenges 
with regard to the Navy plans and the DOD plans. Less Air Force 
planes, less prepositioning squadrons for the marines, and also 
less JHSVs. The JHSV has been a very popular ship, has it not, 
Admiral Greenert, by the commanders who've benefited from it?
    Admiral Greenert. It has, yes. The Westpac Express, which 
is what it's kind of based on, has been successful. There's 
great anticipation by the combatant commanders for the JHSV.
    Senator Sessions. It is being reduced, and maybe we can 
examine that. What are your thoughts about that?
    Admiral Greenert. We looked at that and said, I think we 
need 21, and we said, well, what if we crew it with Maritime 
Sealift Command people, because they operate at 270 days a 
year, instead of sailors, 180. With that, it becomes a 
requirement of 16 ships to provide the same presence.
    We said, if we forward-station them, they're there. If we 
can do that, we can get by with 10. We did a study on that and 
that's where the 10 comes from, and that's how that worked its 
way in that direction.
    Subject to change in the world and to strategy, we think 
we're good with ten, and so do the combatant commanders, sir.
    Senator Sessions. Thank you.
    Thank you, Mr. Chairman.
    Chairman Levin. Thank you very much, Senator Sessions.
    Senator Reed.
    Senator Reed. Thank you, Mr. Chairman.
    Gentlemen, thank you for your service to the Nation and to 
the Naval Services.
    Secretary Mabus and Admiral Greenert, your budget includes 
a proposed delay of the Ohio replacement class submarine, the 
SSBNX, by 2 years. Last year the Navy testified that they 
needed the original schedule to maintain strategic deterrence 
patrol requirements, which begs the question: If this 
postponement is in effect, can you maintain the level of 
strategic systems patrolling during the transition from the 
Ohio-class to the new class? Admiral Greenert?
    Admiral Greenert. Today, Senator, we have 14 Ohio-class 
submarines. Two are in overhaul, so that leaves us with 12 
really operational. With that, there are 10 or 9 available at 
any given time for U.S. Strategic Command.
    We feel due to this delay we will ride a period where we'll 
have 10 operational, sometimes 9. So we'll have a similar risk 
there. We have to watch it very closely because at that 
timeframe in that future--I'm talking about the late 20s and 
the 30s--we'll have older Ohios. So we'll have to watch it very 
carefully. But right now we think that we can mitigate that 
risk.
    Senator Reed. In thinking forward, what assumptions are you 
making? Because frankly, you pointed out with the age of the 
fleet, if you're assuming sort of standard operational 
availability that assumption might not be a very good one. So 
are you making any heroic assumptions that fill the gap on 
paper?
    Admiral Greenert. Being Navy nukes, we don't try to be 
heroic. We're engineers. You know us, Senator.
    Senator Reed. I disagree. You're heroes.
    Admiral Greenert. But the long-term maintenance will be 
complete on the class at that time, so we were comfortable 
about that, that we'll have shaken all that down. So far the 
returns on the extension of the Ohio-class, because that's what 
we're talking about in that timeframe, are good. We have to pay 
attention to the sea water systems, the hull measurements, and 
the reactor plant components, which were subjected to neutron 
irradiation.
    We've done this before, that is the process, but not on 
this class of ship. The returns are good so far. We must be 
vigilant.
    Senator Reed. Let me ask another related question, and this 
we've touched upon in some private meetings, the Ohio 
replacement is part of the broader issue of the nuclear triad, 
which for both strategic reasons and for economic reasons is 
going to have to go under significant reevaluation. It seems to 
me, as I've said before, that, given the historic relative 
invulnerability of missile submarines, and given the fact that 
this is really the only new strategic system that is being 
planned actively and funding being afforded to it, delaying it 
might have implications for the overall triad in terms of how 
do we maintain it, particularly if we find ourselves on the air 
and land side with not enough assets.
    So this raises a huge question. I don't know if you have 
any comments today on that topic.
    Admiral Greenert. That's a good question. We looked at the 
nuclear strategic force structure, intercontinental ballistic 
missiles, bombers, and the submarines. We're comfortable with 
the 2-year delay in the Navy, with what we have to deliver as 
it stands today. There's a study underway, nuclear posture, 
post-nuclear posture review study. Pending the results of that, 
we're comfortable.
    But we need to bring the Ohio replacement in. It's 
important. It is the survivable piece of the triad, as you 
said. The Department's been pretty clear on that to us in 
general.
    Senator Reed. Changing subjects from ballistic missile 
submarines to attack submarines, with a constant theme, the 
Virginia-class within your budget we're doing two a year, and I 
thank you gentlemen and your predecessors for working that. It 
took many years. But we're slipping one of the boats, and that 
causes problems. It causes problems, I think, in the overall 
cost of the program. Let me ask either the Secretary or the CNO 
whether you would concur that would add additional costs to the 
program over time? Then what steps you might take to mitigate? 
For example, if we could include an additional ship in the 
multi-year contract, allowing long-term purchases, that might 
be the most effective way to deal with that?
    Admiral Greenert. There's an operational cost that I'll 
quickly allude to. There's SSN years, the requirements of the 
global combatant commanders, and we have a deficit in the 20s 
and 30s. This will exacerbate that by moving the boat from 2014 
to 2018, and that's regrettable. The year 2014 will be hard for 
us. We will retire ships early in that year more than any other 
year in the FYDP.
    If we could work a procurement process using a fiscal 
arrangement, and we will ask for a multi-year procurement in 
that class, as was stated earlier. We would ask for a block 
buy. We have good data on our block buy, where we have saved 
substantial amounts of moneys. It's most efficient. As you 
alluded to, the workforce learning curve is high, the vendors 
are good. Everything comes about. We're getting these 
submarines in early.
    If we could find a way to incrementally fund this, we are 
confident there are substantial savings and we would get a 10th 
boat for less than the notional cost.
    Senator Reed. So there would be a cost savings in terms of 
doing this contractual rearrangement. Then there's also the 
operational costs you'll have to bear because you just don't 
have enough ships capable to go to sea. So there are two costs 
that can be mitigated by this process; is that accurate?
    Admiral Greenert. Yes, sir. There's a capability, a 
capacity, and a cost factor in these.
    Senator Reed. I presume that industry is seriously engaged 
with you to try to find a reasonable way to get this done.
    Mr. Secretary, do you want to comment?
    Mr. Mabus. Yes. We're working with industry. We're working 
to try to find innovative ways to fund this so that we can meet 
the mitigation that you and the CNO have talked about.
    Senator Reed. Thank you, Mr. Secretary.
    My time has expired. General Amos, you look great. I wish I 
looked that good even without an operation. So keep it up. Tell 
those marines to keep going. Thank you, sir.
    Chairman Levin. Thank you, Senator Reed.
    Senator Wicker.
    Senator Wicker. Thank you very much.
    Mr. Secretary, I was very pleased to receive word the other 
day that a memorandum of agreement had been signed for the LHA-
7 America-class amphibious ship that's very important for our 
future freedom of the seas. As we draw down forces in some 
areas of the world and focus on the Asia-Pacific region, this 
will be a linchpin in the American force.
    I assume we will see that final contract concluded within a 
matter of weeks?
    Mr. Mabus. Senator, we anticipate that final contract 
before the end of April.
    Senator Wicker. Excellent. Thank you very much.
    Let me ask you then, both of you, Secretary Mabus and 
Admiral Greenert, about the shipbuilding industrial base. Of 
course, your main concern is getting the job done, but we also 
have to be concerned about the employment peaks and valleys 
that we may see. I noticed in your testimony, Secretary Mabus, 
we're not going to be back to 300 ships until 2019.
    The current FYDP says we'll have new construction of 41 
ships. This is a decrease of some 17 ships from the previous 
FYDP. Considering that and the fact that we're not going to 
even get within 13 ships of our requirement until 2019, what is 
that going to do to the so-called employment valleys, where 
employment at the shipyards is here and then it dips down and 
then we're expecting it to be able to come back and have the 
capacity to go up to a previous level? How is that going to 
play out?
    Mr. Mabus. You're absolutely correct that the industrial 
base is one of the things, particularly in shipbuilding, that 
we have to protect. Once you lose those unique skills, it's 
very hard to get them back when you need them.
    In terms of that, we want to make sure that we have an 
industrial base that provides as much competition as possible, 
so that we not only protect the industrial base, but we also 
protect the taxpayers in terms of how much money we pay for 
ships. Today we have 37 ships under contract, which I believe 
will keep all of our shipyards at a fairly steady manning pace.
    For Pascagoula, for example, they have a DDG-51, they have 
the LHA-7 that you pointed out, they have LPD-26, and we're in 
negotiations over LPD-27. If you take all those and you project 
them forward, there's still going to be at any time in an 
industry like that some peaks and valleys, but we think we've 
smoothed it out to the maximum extent that we can.
    In terms of our other shipbuilders, we only have one yard 
that builds auxiliaries. They now have in the current 
shipbuilding plan and in the FYDP a request for about one ship 
per year, which will keep them stable.
    But we keep a close eye on the industrial base and on the 
competition inside the industrial base, because sometimes one 
of the things that causes these peaks and valleys is not the 
welder out there, it's the overhead. It's the amount of money 
that the shipbuilder decides is necessary in terms of the 
support services. We keep a close eye on this and we expect the 
shipbuilders to do the same.
    But you're absolutely correct in your concern for the 
industrial base and we certainly share that concern.
    Senator Wicker. Admiral, if sequestration kicks in what's 
it going to do to what Secretary Mabus was just talking about? 
Then, Mr. Secretary, I'll let you answer that question also.
    Admiral Greenert. In this strategy, one of the things we 
talk about is reversibility. That's the ability to ramp up if 
need be. But you have to have an industrial base to do that. In 
my view, if sequestration kicks in we will lose the abilities 
that Secretary Mabus referred to in some shipyards. When I do 
rough math, I'm looking at not 285 ships in a given year, I'm 
looking at 230 ships. We don't have enough force structure to 
accrue that kind of savings without reducing procurement.
    I'm very concerned about an industrial base that would be 
able to adjust from sequestration. It would be very difficult 
to keep a shipbuilder that could be efficient in the types of 
ships we need.
    Senator Wicker. Say that again about 230 ships.
    Admiral Greenert. We have 285 ships today. You do rough 
math, you look at the kind of numbers we talk about, and where 
I am today, it's just simple, straight application of math from 
where we are today. We could be around 235 ships.
    Senator Wicker. Mr. Secretary?
    Mr. Mabus. Sequestration has two big problems that there's 
been a lot of conversation about, and a lot of testimony before 
you. One is the amount, but second is how it is implemented, 
without regard for strategy, without regard for priorities, and 
you simply have to take a certain percentage out of every 
account.
    It would be a big issue for shipyards, like the CNO said. 
It would also be a big issue because if we have to take a 
certain amount out of every single program line, there are some 
contracts that we already have out there that we would have to 
take money from. So for both reasons, the amount that is being 
reduced and the way that they're being reduced, I believe that 
Secretary Panetta described the effects as catastrophic.
    Senator Wicker. Thank you.
    Chairman Levin. Thank you, Senator Wicker.
    We're going to take a 10-minute break. [Recess.]
    The committee will come back to order.
    Senator Akaka.
    Senator Akaka. Thank you very much, Mr. Chairman.
    I want to add my welcome and aloha to our panelists, who 
are considered distinguished leaders of our country. I want to 
thank you very much for your tireless efforts in leading the 
men and women of our Navy and Marine Corps for our country. I 
also want to recognize and thank the military members and their 
families for their outstanding service.
    Mr. Secretary, it's always good to see you and speak with 
you. I always wish you well. In your written testimony, Mr. 
Secretary, you indicate the Naval Academy received nearly 7,000 
minority applications for the 2014 class, and it's double the 
number for the class of 2010. Can you discuss what the Navy's 
doing to achieve these significant gains, as well as the 
benefits of a larger pipeline of qualified minority officers 
for the Navy and Marine Corps?
    Mr. Mabus. Thank you, Senator. I will return the good 
wishes, and it's very good to see you.
    The Naval Academy has had an outreach program going now for 
several years to make sure that we get as diverse an applicant 
pool as is possible. Everybody should be accorded the honor of 
defending this country through military service.
    As you pointed out, the number of minority not only 
applicants, but also acceptances, has gone up dramatically. We 
have outside the Academy taken action to make sure for both the 
Navy and the Marine Corps that we are gathering in highly 
qualified, diverse background Americans, not just diversity in 
ethnicity or national origin, but also in terms of geography, 
in terms of backgrounds, and in terms of educational 
experiences, because we believe that we will be a better 
fighting force having that diversity of points of view that we 
bring to bear on any issue.
    We have also expanded Naval Reserve Officer Training Corps 
(ROTC), returning it to some schools, such as Harvard, Yale, 
and Columbia, where it had historically been, but where it had 
been absent for almost 40 years. We are bringing Naval ROTC to 
other schools, like Arizona State and Rutgers, to make sure 
that we do reach the widest population possible.
    Finally, the other thing that we have to do in the military 
is not only get these young, diverse Americans to sign up, but 
also to remain and make the Navy and Marine Corps a career, so 
that the diversity at our higher ranks will mirror the ones at 
our lower ranks.
    Senator Akaka. Thank you very much, Mr. Secretary.
    Admiral, good to see you, too. First, I applaud the 
decision to fully fund ship and depot maintenance accounts. The 
Navy is taking steps to improve maintenance work on its surface 
ships so as to mitigate problems in material readiness that 
have come to light in recent years. Admiral, can you talk about 
some of these improvements? How will these steps affect ship 
maintenance work? Talk particularly, if you can, about Pearl 
Harbor and other shipyards as well.
    Admiral Greenert. Aloha, Senator.
    The biggest change is called the Surface Management 
Engineering Program. We have this in the submarine program and 
the carrier program. Actually, we reinstituted it into the 
surface program. It's laying out the key and critical 
maintenance procedures that need to take place when we bring a 
surface ship in for maintenance, to ensure that it gets to its 
expected service life.
    It involves going into the tanks, looking at the turbines, 
the shafts, the shaft seals, those long-term items that you 
might be tempted not to look at and that we didn't look at in 
the past, where we started finding emergent problems coming up. 
That's the biggest change.
    Then it's to have the discipline to see to it that when we 
bring the ship in for maintenance that we get that work done. 
We have to man the shipyards, such as Pearl Harbor, so we have 
the right planners that can lay out what needs to take place so 
we're efficient when we bring the ship in.
    Senator Akaka. Thank you very much.
    General Amos, I understand that you recently signed a 
revision to a 15-year-old policy addressing hazing. You also 
ordered the Service to begin tracking all hazing allegations 
and investigations, and called on leadership to get more 
aggressive in confronting claims of abuse, and instituted new 
protections for victims and whistleblowers.
    General, I really applaud your attention to this very 
serious matter. Can you discuss some of these new protections 
for victims and whistleblowers?
    General Amos. Senator, it's true I signed a new order out. 
I was a bit surprised to find out it was as antiquated as it 
was. So we did do that. It did put my fingerprints as the 
Commandant of the Marine Corps on the entire matter.
    I've required all leadership, all my general officers, all 
my commanding officers, to immediately put their attention and 
their leadership fingerprints on the matter of hazing and to 
eradicate it. It is like a cancer that is treated and gets beat 
back and you begin to feel good about it, but if you don't keep 
persistent attention on the matter across the Marine Corps, all 
202,000 marines, then it begins to show again, and then you 
have to treat it again.
    This is a leadership issue, Senator. Clearly I'm not happy 
with it. I have not set anything in motion with regards to 
whistleblowers specifically, but the Marine Corps understands, 
they've gotten the message loud and clear, that, number one, 
this is a leadership issue; number two, it's their 
responsibility; and number three, it's absolutely without 
exception unacceptable behavior, and if found out then it's my 
full intention to prosecute it in every case.
    Senator Akaka. Thank you very much for your efforts.
    Thank you, Mr. Chairman.
    Chairman Levin. Thank you, Senator Akaka.
    Senator Ayotte.
    Senator Ayotte. Thank you, Mr. Chairman.
    Thank you, Admiral, Mr. Secretary, and General, for being 
here today. I appreciate it, and your service to our country.
    Admiral Greenert, Admiral Locklear has described the 
Virginia-class submarine as the backbone of our attack 
submarine force. Based on the line of questioning you just had 
with Senator Reed, you said that the slipping of the Virginia-
class production will exacerbate the shortfall that we're going 
to see going forward.
    I have a couple of questions for you. First of all, let me 
say that I'm very proud of the maintenance done at the 
Portsmouth Naval Shipyard, the excellent work done there on the 
Virginia-class submarine, and the importance of that work when 
we think about the role of the Virginia-class submarine as the 
backbone of our attack submarine force.
    But it's my understanding--this is obviously a very 
important issue for us--that the Navy was only able to support 
61 percent of the combatant commanders' requirements for attack 
submarines in 2011; isn't that right?
    Admiral Greenert. That's right.
    Senator Ayotte. So we're only currently in 2011, when the 
combatant commanders asked for support of attack submarines, 
meeting essentially 6 out of 10 requests?
    Admiral Greenert. That's right, ma'am. They provide their 
requests, they're adjudicated within the Joint Staff, and then 
we get our distribution for providing worldwide presence.
    Senator Ayotte. The Navy has a requirement for 48 attack 
submarines?
    Admiral Greenert. That's correct, Senator.
    Senator Ayotte. Based on where we are, and when we look at 
the build rates that are proposed, is it correct to say that 
the Navy will only have 39 attack submarines if we look forward 
to 2030?
    Admiral Greenert. That will be the low point, yes, ma'am.
    Senator Ayotte. So we'll have a nine-submarine shortfall in 
2030 if we continue with the proposed build rate that we have 
in this budget?
    Admiral Greenert. Yes, ma'am. That's the depth, and there's 
a breadth to that, too, of course. Any time you go below 48, 
there's the divot, so it's also the width of that as well.
    Senator Ayotte. Right. So this is a real concern, and what 
it also results in, as I understand it, is a 43-percent 
reduction in forward presence and a 60-percent reduction in 
undersea strike volume if we allow our submarine force to go 
below this level, down to the 39?
    Admiral Greenert. I can't validate the numbers themselves, 
but you're in the rough order of magnitude. It would be 
dramatic. It's very important.
    Senator Ayotte. This is at a time, obviously, where we're 
shifting our focus to the Asia-Pacific region, and of course 
this is an important capability to have in that region, but not 
only in that region. We've talked about the importance in the 
Middle East and other areas around the world.
    Admiral Greenert. Yes, Senator. With the submarines we 
have, the Asia-Pacific would get the attention. So it's the 
rest of the world we also have to pay particular attention to.
    Senator Ayotte. We have other hot areas that we would want 
to be able to do, not only focus on the Asia-Pacific, but of 
course the Middle East and other areas around the world, our 
own homeland as well. Isn't that right, Admiral?
    Admiral Greenert. That's right, Senator.
    Senator Ayotte. I'm very concerned about the proposal in 
the fiscal year 2013 budget of where this will bring our 
production rate. I think that's something that we have to look 
at very carefully in this committee.
    I have to ask you an important question. Would you be 
proposing this production rate but for us handing you a number 
in the Budget Control Act?
    Admiral Greenert. This was a budgetary process. It was all 
about not having enough money in 2014, our toughest year.
    Senator Ayotte. It was about just the number we handed you 
and nothing to do in terms of what we would need for capacity 
to protect, to have a full, robust force where we would want to 
be as we look forward; isn't that right?
    Admiral Greenert. That is correct, Senator.
    Senator Ayotte. That's a real concern to me, because we 
can't drive our national security interests, particularly on 
something so important as our attack submarine fleet, and also 
the overall size of our fleet, by just being handed a number by 
Congress.
    Are we taking on additional risk by doing this?
    Admiral Greenert. There is risk. As you mentioned, capacity 
is the primary. These are very capable submarines. It's the SSN 
capacity around the world.
    Senator Ayotte. I think that's something that this 
committee has to look at and address as we look at the 
authorization and further consider the proposal for fiscal year 
2013.
    I wanted to ask all of you gentlemen, in particular General 
Amos. Last year the Navy announced the plans to place 6 of the 
16 ships from the 3-squadron Maritime Prepositioned Forces for 
the Marine Corps into reduced operating status. This proposal 
was made at a time before the Arab Spring, before we've seen 
some of the unrest in the Middle East that has come forward.
    I was concerned about that reduced operating status at the 
time. In fact, General Panter came before the committee and 
said that it required additional analysis before we went on 
reduced operating status.
    But let's push forward to where we are today. We have three 
prepositioned forces. As I understand the fiscal year 2013 
proposal, we're going to go from three to two. In the area that 
we're going to take out one of the prepositioned forces is in 
the Mediterranean. Just so people understand what areas that 
allows us for faster response time because we have the 
prepositioned forces ready to go there in terms of the 
equipment needed if we have to respond, that's the area of 
Syria, Egypt, Israel, Lebanon, Tunisia, Libya, and the entire 
west coast of Africa. There's nothing happening in that area of 
the world at all that we might want to keep a focus on at the 
moment?
    My question first to General Amos would be was it the 
Marine Corps' proposal to eliminate one of these prepositioned 
squadrons?
    General Amos. Senator, discussion came about the time I 
became the Commandant, so just about 18 months ago, as we were 
looking. This was before the Budget Control Act and where we 
are today, so I want to put it in context. But I looked at this 
thing, having looked at Maritime Prepositioning Ship Squadrons 
(MPSRON) for many, many years, and said, okay, what do we 
really need as a Nation?
    My instinct at that time was probably two squadrons. So 
then the discussion began 18 months ago, do we need three or do 
we need two? But how do we do this thing? I'm a believer that 
two is sufficient, Senator. I think we make adjustments on some 
of the areas that you just talked about and we're going to end 
up having to be more flexible, there's no question about it.
    But my concern with the MPSRONs going to two was that once 
we made that decision, let's build them correctly, let's make 
sure that the two MPSRSONs themselves are what I would call 
enhanced. In other words, they have some of the newer ships 
that are available, with greater capabilities, and they have 
the ability to offload, use these things, and not only for 
training but also for contingencies.
    That's where I am. I'm very comfortable with two. I was 
briefed last night that it hasn't come to the Secretary of the 
Navy for his final decision yet, but among the two Services 
they've worked the details out where they have a pretty good 
plan with 13 ships out of the two. So that's where I know it as 
of today, Senator. I'm comfortable with two; I just want to 
make sure that they are the right makeup.
    Senator Ayotte. In last year's defense authorization I 
included asking for a certification for the readiness posture 
of reducing the status of one of the forces from yourself, 
Commandant, as well as obviously from the CNO and the Secretary 
of the Navy, and then to have the Secretary of Defense make a 
certification to Congress that he felt that acceptable 
readiness posture would still be available.
    I'm going to ask that the same type of certification be 
done if we're going to reduce this, because we're not only 
going from a reduction, but an elimination. We need to 
understand what additional risk we're taking on with that and 
whether in all of your esteemed opinions that this is 
sufficient in terms of our readiness in a critical area of the 
world.
    Mr. Mabus. Senator, we are treating the requirement that is 
in the current NDAA about reduced operating status to also 
apply to the removal of one squadron, and that was the report 
that General Amos referenced that the certifications will be 
coming.
    Senator Ayotte. Very good. I appreciate that.
    My time is up. I can't leave, though, without saying that 
I'm deeply troubled, Admiral, when you tell me that if we 
allow, this Congress, sequestration to go forward that our 
fleet could be in a position where it would go from 285 
capacity to 235, when we know just last year the CNO, your 
predecessor, had told us that the ideal capacity for our fleet 
to meet all of our needs is actually 313.
    So I hope that we will act immediately on a bipartisan 
basis in Congress to stop the sequestration, because when you 
think about our fleet going down to 235 that is an unacceptable 
risk to our country and our allies. I thank you for your 
testimony today and I hope we work immediately so that this is 
not hanging over the head of DOD for you to have to worry about 
and for our military men and women to know that we are behind 
them and we're not going to allow this to happen.
    Chairman Levin. Thank you, Senator Ayotte.
    Senator Begich.
    Senator Begich. Thank you very much, Mr. Chairman.
    Thank you all for being here. Thank you for being so 
patient. I think I'm the last man standing, or the second to 
the last man standing, so I'll try to walk through a couple 
issues.
    Let me say I want to talk a little bit about the Arctic, as 
you can imagine. But first I want to comment on the very early 
stages of this discussion about your research and your 
development with regards to energy. I will tell you I'm going 
to be a huge supporter of your efforts of DOD. I may have some 
questions about some of the efforts that you're doing, but if 
we go back to the 60s in Defense Advanced Research Projects 
Agency, a lot of people forget that they decided to do some 
simple things. They just wanted to communicate between some of 
the different facilities and, lo and behold, today we have the 
Internet.
    Now, you took an initiative. You actually hired someone out 
of the private sector because you thought it was such an 
important thing. The military has been the lead in many areas 
that have advanced this economy in many ways. I use that as an 
example, the 1960s, when the military saw the high value of 
communication and connectivity, and most people didn't even 
know what the heck we were talking about, but DOD spent money, 
probably a lot of money in those early days, which was probably 
criticized. I'm sure there was some criticism back then. But 
today what would we do without it?
    So I think what you're doing in alternative and renewable 
energy, even though I will have some questions on some of the 
expenditures and taking the lead in some of these areas, it is 
critical for our long-term national and economic security.
    I was just in Afghanistan, General, and I saw, I think it 
was at Boldak and a forward operating base, the power of the 
solar panels and the change that has occurred through on-the-
ground testing. As the marines tell me all the time: We don't 
want to carry a lot of junk; we want to carry what we need to 
do our job. When you can knock a lot of pounds off the weight 
and transfer it off the backs of the marines and then they can 
do their job because they have better energy sources, like 
solar panels and the utilization of the battery systems, that's 
powerful. That gives us tactical advantage, at least from my 
perspective.
    So I want you to know, from a person from a State that 
produces a lot of oil and gas, we like what you're doing around 
renewable and alternative energy and research to help this 
country be more economically secure from a national security 
perspective. I hear this debate out there because people wonder 
why you're in the business. Well, because you're in the 
business of saving lives. Part of the work you do in the 
military is try to look at risk analysis, and you have high 
risk when you move those convoys of diesel. If you can reduce 
the risk you save lives, and that's how I look at it.
    That's not necessarily a comment. I just get very 
frustrated when I start hearing the noise out there on what's 
going on.
    So again, I'll pause and just say thank you for the work 
you're doing on the ground. I was impressed by the technology. 
The marines were excited at what they were producing and how 
they could do things that they couldn't do before in 2- and 3-
day increments with energy sources with self-sufficiency.
    So let me pause there. But let me get to the larger 
question if I can: The United Nations Convention on the Law of 
the Sea (UNCLOS), do you support it?
    Mr. Mabus. Yes, strongly.
    Admiral Greenert. Yes, sir, I do.
    Senator Begich. Thank you.
    Let me also say, we had General Jacoby here of U.S. 
Northern Command (NORTHCOM). He was talking about the 
importance and the evolution of Arctic, and one of the 
agreements they're working on--I think he was doing it that 
day, as a matter of fact--between NORTHCOM and the Coast Guard 
is a gap analysis process of what we may need. Today you 
probably saw, or maybe not, because you've been stuck here, the 
Snow Dragon, which is an icebreaker from China.
    They're moving up to the Arctic. They're not messing 
around. They see that as an opportunity economically and 
militarily.
    Can you give me your thoughts, Mr. Secretary and then 
Admiral, how you view the Arctic? Are we prepared? I know you 
did a study on the Arctic roadmap, which was released by the 
Navy through your Task Force Climate Change. Are we prepared? 
If not, what do we need to do?
    Mr. Mabus. Senator, you accurately pointed out we've 
released the Arctic roadmap in 2009, and we are following that 
roadmap. Both the CNO and I have recently been to Canada to 
talk to our Canadian allies about what they are doing in the 
Arctic, what we are doing in the Arctic, and how we can better 
coordinate.
    The question you asked immediately before that. One of the 
things that would help us the most is by approving the UNCLOS. 
It would help us in terms of the rights of freedom of 
navigation. It would also help us as a Nation establish our 
claims in the outer continental shelf and the Arctic. As you 
are far better aware than I am, we have different nations 
competing for the same resources in an Arctic that is going to 
be increasingly ice-free in the summer, so that you can not 
only have navigation through there, and you're already 
beginning to see that, but also extraction of seabed resources.
    I think the first thing we could do is become a signatory 
to the UNCLOS conference. Second, we are actively doing things 
like Ice Exercise (ICEX), where I went last year. We operate 
with the Canadians in their Operation Nanook. But I think that 
our plan is to become more capable in the Arctic as the Arctic 
becomes more accessible over time.
    Senator Begich. Admiral?
    Admiral Greenert. I back everything the Secretary just 
said. I'm completely in line with that. I would add that as we 
organize, train, and equip, operations in the Arctic have to be 
a bullet, a factor, a principle, just like operating in the 
Gulf, which unfortunately we didn't do right the first time, so 
we had problems with warm water, sand, and grit.
    Likewise, we need to continue to do the Nanook exercises 
with the Canadians and the Norwegians, keep those deliberations 
and collaboration going on, continue with ICEX, so we're 
comfortable operating in that domain. That includes critical 
infrastructure, making sure our command and control can be 
supported in that area of the world. Just as we prepare our 
Navy, the Arctic operations have to be a factor in that.
    Senator Begich. One of the things I know and I'm hoping 
for, and maybe we could get this at a later time from you, 
maybe as you lay the Arctic roadmap out, tell us where you 
think you are time-wise on resources and how you're doing, 
because when I see the map, I love this map. I just want to 
have more numbers up here, because I see China and what they're 
doing. They're not messing around. They see us as incapable 
because we don't have enough ice-capable vessels, so they're 
taking advantage of that. We need to equalize our opportunities 
up there.
    I would like at some point, a determination of here's where 
we are, here's where we think we're going, and here are some 
gaps that we need to fill; if that's possible to do in a 
written statement.
    [The information referred to follows:]

Where we are:
    The Navy has made significant progress and completed several major 
action items in the Arctic Roadmap to include the Arctic Mission 
Analysis, two Capabilities Based Assessments and the Fleet Arctic 
Readiness Assessment. These documents provide the foundation and 
justification for future efforts and identify the most likely Navy 
missions and capability needs in the region. We have also made great 
strides in strengthening existing and fostering new cooperative 
relationships in the region. The principle international example of 
this is the Arctic Security Forces Roundtable effort, which is designed 
to promote regional understanding, dialogue and cooperation among 
Arctic Security Forces, enhance multilateral Arctic security and safety 
operations, and adapt to the changing environment and emerging 
missions. It is co-sponsored by U.S. European Command and the Norwegian 
Defense Staff, but much of the work behind the design and execution has 
come from the efforts of Task Force Climate Change and the Arctic 
Roadmap.
Where we are going:
    To facilitate the way ahead on the Navy's plan for the Arctic, we 
are co-sponsoring an Arctic Symposium at the Naval War College with the 
U.S. Coast Guard. This symposium will examine maritime challenges in 
the Arctic region and will develop a risk-based investment and policy 
strategy that identifies and prioritizes near-term (within the next 5 
years) Arctic capability needs. It will include a timeline for 
addressing these capabilities and identify either an existing forum or 
propose a new forum through which we can leverage federal investments 
to avoid overlap and redundancies in addressing mid- and long-term 
Arctic capability needs. The capability recommendations identified in 
the Symposium will be incorporated into the budget process, enabling 
the final phase of the Arctic Roadmap that includes execution of Navy 
budget initiatives to address Arctic requirements.
Gaps that we need to fill or potentially fill:
    As identified in the Department of Defense Arctic Report to 
Congress in May 2011 and supported by the Navy's Capabilities Based 
Assessments, there are three capability gaps that have the potential to 
hamper Arctic operations over the next three decades. The first gap is 
in Arctic communications, and the second is in navigation, to include 
accurate charting of the sea floor, sea ice and weather observation and 
forecasting capabilities. The final gap is in the ability to obtain and 
sustain awareness across all domains in the Arctic region. 
Specifically, there is a significant gap in the area of maritime domain 
awareness, which was identified as a key area for improvement in the 
U.S. Arctic Policy (NSPD-66/HSPD-25).

    Senator Begich. My time is up, but one other piece I'd say 
is we should have further discussion on the need for a U.S.-
controlled deepwater port in the Arctic. We can have further 
discussion. Not only for military activity, but all the other 
activity that's going on up there, we are just at a lack of 
facility up there.
    But again, thank you all very much. I didn't mean to get 
into my rant there about alternative and renewable energy, but 
just a last data point: Alaska by 2025 will be run on 50 
percent renewable energy. We understand the value of it, so I'm 
glad you guys do, too.
    Thank you very much.
    Chairman Levin. Thank you, Senator Begich.
    Senator Blumenthal.
    Senator Blumenthal. Thank you, Mr. Chairman.
    Thank you to all three of you for your extraordinary and 
distinguished service to our Nation, and particularly, General 
Amos, thank you for your endurance and tolerance with us. I 
know your back must be reaching a point of some pain anyway. 
But I'm glad to see you here, as Senator Reed said, looking 
like all of us would like to look with or without that kind of 
surgery.
    Let me begin by saying also how much I admire and respect 
the success--and I underscore the word success--of our marines 
and our soldiers in Afghanistan, where I have recently visited, 
despite all of what we see and all of what's been emphasized at 
the ground level, in targeting high-level leadership of the 
Taliban, the insurgents, and the work done in terms of training 
and transition. I think the work has been very, very 
impressive, and I know you've testified already to that effect, 
but I would just underscore it now.
    I gather that improvised explosive devices (IED), the 
roadside bombs, continue to be a problem there, and I wonder 
whether you feel that we are making any progress in that area?
    General Amos. Senator, they continue to be the low-grade, 
low-expense, highly effective weapon of the enemy, especially 
in the counterinsurgency environment. They're cheaply made. A 
little bit of fertilizer and technical know-how, and you can 
make something that becomes pretty catastrophic.
    We have made progress. We have put a lot of money into 
trying to find these things under the ground. Interestingly 
enough, what we found to be the most successful has been often 
the human eyeball, teaching observation skills to our marines, 
who've kind of gone back to the way we have done business in 
the past.
    So we use some of those things. We use ancient things like 
a bamboo pole that's about 12 or 15 feet with a small hook on 
it, and you kind of drag the ground in front of you looking for 
a command wire. It doesn't cost anything, but saves lives. 
Dogs. We've tried everything from ground-penetrating radar to 
mine rollers. Mine rollers continue to be very successful. 
They're made in Panama City for the most part. We repair those. 
They find the pressure-plated mines on the roads that our 
vehicles go on.
    The ones that get us the most are those ones that are off 
the road, on canal sides, along footpaths and off areas, where 
marines might patrol. Sir, we are mindful; we teach people how 
to look for IEDs and there's a series of ways we grow that 
experience. But nothing replaces the human eyeball.
    It's still a high threat and you still see our great young 
heroes up at the new Walter Reed without their legs today 
because of IEDs.
    Senator Blumenthal. The Pakistanis have been of very little 
or insignificant help in interdicting the ammonium calcium 
nitrate fertilizer that flows across the border?
    General Amos. Sir, what I've read is that's absolutely 
correct. Fertilizer comes in. Of course, it's a big 
agricultural area where we are, Helmand. It's kind of the 
breadbasket of Afghanistan. So you need fertilizer. We don't 
need it to make IEDs.
    Senator Blumenthal. I want to ask a quick question about a 
program that you and I have discussed before, the transition 
assistance program that you have very, very commendably in my 
view emphasized for our marines, and hopefully will be expanded 
for our soldiers as well. Is that transition assistance skill 
training, counseling, expanding, and enhancing in the way that 
you have planned to do?
    General Amos. Senator, it's in its debut stages. We did our 
first two beta tests in the middle of January, and we're 
unveiling it both on the east coast and the west coast. We're 
unveiling it now to the rest of the Marine Corps over this 
spring and the beginning of the summer. In a nutshell, for all 
the members, that's taking the old transition program that I 
went through as Captain Amos years ago, which hadn't changed 
any, to completely new, let's get our veterans hired, how do we 
take that young marine that joined the Service and make him a 
marine for life, such that when he or she finishes their tour 
in 4 years, 8 years, they come out the other side and they have 
the greatest opportunity and chance to get a job, to go to 
school, to learn a trade, or to start a business.
    Those are the four main pathways that we have set for our 
marines. It is a significant effort and we probably won't see 
the real benefits of this for another couple of years. I'm 
willing to wait, but we're on it right now, Senator. I'm very 
optimistic.
    Senator Blumenthal. That's very exciting and very 
promising. Thank you and the Marine Corps for that great work.
    Secretary Mabus, in light of the Navy's need for strategic 
dispersal of undersea warfare assets and the commitment to keep 
40 percent of the attack submarines on the east coast, please 
give us your assessment of the capacity and military value of 
the submarine base at New London.
    Mr. Mabus. The submarine base at New London is one of the 
key components of the strategy in terms of what you pointed 
out, the fact that we will be keeping attack submarines in a 
40-60 split, Atlantic-Pacific; what Admiral Greenert testified 
to a little bit earlier, that it's not just the Pacific where 
the capacity and the capability of these incredible warships 
are needed.
    I also want to thank the State of Connecticut. They have 
invested about $40 million into the sub base there to upgrade 
some facilities so that we can maintain that base at the high 
rate of operational readiness that it is, and that's very much 
appreciated and it's been very helpful.
    Senator Blumenthal. Thank you for those comments. I will 
say on behalf of the State of Connecticut, we've been proud to 
support that sub base because it performs such an important 
mission.
    Would you agree also that with the increasing trend toward 
unmanned underwater vehicles and countermine warfare, the 
strategic importance of that base is only increasing?
    Mr. Mabus. I will agree with that, Senator.
    Senator Blumenthal. Thank you.
    My time is up, but again I want to thank all of you for 
your service and for your very helpful testimony today. Thank 
you.
    Chairman Levin. Thank you, Senator Blumenthal.
    Senator Webb.
    Senator Webb. Thank you, Mr. Chairman. Mr. Chairman, you 
and I probably are the only people here who would remember 
this, but I just have to say, listening to Senator Begich's 
questions about wanting a deepwater port in Alaska brought back 
fond memories of Senator Stevens, when I was Secretary of the 
Navy many years ago, under the strategic dispersal concept at 
that time he was pushing very hard for home ports in Alaska. Of 
course, at that time we had 568 ships in the Navy.
    But also, Admiral, I take your comment about learning how 
to operate in the Persian Gulf, that really brought back a 
strong memory to me from when I was Secretary of the Navy. We 
had just started, actually, operating full-time in there. I 
remember visiting the USS Stanley in the Persian Gulf back in 
1987. The first thing I would do when I would go aboard a ship, 
it came from my youngster cruise at the Naval Academy when I 
worked in the engineering spaces with the snipes, was always to 
go down in the engineering spaces and ask them the last time 
their commanding officer had visited the engineering spaces. 
The railings on the ladder going down in the engineering spaces 
were so hot you couldn't hold onto them. So we've come a long 
way since then.
    I remained almost to the end of this hearing because I was 
quite surprised, Secretary Mabus, to hear the response with 
respect to the questions from Chairman Levin and Senator McCain 
regarding this independent study for the layout on Okinawa and 
Guam that we had mandated. Perhaps this is just a 
miscoordination, because I know it's not under the jurisdiction 
of the Navy, but I hope what you said is not right.
    We mandated by law that there be an independent study and 
that they would report to the Secretary of Defense 90 days 
after the signing of the NDAA, which was December 31, which 
means that this independent study not only is supposed to have 
been contracted, but it's supposed to give its first report to 
the Secretary of Defense in about 2 weeks. Then the Secretary 
of Defense has up to 90 days after that to report to us.
    This is not a small thing. We're not in any way up here 
attempting to kill this program. We're trying to unstick it. 
Administrations have been working on this issue for a little 
more than 15 years. I have had dozens of Japanese delegations 
visit my office just over the last year, including another one 
coming in this afternoon.
    I have been saying to them over the last 3 months that 
there is an independent review that's going to take place in 
tandem with the reviews that are going on. I'm visiting Japan 
on April 1. I had assumed that there would be some sort of 
preliminary report in from the study. Then we're hearing that 
apparently there hasn't even been a contract let. I hope we can 
clarify this.
    Admiral, maybe you can clarify this for me, that the Navy 
has halted potentially about $3 billion worth of construction 
projects on Guam as we attempt to sort all this out. Is that 
correct?
    Admiral Greenert. I don't know that that number is correct. 
I'll have to go back and do the research on that. There are 
some on hold, but the specifics and what they're based on, I 
better check it out before I give you an answer.
    [The information referred to follows:]

    The Navy has not terminated any of its previously awarded military 
construction projects on Guam related to the U.S. Marine Corps 
relocation. Approximately $474 million in construction is underway at 
Andersen Air Force Base, Naval Base Guam and on civilian roadways 
(funded through the Defense Access Roads program). However, the 
Department of the Navy has deferred award of approximately $687 million 
in projects appropriated by the United States and the Government of 
Japan, pending the completion of new environmental studies and master 
planning related to the reduced Marine Corps laydown on Guam. That 
figure consists of: $580 million for five construction projects funded 
by the Government of Japan, $74 million for roadway improvements in 
northern Guam, and $33 million for a cultural repository, mental health 
facilities and school vehicles and supplies.

    Senator Webb. We are in a freeze, and it's being 
misunderstood on Guam. The situation on Okinawa is one of 
probably the top two most volatile domestic political issues in 
Japan. We need to get this going. I know there are continuing 
talks. We follow them every day in my office.
    This is a part of it. It's designed to get an independent 
set of eyes on this because there are so many turf battles over 
in DOD, quite frankly.
    Admiral Greenert. There are harbor projects, regardless of 
how many marines are on Guam, that are proceeding.
    Senator Webb. I know that. I came back from Guam a little 
more than 2 years ago and did everything I could to get the 
White House to put money into that from the Tiger funds. We 
follow this very closely.
    But at the same time, you know and, General Amos, I know 
you know--you and I have had many talks about this--that one of 
the big questions on Guam was just exactly what the Marine 
Corps laydown would look like. I had my own questions about 
this when I first revisited Guam a couple of years ago because 
they were doing a laydown that included dependent personnel, 
family personnel, which was driving up infrastructure and the 
numbers, from 8,000 to potentially more than 20,000 people.
    So we know that this needs to be redone. But I can't 
emphasize strongly enough how important it is that, first of 
all, the law be obeyed here and, second of all, that we reach 
an end point on this for the good of our strategic posture in 
that part of the world and also for our relations with the 
Japanese and the people of Guam.
    No further response is required, but I just wanted to 
reemphasize what Chairman Levin and Senator McCain were saying.
    Thank you, Mr. Chairman.
    Chairman Levin. Thank you very much, Senator Webb.
    Senator Shaheen.
    Senator Shaheen. Thank you, Mr. Chairman.
    Thank you, Secretary Mabus, General Amos, and Admiral 
Greenert, for being here this morning. Hopefully I am the last 
person that you have to hear from. I figure on this committee 
we always save the best for last.
    I actually want to begin where some of my colleagues left 
off, particularly Senator Begich, and that is on the issue of 
energy. I want to thank you very specifically, Secretary Mabus, 
for coming to testify on Monday. The Water and Power 
Subcommittee of the Energy Committee in the Senate, which I 
chair, held a field hearing down at Norfolk on the USS 
Kearsarge. I want to compliment the great staff work in finding 
a ship that was named after a mountain in New Hampshire for us 
to hold the hearing on. It was a nice benefit to the hearing.
    But it was an excellent hearing and it's one that I wish 
everybody on this committee could have gone to, to see very 
directly the difference that moving towards alternatives and 
energy efficiency is making for the efficiency and the capacity 
of our fighting men and women out in the field to do their 
jobs. Secretary Mabus, you made the point that national 
security in today's day and age is really about energy 
security, and if we don't have to be defending the Straits of 
Hormuz and deploying men and women around the world to defend 
foreign oil that comes to us, then we are in a much better 
position to defend the country.
    I was also impressed at some of the statistics that you 
mentioned in your testimony and that we heard at the hearing. 
The Federal Government is the biggest energy user within 
America. DOD is the biggest energy user within the Federal 
Government; 93 percent of all energy used is used by DOD. As 
you so rightly point out, so much of that is fuel to power our 
vehicles.
    I know that there was an exchange earlier around the cost 
of biofuels. I wonder if you could speak to the memorandum of 
understanding that you have with the Department of Agriculture 
and the Department of Energy to try and move forward to develop 
a biofuel that is drop-in, that will allow us to be more 
efficient and reduce the dependence on oil?
    Mr. Mabus. Thank you, Senator. It was good to see you on 
the USS Kearsarge.
    The memorandum of understanding that Energy, Agriculture, 
and Navy signed and that the President announced last August 
was in response to the direction of the Commander in Chief to 
our three departments to come up with a geographically 
dispersed, commercially viable, competitively priced biofuel 
industry for the country. Navy's contribution to that would 
come from the Defense Production Act, which, as I pointed out a 
little bit earlier, explicitly mentions energy as one of the 
things that the Defense Production Act could be used for.
    I think it's important that the requirement is drop-in 
fuel. We're not going to change the engines on our ships or our 
aircraft. We have to have a fuel that will operate on the fleet 
we have today, with the aircraft we have today.
    Second, that this be a geographically dispersed effort; and 
third, that it help this industry reach commercial viability. 
We have seen the cost of biofuels come down dramatically just 
in the small amounts that we have been buying so far. We bought 
biofuels to test and certify our aircraft on, including the 
Green Hornet; and the Blue Angels have flown on biofuels. We 
made, as I pointed out at the hearing, the largest purchase, we 
believe, in American history, 450,000 gallons for use in the 
Rim of the Pacific exercise this summer.
    The cost has been cut in half in the last 2 years just in 
those test amounts. We are convinced that as the military 
brings a market here that the cost of biofuels will be 
competitive with existing fossil fuels.
    Finally, one of the things that we got to talk about at the 
hearing is that this really is one of the core competencies of 
the U.S. Navy. We moved from sail to coal in the 1850s, from 
coal to oil in the early part of the 1900s, and we pioneered 
nuclear in the 1950s. Every single time there were concerns 
about was the Navy trading one form of very certain energy for 
another that was uncertain or more costly. Every single time, 
the change has proven to be correct.
    So I appreciate your help, the opportunity to testify on 
the USS Kearsarge, which represents both the Navy and the 
Marine Corps in their efforts, but also the opportunity to talk 
about how we are planning to use these biofuels and the way 
that we believe the costs will come down.
    Senator Shaheen. Thank you.
    General Amos, we also saw a very impressive demonstration 
of some of the equipment that the marines are using out in the 
field in Afghanistan. I asked one of your Marine Corps 
colonels, Colonel Shurett, who was there, what had been the 
reaction to the marines out in the field when they were 
introduced to things like solar blankets and some of the 
smaller weight batteries and the generators that are now going 
into Humvees. He said, ``Well, the first reaction wasn't so 
positive, but once they realized it could help them complete 
their mission easier and more effectively they're sold.''
    So I wonder if you could comment on that?
    General Amos. Senator, I'd be happy to. I'll tell you, 
marines are slow to change. We have 236 years of history 
unhindered by change and progress. But once we do, we get on it 
with reckless abandon.
    Here's a case in point. Those marines--I remember in 
Operation Iraqi Freedom, after we crossed the border into Iraq, 
one of the things we worried about and struggled with were 
batteries. I mean, honest to goodness, I would sit at briefs 
with three- and four-star generals and we'd be talking about 
batteries. By the way, you couldn't get them, and then once you 
got them you had to carry them.
    Here's a case in point where those solar panels, the 
ability to recharge your radio batteries while you're humping 
along a ridgeline in the Helmand Province, that's what sold it 
for the marines.
    The other thing I'll tell you is that all of a sudden it 
went from being 120 degrees outside and in their shelters and 
now, just with a little bit of ingenuity and some of the energy 
initiatives, you can actually walk inside these things and it 
may be 87 degrees, you might as well be at the North Pole. 
That's what these kids feel like.
    They really have gotten into it, and it's exciting. From my 
perspective, we're just on the cusp of it. I think there's so 
much more we can do when we're dedicated to doing it.
    Senator Shaheen. Thank you very much.
    My time is up, but as a final comment, you'll not be 
surprised to hear that I am also concerned about our four 
public shipyards and the fact that this year's military 
construction budget does not, again, contain much-needed 
dollars for the Portsmouth Naval Shipyard. We have a request 
for modernization report that we, Senators Collins, Ayotte, and 
I, included in the NDAA last year, and it's due back by 
September 1. I hope that that will be on time, and we will see 
what your commitment is to supporting our public shipyards.
    Mr. Mabus. It will be on time.
    Senator Shaheen. Thank you.
    Thank you, Mr. Chairman.
    Chairman Levin. Thank you, Senator Shaheen.
    Do either of my colleagues have additional questions? 
Senator Blumenthal.
    Senator Blumenthal. Yes, Mr. Chairman. I appreciate the 
opportunity to ask one last question to really follow on 
Senator Ayotte's questions about the submarine force and about 
the possibility of going back to the two subs a year program 
for 2014, which I strongly support. I know we've talked about 
it a little bit.
    I believe that going back to that program would be cost 
effective in the long run. I would just like, if you would, 
Admiral Greenert, to comment on the possibility of alternative 
plans and the possibilities for transitioning to that kind of 
2014 two-sub option?
    Admiral Greenert. Yes, sir, Senator. Right now, of course, 
the submarine is in fiscal year 2018. We are requesting a block 
buy starting in fiscal year 2014 through 2018. We would request 
a multi-procurement authority. That gives us the opportunity to 
make what we call an economic order quantity buy, so you can 
buy the reactor vessels, turbines, the shafts, and all that at 
a much better price. The vendors are more efficient, the 
workload and the learning curve is more efficient. Everything 
is more efficient. We have experience in this, and that's 
partly the reason why these submarines are coming in under 
budget and on time.
    What we're looking for is an opportunity, using fiscal 
processes, to be able to, if necessary, incrementally fund this 
such that the savings we know we will accrue in the later years 
can be rolled forward and therefore applied to a second 
submarine in fiscal year 2014. Right now our budget request has 
one submarine. So we'd like to pursue that, and we appreciate 
your willingness to help us with that.
    Senator Blumenthal. I am eager to help you, and I thank you 
for that excellent answer. Thank you very much.
    Thank you, Mr. Chairman.
    Chairman Levin. Thank you, Senator Blumenthal.
    Let me just close by commenting further on this energy 
issue, which I made reference to in my opening statement, 
commending you, Secretary Mabus, for the initiatives that 
you've shown in the Navy. By the way, the Army was here at its 
posture hearing not too many days ago with batteries, pointing 
out how much lighter the batteries are that they're now going 
to use with the troops and what a difference that makes in 
terms of weight and security for our people, as well as energy 
independence for the Nation.
    So you're going to find a lot of support for the energy 
initiatives that you've taken on this committee. There may be 
opposition to it from some and questions probably from all of 
us. But basically I believe most of us will support, at least I 
hope most of us will support, the initiatives that you've taken 
and that the Army is now taking as well.
    We've seen this before. We've gone through this whole 
business before when we've tried to take some action on energy 
alternatives. What we saw is the argument made: well, heck, 
they cost more in the short run. Well, of course they do, and 
that's why we can't just rely on the private sector to produce 
them, because the private sector has a different goal than our 
military does and our government does. Their goal, 
legitimately, is profit. Our goal is the Nation's security. 
Those are not always the same. Short-term profit is not always 
the same as planning for our Nation's security.
    What you have done here is taken some initiatives which are 
the right way to go. They fill in a vacuum that exists in the 
private sector. They fill a vital need. We cannot rely on the 
marketplace to take these initiatives because there's a short-
term loss. They're not as competitive in the short term. That's 
why you have to have these test samples run and a number of 
other short-term production activities.
    I just want to add my voice at the end of the hearing, as I 
did at the beginning of the hearing, in support for these 
creative initiatives which are directly aimed at enhancing the 
security of our country.
    If there are no further questions, we will adjourn again, 
with thanks to all of you, and good wishes for your continuing 
strong recovery, General Amos.
    [Questions for the record with answers supplied follow:]

            Questions Submitted by Senator Claire McCaskill

                       AIRBORNE ELECTRONIC ATTACK

    1. Senator McCaskill. Secretary Mabus, electronic attack is a 
powerful capability that has proven its worth on the battlefields of 
Afghanistan and in the airspace above Libya. The Marine Corps is 
scheduled to begin decommissioning the aging EA-6B fleet in 2016. 
According to fiscal year 2013 budget justification documents, the 
procurement plan for the EA-18G, along with the F/A-18E/F, provide ``a 
solid transition to the Joint Strike Fighter (JSF).'' However, reports 
indicate that the Navy may no longer be planning to use the JSF as an 
airborne electronic attack (AEA) platform. What capability gap for AEA 
will result from the decommissioning of the EA-6B?
    Secretary Mabus. There will be no gap resulting from the 
decommissioning of the EA-6B. The Navy is replacing their EA-6Bs with 
EA-18G aircraft. Currently all three Active component Navy 
expeditionary squadrons and 3 of the 10 carrier air wing squadrons have 
completed transition to the EA-18G. Navy EA-18G squadrons have 
completed two expeditionary deployments including combat operations in 
support of Libya Operation New Dawn (OND), one carrier deployment and 
one squadron is forward deployed in Japan as part of the USS George 
Washington (CVN-73) Carrier Strike Group.
    The Navy will complete its divestiture of the EA-6B by 2015. The 
Marine Corps will continue to fly the EA-6Bs through 2019. As the 
Marine Corps EA-6B fleet draws down, the Marine Corps will transition 
to a Marine Air Ground Task Force (MAGTF) Electronic Warfare (EW) 
`system of systems' approach. This approach will provide the MAGTF 
commander with more capability and more capacity in EW by providing 
systems that are organic to the MAGTF which will reduce dependency on 
low-density/high-demand platforms such as the EA-6B. Podded EW systems 
that are platform agnostic, networked together and coordinated at a 
tactical level will be more integrated and more responsive than current 
Marine Corps EW solutions. Systems like Intrepid Tiger II and software 
defined jamming payloads will provide the warfighter with a more 
flexible and more responsive EW capability that is designed to be 
interoperable with the joint force.

    2. Senator McCaskill. Secretary Mabus and Admiral Greenert, what 
affect will changes to the JSF program have on the Navy's AEA 
capability?
    Secretary Mabus and Admiral Greenert. Changes to the JSF fleet have 
no impact on the Navy's AEA capability. The Navy is transitioning its 
entire EA-6B fleet of aircraft to the EA-18G and will be completely 
divested of the EA-6B by end of fiscal year 2015.

    3. Senator McCaskill. Admiral Greenert and General Amos, please 
describe the importance of controlling the electro-magnetic spectrum 
for your ability to conduct operations?
    Admiral Greenert. In the next 2 decades, we believe the 
electromagnetic environment will become an essential and primary 
warfighting domain. Programmatically, organizationally and conceptually 
(our CONOPS) we are making investments to fully ``operationalize'' this 
important area of warfighting. By 2025, the Navy will manage sensors, 
attacks, defense and communications, treating EW and Cyber environments 
as maneuver spaces on par with surface, undersea and air. We see EW, 
cyber, and spectrum management operations, to include AEA, as essential 
elements of controlling the electromagnetic spectrum (EMS) for global 
maritime operations and addressing the anti-access/area denial (A2/AD) 
strategies of potential adversaries. An example of this is the recent 
significant contribution of EA-18G aircraft conducting EW in support of 
U.S. and NATO forces during the conflict in Libya.
    The Navy continues to sharpen its focus on the ability to fight and 
win in the EMS. As described in my Sailing Directions, Navy will 
``operationalize'' cyberspace with capabilities that span the EMS--
providing superior awareness and control when and where we need it. It 
is a key area of emphasis for our future force development. We have 
made significant commitments in this area that include standing up the 
Information Dominance Community--a workforce focused on this important 
area--as well as recapitalizing our assets that enable us to exploit 
the EMS for sensing and communication, while denying our adversaries 
accurate or effective information. From EA-18G ``Growler'' with planned 
Next Generation Jammer, to shipboard EW modernization with Shipboard EW 
Improvement Program and Ship Signal Exploitation Equipment, our Navy is 
committed to conducting sophisticated AEA as well as effectively 
operating in and controlling the EMS today and far into the future.
    General Amos. Controlling the EMS is equally as important as 
controlling the air, land, and sea domains in which we fight. However, 
we do not need to control this entire spectrum, all of the time. In 
order to operate decisively in a modern electromagnetic environment and 
meet mission objectives, it is essential that we achieve Spectrum 
Control at the time and place of our choosing.
    The EMS is an increasingly congested and contested arena. Our 
success in any operation from disaster response to irregular warfare 
and major combat operations will be linked to our ability to 
communicate, pass data, collect signals intelligence, control unmanned 
vehicles, guide our advanced weapons and utilize global positioning 
systems. Our adversaries, as well as users of commercial technology and 
the world's growing demand for the spectrum, will challenge the 
fundamentals of our operations. Thus, operational success will become 
increasingly dependent upon our ability to achieve control and affect 
maneuver within the EMS.

    4. Senator McCaskill. Admiral Greenert and General Amos, 
operationally, how will the decommissioning of the EA-6B affect the 
Navy's and the Marine Corps' ability to supply AEA platforms to support 
the warfighter?
    Admiral Greenert. The Navy is transitioning its fleet of EA-6B to 
the EA-18G and will be completely divested of the EA-6B by the end of 
fiscal year 2015. By 2016, all 10 carrier air wings will have EA-18G 
squadrons attached to them. Currently all three Navy Active component 
EA-6B expeditionary squadrons have completed transition to the EA-18G 
and the Reserve component squadron will complete its transition in 
2016.
    General Amos. Over the coming years as the EA-6B fleet draws down, 
the Marine Corps will transition to an EW `system-of-systems' approach 
in support of our MAGTF. In time, this approach will provide the 
commander with more capability and capacity to conduct EW by providing 
systems that are organic to the MAGTF. This will reduce our dependency 
on low-density/high-demand platforms. Podded EW systems that are 
platform neutral, networked together and coordinated at a tactical 
level will be more integrated and more responsive than current EW 
solutions. The capabilities being designed into the F-35B, integrated 
with systems like Intrepid Tiger II and software-defined jamming 
payloads, will provide the warfighter with a more flexible and more 
responsive EW capability that is designed to be interoperable with the 
Joint Force.

    5. Senator McCaskill. Admiral Greenert, will the Navy be able to 
meet the AEA requirements of the combatant commanders?
    Admiral Greenert. Yes. The Navy will continue to meet AEA 
requirements of combatant commanders. In PB 2011, Navy procured 
additional EA-18Gs to recapitalize Navy expeditionary squadrons. Navy 
has sustained operations and maintenance for Navy expeditionary AEA as 
well as carrier-based AEA missions. The EA-18G is replacing the EA-6B 
squadron-by-squadron and preventing a potential capacity shortfall in 
this mission area during the transition. Coupled with the Next 
Generation Jammer (NGJ), the EA-18G will provide full spectrum 
electronic attack against high-end threat systems and increased 
capability in Electronic Support and Communications.

    6. Senator McCaskill. Secretary Mabus, the Future Years Defense 
Program (FYDP) contains no funding for EA-18G procurement after fiscal 
year 2013. Does the current EA-18G procurement plan account for changes 
to the JSF program and the effect those changes will have on the Navy's 
AEA capability?
    Secretary Mabus. The U.S. Navy's EA-18G procurement program is a 
self contained electronic attack capability and is independent of the 
F-35 program. The EA-18G program fully recapitalizes the U.S. Navy's 
EA-6B electronic attack capability independent of JSF program changes. 
The Navy will complete procurement of the program of record (114 EA-
18Gs) with the last 12 aircraft in fiscal year 2013. To date, all three 
U.S. Navy Active component expeditionary squadrons and three carrier 
based squadrons have completed transition from the EA-6B to the EA-18G. 
The remaining seven carrier based and one Reserve squadron will 
complete transition by 2016.

               KANSAS CITY INFORMATION TECHNOLOGY CENTER

    7. Senator McCaskill. Secretary Mabus and General Amos, the Marine 
Corps Enterprise Information Technology Services (MCEITS) program is 
currently located at the Kansas City Information Technology Center 
(KCITC). I understand that the Marine Corps has committed to staying at 
the KCITC through at least 2017 and is currently conducting a business 
case analysis (BCA) to help determine a final location for the MCEITS 
program. I have expressed to the Marine Corps on multiple occasions the 
clear advantages of keeping the MCEITS program in Kansas City due to, 
among other things, the duplicative costs to the U.S. taxpayers 
associated with moving the program's personnel and equipment. I am 
confident that, if done correctly, the Marine Corps BCA will 
demonstrate the cost-effectiveness of maintaining operations in Kansas 
City. Will the BCA consider only the costs to the Marine Corps, or will 
the analysis provide a thorough review by taking into account all 
Federal funds associated with each scenario?
    Secretary Mabus. The Marine Corps is conducting a BCA comparing the 
costs and relative benefits/challenges associated with establishing a 
consolidated IT Center to house MCEITS and similar functions in one of 
three potential locations after 2017. Factors that will be considered 
include costs (initial purchase or construction cost of facility, costs 
to upgrade existing facilities, long-term maintenance costs, and long-
term operating costs), ability to attract and maintain a qualified 
workforce, Anti-Terrorism/Force Protection concerns, relocation costs 
and potential encroachment risks.
    The possible locations were selected as a result of a Regional, 
Site and Facility Evaluation Study completed by the Marine Corps in 
October 2010. This study focused on the physical requirements for the 
proposed IT Center; the additional studies being performed include a 
secondary economic analysis that will focus on life-cycle costs over a 
30-year period for each of the alternatives, and a BCA. The BCA, which 
will follow the Department of the Navy Enterprise IT Business Case 
Analysis Template (version 1.1, dated 15 July 2011), will identify the 
specific functions to be included in the IT Center, overall economic 
viability, ability of each alternative to satisfy the requirements for 
an Integrated IT Center, comparison of Mission and Operational Impacts, 
and a comparison of any risks associated with each alternative.
    General Amos. The Marine Corps is conducting a BCA comparing the 
costs and relative benefits/challenges associated with establishing a 
consolidated IT Center to house MCEITS and similar functions in one of 
three potential locations after 2017. Factors that will be considered 
include: costs (initial purchase or construction cost of facility, 
costs to upgrade existing facilities, long-term maintenance costs, 
long-term operating costs), ability to attract and maintain a qualified 
workforce, Anti-Terrorism/Force Protection concerns, relocation costs 
and potential encroachment or future Base Realignment and Closure 
risks.
    The possible locations were selected as a result of a Regional, 
Site and Facility Evaluation Study completed by the Marine Corps in 
October 2010. This study focused on the physical requirements for the 
proposed IT Center; the additional studies being performed include a 
secondary economic analysis that will focus on life-cycle costs over a 
30-year period for each of the alternatives, and a BCA. The BCA, which 
will follow the Department of the Navy Enterprise IT Business Case 
Analysis Template (version 1.1, dated 15 July 2011), will identify the 
specific functions to be included in the IT Center, overall economic 
viability, ability of each alternative to satisfy the requirements for 
an Integrated IT Center, comparison of Mission and Operational Impacts, 
and a comparison of any risks associated with each alternative.

    8. Senator McCaskill. Secretary Mabus and General Amos, in August 
2011, the assistant Secretary of the Navy for Energy, Installations, 
and Environment stated that the analysis was expected to be complete in 
spring 2012. However, on March 1, 2012, the Marine Corps informed me 
that the analysis will be complete in the fourth quarter of 2012. What 
accounts for the delay in the expected completion of the BCA?
    Secretary Mabus and General Amos. Completion of the BCA for the 
consolidated IT Center involves a number of steps, including a study of 
existing and proposed business relationships between computer platform 
managers, like the MCEITS program, and data users; and revalidation of 
requirements (personnel and square footage) anticipated post-2017, when 
the occupancy agreement at the Bannister Complex in Kansas City 
expires. Finalizing the scope of work for the BCA has required 
additional time, particularly as more organizations become interested 
in migrating to MCEITS. Our current projection is that the BCA will be 
complete by the end of August 2012 and certainly in time to support our 
decision schedule for a permanent location after 2017.
    In the interim, the Marine Corps has informed GSA of our intent to 
renew the occupancy agreement on 256,000 square feet of space at 
Building 2306 in the Bannister Complex in Kansas City through 2017.

                              F-35 PROGRAM

    9. Senator McCaskill. Secretary Mabus, for the third year in a row, 
the Department of Defense (DOD) has been forced to delay plans for full 
production of the F-35. Deputy Secretary of Defense Ash Carter has 
stated that the delay is not a budget issue, but rather a fundamental 
problem with the F-35 program. Frank Kendall, Acting Under Secretary of 
Defense for Acquisition, Technology, and Logistics, has stated, 
``putting the F-35 into production years before the first test flight 
was acquisition malpractice.''
    While much attention has been given to the problems plaguing the 
Marine Corps F-35B variant, the F-35A and F-35C both suffer from 
significant design issues. For example, the F-35C has encountered a 
problem with its tailhook, a real and significant problem for an 
aircraft designed to land on an aircraft carrier deck. Last year, the 
Navy requested additional Super Hornets in order to mitigate delays in 
the JSF procurement schedule. Fiscal year 2013 marks the third delay in 
3 years for the JSF program, but, under current plans, the F/A-18 
production line will end in fiscal year 2014, well before the F-35C is 
projected to be combat ready. Ending a viable aircraft production line 
before the JSF program will be able to meet full combat capability 
inevitably assumes a level of risk to the Navy and to the military as a 
whole. What are the risks to the Navy's tactical air (TACAIR) inventory 
of continued delays to the F-35 program combined with the potential end 
of the F/A-18 production line?
    Secretary Mabus. The PB-13 Strike Fighter shortfall will remain 
below a manageable 65 and is predicted to peak at 56 aircraft in 2025. 
The forecasted inventory is based on, among other factors, the SLEP of 
150 legacy Hornets and the F-35 production levels as layed in with PB-
13. Based on current conditions, The Department considers the shortfall 
manageable with acceptable risk.

    10. Senator McCaskill. Secretary Mabus, can the Navy determine with 
certainty that the current service life extension program (SLEP) for 
the F/A-18 will meet program goals?
    Secretary Mabus. Risk is inherent to extending the service life of 
any aircraft. The service life assessment program (SLAP) has been 
completed. Based on the results of SLAP, the Department believes at 
least 150 of these aircraft can reach 10,000 flight hours. The F/A-18 
A-D SLEP program is currently underway. We are continuing to design the 
kits and installations that will be required to extend the service life 
of these aircraft based on the assessment that was done during SLAP. 
The technical risk of developing the required modification kits is 
deemed low, however, changes in fleet usage and aircraft condition 
could dramatically change the technical risk evaluation. The cost and 
schedule risks are medium and known uncertainties at this phase of the 
program remain, therefore we are unable to say with certainty that the 
currently planned SLEP will meet program goals.

    11. Senator McCaskill. Secretary Mabus, if F-35 delays continue, 
will the Navy allow the F/A-18 line to close?
    Secretary Mabus. The Department remains committed to the F-35 
program. The Department of the Navy does not currently plan to keep the 
F/A-18 production line open beyond the final procurement of EA-18G 
aircraft in fiscal year 2013 and F/A-18E/F in fiscal year 2014; 
however, if further delays were discovered beyond the current F-35 
program as presented in the fiscal year 2013 President's budget 
request, then depending on the character of the delays, the Department 
would consider all options, including procuring additional F/A-18 Super 
Hornets. Currently, the F/A-18 production line shut down begins with 
the key long lead suppliers in June 2012. With regard to the EA-18G 
unique parts, the final orders are being placed this summer to support 
the final fiscal year 2013 procurement.

    12. Senator McCaskill. General Amos, the Marine Corps F-35B variant 
has had a particularly troubled history. Former Secretary of Defense 
Gates placed the program on a 2-year probation, and while Secretary 
Panetta has chosen to lift that probation after only 1 year, the 
analysis for doing so remains in question. The Marine Corps has put the 
future of its tactical fighter capability in a program that has shown 
to be unreliable. In light of the many problems associated with the F-
35B, has the Marine Corps considered procuring a mix of F/A-18s and F-
35s in order to mitigate risks to the future fighter fleet?
    General Amos. The Marine Corps has no plans to procure the Super 
Hornet at this time. The F/A-18 E/F lacks a fifth generation capability 
that our MAGTF require to conduct missions across the range of military 
operations now and in future decades. With its expected service life 
and necessary survivability upgrades, this platform does not meet our 
vision for TACAIR recapitalization.

    13. Senator McCaskill. General Amos, how often does the Marine 
Corps reevaluate the decision to procure only F-35Bs?
    General Amos. The Marine Corps' JSF Program of Record is a mixed 
procurement of F-35B and F-35C aircraft. We review and revalidate our 
procurement quantity and mix on an annual basis in concert with the 
annual DOD Planning, Programming, Budgeting and Execution System 
(PPBES) process. In addition, we periodically review our overall 
operational requirements and force structure to ensure we can meet the 
Nation's needs and our assigned missions in support of the geographic 
combatant commanders.
                                 ______
                                 
               Questions Submitted by Senator John McCain

             CVN-78 AND CVN-79 FORD-CLASS AIRCRAFT CARRIER

    14. Senator McCain. Secretary Mabus, the cost to complete 
construction of the USS Gerald R. Ford (CVN-78) aircraft carrier has 
overrun significantly. At this point, its cost is expected to grow over 
the original estimate by at least $1 billion--bringing the cost to well 
over $12 billion and exceeding the legislatively-provided cost cap by 
as much as $600 million. What approaches that the Navy has not yet 
taken will the Navy take in the future to ensure that the Ford-class 
carriers' costs get under control?
    Secretary Mabus. Few major programs carry greater importance or 
greater impact on national security, and no other major program 
comprises greater scale and complexity than the Navy's nuclear aircraft 
carrier program. Accordingly, successful execution of this program 
carries the highest priority within the Department of the Navy. The 
attached letter sent to Senator McCain, dated March 26, 2012, includes 
a detailed review and the steps we are taking to drive affordability 
into the remaining CVN-78 construction effort.
    [See attached letter as follows:]
      
    
    
      
    
    

    15. Senator McCain. Secretary Mabus, will the Navy be asking for 
legislative relief from this cost cap this year or next year, and, if 
so, given how much costs are expected to increase, why should Congress 
provide the Navy with that relief?
    Secretary Mabus. Coincident with the President's budget request for 
fiscal year 2014, the Navy will request an increase to the 
congressional cost cap for the aircraft carrier Gerald R. Ford (CVN-
78). Beginning in fiscal year 2014, the estimated costs to complete CVN 
will exceed the congressional cost cap established by section 122 of 
the National Defense Authorization Act (NDAA) for 2007, Public Law 109-
364, and later adjusted by the Secretary of the Navy pursuant to 
authority granted under section 122.
    The Navy remains steadfast in its commitment to keeping aircraft 
carrier construction costs on the sustainable path laid out by former 
Secretary Gates in 2009, and with the shipbuilder, continues to work to 
improve cost performance on CVN-78 and to improve manufacturing and 
organizational performance for future aircraft carriers.

    16. Senator McCain. Secretary Mabus, will the Navy be requesting an 
above threshold reprogramming (ATR) request to cover cost growth for 
completing the construction of CVN-78, and, if so, please describe the 
source of funds for the ATR and why the funding is needed.
    Secretary Mabus. The Department continues to review the execution 
of the CVN-78 construction program. Any shortfalls requiring a prior 
approval reprogramming action will be briefed to the committee after 
submission of the reprogramming request.

                     OTHER AIRCRAFT CARRIER MATTERS

    17. Senator McCain. Secretary Mabus, I understand that the Navy 
will be requesting to move $18 million of unspent funds from the 
completed CVN-70 Refueling Complex Overhaul (RCOH) program via Special 
Transfer Authority (STA) to cover incurred costs on the CVN-71 RCOH 
currently in progress at Huntington Ingalls in Newport News, VA. Please 
explain the genesis of the funding and why it is needed on the CVN-71 
RCOH.
    Secretary Mabus. The Navy projects the CVN-71 RCOH to complete in 
June 2013, 4\1/2\ months after the original contract duration. The 
current estimate of total funding required to complete the CVN-71 RCOH 
is $153 million. The $135 million requested in the President's budget 
is intended to be applied against the projected $153 million shortfall. 
The remaining funding required will be requested separately.
    The CVN-71 RCOH has included more new work and has experienced more 
growth as compared to previous CVNs. In addition to incorporating the 
SRA package into the CVN-71 RCOH Execution Contract, an additional 134 
new work items were added to the Authorized Work Package (AWP) early in 
the execution period. As a result, the growth work incurred on CVN-71 
RCOH exceeded that experienced on the CVN-70 RCOH, specifically in the 
areas of aircraft launch and recovery equipment, shafting, tanks, 
emergency diesel generators (EDGs) and ventilation.
    To reduce costs and schedule risk on the CVN-71 RCOH, the Program 
Office descoped work from the CVN-71 RCOH as well as rescreened work 
from NNS to Government Alteration Installation Teams (AITs). 
Additionally, the Program Office has limited changes on CVN-71 RCOH to 
authorized mission critical growth work only.
    To reduce future RCOH costs, the Program Office is implementing the 
following initiatives for CVN-72 and future RCOHs: improved planning, 
rates reduction, service reductions, supervision reductions, government 
furnished equipment (GFE) cost reductions, risk management programs, 
implementation of a rotatable pool of refurbished parts, condition 
based maintenance, and configuration control. Examples of improved 
planning include design reuse, improved baseline work package 
definition, more accurate/complete cost data sheets (estimates), and 
co-yard best practices. These actions resulted in a 4 percent labor 
hour reduction in the CVN-72 work package. Additionally, the CVN-72 
RCOH will apply lessons learned from CVN-71 RCOH by integrating the SRA 
work into RCOH within the Carrier Continuous Maintenance Plan (CMP) 
with a focus on modernization, insertion and maximization of AIT 
efforts, proper utilization of NNS critical skills and resources, and 
development of an RCOH execution schedule for a notional 44 months.

    18. Senator McCain. Secretary Mabus, the Navy is requesting $135 
million to complete the CVN-71 RCOH.
    Has there been unexpected cost growth in the CVN-71 RCOH, and, if 
so, please explain the reasons for this cost growth; the history of 
cost growth in this program; and what steps that have not yet been 
taken that will be taken in the future to reduce cost growth on CVN-71 
RCOH and future RCOH programs.
    Secretary Mabus. The Navy projects the CVN-71 RCOH to complete in 
June 2013, 4\1/2\ months after the original contract duration. The 
current estimate of total funding required to complete the CVN-71 RCOH 
is $153 million. The $135 million requested in the President's budget 
is intended to be applied against the projected $153 million shortfall. 
The remaining funding required will be requested separately.
    The CVN-71 RCOH has included more new work and has experienced more 
growth as compared to previous CVNs. In addition to incorporating the 
SRA package into the CVN-71 RCOH Execution Contract, an additional 134 
new work items were added to the Authorized Work Package (AWP) early in 
the execution period. As a result, the growth work incurred on CVN-71 
RCOH exceeded that experienced on the CVN-70 RCOH, specifically in the 
areas of aircraft launch and recovery equipment, shafting, tanks, 
emergency diesel generators (EDGs) and ventilation.
    To reduce costs and schedule risk on the CVN-71 RCOH, the Program 
Office descoped work from the CVN-71 RCOH as well as rescreened work 
from NNS to Government AITs. Additionally, the Program Office has 
limited changes on CVN-71 RCOH to authorized mission critical growth 
work only.
    To reduce future RCOH costs, the Program Office is implementing the 
following initiatives for CVN-72 and future RCOHs: improved planning, 
rates reduction, service reductions, supervision reductions, government 
furnished equipment (GFE) cost reductions, risk management programs, 
implementation of a rotatable pool of refurbished parts, condition 
based maintenance, and configuration control. Examples of improved 
planning include design reuse, improved baseline work package 
definition, more accurate/complete cost data sheets (estimates), and 
co-yard best practices. These actions resulted in a 4 percent labor 
hour reduction in the CVN-72 work package. Additionally, the CVN-72 
RCOH will apply lessons learned from CVN-71 RCOH by integrating the SRA 
work into RCOH within the Carrier Continuous Maintenance Plan (CMP) 
with a focus on modernization, insertion and maximization of AIT 
efforts, proper utilization of NNS critical skills and resources, and 
development of an RCOH execution schedule for a notional 44 months.

    19. Senator McCain. Secretary Mabus, I understand that the Navy 
will be requesting a $33.8 million ATR to cover increased research, 
development, test, and evaluation (RDT&E) costs on the Electromagnetic 
Aircraft Launch System (EMALS). Please explain the source of the 
funding and why the funding is needed on the EMALS.
    Secretary Mabus. The Department of the Navy continues to review 
execution of the EMALS program. Based on the current status of the 
program, the department does not intend to request a reprogramming 
action this year.

                          LITTORAL COMBAT SHIP

    20. Senator McCain. Secretary Mabus, construction of the follow-on 
Littoral Combat Ship (LCS) seaframes (LCS-3 and -4) is almost 
finished--with their costs leveling out at about $400 million each. How 
likely is it that the cost to build each LCS seaframe that the Navy 
intends to buy under its dual-award block-buy strategy will come in at 
less than the cost of completing the construction of LCS-3 and -4? In 
other words, how executable are these prices over the entire intended 
purchase?
    Secretary Mabus. Beginning with the construction contracts for LCS-
3 and LCS-4 which were awarded in 2009, the Navy transitioned to fixed-
price type contracts, thus limiting the Navy's cost liability. Use of a 
fixed-price type contract was continued as part of the dual Block Buy. 
As execution of the dual Block Buy contracts continues, lower costs can 
be expected for follow ships as the design becomes more stable and 
minimal non-recurring engineering changes are required. LCS-3 and LCS-4 
have experienced minimal design changes and are reflecting the results 
of the learning and investment by both builders as evidenced by the 
cost leveling at an average of about $400 million each.
    The pricing within the dual Block Buy also accounts for significant 
planned facility upgrades, funded by both public and private resources, 
to improve the production quality and efficiency of both shipyards. As 
a result, the Navy anticipates a continuation of the learning and 
production efficiencies experienced on LCS-3 and LCS-4 at each shipyard 
during the execution of the Block Buy contracts. Increased staffing 
levels for program management and on-site government oversight have 
both increased in recent years which will also contribute to ensuring 
the Industry teams success in meeting their cost and schedule 
objectives.
    The average awarded cost of the 20 ships on the dual Block Buy 
contracts is $357 million which is well below the projected $400 
million average cost of LCS-3 and LCS-4.
    The Navy is confident that the development risks associated with 
new ship designs have been retired with the construction of the first 
four ships.

    21. Senator McCain. Secretary Mabus, as you know, the LCS combat 
capability comes from the integration of three interchangeable types of 
mission modules into the seaframes--not the seaframes by themselves. At 
this point, what are the major challenges facing the Navy's development 
of these mission modules?
    Secretary Mabus. While significant combat capabilities are added 
with the mission packages, the ship has inherent capabilities with its 
sophisticated sensors, gun and missile systems. The unique process by 
which mission modules are integrated with the ship provides LCS with 
combat capability that can be easily updated as technology matures. 
Navy has made and continues to make significant progress in the 
development and testing of the mission modules.
    At this stage in mission module development, weight, performance, 
and integration continue to be on track. A robust testing phase is 
underway for all Mission Packages (MPs) to evaluate their performance 
and integration with the ships. As testing progresses, Navy is 
quantifying and validating the MP capabilities.
    The Mine Countermeasures (MCM) MP recently completed Phase 2 of 
developmental testing (DT) on LCS-2 with the MCM MP detachment able to 
conclusively demonstrate the viability of using unmanned and airborne 
systems to detect and neutralize mines. Preparations for Surface 
Warfare MP DT are in progress for commencement later this year. 
Preliminary testing of Increment 2 Anti-Submarine (ASW) MP systems has 
begun on white shipping.

      PROPOSED EARLY RETIREMENTS OF CRUISERS AND AMPHIBIOUS SHIPS

    22. Senator McCain. Admiral Greenert and General Amos, how does 
retiring seven Ticonderoga-class Aegis cruisers early and putting two 
LSD amphibious ships in reduced operating status reconcile with the 
Secretary of Defense's new strategic guidance, which puts renewed 
emphasis on the Asia-Pacific region?
    Admiral Greenert. The decision to decommission seven Ticonderoga-
class cruisers and two amphibious ships was made to ensure sufficient 
resources were available for readiness while maintaining the proper mix 
of capability in the battle force in a fiscally constrained 
environment. The Navy selected ships for decommissioning based on an 
analysis of the costs required to sustain their material condition and 
update their combat capability. The selected ships had little or no 
previous modernization completed, were the oldest ships in their class 
and would become increasingly expensive to maintain, operate, and 
upgrade to remain relevant to evolving threats.
    The Navy has certified to the Secretary of Defense that we will 
meet the fiscal year 2013 Global Force Management Allocation Plan and 
requirements in the Defense Strategic Guidance. From fiscal year 2013 
through fiscal year 2020, the Navy ship inventory and extrapolated 
force presence will increase in the Asia-Pacific and Arabian Gulf 
regions.
    General Amos. The U.S. Pacific Command (PACOM) Area of 
Responsibility (AOR) is dominated by the ocean and so is ideally suited 
to naval and amphibious forces. As such, amphibious shipping is optimal 
for the movement, maneuver and employment of marines across the range 
of military operations. PACOM currently has four amphibious warships 
forward deployed that are critical to day-to-day operations in the AOR. 
Refocusing the national security strategy on the Pacific requires an 
increase in mobility. Emergent requirements, such as the Australia and 
Guam MAGTFs, will require additional amphibious shipping capacity. 
Other lift options, such as the Joint High Speed Vessel, somewhat 
mitigate the lack of mobility to conduct movement of forces, but do not 
replace all of the capabilities inherent in amphibious shipping that 
permit the maneuver of forces in response to crises. Decreasing the 
number of amphibious warships in the inventory reduces the number of 
vessels available to support an increased U.S. presence in the Asia-
Pacific region and the rest of the world. Furthermore, it stresses the 
ability to support CENTCOM Amphibious Ready Group/Marine Expeditionary 
Unit (ARG/MEU) rotation.
    In 2009, the Department of the Navy identified a requirement for a 
38 amphibious warship fleet to lift two Marine Expeditionary Brigade 
assault echelons in support of operational plans calling for a joint 
forcible entry operation. Compelled by fiscal realities, we accepted 
risk down to 33 warships, and the Navy has adjusted this inventory to 
32 warships over the current Long Range Shipbuilding Strategy. 
Regardless of total inventory, we require 30 operationally available 
ships to support geographic combatant commander operational plans (with 
risk), day-to-day forward deployed and rotational requirements such as 
our ARG/MEU, and crisis response missions. When considering the term 
``operationally available'', it is important to note that it implies a 
ship that is able to deploy immediately or on relatively short notice 
in order to meet operational plan response timelines. Factoring 
maintenance cycles and other prevailing conditions, the amphibious 
warship fleet typically requires an inventory above 30 vessels to meet 
day-to-day deployable threshold in support of the previously-mentioned, 
required mission profiles.

    23. Senator McCain. Admiral Greenert and General Amos, what is the 
Navy doing to enable it to reactivate at a later date the seven 
cruisers it plans to retire early?
    Admiral Greenert. The seven cruisers will be retained in the 
inactive ship inventory as retention assets identified as Out of 
Commission, in Reserve (OCIR) and will be held in reserve to support 
the Navy's future mobilization requirements. Ships in OCIR status are 
retained on the Naval Vessel Register and assigned Maintenance Category 
B. Category B ships receive a standard inactivation lay-up which 
determines the amount of maintenance and repair that will be performed 
prior to and during the inactivation. The ship and its equipment will 
be preserved in an ``as-is'' condition with the application of 
dehumidification and cathodic protection to minimize long-term 
degradation and maintain the ship's condition at decommissioning. All 
C-3/C-4 Casualty Report (CASREP) deficiencies will be corrected before 
decommissioning unless waived by the responsible Ship Resource/Platform 
Sponsor.
    General Amos. Given that cruisers are a Navy, not Marine Corps, 
equity/platform, I defer to Admiral Greenert's response.

    24. Senator McCain. Admiral Greenert and General Amos, what are the 
potential operational implications of these early retirements?
    Admiral Greenert. The fiscal year 2013 budget reflects the Navy's 
strategy to build ships better suited for current and future needs. The 
Navy is funding this effort, in part, by deactivating older, less 
capable ships that are increasingly expensive to maintain, operate, and 
upgrade to remain relevant. Keeping these ships in service would divert 
funding from other programs vital to the Navy's mission, including the 
modernization and procurement of ships critical to fleet needs.
    Innovative approaches are being employed to mitigate the potential 
impacts to presence caused by early ship retirements. For example, 
relocating four Ballistic Missile Defense capable destroyers to Rota, 
Spain will provide presence and be a more efficient option to source 
European Command's Ballistic Missile Defense mission. Effectively, it 
frees up six surface combatants for other operations. The integration 
of Joint High Speed Vessel (JHSV) and LCS will allow cruisers, 
destroyers, and amphibious ships to shift to other missions by taking 
on security cooperation, humanitarian assistance and disaster response, 
and maritime security operations. These new ship classes are also 
designed to spend 50 percent or more of their service life forward, 
significantly increasing the forward presence per hull. Navy will 
continue to explore new employment models to sustain our forward 
operations.
    General Amos. In terms of amphibious warships, the Marine Corps 
requires 30 operationally available vessels (10 LHA/D, 10 LPD, 10 LSD) 
at any given time in order to still be able to execute the 2.0 Marine 
Expeditionary Brigade Assault Echelon operational planning requirement 
in support of geographic combatant commander operational plans for 
joint forcible entry operations, respond to crisis, and to conduct 
rotational deployments such as our Amphibious Ready Group/Marine 
Expeditionary Units. When considering the term ``operationally 
available'', it is important to note that it implies that a ship that 
is able to deploy immediately or on relatively short notice. Factoring 
maintenance cycles and other unforeseen conditions, an amphibious 
warship force structure typically requires an inventory above 30 
vessels is necessary to meet day-to-day the daily deployable threshold 
in support of the previously-mentioned, required mission profiles. In 
as much as any early retirements of amphibious warships would cause the 
fleet to drop below this level, Marine forces would still be able to 
respond around the world, but the force will require more time to 
respond and the rate of response will be impacted. As such, projected 
early retirements of amphibious warships might necessitate that 
geographic combatant commanders review and revise their plans to 
account for potentially increased response times. In turn, these 
commanders may place a heavier demand on intelligence, surveillance, 
and reconnaissance (ISR), prepositioning, forward deployed forces, and 
strategic air and sealift to ensure forces are available in the timings 
required.

    25. Senator McCain. General Amos, according to the Quadrennial 
Defense Review (QDR), the Marine Corps needs a minimum of 38 amphibious 
ships. Just last year, we heard testimony that the Marine Corps could 
accept the risk associated with 33 ships. Now, the Navy proposes a 32-
ship amphibious fleet. What has changed?
    General Amos. Nothing has changed from a Marine Corps requirements 
perspective. The Marine Corps continues to require 30 operationally 
available amphibious ships (10 LHA/D, 10 LPD and 10 LSD) in order to 
meet 2.0 Marine Expeditionary Brigade assault echelon lift requirements 
and to provide global coverage, forward presence and crisis response.
    In 2009, the Department of the Navy determined that the force 
structure requirement to support a 2.0 Marine Expeditionary Brigade 
(MEB) assault echelon (AE) lift for a joint forcible entry operation 
(JFEO) is 38 total amphibious assault ships. Understanding this 
requirement in light of fiscal constraints, the Department's leadership 
agreed to sustain 33 total amphibious ships in the assault echelon. 
This agreement accepted risk in the arrival of some MEB AE combat 
support and combat service support elements. It determined that risk 
could be accepted by planning for 15 rather than 17 amphibious ships 
for each MEB AE, and thus the Department's goal was to be able to 
deploy 30 operationally available amphibious warships (10 LHA/D, 10 
LPD, 10 LSD) to meet 2.0 MEB AE operational planning requirements. The 
Department's most recent Long Range Shipbuilding Strategy adjusted this 
requirement to 32 amphibious warships, reflecting plans for 11 LHA/Ds, 
11 LPDs and 10 LSDs in commission, plus a commitment to maintain two 
LSDs to be decommissioned in fiscal year 2013 in Category B 
mobilization status.
    Regardless of total amphibious warship force structure inventory, 
the Marine Corps requires 30 operationally available ships to support 
geographic combatant commander operational plans (with risk) for JFEO, 
rotational deployments such as our ARG/MEU units at sea, and 
unforecasted crisis response missions. When considering the term 
``operationally available'', it is important to note that it implies a 
ship that is able to deploy immediately or on relatively short notice. 
Factoring maintenance cycles and other unforeseen conditions, the 
amphibious warship force structure requires an inventory above 30 
vessels to meet a day-to-day daily deployable threshold in support of 
the previously-mentioned, required mission profiles.
    The Secretary of the Navy, the Chief of Naval Operations (CNO) and 
I are committed to resourcing the President's strategic guidance. I am 
concerned that the competition for defense dollars beyond the FYDP will 
force even more difficult choices within DOD and among many important 
Department of the Navy programs. The Secretary has had to make some 
tough calls in this regard, but both the CNO and I believe that the 
risks accepted in this FYDP will allow for many important programs to 
mature and compete successfully in future FYDPs. That said, it is 
critical to change the minimum requirement from 32 amphibious warships 
to 33 over the next year.

    26. Senator McCain. General Amos, what are the risks with a 32-ship 
amphibious fleet and how will the Marine Corps manage these risks?
    General Amos. An amphibious warship inventory that does not 
maintain 30 operationally available warships (10 LHA/D, 10 LPD, 10 LSD) 
adversely affects our ability to conduct day-to-day deployments, meet 
necessary training standards, and surge forward in response to crises 
with a balanced combat capability. When considering the term 
``operationally available'', it is important to note that it implies a 
ship that is able to deploy immediately or on relatively short notice 
in order to meet operational plan response timelines. Factoring 
maintenance cycles and other prevailing conditions, the amphibious 
warship fleet typically requires an inventory of at least 33 ships to 
maintain an operationally availability level of 30.
    An amphibious warship fleet with fewer than 30 operationally 
available amphibious warships would increase risk associated with 
meeting day-to-day and wartime combatant command (COCOM) requirements. 
Marine forces would still be able to respond around the world, but the 
rate of response might vary. Shortfalls in these types of critical 
warships will require personnel, equipment and sustainment to close 
across strategic distances via TRANSCOM and will be subject to 
prioritization of limited assets to meet competing demands. Marine 
forces would still be able to respond around the world, but the rate of 
response might vary. Shortfalls in these types of critical warships 
will require personnel, equipment and sustainment to transit strategic 
distances via TRANSCOM and will be subject to prioritization of limited 
assets to meet competing demands. As a means to mitigate this risk, 
geographic combatant commanders may place a heavier demand on ISR, 
prepositioning and forward deployed forces to ensure forces are 
available in the timings required.
    Shortfalls in amphibious lift remain a concern as we work with the 
Chief of Naval Operations and his staff to mitigate risk in meeting the 
amphibious lift requirement. We are aggressively reviewing our 
amphibious concepts, doctrine, and plans; and recently stood up the 
Ellis Group, a consortium of amphibious warfare experts that is 
partnered with the Navy to develop innovative solutions to overcome 
these challenges and look for new methods to operate given amphibious 
ship shortfalls.

    27. Senator McCain. General Amos, how are the risks exacerbated by 
the planned retirement of one of the three Maritime Prepositioned 
Squadrons?
    General Amos. The Maritime Prepositioning Force (MPF) remains a key 
component of our Nation's overall global response strategy and maritime 
expeditionary capability. As the Nation's crisis response force, the 
Marine Corps must be prepared to rapidly respond to contingencies 
across the range of military operations. During fiscal year 2013 budget 
development, the MPF structure, capabilities, and associated capacity 
was thoroughly examined and assessed, and the Marine Corps position is 
reflected in the fiscal year 2013 President's Budget Request. With an 
acceptable level of risk, the Marine Corps can meet existing 
operational requirements by maintaining two full, operationally 
enhanced, Maritime Prepositioning Ship Squadrons (MPSRON-Es) that 
support the geographic combatant commanders and retain critical sea-
basing enabling capabilities. Specifically, the current three MPSRON 
set is capable of carrying 58 percent of a three MEB requirement. Two 
MPSRON-Es can carry 69 percent of a two MEB requirement. Based on the 
new strategic guidance, this risk is acceptable. Marine Corps and Navy 
leadership are closely coordinating to develop an enhanced two-MPSRON 
program that maximizes afloat capacity, provides operational relevance 
for combatant commanders for use not only during contingencies but for 
engagement as well, and mitigates the risk associated with the loss of 
MPSRON 1. Plans call for the remaining two MPSRONs to be enhanced by 
increasing the number and type of ships assigned to each MPSRON as well 
as by optimizing the equipment and load configuration for the ships.
    The U.S. European Command and U.S. Africa Command are directly 
affected by the MPF reorganization. Both combatant commanders have 
stated that the associated risk is acceptable, recognizing potential 
capability gaps, timely force closure and crisis response time.
    We have conducted a thorough review and assessment to preserve 
capabilities and ensure the enhancement of the remaining two squadrons 
of the MPF; this remains a national imperative. Achieving the 
appropriate ship mix and embarked equipment sets/density is ongoing to 
optimize operational capability and mitigate risk. Additional 
mitigation is provided by Marine Corps Prepositioning Program-Norway 
(MCPP-N): a task-organized equipment set forward deployed in the 
USEUCOM AOR. The Marine Corps is committed to maintaining a ready, 
relevant and responsive MPF posture consisting of two enhanced MPSRONs 
that best balances military risk with operational necessity.

         MARINE CORPS CUTS IN END STRENGTH AND FORCE STRUCTURE

    28. Senator McCain. General Amos, under DOD's plans, the Marine 
Corps will lose 20,000 Active Duty marines over the next 4 years and 
reduce six combat battalions and four TACAIR squadrons. I remain 
concerned about the impact of these cuts, which, in my view, reflect 
budgetary imperatives rather than the national security threats we 
face. Did this 20,000 proposed reduction result from a neutral 
requirements-based review?
    General Amos. Yes it did result from a neutral requirements-based 
review. In an effort to ensure the Marine Corps is organized for the 
challenges of the emerging security environment, we conducted a 
capabilities-based Force Structure Review beginning in the Fall of 2010 
to identify ways we could rebalance and posture for the future. The 
Force Structure Review incorporated the lessons learned from 10 years 
of combat and addressed 21st century security challenges confronting 
our Nation and its Marine Corps. 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 have been shared with 
Congress over the past year. While affirming this strategy-driven 
effort, we aligned our force based on the realities of constrained 
spending levels and the new Strategic Guidance.
    During our comprehensive Force Structure Review, we tailored a 
force structure to ensure a sufficient type and quantity of force 
available to meet the forward presence, engagement and crisis response 
requirements of the geographic combatant commanders. The resulting 
force structure is intended to meet Title 10 responsibilities, broaden 
capabilities, enhance speed and response options and foster the 
partnerships necessary to execute the range of military operations 
while providing the ``best value'' to the Nation. This force structure 
also accounted for the addition of enabling assets (e.g. combat 
engineers, information operations specialists, civil affairs personnel, 
specialized intelligence marines, cyber operators, special operators, 
et cetera) necessary to meet the demands of the battlefields of today 
and tomorrow.
    Our 182,100 Marine Active-Duty Force, planned to be in effect by 
the end of fiscal year 2016, retains the capacity and capability to 
support steady state and crisis response operations through rotational 
deployments, and to rapidly surge in support of major contingency 
operations. Although reshaping the Marine Corps from 202,100 marines to 
a force of approximately 182,100 marines entails some risk to our 
ability to simultaneously respond to multiple large-scale 
contingencies, it is manageable. We intend to leverage the diverse 
depth and range of assets within our operational Reserve component both 
to mitigate risk and maximize opportunities where available.
    Our planned end strength of 182,100 marines represents fewer 
infantry battalions, artillery battalions, fixed-wing aviation 
squadrons, and general support combat logistics battalions than we had 
prior to September 11. However, it adds cyber operations capability, 
Marine special operators, wartime enablers and higher unit manning 
levels--all lessons gleaned from 10 years of combat operations; it is a 
very capable force.

    29. Senator McCain. General Amos, what is the risk of these 
reductions to your ability to support the requirements of the combatant 
commanders, particularly in major conflicts in the Asia-Pacific or in 
the Middle East?
    General Amos. The primary risk involved with cuts to Marine Corps 
end strength and force structure entails our ability to respond to 
multiple, simultaneous large scale contingencies in support of the 
geographic combatant commanders. However, I have assessed this risk to 
be manageable. The Marine Corps intends to leverage the diverse depth 
and range of assets within our 39,600 strong operational Reserve 
component both to mitigate risk and maximize opportunities where 
available.

    30. Senator McCain. General Amos, have you developed a risk 
assessment to accompany the fiscal year 2013 budget?
    General Amos. Yes, in the development of our fiscal year 2013 
budget, we did assess risk. Manpower is the single greatest area where 
the Marine Corps has taken some risk. Reduced end strength creates risk 
in warfighting capacity as operating force manning levels will go from 
99 percent for both officer and enlisted ranks to 95 percent for 
officers and 97 percent for enlisted. However, this risk is manageable 
and provides an affordable solution that maintains a ready, capable and 
more senior force in support of the new strategic guidance. This 
enduring strength level and force structure ensure that the Marine 
Corps retains the necessary level of non-commissioned officer and field 
grade officer experience and warfighting enablers to support the future 
security environment and needs of the Nation after the drawdown in 
Afghanistan.
    The Marine Corps maintains its operational forces at a high level 
of readiness. Any further reductions in funding to the operations and 
maintenance account will degrade Marine Corps training at every level, 
from small-unit to large scale MAGTF, and will reduce forward-deployed 
training with partner nations and allies. Other areas where the Marine 
Corps is taking some risk is in both the maintenance and modernization 
of equipment necessary after more than 10 years of war. While the 
current budget will allow for the reset and reconstitution of equipment 
on a reasonable timeline, any future reductions will result in delays, 
modification, or elimination of key maintenance and modernization 
programs. Lastly, any additional large-scale budget reductions in 
fiscal year 2013, such as those pending in the sequestration component 
of the Budget Control Act of 2011, will result in increased risk to the 
concept of maintaining a modernized and ready force, and could 
potentially impact the requirements of the new strategy and our ability 
to provide operational reach during times of crisis.
    With that said, the fiscal year 2013 budget ensures the Marine 
Corps remains the Nation's expeditionary force in readiness, while 
simultaneously keeping faith with our marines, sailors, and their 
families. It funds a force that is fully capable of executing all 
assigned missions in the new Defense Strategic Guidance with 
capabilities optimized for forward-presence, engagement and rapid 
crisis response.

    31. Senator McCain. General Amos, have these reductions in end 
strength already been factored into the operational plans of the 
combatant commanders?
    General Amos. Our planned force reductions are being made with a 
full understanding of the demands the geographic combatant commanders 
have for Marine forces. The reductions in Marine Corps end strength 
should not impact current Operational Plans. The only category where 
risk is a factor is in cases where Marine forces would be called upon 
to respond to multiple, simultaneous large- scale contingencies. In 
such cases, we would be able to rely on the operational depth and 
flexibility resident in our Reserve component.

    32. Senator McCain. General Amos, do Marine Corps troop reductions 
introduce any risk to operations in Afghanistan?
    General Amos. No, they do not. While we are making some very 
measured reductions in the Marine Corps Active component before we 
completely transition from Afghanistan (5,000 marines per year in 
fiscal year 2013 and fiscal year 2014)--we will retain enough of the 
right type of forces to continue to support all existing CENTCOM 
requirements for Operation Enduring Freedom. I am committed to ensuring 
we provide the best trained and equipped Marine units to Afghanistan. 
This remains my top priority.

                             REVERSIBILITY

    33. Senator McCain. Admiral Greenert, DOD has cited reversibility 
in connection with its new strategic guidance. What is the Navy doing 
to enable it to reactivate at a later date the seven cruisers it plans 
to retire early?
    Admiral Greenert. The seven cruisers will be retained in the 
inactive ship inventory as retention assets identified as Out of 
Commission, in Reserve (OCIR) and will be held in reserve to support 
the Navy's future mobilization requirements. Ships in OCIR status are 
retained on the Naval Vessel Register and assigned Maintenance Category 
B. Category B ships receive a standard inactivation lay-up which 
determines the amount of maintenance and repair that will be performed 
prior to and during the inactivation. The ship and its equipment will 
be preserved in an ``as-is'' condition with the application of 
dehumidification and cathodic protection to minimize long-term 
degradation and maintain the ship's condition at decommissioning. All 
C-3/C-4 CASREP deficiencies will be corrected before decommissioning 
unless waived by the responsible Ship Resource/Platform Sponsor.

    34. Senator McCain. General Amos, DOD has also cited reversibility 
with respect to personnel cuts. But, the force reductions the Marine 
Corps proposes may result in the loss of combat-experienced Marine 
Corps noncommissioned officers (NCO) and NCOs in-the-making. With 
regard to your proposed personnel cuts, what does reversibility mean?
    General Amos. We carefully designed our 182,100 Active-Duty Force 
to meet expected post-Operation Enduring Freedom operational 
commitments in support of the new Defense Strategic Guidance issued in 
January 2012. This force will contain sufficiently experienced non-
commissioned officers and provide both a grade and year of service mix 
appropriate to sustain the force in the future, and it will be 
complemented where necessary by our highly capable Reserve component of 
countless combat veterans. If operational requirements necessitate an 
increase in the size of the Marine Corps, we will be able to 
accommodate additional requirements for non-commissioned officers via 
retention and promotion.

    35. Senator McCain. General Amos, once you have discharged a 
combat-trained marine, how do you reverse that decision?
    General Amos. Approximately 75 percent of our first-term enlisted 
marines choose not to re-enlist in the Marine Corps beyond their first 
4-year initial term. However, all marines (officer and enlisted) have 
an 8-year commitment upon signing a contract to serve. Thus, those 
marines who voluntary separate prior to 8 years of active duty service, 
must complete their contractual obligation in a Reserve status, namely 
either the Select Marine Corps Reserve (SMCR) or the Individual Ready 
Reserve (IRR). Those marines who affiliate with the SMCR often fulfill 
their remaining obligated time in SMCR units. Our Marine Forces Reserve 
maintains contact with marines in the IRR and informs them of 
opportunities within a SMCR unit. Per provisions of Title 10, marines 
in the IRR are subject to Presidential Reserve Call-up Authority for 
limited periods of time in specific cases impacting national security. 
Once beyond the 8 year mark, those marines who do not remain affiliated 
with either the SMCR or IRR quickly lose their technical and tactical 
proficiency in their military occupational specialty, and more 
importantly, there is no contractual obligation remaining for their 
military service beyond that point.

             NAVY AND MARINE CORPS STRIKE FIGHTER SHORTFALL

    36. Senator McCain. Admiral Greenert and General Amos, is there a 
projected strike fighter shortfall for the Navy and Marine Corps, and, 
if so, what is that number?
    Admiral Greenert. The PB-13 strike fighter shortfall will remain 
below 65 aircraft and is predicted to peak at 56 aircraft in 2025. The 
strike fighter shortfall today is zero aircraft.
    General Amos. The Navy and Marine Corps continue to carefully 
monitor strike fighter inventory requirements and projected 
availability. The currently projected fighter inventory peak shortfall 
estimate is 56 aircraft in 2023. This shortage results primarily from a 
decrease in the 5 year utilization rate history, accelerated Navy 
transition from legacy Hornets to Super Hornets, and changes in Marine 
Corps force structure. The shortfall will be seen predominantly in the 
Marine Corps through 2023 due to the concentration of the F/A-18A-D in 
our tactical aircraft inventory, and will continue to rely heavily on 
F-35 procurement rates. The U.S. Navy will possess the majority of the 
shortfall in the mid 2020's due to service life limits in the F/A-18 E/
F Super Hornet.

    37. Senator McCain. Admiral Greenert and General Amos, in your 
opinion, what options would help mitigate the strike fighter shortfall?
    Admiral Greenert. The Navy will continue to ensure sufficient 
strike fighters for deploying air wings through the management and 
supply initiatives including the accelerated transition of legacy 
Hornet (F/A-18A-D) squadrons into Super Hornets (F/A-18E/F) and the 
service life extension of 150 legacy Hornets.
    General Amos. The Marine Corps continues to meticulously manage the 
flight hours and fatigue life of our legacy TACAIR. We have provided 
fleet users guidance and actions to optimize aircraft utilization rates 
while maximizing training and operational opportunities. The High 
Flight Hour and Service Life Extension Program (SLEP) efforts can 
effectively extend the F/A-18 A-D service life to 10,000 hours, thereby 
mitigating the impacts of the strike fighter shortfall. Continued 
investment in program related engineering and program related logistics 
funds within the Operations and Maintenance, Navy accounts is critical 
for sustaining the Navy's legacy platforms through the TACAIR 
transition. Additionally, any opportunity to increase the current F-35 
procurement rates will enable the Marine Corps to transition out of 
legacy platforms, thereby reducing projected shortfall numbers.

                        CEASE AND DESIST LETTER

    38. Senator McCain. Secretary Mabus, will the Navy comply with the 
request made by me and the chairman in our letter of March 19, 2012, 
not to implement any of its proposed force structure reductions in 2012 
before Congress has authorized the Navy to do so?
    Secretary Mabus. The Department of the Navy has not undertaken any 
efforts to ``restrict Congress' ability to consider and act on the 
fiscal year 2013 budget request'' and certainly we have not taken any 
steps to ``implement decisions that would be difficult or impossible to 
reverse''. However, we have made prudent fiscal decisions such as 
placing funds on withhold for proposed fiscal year 2013 program 
terminations (i.e. Joint Air-to-Ground Missile, Medium Range Maritime 
Unmanned Aerial System, and SPS), canceled ship depot maintenance 
availabilities (for ships planned for fiscal year 2013 cruiser 
decommissionings i.e. Port Royal), program delays (i.e. LSD(X)), and 
not backfilled some vacant positions (that are slated to be eliminated 
in fiscal year 2013). None of these actions are irreversible.
    The Department will continue to exercise increased fiscal scrutiny 
of resource application in areas of potentially declining resources. 
There may be the need for future action based on emergent unforeseen 
execution issues (i.e. fuel ($.5 billion), COCOM demands ($.5 billion), 
ship maintenance ($.3 billion)) which cannot be covered by current 
mitigation efforts.

   USE OF THE DEFENSE PRODUCTION ACT TO CONSTRUCT BIOFUEL REFINERIES

    39. Senator McCain. Secretary Mabus, in March 2011, the President 
directed the Departments of Agriculture, Energy, and the Navy to assist 
the development of a sustainable commercial biofuels industry. The Navy 
has pledged taxpayers' funds of $170 million as its share of a $510 
million effort to construct or retrofit biofuel refineries in order to 
create a commercially viable market. With a range of alternatives to 
petroleum already commercially viable and in use, why should the Navy 
subsidize the development of biofuel refining capability over any other 
reasonable alternative energy solution?
    Secretary Mabus. There are currently no commercially viable, in-use 
petroleum alternatives that are drop-in substitutes for JP-5, JP-8, or 
F-76. To be fit for Naval purposes, a drop-in alternative fuel must 
require no changes to infrastructure and its use must result in no 
degradation of performance--performing seamlessly to our ship and 
aircraft operators. First-generation biofuels do not have the energy 
density, long-term storage stability, cold flow properties, and ability 
to be used in seawater-compensated fuel tanks that the Navy requires. 
Since the Navy owns and operates ships and aircraft for many decades, 
it is more cost effective for the Navy to concentrate on an energy 
solution that works directly with the platforms that we already possess 
than one that requires new platforms or major platform overhauls. 
Advanced alternative fuels are the best way to address the Navy's sole 
dependence on highly volatile global oil prices. In fiscal year 2012 
alone the Navy faces more than $1 billion in additional fuel costs due 
to the increased cost of petroleum. The Navy must find that money in 
the current year budget, and there are only a few accounts with funds 
that can be transferred to pay for the price spike; operations and 
procurement. If we transfer funds from operations, our planes and 
aviators spend less time in the air, our ships and sailors spend less 
time at sea, and our marines and sailors have less time to train. If we 
take money from procurement, we have fewer funds to purchase new 
platforms and other technology.

    40. Senator McCain. Secretary Mabus, why should Congress believe 
that the Navy would be any better at doing this than the Department of 
Energy (DOE) and Solyndra?
    Secretary Mabus. The advanced biofuel commercialization initiative 
being pursued by the Departments of Navy, Agriculture and Energy will 
utilize the authority of the Defense Production Act Title III (DPA). 
DPA is neither a loan guarantee nor a grant program and cannot 
accurately be compared to the DOE's funding of Solyndra. The DPA 
authority dates back to 1950 and has been used to support the 
industrialization of defense critical domestic industries such as 
steel, aluminum, titanium, semiconductors, beryllium, and radiation 
hardened electronics. Under the authority the Federal Government 
participates as a co-investor for a prescribed period of time, 
generally 5-10 years, and requires at least a one-to-one cost share. 
This means that the Federal Government has the teeth of both day-to-day 
oversight as well as the ownership of specific assets. When utilizing 
the DPA authority DOD generally employs a multi-phased approach and the 
advanced biofuels effort will do the same. On March 29, a draft special 
notice was published that outlines this approach. In phase one, 
companies will complete rigorous technical, architectural/engineering, 
business case and financing deliverables. This data will be evaluated 
by both a team of government experts and a third party reviewer and 
only those companies deemed competitive from this process will be 
eligible for funding in phase two.

    41. Senator McCain. Secretary Mabus, to your knowledge, has anyone 
in the Navy been contacted by a Member of Congress or staff with any 
instruction or guidance on the use of any part of the $150 million 
added by Senate appropriators in the fiscal year 2012 Omnibus 
Appropriations Act to the account for the Defense Production Act to 
fund this initiative?
    Secretary Mabus. Department of Navy representatives have met with 
and briefed both members and professional staff members from the DOD 
committees (Senate Armed Services Committee, the Senate Appropriations 
Committee, the House Armed Services Committee, and the House 
Appropriations Committee) as well as the Agriculture and Energy 
Committees on the U.S. Department of Agriculture (USDA)/Department of 
the Navy/DOE alternative fuels initiative and the applicability of DPA 
Title III.
                                 ______
                                 
             Questions Submitted by Senator James M. Inhofe

                         TRICARE COST INCREASES

    42. Senator Inhofe. Secretary Mabus, DOD's healthcare costs have 
doubled since fiscal year 2001, growing from around $17 billion to over 
$42 billion in fiscal year 2009. Healthcare is projected to consume 12 
percent of DOD's budget in 2015, compared to 4.5 percent in 1990. 
During the Bush administration, attempts were made to raise TRICARE 
premiums, and Congress placed the premium increases on hold for fiscal 
year 2007, fiscal year 2008, fiscal year 2009, and fiscal year 2010. 
Our military's greatest asset is the people who have volunteered, and 
we cannot afford to lose those qualified career servicemembers because 
of poor benefits. The new Obama budget calls for military families and 
retirees to pay more for their healthcare, while leaving other Federal 
unionized workers alone. The budget seeks to save $1.8 billion in 
fiscal year 2013 and $12.9 billion over the FYDP.
    For example, enrollment fees for TRICARE Prime in the fiscal year 
2013 budget request would increase fees anywhere from 30 percent to 78 
percent. Over 5 years, compared to current fees, the fiscal year 2013 
proposal would increase the enrollment fee by 94 percent and up to 345 
percent for some retirees. This plan also calls for pharmacy co-pays to 
double and then triple over the FYDP. There is no debating the fact 
that healthcare costs are absorbing large parts of DOD's budget. 
Programs are on unsustainable paths, and we do need to increase rates 
and co-pays as Congress did in fiscal year 2012. However, I am deeply 
concerned that the magnitude of the fiscal year 2013 increases will 
break faith with our servicemembers and their families. If costs rise 
345 percent, as planned in the fiscal year 2013 proposal, will some 
Navy beneficiaries not be able to afford TRICARE?
    Secretary Mabus. I appreciate your recognition that the rate of 
growth in our health care expenditures within DOD is not sustainable. I 
was pleased that Congress supported the TRICARE Prime fee increases 
last year and strongly believe that we must move forward with the 
proposed adjustments to enrollment fees and co-payments as identified 
in the DOD fiscal year 2013 budget request. Today, a TRICARE-eligible 
working age retiree's family of three contributes a lower percentage 
towards their total health care costs than they did in 1996. Despite 
health care costs doubling or tripling since the full implementation of 
TRICARE, out of pocket expenses, including enrollment fees, deductibles 
and cost shares, has only grown 20 to 30 percent. The proposals will 
bring beneficiary cost shares closer to the original levels mandated by 
Congress when the program was established.
    In order to help ensure affordability and equity among our retired 
beneficiaries, the proposed increases to TRICARE Prime enrollment fees 
for working age retirees (under age 65) and the enrollment fee TRICARE 
for Life (TFL) beneficiaries will be phased-in over a 4-year period and 
will be tiered based on the amount of the beneficiary's military 
retirement fee. The retired pay tiers will also be indexed to ensure 
that beneficiaries are not pushed into a higher tier as a result of 
annual cost-of-living increases. This construct and tiering are 
consistent with the recommendations from the DOD's 2007 Task Force on 
the Future of Military Health Care.
    Even with these proposed increases, our beneficiaries will continue 
to have access to one of the most comprehensive and affordable health 
benefits available--and deservedly so.

    43. Senator Inhofe. Secretary Mabus, do you know how many 
beneficiaries will no longer be able to afford TRICARE in the out-years 
with the increases planned in the fiscal year 2013 proposal?
    Secretary Mabus. The constructs for the proposed changes to TRICARE 
fees, including tiering the increases to the beneficiaries military 
retirement pay, are largely based on recommendations contained in the 
DOD's 2007 Task Force on the Future of Military Health Care. It is 
clear that our working age retirees are paying a lower out of pocket 
costs now than when TRICARE was fully implemented in 1996 so we need to 
move forward implementing a more equitable cost structure for our 
TRICARE retiree beneficiaries. While I do not have any specific 
projections about beneficiaries and would accordingly defer to DOD, I 
do believe our beneficiaries recognize the shared responsibilities for 
their health care benefits. The fiscal year 2013 budget proposals are 
reasonable in scope, appropriate in tiering, indexing and phasing, as 
well as necessary for the Department to deliver a long-term sustainable 
health benefit.

    44. Senator Inhofe. Secretary Mabus, if beneficiaries no longer 
opt-in to TRICARE, will cost-driven attrition put TRICARE's 
sustainability at greater risk than healthcare costs?
    Secretary Mabus. The proposed TRICARE enrollment fee increments 
only apply to retirees, not Active Duty personnel. Military retirees 
over age 65 have access to Medicare for their healthcare needs. 
Military retirees under age 65 may have access to other health 
insurance mechanisms such as employer sponsored health insurance 
programs.

    45. Senator Inhofe. Secretary Mabus, are other options available 
for Navy beneficiaries that are driven out of TRICARE due to cost?
    Secretary Mabus. We are committed to providing a high quality, 
affordable health care program to our retirees and their families. They 
have earned this benefit through years of dedicated service and 
sacrifice. While working age retirees may have access to employer-
sponsored health insurance and our over 65 million beneficiaries will 
continue to be Medicare-eligible, I do not believe that the proposed 
fee increases will result in our beneficiaries being displaced from 
TRICARE and that is not the intent. These well-developed proposals will 
be tiered based on the beneficiary's retiree pay meaning those who 
receive higher retirement pay will pay higher enrollment fee than those 
who earn less. With this tiered system, TRICARE will still be far lower 
than other health care options. The construct for the fiscal year 2013 
tiers are the same levels recommended by the DOD's 2007 Task Force on 
the Future of Military Health Care.

    46. Senator Inhofe. Secretary Mabus, is the state exchange system 
being considered as a viable alternative to TRICARE for military 
beneficiaries?
    Secretary Mabus. I am not in a position to offer perspectives about 
the proposed state exchange systems associated with the Patient 
Protection and Affordable Care Act of 2010. I will, however, reiterate 
my commitment to providing an outstanding health care benefit program 
to our retirees and their families. Even with this proposed adjustment 
to fees for our retiree beneficiaries, TRICARE will remain 
exceptionally affordable and one of the finest health care benefits 
available.

    47. Senator Inhofe. Secretary Mabus, do you consider the proposed 
increases to be fair and appropriate given the time and the sacrifices 
of our military members and their families?
    Secretary Mabus. The proposals are reasonable in scope, appropriate 
in tiering, indexing and phasing, as well as necessary for the 
Department to deliver long-term sustainable health benefits. It is 
important to recognize that these proposals are largely focused on the 
retired military population and, even with the proposed increases, the 
amount of beneficiary cost-sharing remains far below the levels 
experienced by retirees in the mid-1990s. The TRICARE fee proposals do 
not affect our active duty service members, and specifically exempt 
medically-retried service members and their families, as well as 
survivors of military members who died on active duty. Even with these 
proposed increases, our beneficiaries will continue to have access to 
one of the most comprehensive and exceptionally affordable health 
benefits available.
    The Military Health System is not immune to the challenges of 
health care spending that our country is facing. Moving forward, we 
must balance controlling health care costs with maintaining an 
affordable benefit and this responsibility must be shared by all of us. 
These proposals are important to maintaining our obligations to 
beneficiaries and ensuring our commitment to improving the long-term 
fiscal stability of the Military Health System. Under the leadership of 
the Secretary of Defense, the Military Departments have worked 
carefully to develop these proposals. Furthermore, the Secretary of 
Defense has articulated the potential risks to other programs should 
these proposals not be authorized. We are at an important inflection 
point within our health benefit program and I believe our beneficiaries 
recognize these challenges.

                        U.S. NAVAL FORCES AFRICA

    48. Senator Inhofe. Secretary Mabus and Admiral Greenert, U.S. 
Africa Command (AFRICOM) was created in February 2007. On October 1, 
2008, AFRICOM took command of U.S. military operations in Africa. Last 
year, I visited Combined Joint Task Force-Horn of Africa (CJTF-HOA) and 
met with Admiral Losey, Commander, CJTF-HOA, their staffs, and the 
servicemembers deployed in support of CJTF-HOA. I am impressed with the 
number of operations being conducted by the Navy in and around the 
African continent to include combating the transit of extremists, 
counter-piracy, military-to-military engagements, and building maritime 
security capacity through the Africa Partnership Station (APS) program. 
I also 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.
    The Navy has done incredible work combating high-seas piracy in the 
Gulf of Aden. High-seas piracy is now becoming increasingly common on 
the west coast of Africa. In 2011, 64 incidents of piracy were reported 
in 9 countries off the Gulf of Guinea region, up from 45 incidents in 7 
countries in 2010. These attacks seem to be a natural extension of the 
common practice of siphoning off crude oil from land-based pipelines 
done by Nigerian gangs.
    Al Qaeda in the Islamic Maghreb (AQIM) has begun to form alliances 
with drug traffickers and other criminal syndicates in South America. 
The proceeds from drug trafficking are being used to fund terrorist 
activities in north and east Africa. On February 2, 2012, 10 defendants 
were arraigned in Mauritania's economic capital of Nouadhibou for 
possession of 2 tons of drugs. The defendants were directly connected 
to AQIM. Which, if any, African nations have the resources to assist 
with building a coalition to fight piracy off the West Coast of Africa 
and the Gulf of Guinea?
    Secretary Mabus and Admiral Greenert. No African nation is 
singularly capable of providing the adequate means or leadership to 
develop a regional coalition to combat piracy and other maritime 
illicit activities in the Gulf of Guinea (GoG) at this time. However, 
recent developments since 2010 among the member nations of the Economic 
Community of West African States (ECOWAS) and Economic Community of 
Central African States (ECCAS) show promise of growing collective and 
coordinated action within West and Central Africa and the GoG.

    49. Senator Inhofe. Secretary Mabus and Admiral Greenert, what is 
the plan to help build the capacity of African nations in those regions 
to be able to combat piracy on their own, and what assistance do you 
need from Congress?
    Secretary Mabus and Admiral Greenert. The Navy, through the 
leadership of U.S. Naval Forces Africa and the U.S. Sixth Fleet, 
remains committed to building partnerships in Africa via innovative, 
low-cost, small-footprint efforts such as maritime exercises, 
operations, rotational training missions, and supporting Offices of 
Security Cooperation.
    Africa Partnership Station (APS) and African Maritime Law 
Enforcement Program (AMLEP) continue to be the flagship maritime 
security cooperation events for AFRICOM executed by Naval Forces Africa 
(NAVAF). The strength of APS and AMLEP lies in their cooperative, 
multilateral, multiagency approach whereby U.S. maritime forces 
leverage the subject matter expertise of its international partners and 
the U.S. interagency to provide training and courses of instruction to 
strengthen African maritime security, capability, and capacity.
    As part of the interagency, I would like to recognize the 
contributions of the U.S. Coast Guard. Their support to AMLEP 
operations has been instrumental in developing maritime security 
capabilities off the west coast of Africa to combat illegal fishing 
activities which cost the region up to $1 billion in losses every year. 
They have also contributed to the reduction in illicit trafficking 
activities in the region. I would also note the important role the U.S. 
Coast Guard has played in assisting Liberia to reestablish its own 
Coast Guard.
    Consistent with strategic guidance AFRICOM is expanding Offices of 
Security Cooperation with additional Foreign Area Officers (FAO) as a 
low-cost, small-footprint, force multiplier to building partnership 
capacity and affinity for U.S. policies with partner African nations.

    50. Senator Inhofe. Secretary Mabus and Admiral Greenert, do you 
see your engagements in Africa and AFRICOM increasing, decreasing, or 
staying the same in fiscal year 2013 and through the FYDP?
    Secretary Mabus and Admiral Greenert. Due to budget challenges and 
asset availability we anticipate a decrease in Navy ship presence 
around the continent. However, the Navy stands by to support the 
requirements of the combatant commander and we expect the number of our 
overall engagements to stay the same--although the nature of these 
engagements is evolving.
    We anticipate further cooperation and integration with our Euro-
Atlantic partners, who understand the value of engagement in Africa and 
appreciate the global challenges of African maritime security. For 
example, Africa Partnership Station (APS) will work with 12 different 
Euro-Atlantic partners this year including Brazil, Canada, Italy, 
Spain, Portugal, Germany, the United Kingdom, France, Denmark, Belgium, 
Norway, and the Netherlands. This work includes partner staff officer 
exchanges, training teams for ships, and maritime patrol aircraft 
operating in theater.
    Additionally, we have seen an increase in participation by regional 
partners, and by the end of this year we'll have up to seven different 
African maritime forces providing training teams in the effort to build 
additional maritime capacity in the region. Our four regional exercises 
will be co-sponsored by African partners through regional organizations 
such as the Economic Community of West African States and the Economic 
Community of Central African States taking on a key role.
    While we may see a reduced U.S. Navy footprint associated with our 
engagements in Africa, the desire is for the overall level of 
engagement in Africa to remain steady--or even increase slightly. We 
anticipate this trend in the changing nature of U.S. Navy engagement in 
Africa to continue next year and for the near future.

               NAVY GREEN FLEET ALTERNATIVE FUEL PROGRAM

    51. Senator Inhofe. Secretary Mabus and Admiral Greenert, as you 
know, I served as Chairman of the Environment and Public Works (EPW) 
Committee in the Senate for several years. I now serve as Ranking 
Member on the EPW Committee. The Navy plans to sail its green fleet, a 
strike group powered by alternative fuels, by 2016. The success of this 
green fleet is predicated upon biofuel, much of it algae-based, 
becoming practical and affordable. In 2009, the Navy paid $424 per 
gallon for 20,000 gallons of biodiesel made from algae, which set a 
world record at the time for the cost of fuel. In December 2011, the 
Navy purchased 450,000 gallons of biofuel for $12 million, about $26 
per gallon.
    This purchase is part of a larger deal in which the Navy has 
pledged taxpayers' funds of $170 million as their share of a $510 
million effort to construct or retrofit biofuel refineries in order to 
create a commercially viable market. This biofuel will be mixed with 
petroleum-based fuel in a 50/50 ratio to yield a blend that will cost 
roughly $15 per gallon; nearly four times the market price of Jet 
Propellant-5 (JP-5). This, of course, is coming at a time where the 
Obama administration is cutting the defense budget by $487 billion over 
the next 5 years and potentially another $500 billion due to 
sequestration.
    I have been a strong supporter of alternative energy solutions to 
include non-algae biofuels and natural gas. However, DOD pushed back on 
those efforts, specifically coal-to-liquid fuels, stating that DOD 
would not be used to prop up the alternative energy sector in the 
United States. Some of this technology and production capability has 
now moved to China. With the Navy and Marine Corps budgets already 
decreasing--forcing cuts to personnel, ships, and aircraft--what will 
be the impact of tripling or quadrupling your fuel costs?
    Secretary Mabus and Admiral Greenert. The referenced 2009 algae R&D 
program, which was funded through a congressional add, involved many 
labor hours conducting research on the algal pathway and the 20,055 
gallons of fuel was the result of this rigorous R&D work. Therefore, it 
is inaccurate to divide the total project cost by the amount of fuel 
delivered to determine total fuel cost.
    Since the volumes of biofuel required for testing are very small in 
comparison to overall petroleum use, the Navy does not anticipate a 
tripling or quadrupling of fuel costs from testing and certification 
efforts. Of the $4 billion budget for liquid fuel in fiscal year 2012 
and the additional $1 billion we will pay due to the increase in the 
price of fossil fuel, just $12 million (0.2 percent of the overall fuel 
bill) will be spent on biofuel to further Navy's on-going test and 
certification efforts. The Navy has no plans to purchase alternative 
fuel for operational use until it is cost competitive with conventional 
fossil fuels.
    There are a number of studies that state the case that biofuels 
will be cost competitive in the 2018-2025 timeframe without government 
investment. These studies are from LMI and Bloomberg New Energy 
Finance. Additionally, the Office of the Deputy Assistant Secretary of 
the Navy for Energy has met with over 80 alternative fuel companies, 
trade organizations, and venture capital and investment firms over the 
past 2 years. When directly asked about the potential for their product 
to be cost competitive with fossil fuels, the resounding reaction from 
numerous alternative fuel companies is that the costs for alternative 
fuel will be cost competitive in the future. Highlighted is the fact 
that from a long-term perspective, the cost of biofuels will continue 
to drop, while the price of fossil fuels is only expected to increase. 
For example the cost of biofuel purchase by the Navy has been cut by 
more than half over the last 3 years, even with the purchase of 
relatively small amounts.

    52. Senator Inhofe. Secretary Mabus and Admiral Greenert, how many 
steaming or flying days did the Navy sacrifice in order to purchase 
biofuels?
    Secretary Mabus and Admiral Greenert. The Fleet executed all 
planned steaming days and flight hours. The fuels referenced were for 
testing and evaluation purposes and, thus, not part of the Navy's 
operational fuel purchase. Therefore there was no impact to the number 
of steaming and flying days associated with this purchase.
    By continuing to rely on petroleum fuels, DOD is subject to price 
volatility in the global petroleum market and bears potential exposure 
to foreign supply disruptions. Last year after the Libyan crisis 
occurred, the price per barrel charged by the Defense Logistics Agency 
(DLA) Energy increased $38 to $165 per barrel. With this increase in 
the price of a barrel of oil, the Department of the Navy realized a 
$1.1 billion increase in our fuel bill. These mid-year increases equate 
to less flying hours, less steaming hours, and less training, 
ultimately impacting readiness. Additionally, national security is 
threatened by the potential to be physically cut off from foreign 
sources of petroleum.
    Currently, the Navy uses about 50 percent of its tactical fuels 
stateside, and 50 percent deployed overseas. The stateside portion is 
where most of our crucial training and readiness events take place. 
When petroleum prices exceed budget forecasts or supplies are 
constrained, the amount of training can get reduced. To ensure the Navy 
is ready to serve national interests, this training must not be subject 
to the vagaries of the petroleum market. Domestically sourced and 
produced advanced alternative fuels could provide energy security for 
training and readiness and more budgetary certainty as alternative fuel 
prices will not move directly with the petroleum prices.

    53. Senator Inhofe. Secretary Mabus and Admiral Greenert, at what 
cost to the readiness of our naval and Marine Corps forces will you 
continue to advocate for defense funds on biofuels?
    Secretary Mabus and Admiral Greenert. The Navy's small investment 
in testing and certifying drop-in alternative fuels has no impact on 
readiness. While the recent $12 million purchase of alternative fuels 
represents only 0.2 percent of Navy's overall annual fuel spend, the 
bigger challenge to the readiness of our naval forces is due to 
increased fuel price volatility of conventional fossil fuels. In fiscal 
year 2012 alone, this volatility resulted in an additional $1 billion 
bill to Navy operational and maintenance accounts that we must resolve 
within our operating budget. Were the Navy to reconcile this bill 
exclusively by cutting flying hours and steaming hours, the additional 
$1 billion in fiscal year 2012 would represent a 20 percent decrease in 
flying and steaming hours. More likely, in addition to cutting flying 
and steaming hours, the Navy will resolve the deficit by also reducing 
sustainment of our facilities, delaying new programs, and delaying new 
and ongoing procurements.
    Navy is pursuing alternative fuels to achieve a less petroleum-
dependent future but will not purchase alternative fuels for 
operational purposes unless the price is competitive with conventional 
fossil fuels. Given the increasingly volatile and challenging market 
and supply constraints associated with conventional fossil-fuel based 
petroleum, a robust advanced drop-in alternative fuels market is an 
essential element of our national energy security. Advanced drop-in 
domestically produced alternative fuels that use renewable feedstocks 
provide a secure, assured alternative that reduces the risks associated 
with petroleum dependence.

    54. Senator Inhofe. Secretary Mabus and Admiral Greenert, since 
you'll eventually need 330 million gallons per year of alternative 
fuels to meet your goal of having 50 percent of the Navy's energy needs 
supplied from alternative sources by 2020, what price are you willing 
to pay per gallon of biofuel to achieve this goal?
    Secretary Mabus and Admiral Greenert. When the Navy is buying 
alternative fuels at operational quantities they must be competitive 
with the fuels they are replacing.
    To meet our 2020 goal, the Navy estimates that annually we will 
need 336 million gallons of neat advanced alternative fuels blended 50-
50 with conventional petroleum-derived fuels. This estimated amount is 
after the Navy takes into account its achievements in energy 
efficiencies.
    Advanced alternative fuels are the best way to address the Navy's 
sole dependence on highly volatile global oil prices. For every dollar 
rise in the price of a barrel of oil, the Navy's fuel bill rises by $30 
million. In fiscal year 2012 alone, increased price volatility has 
resulted in $1 billion additional bill to the Navy and a more than $3 
billion additional bill to DOD. These increases in price must be paid 
for either out of the Department's operations which means we will steam 
less, fly less and train less or out of other procurements such as 
ships and planes. Conversely, the cost of biofuels has been cut by more 
than half over the last 3 years, even with the purchase of relatively 
small amounts.

    55. Senator Inhofe. Secretary Mabus and Admiral Greenert, if this 
is a priority of yours, are you planning to make any additional 
purchases of alternate or synthetic fuels with defense funds this year 
or in fiscal year 2013?
    Secretary Mabus and Admiral Greenert. In fiscal year 2012 Navy is 
forecasted to spend nearly $4 billion on liquid fuel. Of this, only $12 
million, or 0.3 percent of the total fiscal year 2012 fuel bill will be 
used to procure alternative fuel. This purchase price is roughly 
equivalent to a $.40 increase in the price of a barrel of petroleum. In 
early fiscal year 2012, Navy purchased 450,000 barrels of alternative 
fuel for $12 million to support the Green Strike Group demonstration at 
RIMPAC that will take place in July 2012. The exercise culminates our 
testing and certification program by allowing the fleet to utilize 
alternative fuels in operations such as UNREPs for our destroyers and 
refueling of helos and jets on the deck of our carrier. In addition, 
Navy has programmed $16 million in fiscal year 2012 and just over $11 
million in fiscal year 2013 for the alternative fuels test and 
certification program. This funding supports the testing and 
certification of alternative fuels for use in Navy systems, and some 
portion of the funding goes to fuel purchases.

    56. Senator Inhofe. Secretary Mabus and Admiral Greenert, is the 
continued use of nuclear power on Navy ships a part of your plan for a 
green fleet?
    Secretary Mabus and Admiral Greenert. Yes, nuclear powered aircraft 
carriers and submarines will continue to be an integral part of Navy's 
fleet, and are vital to Navy's ability to carry out its mission. 
Nuclear power provides the Navy with unique tactical and strategic 
benefits, and plays a key role in reaching the Secretary's goal of 50 
percent use of alternative energy by 2020.

    57. Senator Inhofe. Secretary Mabus and Admiral Greenert, why did 
you restrict the proposal to only fuels derived from plants or algae 
when other cheaper alternatives to petroleum already exist?
    Secretary Mabus and Admiral Greenert. There are currently no 
commercially viable, in-use petroleum alternatives that are drop-in 
substitutes for JP-5, JP-8, or F-76. To be fit for Naval purposes, a 
drop-in must require no changes to infrastructure and its use must 
result in no degradation of performance for our ships and aircraft. 
First-generation biofuels do not have the energy density, long-term 
storage stability, cold flow properties, and ability to be used in 
seawater-compensated fuel tanks that the Navy requires. Gas-to-liquid 
and coal-to-liquid technologies are not likely to meet the Energy 
Independence and Security Act (EISA) Section 526 regulations.
    We have not issued a request for proposal (RFP) for fuels derived 
only from plants or algae. We have been feedstock agnostic as long as 
they meet EISA Section 526, and do not impact food production. Previous 
and future solicitations include plant material, algae, municipal solid 
waste, animal waste, animal products, municipal sewage sludge, food 
waste, yard waste, forest thinning, crop residue, and other vegetative 
waste. For a more expansive list of eligible feedstocks, contact USDA's 
Commodity Credit Corporation (CCC).
    Fuel for the Green Strike Group in 2012 is primarily derived from 
animal fats (byproducts from the poultry industry). A small (10 
percent) portion of the feedstock was derived from algae.

    58. Senator Inhofe. Secretary Mabus and Admiral Greenert, what 
trade-offs in terms of operational capability are being made to fund 
the green fleet?
    Secretary Mabus and Admiral Greenert. Navy is not forgoing any 
operational capability to fund the Green Strike Group demonstration 
during RIMPAC 2012. On the contrary, Navy's investments in the testing 
and certification of alternative fuels for use in Navy's platforms will 
only increase Navy's future combat capability. Investing in future 
technologies, which the alternative fuel effort represents, is crucial 
to Navy's ability to remain the world's premier Navy and avoid 
detrimental operational effects of rising energy costs.
    The need to find cost competitive alternative fuels has never been 
greater. In fiscal year 2011 alone, the price of petroleum went up by 
$38/bbl, an increase of 30 percent, which equated to a $1.1 billion 
increase, that was not included in the budget. This extreme price 
volatility and upward trend of fuel prices significantly impacts 
readiness in execution years and represents the real future opportunity 
cost of failing to position the Navy to use promising cost effective 
energy sources.

    59. Senator Inhofe. Secretary Mabus and Admiral Greenert, is the 
Navy looking at all sources of domestic energy alternatives, to include 
biodiesel and liquid hydrocarbon fuels made from coal using the 
Fischer-Tropsch (FT) process?
    Secretary Mabus and Admiral Greenert. Biodiesel, by definition, is 
fatty acid methyl ester (FAME), and does not come from the Fischer 
Tropsch (FT) process or from coal. Biofuel produced by this process is 
not a suitable fuel for use in Navy ships and aircraft as it does not 
exhibit the energy density, cold flow properties, oxidative stability, 
and non-miscibility with water that the Navy requires.
    We have looked at renewable diesel and synthetic paraffinic 
kerosene (SPK) yielded by the FT process and we have available data 
from the Air Force's extensive testing of FT-SPK. We believe that fuels 
created by the FT process, which can also use bio-derived feedstocks, 
can be made suitable for Naval use. However, coal-to-liquid fuels are 
not likely to meet the Energy Independence and Security Act Section 526 
requirements without further development on carbon capture and 
sequestration technology that has yet to be demonstrated at a 
commercial scale in the United States.

                                  F-35

    60. Senator Inhofe. Secretary Mabus, Admiral Greenert, and General 
Amos, the Navy strike fighter shortfall is assessed to be 65 aircraft 
in the 2018 to 2019 timeframe. The President's budget request cuts the 
F-35 budget by $1.6 billion in fiscal year 2013 and $15.1 billion over 
the FYDP. This fiscal year 2013 cut results in 179 fewer planes being 
procured over the FYDP. Fiscal year 2013 is the third straight 
President's budget that has scaled back F-35 orders. This delay will 
increase the overall cost of the program, is already negatively 
impacting our international partners in this program, could potentially 
reduce the total number of F-35s procured, and will require the Navy to 
extend the service life of the F/A-18. While the United States has not 
cut the total number of aircraft to be procured, our international 
partners are cutting and looking at alternatives to replace their 
fighter fleets by 2018--the year many of their legacy aircraft must be 
retired with no SLEP planned or budgeted.
    These short-term cost savings are having immediate negative impacts 
on our long-term readiness, the readiness of our international 
partners, and the viability of the entire program. Affordable F-35 
recapitalization is dependent on capturing economies of commonality and 
scale as quickly as possible. Yet, basic economics tell us that if you 
continue to reduce the number of aircraft, unit costs will not continue 
to come down. Increasing the production rate is the key to future 
affordability and the only path to replacing our aging Air Force, Navy, 
and Marine Corps fleets of multi-role fighters. In your opinion, what 
can be done in the near-term to help drive down costs and ensure an 
efficient ramp rate to make certain the F-35 program will be affordable 
in the long-term?
    Secretary Mabus and Admiral Greenert. DOD reduced low-rate initial 
production (LRIP) rates to reduce F-35 program concurrency until there 
is higher aircraft design maturity. Continuing at higher production 
rates at this stage of development would only result in higher numbers 
of aircraft that would have to be retrofitted in the future at an 
overall higher cost to the U.S. Government and the taxpayer. This 
production strategy decision was informed by the Office of the 
Secretary of Defense's (OSD) `Quick Look Review' in the fall of 2011 
that affirmed that DOD is still in the `discovery' portion of F-35 
testing with a design that is no more mature than other aircraft at an 
equivalent point. Towards balancing overall program cost and risk, 
while implementing a strategy leading to long-term affordability and 
efficiency, DOD developed a production ramp to support the prime 
contractor and supplier base that leads to a projected full rate 
production decision in the fiscal year 2019/fiscal year 2020 timeframe, 
following successful completion of Initial Operational Test and 
Evaluation.
    General Amos. A series of system reviews and cost control 
initiatives, overseen by the Office of the Under Secretary of Defense 
for Acquisition, Technology, and Logistics with participation by all 
the services and managed by the JSF Program Office, have been 
instituted as part of the program restructure and Defense Acquisition 
Board decision in February 2012.
    Affordability is the balance of cost and capabilities required to 
accomplish assigned missions. Since 2000, the Marine Corps has avoided 
the cost of new tactical aircraft procurement during a time where 
capabilities and service life of our legacy aircraft were sufficient to 
meet the missions assigned. The return on investment in capabilities of 
the F-35B outweighs the unavoidable legacy aircraft operations and 
sustainment cost increases we will incur with the F/A-18, AV-8B, and 
EA-6B. Optimizing this balance is, and will be, a continual process of 
refinement as the program development, production, and sustainment 
processes mature over the next few years.

    61. Senator Inhofe. Secretary Mabus, Admiral Greenert, and General 
Amos, recent delays in the F-35 program have required the Navy to 
procure an additional 41 F/A-18E/F aircraft and to extend the life of 
150 F/A-18A, B, C, and D aircraft from 8,000 to 10,000 hours. Will the 
proposed fiscal year 2013 delay force the Navy to SLEP or procure more 
F/A-18s?
    Secretary Mabus and Admiral Greenert. The PB-13 Strike Fighter 
shortfall will remain below a manageable 65 and is predicted to peak at 
56 aircraft in 2025. The Navy will continue to manage the Strike 
Fighter inventory through the implementation of management and supply 
initiatives, including the accelerated transition of legacy Hornet 
squadrons into Super Hornets and the service life extension of 150 
legacy Hornets.
    Change in strike fighter shortfall projection is mainly attributed 
to: A substantial decrease in Hornet 5 year utilization rates and the 
proposed Marine Corps TACAIR force structure end state of 20 squadrons 
(18 act/2 res), vice 24, in accordance with overall Marine Corps 
structure reductions.
    The Navy does not plan to increase the F/A-18E/F POR of 565 
aircraft or to SLEP more than 150 aircraft.
    General Amos. Current Marine Corps aircraft transition planning and 
implementation does not include the purchase of additional F/A-18s. If 
the JSF delivery profile remains unchanged, and the service life of 150 
F/A-18A-D is extended to 10,000 flight hours (along with success in 
other mitigation efforts), the Department of the Navy will continue to 
assess the most recent shortfall projection as manageable. The Navy 
fiscal year 2013 funding fully supports this strategy. However, any 
further delay in the JSF delivery profile will have a negative effect 
on existing strategies and the projected strike fighter shortfall in 
both magnitude and duration. Expanded inventory management decisions 
(i.e. Service Life Extension Programs of additional legacy aircraft) 
are possible but depend greatly upon expected JSF availability, legacy 
aircraft utilization and attrition rates.

    62. Senator Inhofe. General Amos, when does the Marine Corps plan 
to achieve F-35B initial operating capability (IOC)?
    General Amos. The Department of the Navy has not yet determined IOC 
for the F-35B and the F-35C. The Navy and Marine Corps require service-
specific operational capabilities as defined in the F-35 Operational 
Requirements Document prior to considering declaration of IOC. 
Achieving these capabilities are event-driven and dependent upon the 
progress of the rebaselined JSF Program.
    For F-35C IOC, the Navy requires the following:

    (1)  One squadron of 10 F-35C aircraft.
    (2)  Functional Autonomic Logistic Information System (ALIS) 
(including peripherals) and carrier integration modifications in place 
to support CVN deployments, airworthiness and flight deck 
certifications.
    (3)  Trained aircrew, maintainers, and support personnel.
    (4)  System Development and Demonstration/Operational Evaluation 
complete and Joint Program Office/F-35 contractor procedures, 
processes, and infrastructure capable of sustaining operations of the 
F-35C IOC squadron.

    For F-35B IOC, the Marine Corps requires the following:

    (1)  One squadron of 10 F-35B aircraft with required spares, ground 
support equipment, tools, technical publications and a functional ALIS 
(including peripherals).
    (2)  One squadron manned with trained/certified personnel capable 
of conducting autonomous operations.
    (3)  F-35B aircraft with the requisite performance envelope, 
mission systems, sensors and weapon clearances (Block 2B).
    (4)  Home base supporting infrastructure and facilities ready and 
capable of supporting and sustaining operations.
    (5)  Qualifications/certifications required for deploying on F-35B 
compatible ships and to austere expeditionary sites.
    (6)  The ability to execute the tactical aircraft directed mission 
sets.
    (7)  Joint Program Office/F-35 contractor procedures, processes, 
and infrastructure capable of sustaining operations of the IOC 
squadron.

    63. Senator Inhofe. Secretary Mabus, Admiral Greenert, and General 
Amos, what has been the reaction of the allied partners on the 
restructured production plan for the F-35 program?
    Secretary Mabus and Admiral Greenert. Overall, partner nations 
remain very supportive of the F-35 program and the cooperative 
partnership established via the 2006 Joint Strike Fighter Production, 
Sustainment, and Follow-on Development (PSFD) Memorandum of 
Understanding (MOU). While all nations have expressed concern about F-
35 progress, no partners have indicated any plans to leave the program 
due to the technical or programmatic challenges encountered in recent 
years. While Italy recently announced plans to reduce total procurement 
to 90 (vs. 131) aircraft, we understand this is due to national 
economic challenges vs. programmatic concerns. And while the potential 
exists for other partners to consider changes--no other nation has 
formally advised DOD of any modification to national procurement plans.
    General Amos. The F-35 Lightning II Program is a joint, multi-
national program among the U.S. Air Force (USAF), U.S. Navy (USN), U.S. 
Marine Corps, and eight cooperative international partners: the United 
Kingdom (UK), Italy (IT), the Netherlands (NL), Turkey (TU), Canada 
(CA), Australia (AS), Denmark (DK), and Norway (NO). The International 
Partners as well as our U.S. Service partners are keenly interested and 
engaged in seeing the JSF enter into service as soon as practicable and 
affordable. The United States is obviously leading on test, 
development, production and sustainment of the aircraft and has assumed 
the highest risk in regards to the concurrency strategy of these 
efforts. Our partners sometimes can misinterpret our confidence in the 
F-35 program when we restructure it. However, from a Marine Corps 
perspective, we are continuously engaged with our international 
partners, particularly those procuring the F-35B and F-35C variants, in 
seeking out and planning for opportunities to collaborate in 
development, training, and long term sustainment of the JSF. Stability 
in procurement rates, infrastructure build-out, and meeting our 
development and test schedules demonstrate our commitment to the 
program and our international partners.

    64. Senator Inhofe. Secretary Mabus, Admiral Greenert, and General 
Amos, does DOD believe that the recent announcement will impact when or 
how many aircraft the international partners will ultimately buy?
    Secretary Mabus and Admiral Greenert. No. Overall, partner nations 
remain supportive of the F-35 program and the cooperative partnership 
established via the 2006 JSF PSFD MOU. While all nations have expressed 
concern about F-35 progress, no partners have indicated any plans to 
leave the program due to the technical or programmatic challenges 
encountered in recent years. While Italy recently announced plans to 
reduce total procurement to 90 (vs. 131) aircraft, we understand this 
is due to national economic challenges vs. programmatic concerns. And 
while the potential exists for other partners to consider changes--no 
other nation has formally advised DOD of any modification to national 
procurement plans.
    General Amos. Just as the United States has done in the past, our 
international partners in the JSF program will continue to make 
adjustments in their procurement plans based on the common factors of 
need, funding available, and affordability. In response to decreased 
U.S. procurement rates submitted in the fiscal year 2013 budget, it is 
anticipated the partners will adjust the timing of their procurements 
and possibly reduce their procurement targets. These adjustments will 
be coordinated with the Joint Program Office and be formally presented 
at the fall 2012 Joint Executive Steering Board that oversees 
international governance of the JSF Program.

    65. Senator Inhofe. Secretary Mabus, Admiral Greenert, and General 
Amos, is there a cost impact for the partner countries based on the 
changes DOD is implementing?
    Secretary Mabus and Admiral Greenert. We are continuing efforts to 
understand what cost impact will result for F-35 partner nations 
resulting from DOD PB13 quantity changes. Specific F-35 unit recurring 
flyaway costs changes will ultimately depend upon the outcome of 
contract negotiations with the prime contractor (Lockheed-Martin) for 
future LRIP annual procurement actions that combine U.S., Partner, and 
(as applicable) Foreign Military Sales purchases in any given LRIP 
contract.
    General Amos. We are continuing efforts to understand what cost 
impact will result for F-35 partner Nations resulting from DOD fiscal 
year 2013 quantity changes. Specific F-35 unit recurring flyaway costs 
changes will ultimately depend upon the outcome of contract 
negotiations with the prime contractor (i.e. Lockheed-Martin) for 
future LRIP annual procurement actions that combine U.S., partner, and 
(as applicable) Foreign Military Sales purchases in any given LRIP 
contract.

    66. Senator Inhofe. Secretary Mabus, Admiral Greenert, and General 
Amos, what is the importance of international participation to 
controlling costs on the F-35 program?
    Secretary Mabus and Admiral Greenert. In addition to the important 
national security and coalition warfare benefits and synergies, 
international participation in the F-35 program is also important to 
DOD for the affordability benefits such participation enables. With 
additional international procurements, program costs can be shared over 
a higher production quantity base--thereby enabling lower overall costs 
to the U.S. Government as the Department moves down the aircraft cost 
curve. While higher quantities enable lower costs through production 
efficiencies, controlling overall program costs have many additional 
components, to include, productivity improvements, elimination of low-
value added tasks contributing to program cost, and similar cost 
reduction initiatives that are also being implemented in the F-35 
program.
    General Amos. In addition to the important national security and 
coalition warfare benefits and synergies, international participation 
in the F-35 program is also important to DOD for the affordability 
benefits such participation enables. With additional international 
procurements, program costs can be shared over a higher production 
quantity base--thereby enabling lower overall costs to the U.S. 
Government as the Department moves down the aircraft cost curve. While 
higher quantities enable lower costs through production efficiencies, 
controlling overall program costs have many additional components, to 
include, productivity improvements, elimination of low-value added 
tasks contributing to program cost, and similar cost reduction 
initiatives that are also being implemented in the F-35 program.

    67. Senator Inhofe. Secretary Mabus, Admiral Greenert, and General 
Amos, what feedback are you getting from pilots and crew at Pax River 
on the aircraft performance and flight characteristics?
    Secretary Mabus and Admiral Greenert. The F-35 Integrated Test 
Force (ITF) test pilots conducting the developmental test of the F-35B/
C aircraft at NAS Patuxent River have provided positive comments about 
the aircraft performance and handling characteristics within the 
current flight test envelope. The aircraft performance in many flight 
regimes is similar to legacy Marine Corps and Navy tactical fighter 
aircraft, and in other areas the F-35B/C variants provide performance 
and handling qualities that surpass the characteristics of prior 
tactical platforms. In particular, the test events executed last fall 
on the USS Wasp have indicated that the F-35B provides a significant 
increase in ease of operations in the shipboard environment.
    General Amos. Feedback from the aircrew and maintenance personnel 
at our primary test facility at Naval Air Station Patuxent River, MD, 
has been extremely positive and favorable. As demonstrated in 2011, 
flight test is proceeding in accordance with the plan and the results 
of testing are as expected for this stage of development.

    68. Senator Inhofe. Secretary Mabus, Admiral Greenert, and General 
Amos, how are these aircraft flying?
    Secretary Mabus and Admiral Greenert. The eight F-35 B and C 
variant aircraft assigned to the Patuxent River F-35 ITF are executing 
flight test in accordance with the revised baseline test plan 
established in 2011. Test point execution remains ahead of plan for 
calendar year 2012 for the B and C variants, and the aircraft are 
flying routinely to execute developmental flight test, and executing 
ground-based tests as required to meet program goals.
    General Amos. Both the F-35C and F-35B variants are achieving 
developmental test points within the restructured program parameters.

    69. Senator Inhofe. Secretary Mabus, Admiral Greenert, and General 
Amos, you recently lifted the F-35B short takeoff/vertical landing 
(STOVL) variant from probation. Please discuss the reasons that led to 
this decision.
    Secretary Mabus and Admiral Greenert. Secretary Gates placed the F-
35B on probationary status because it was experiencing significant 
unique technical issues (which will be discussed below). As a result of 
these issues, the Department of the Navy supported the decoupling of F-
35B testing from the other two variants, allowing the program to 
increase focus on F-35B specific developmental issues, while testing on 
the other variants progressed. In 2011, the program office addressed 
all F-35B probationary risk areas, F-35B successfully completed more 
flights and more test points than planned, and overall, F-35B is 
currently demonstrating development, test, and production maturity 
comparable to, and not substantially different from, the other F-35 
variants.
    When F-35B was placed on probation, the following five F-35B-unique 
technical issues were identified as focused risk areas to be addressed 
during the probationary period: Bulkhead Cracks: Cracks developed in 
the F-35B flight station (FS) 496 bulkhead after 1,500 hours of fatigue 
testing. Auxiliary Air-Inlet Doors: Vortices rolled off the upper lift-
fan door created loads on the auxiliary air-inlet doors in excess of 
design limits. Clutch Plate Heating: Higher-than-expected clutch 
heating was encountered intermittently during F-35B up and away flight. 
Drive Shaft Articulation: Higher-than-expected thermal growth of the F-
35B airframe and engine exceeded the drive shaft articulation 
(horizontal movement) standards. Roll Control Nozzle Heating: The roll 
control nozzle was overheating during STOVL operations at low airspeeds 
(less than 60 knots).
    These five technical risk areas have now been addressed in the 
following fashion: The FS 496 bulkhead has been redesigned for 
production, with additional fixes identified for retrofit of aircraft 
already delivered. Upper auxiliary air inlet door hardware has been 
redesigned and began flight test in December 2011. Analyses of test 
flight results to-date show the design corrected the anomaly. We have 
confirmed the source of the clutch-plate friction that was causing the 
heating condition and are correcting the design. While the new design 
is being qualified and produced, we have mitigated its potential impact 
on the current aircraft operations by adding a temperature sensor which 
alerts the pilot to modify the aircraft flight conditions to ensure 
clutch temperatures do not exceed design limits.
    The vertical lift propulsion system drive shafts are being custom 
fitted with spacers to ensure the shaft can accommodate the airframe 
thermal expansion and contraction, ensuring their airworthiness. While 
``tuning'' drive shafts to specific aircraft eliminates the 
probationary risk area, it also reduces commonality and may increase 
maintenance cost and complexity. As such, we do not believe this 
hardware resolution is an affordable fleet solution. To address 
commonality/affordability, we are designing a new driveshaft 
configuration to provide a common configuration and meet the aircraft's 
thermal requirements to permit faster maintenance change-outs and 
reduce the number of unique end-items. The probationary airworthiness 
risk associated with roll post nozzle actuator heating has been 
addressed by insulating the actuator with a thermal blanket. To reduce 
aircraft weight, however, we are designing a new actuator that will 
also eliminate the need for a thermal blanket. That actuator design 
completed its critical design review in January 2012.
    The Secretary of Defense decision to lift probation will result in 
absolutely no reduction in Department of the Navy's F-35B oversight or 
the level of attention given by DOD to each of the F-35 variants going 
forward.
    General Amos. Based upon the current assessment of the F-35B STOVL 
and the requirements of the defined exit criterion, the Commandant of 
the Marine Corps and other Department leadership recommended the 
removal of F-35B from probationary status. The Secretary of Defense 
determined that the F-35B had made sufficient progress in development, 
test and production such that no uniquely distinguishing issues require 
more scrutiny than the other two variants of the F-35, and on January 
20, 2012 he announced that F-35B was no longer in a probationary 
status.
    Looking back to the 12 months of fixed scrutiny, the F-35B program 
made positive increases in flight test metrics, resolved technical 
issues, and met performance requirements. In October 2011, the F-35B 
satisfactorily executed a limited demonstration of ship suitability 
when two aircraft completed the initial sea trials on USS Wasp. Testing 
included flight envelope expansion, airborne and deck handling 
qualities, and the aircraft effects on the shipboard environment. The 
sea trials were very successful. Flight deck heating and exhaust jet 
blast velocity demonstrated satisfactory results.
    F-35B weight essentially has remained stable since January 2011. In 
addition, engine performance data collected has allowed credit for 
better lift performance and the Vertical Landing Bring Back) Key 
Performance Parameter has maintained a consistently positive margin. In 
2011 the F-35B performed on or ahead of the test plan. Total flights 
planned versus actual were 293/333 and total test points planned versus 
actual were 2272/2636.
    The FS 496 bulkhead has been redesigned for production, with fixes 
identified for retrofit as needed. F-35B fatigue test (also known as 
durability test) resumed January 19, 2012. This particular test had 
been halted for new bulkhead fabrication and instrumentation and test 
article reconstruction in November 2010. The redesigned upper auxiliary 
air inlet door hardware began flight test in December 2011. Analyses of 
the results from early test flights are promising; weather and pace of 
flights will determine when this is completed. Additionally, ordering 
of modification kits for aircraft retrofit began in parallel with this 
testing in order to gain clearance for fleet STOVL mode operation as 
soon as possible.
    Airworthiness concerns with the lift fan clutch heating issue have 
been mitigated by the incorporation of a temperature sensor that alerts 
the pilot to take corrective action if the clutch exceeds acceptable 
temperatures. At the same time, a detailed root cause investigation for 
a permanent fix to eliminate clutch heating is underway. The 
airworthiness risk associated with roll post actuator heating has been 
mitigated by insulating the actuator with a thermal blanket. The 
critical design review for a new actuator design that will eliminate 
the need for a thermal blanket was conducted January 19-20, 2012.
    The vertical lift propulsion system drive-shafts are being custom 
fitted with spacers to ensure the shaft can accommodate the airframe 
thermal expansion and contraction. While this is currently a 
maintenance burden, it eliminates the airworthiness concerns with the 
current driveshaft design. A new driveshaft that can meet the actual 
aircraft environmental requirements is in the early phases of the 
design process.

                    MISSILE DEFENSE--SM-3 AND AEGIS

    70. Senator Inhofe. Secretary Mabus and Admiral Greenert, I 
continue to have concerns about our current missile defense plan. While 
the SM-3 Block IB (short/medium range) will be tested this year and 
hopefully fielded in 2015, the SM-3 Block IIA (short/medium/
intermediate range) is in design with a 2018 projected fielding date 
and the SM-3 Block IIB (long range) is still a concept. Intelligence 
estimates state that Iran may have a long range ballistic capability by 
2015. What is your current level of confidence in being able to deploy 
the SM-3 2A by 2018 and the SM-3 IIB by 2020?
    Secretary Mabus and Admiral Greenert. SM-3 block IIA and SM-3 block 
IIB are being developed by the Missile Defense Agency. Both programs 
are expected to begin deliveries in 2018 and 2020 respectively. Based 
on the close relationship that Navy shares with MDA in developing and 
proving Ballistic Missile Defense capabilities, Navy has confidence 
that MDA will execute the programs as planned.

    71. Senator Inhofe. Secretary Mabus and Admiral Greenert, Aegis 
missions include maritime security, anti-submarine warfare, surface 
warfare, and missile defense. By the end of this year, 23 Aegis ships 
will be ballistic missile defense (BMD)-capable and 110 SM-3 
interceptors will have been delivered. However, 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 meet the wartime requirements 
of all our combatant commanders?
    Secretary Mabus and Admiral Greenert. Demand for missile defense 
assets, to include multi-mission Aegis ships and missiles, continues to 
exceed supply within each region as stated in the 2010 Ballistic 
Missile Defense Review. While Navy is filling the most critical 
combatant commander demands for multi-mission Aegis ships, Navy is not 
able to meet the full demand without exceeding personnel and homeport 
tempo guidelines designed to sustain a capable force over time.
    Combatant commander demands are reviewed periodically and 
adjudicated by the Secretary of Defense through the Global Force 
Management process to ensure the demands are prioritized based on 
overarching global defense priorities and that the Navy's limited BMD 
capacity is applied to the most critical needs.
    Navy is employing a number of material and non-material approaches 
to mitigate the capacity shortfall by moving forward with three 
coordinated efforts to increase the capability and capacity of its BMD-
capable combatants. Navy will also forward deploy four BMD-capable 
destroyers to Rota, Spain, in order to source EUCOM demands more 
efficiently.
    Navy continues to review force structure as a function of demand 
and fiscal conditions and shares the committee's concerns regarding our 
limited BMD capacity but is working within the constraints of the 
existing fiscal environment and therefore accepts risk.
    The Missile Defense Agency (MDA), as the acquisition organization 
responsible for delivery of the SM-3 missile, is procuring SM-3 
missiles to support Navy sourcing Global Force Management plans.

    72. Senator Inhofe. Secretary Mabus and Admiral Greenert, is the 
demand for Aegis ships now and in the future outstripping supply?
    Secretary Mabus and Admiral Greenert. The Navy currently has 
sufficient surface combatants to meet the most critical demands for 
multi-mission warships. The Navy continues to review force structure as 
a function of demand and fiscal conditions and is currently conducting 
a force structure assessment in support of revised strategic guidance, 
which will further refine the large surface combatant requirement.

    73. Senator Inhofe. Secretary Mabus and Admiral Greenert, are there 
Aegis readiness concerns, and, if so, how does the fiscal year 2013 
budget address these concerns?
    Secretary Mabus and Admiral Greenert. As part of our normal process 
of improving system reliability and performance, Navy has established 
an Aegis Combat System Readiness Review board to provide a holistic 
assessment of continued Aegis readiness in terms of interoperability, 
maintainability, test & evaluation, manpower, training, and current 
development efforts. This effort continues to improve current readiness 
and enables Navy's Aegis Surface ships to meet current and future 
threats. The fiscal year 2013 budget provides $249 million in fiscal 
year 2013 and $552 million across the FYDP to address this process of 
improving reliability and performance. Specifically, we are addressing 
interoperability and computer software improvements, SPY readiness 
improvement actions such as increasing SPY transmitter reliability, 
increasing waterfront technical support and training, and including 
improvements based on Fleet feedback into current Aegis development.

                      DETAINEES AND GUANTANAMO BAY

    74. Senator Inhofe. Secretary Mabus and Admiral Greenert, last 
year, terrorist Ahmed Abdulkadir Warsame was interrogated aboard a U.S. 
Navy ship. This move by the Obama administration seemed to be as, or 
more, focused on avoiding the use of the detention facility at 
Guantanamo Bay as properly interrogating Warsame and preparing him for 
trial. The interrogation aboard a Navy ship seems to have brought as 
much international backlash for the Obama administration as 
transferring Warsame to Guantanamo Bay would have. The administration 
was accused of violating the Geneva Convention by prolonging 
interrogation of Warsame on a ship. If Warsame had been transferred to 
Guantanamo Bay, he would have had the benefit of the Expeditionary 
Legal Complex and appropriate legal representation. I joined several 
other members of this committee in protesting the transfer of Warsame 
to Article III, civilian, courts in New York. I have long-supported the 
use of the world-class detention facility at Guantanamo Bay and the 
Expeditionary Legal Complex that is best-suited to hold, interrogate, 
prepare, and try detainees. Are you comfortable with the Obama 
administration's practice of prolonged detention on Navy ships instead 
of immediate transfer to a detention facility; the most appropriate of 
which is Guantanamo Bay?
    Secretary Mabus and Admiral Greenert. The Navy does not conduct 
long-term detentions, or internment, aboard naval vessels. The Navy 
does, when necessary, temporarily detain individuals aboard vessels for 
screening, as was the case with Ahmed Warsame, or for other lawful 
purposes. Temporary detention of al Qaeda detainees aboard U.S. Navy 
vessels provides a legal, humane, and operationally feasible 
alternative to conducting tactical screening and interrogation 
operations in land-based facilities, particularly when those facilities 
are thousands of miles removed from the point of capture. Congress has 
afforded the executive branch the critical legal authority to use 
``necessary and appropriate force'' against al Qaeda and associated 
forces, which includes the authority to detain members wherever they 
may be captured, pursuant and subject to the law of war. The execution 
of this detention authority may lawfully occur--temporarily--aboard 
U.S. Navy vessels. Such detentions fully comply with Common Article 3 
of the Geneva Conventions, DOD Directive 2310.01E (the DOD Detainee 
Program), and the Detainee Treatment Act. Nothing in the law of armed 
conflict prohibits the temporary holding of detainees at sea for 
screening or other lawful purposes. Indeed, in cases of capture at 
sea--as was the case with Mr. Warsame--some period of detention at sea 
would be absolutely necessary.

    75. Senator Inhofe. Secretary Mabus and Admiral Greenert, what are 
the risks associated with prolonged holding of detainees on Navy ships?
    Secretary Mabus and Admiral Greenert. No military operation can be 
conducted completely free from risk. As the Navy's Operational Risk 
Management Instruction (OPNAVINST 3500.39C) directs, it is incumbent on 
commanders and leaders at all levels to recognize and consider those 
risks and, through prudent planning, effective training, and sound 
execution, mitigate them to acceptable levels commensurate with the 
imperative of accomplishing the mission.

    76. Senator Inhofe. Secretary Mabus and Admiral Greenert, what is 
your impression of the operations, quality of our personnel, and 
treatment of detainees at Guantanamo Bay?
    Secretary Mabus and Admiral Greenert. Detention operations at 
Guantanamo Bay are conducted under the command and control of a Joint 
Task Force. Those operations are conducted professionally and in full 
accordance with U.S. law and the law of war. The quality of U.S. 
military personnel at the base is outstanding. Detainees are treated 
humanely and in accordance with U.S. regulations and international law.

    77. Senator Inhofe. Secretary Mabus and Admiral Greenert, have you 
changed any operations in preparation to close Guantanamo Bay in 
accordance with President Obama's Executive Order to close the 
facility?
    Secretary Mabus and Admiral Greenert. Detention operations at 
Guantanamo Bay are conducted under the command and control of a Joint 
Task Force and not the Department of the Navy. The Navy continues to 
support the Joint Task Force's detention operations. In the event that 
the President orders the termination of detention operations at 
Guantanamo Bay, the Navy is prepared to support the Joint Task Force in 
its efforts to terminate the mission.

                       MARINE CORPS END STRENGTH

    78. Senator Inhofe. General Amos, there are over 34,000 marines 
deployed, with over 22,000 in Afghanistan. In 2007, the Marine Corps 
increased their end strength by 27,000 marines. The Marine Corps 
expects to achieve an end strength of 202,934 at the end of fiscal year 
2012; 834 higher than its permanent authorized end strength of 202,100. 
Although end strength numbers are planned to remain relatively stable 
through fiscal year 2014, there is a planned reduction of 15,300 
marines in fiscal year 2015 and fiscal year 2016. The Marine Corps 
continues to struggle to achieve its goal of 1 to 3 dwell time. What is 
the current dwell time ratio for the Marine Corps?
    General Amos. As of May 2012, there were more than 26,000 marines 
deployed around the world, 17,800 of which were in Afghanistan. We 
expect our overall force level in Afghanistan to continue decreasing 
throughout the remainder of this calendar year in accordance with 
prescribed DOD timelines and objectives. Pending final congressional 
approval of the fiscal year 2013 budget, the Marine Corps' active duty 
end strength is scheduled to be 197,300 marines by October 1, 2013. 
Over the FYDP, our end strength is slated for continued reductions with 
a final goal of 182,100 marines on active duty by the end of fiscal 
year 2016, thus equating to a measured and responsible rate of 
reduction of approximately 5,000 marines per year over the FYDP. There 
are no scheduled reductions in our Reserve component, which will remain 
at 39,600 marines.
    During times of war, the deployment to dwell time (DEP:DWELL) goal 
for the Marine Corps continues to be 1:2 for our Active component 
combat units and 1:5 for Reserve component forces (See attached two 
slides depicting DEP:DWELL ratios of primary Marine Corps combat units 
for the past 9 years. Column 1 reflects combined ratios throughout 
operations ISO of both OIF/OND and OEF. Column 2 reflects support to 
OEF only). Given the drawdown of Marine forces in Afghanistan over the 
coming year, we anticipate the dwell time of our combat units to 
improve. However, many units throughout the Marine Corps already have 
more favorable dwell times greater than 1:2. Moreover, through our 
force structure review conducted in 2010-2011, we addressed the 
manpower issues associated with marines in ``high-demand/low-density'' 
military occupational specialties (e.g. signals and geospatial 
intelligence, linguists, etc), resulting in improved dwell times among 
those in these fields. We continue to work actively to recruit, promote 
and retain the right number of marines in the right occupational 
specialties, thus promoting resiliency in our Total Force.
    In a post Operation Enduring Freedom security environment (i.e. 
2014 and beyond), we will strive for a 1:3 DEP:DWELL goal within our 
active duty combat units. We have revised our Marine Corps Service 
Campaign Plan to synchronize the mechanisms of our institution to 
facilitate and support these future goals.
      
    
    
      
    
    

    79. Senator Inhofe. General Amos, what is the dwell time goal for 
the Marine Corps?
    General Amos. During times of war, the DEP:DWELL goal for the 
Marine Corps continues to be 1:2 for our Active component combat units 
and 1:5 for Reserve component forces. Given the drawdown of Marine 
forces in Afghanistan over the coming year, we anticipate the dwell 
time of our combat units to improve. However, many units throughout the 
Marine Corps already have more favorable dwell times greater than 1:2. 
Moreover, through our force structure review conducted in 2010-2011, we 
addressed the manpower issues associated with marines in ``high-demand/
low-density'' military occupational specialties (e.g. signals and 
geospatial intelligence, linguists, etc) resulting in improved dwell 
times among those in these fields. We continue to work actively to 
recruit, promote and retain the right number of marines in the right 
occupational specialites, thus promoting resiliency in our Total Force.
    In a post-Operation Enduring Freedom security environment (i.e. 
2014 and beyond), we will strive for a 1:3 DEP:DWELL goal within our 
active duty combat units. We have revised our Marine Corps Service 
Campaign Plan to synchronize the mechanisms of our institution to 
facilitate and support these future goals.

    80. Senator Inhofe. General Amos, what risks are associated with 
reducing the Marine Corps' size?
    General Amos. As directed over the coming FYDP and pending 
congressional approval, we will draw down our force from its current 
end strength of 202,100 marines to 182,100 in a measured way beginning 
in fiscal year 2013 and concluding at the end of fiscal year 2016. As 
we reduce end strength, we must manage the rate carefully so we reduce 
the force responsibly. We will draw-down our end strength by 
approximately 5,000 marines per year. The pace of Active component 
drawdown will account for completion of our mission in Afghnistan, 
ensuring proper resiliency in the force relative to dwell times.
    By the end of fiscal year 2016, the resulting 182,100 Active-Duty 
Force, supported by our operational Reserve component, retains the 
capacity and capability to support steady state and crisis response 
operations through rotational deployments, and to rapidly surge in 
support of major contingency operations. Although reshaping the Marine 
Corps from 202,100 marines to 182,100 marines entails some risk to our 
ability to simultaneously respond to multiple large-scale 
contingencies, it is manageable. We intend to leverage the diverse 
depth and range of assets within our Reserve component both to mitigate 
risk and maximize opportunities where available.

    81. Senator Inhofe. General Amos, what assurances do we have that 
we will not need a larger Marine Corps in the future?
    General Amos. I cannot assure you that we will not need a larger 
Marine Corps in the future. However, the 182,100 Active Duty Marine 
Corps force that we have designed through our Force Structure Review 
and in support of the new Defense Strategic Guidance issues in January 
2012 can support the geographic combatant commanders' demand for crisis 
response, forward presence and large scale amphibious operations as 
part of a joint campaign. This force, complemented where needed by our 
39,600 Reserve component, will have enough flexibility to respond to 
the unknowns of the future security environment.

    82. Senator Inhofe. General Amos, what is the primary driver behind 
the decision to reduce the size of the Marine Corps?
    General Amos. In an effort to ensure the Marine Corps is organized 
for the challenges of the emerging security environment following our 
commitment in Afghanistan, we conducted a capabilities-based Force 
Structure Review beginning in the fall of 2010 to identify ways we 
could rebalance and posture for the future. The Force Structure Review 
incorporated the lessons learned from 10 years of combat and addressed 
21st century challenges confronting our Nation and its Marine Corps. 
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 have been shared with Congress over the past year. While 
affirming this strategy-driven effort, we have aligned our force based 
on the realities of constrained spending levels and new Defense 
Strategic Guidance issued in January of this year.
    During our comprehensive Force Structure Review, we tailored a 
force structure to ensure a sufficient type and quantity of force 
available to meet the forward presence, engagement and crisis response 
requirements of the geographic combatant commanders. The resulting 
force structure is intended to meet title 10 responsibilities, broaden 
capabilities, enhance speed and response options and foster the 
partnerships necessary to execute the range of military operations 
while providing the ``best value'' to the Nation. This force structure 
also accounted for the addition of enabling assets (e.g. combat 
engineers, information operations specialists, civil affairs personnel, 
specialized intelligence marines, cyber operators, special operators, 
etc.) necessary to meet the demands of the battlefields of today and 
tomorrow.
    The resulting 182,100 Marine Active-Duty Force, supported by our 
operational Reserve component, retains the capacity and capability to 
support steady state and crisis response operations through rotational 
deployments, and to rapidly surge in support of major contingency 
operations. Our 182,100 Marine Corps represents fewer infantry 
battalions, artillery battalions, fixed-wing aviation squadrons, and 
general support combat logistics battalions than we had prior to 
September 11. However, it adds cyber operations capability, Marine 
special operators, wartime enablers and higher unit manning levels-all 
lessons gleaned from 10 years of combat operations; it is a very 
capable force.

                  UNITED NATIONS LAW OF THE SEA TREATY

    83. Senator Inhofe. Secretary Mabus, one of the first things 
President Reagan did when he entered the White House in 1981 was to 
reject the United Nations (U.N.) Law of the Sea Treaty (UNCLOS). 
Despite the Clinton administration signing the treaty in 1994 and 
efforts by the George W. Bush administration, this Senate has refused 
to ratify it. U.S. accession to UNCLOS would harm U.S. national 
interests and jeopardize our sovereignty. UNCLOS gives the U.N. the 
power authority to regulate seven-tenths of the world's surface area, 
to levy international taxes, to regulate ocean research and 
exploration, to impose production quotas for deep-sea mining and oil 
production, or to create a multinational court system. UNCLOS will 
restrict intelligence gathering and mandate technology transfers and 
information-sharing with our allies and our enemies. UNCLOS will 
constrain U.S. naval activities and do nothing to resolve maritime 
territorial claims issues. UNCLOS would expose the United States to 
countless environmental lawsuits to include suits based on alleged U.S. 
contributions to global climate change. In the end, UNCLOS would expose 
the United States to lawsuits on virtually any maritime activity with 
any judgment rendered by the UNCLOS Tribunal being final, unappealable, 
and enforceable in U.S. territory. Are you comfortable with Article 298 
that says a dispute over whether an activity is military would be 
decided by an international tribunal or other manner as prescribed by 
the treaty?
    Secretary Mabus. Accession to UNCLOS will in no way impair U.S. 
military operations, including intelligence gathering operations. I am 
also comfortable with the dispute resolution procedures set forth in 
UNCLOS because the United States will be able to exempt all military 
activities. Furthermore, the U.S. will determine what constitutes a 
military activity. UNCLOS makes it clear that a State Party may 
completely reject all the dispute resolution procedures--on its own 
terms--for disputes involving maritime boundaries, military activities, 
and matters before the Security Council. Military officers serving on 
the delegation that negotiated the Convention ensured that the military 
activities exemption is ironclad. Accordingly, there are no processes 
or procedures available to an opposing State, court, or tribunal to 
attempt to review a State's determination that an activity is a 
military activity. Finally, to ensure that no one could mistake that 
the United States rejects dispute resolution for military activities, 
the proposed Senate Resolution of Advice and Consent could contain 
language conditioning accession to the Convention based on its 
understanding that under Article 298(1)(b) each State Party has the 
exclusive right to determine whether its activities are or were 
``military activities'' and that such determinations are not subject to 
review.
    Becoming a party to UNCLOS would not require any compromise to U.S. 
national security. The effect would be just the opposite. Becoming a 
party would significantly enhance U.S. national security. Twelve Chiefs 
of Naval Operations and five Secretaries of the Navy are on record 
supporting U.S. accession to UNCLOS. Every President since Ronald 
Reagan has supported its ratification and the Secretary of Defense, 
Chairman of the Joint Chiefs of Staff, Chief of Naval Operations, and I 
strongly support it as well.

    84. Senator Inhofe. Secretary Mabus, can you foresee any 
requirements of the treaty forcing the United States to make a choice 
between national security and fulfilling the treaty requirements, and, 
if so, how would you go about addressing the conflict?
    Secretary Mabus. No, becoming a party to the treaty would not 
require any compromise to U.S. national security. The effect would be 
just the opposite. Becoming a party would significantly enhance U.S. 
national security. Twelve Chiefs of Naval Operations and five 
Secretaries of the Navy are on record supporting U.S. accession to the 
Law of the Sea Convention. Since the satisfactory resolution of the 
deep seabed mining provisions in 1994, all three Presidents have 
supported U.S. accession.
                                 ______
                                 
             Questions Submitted by Senator Saxby Chambliss

                                SSBN(X)

    85. Senator Chambliss. Secretary Mabus and Admiral Greenert, the 
Navy is designing the SSNB(X) with 16 submarine-launched ballistic 
missile (SLBM) tubes as opposed to the 24 currently on Ohio-class subs. 
This decision was made to reduce the procurement cost of boats 2 
through 12 in the program to $5.6 billion. With implementation of the 
New Strategic Arms Reduction Treaty (START), the Navy will inactivate 4 
tubes per sub in current Ohio-class subs, so that only 20 missiles are 
aboard each SSBN. This brings the fleet capacity down to 240 SLBMs. The 
Navy in the Ohio replacement program, however, is planning a force of 
12 SSBNs with 16 tubes, which will take our SLBM fleet even further 
down, from 336 missiles to 192 missiles. We can't predict with 
certainty the need for strategic deterrent forces out to the year 2080, 
when the final SSBN(X) is scheduled to leave service, and for that 
reason I believe we may be taking on significant additional risk with 
this decision. Is the plan to design the SSBN(X) with 16 tubes rather 
than 20 fully supported within all parts of DOD including STRATCOM?
    Secretary Mabus and Admiral Greenert. The Ohio-class SSBN shipfill 
requirement of 288 missiles is based on 12 operational Ohio-class 
SSBNs. The Navy maintains 14 Ohio-class SSBNs to support taking ships 
offline for an extended mid-life refueling. The Ohio Replacement will 
be built with a life-of-ship reactor which will eliminate the mid-life 
refueling and allow 12 Ohio Replacement SSBNs to provide the same at 
sea presence as 14 Ohio-class SSBNs.
    OSD and U.S. Strategic Command concur with the Navy's plan to 
recapitalize the Nation's sea-based strategic deterrent with a class of 
12 Ohio Replacement SSBNs, each hosting 16 missile tubes. While 
developing the Ohio Replacement Milestone A Service Cost Position, 
coincident with the submission of the New START implementation plan, 
the Navy conducted an in-depth, extensive review of the capability 
requirements for the Ohio Replacement SSBN. This analysis concluded 
that a force of 12 Ohio Replacement SSBNs with 16 missile tubes each 
can carry all the sea-based warheads and maintain sufficient excess 
capacity for the future, meeting the Nation's sea-based strategic 
requirements. A 20-tube variant would inappropriately sacrifice other 
shipbuilding requirements for excess capacity.

    86. Senator Chambliss. Secretary Mabus and Admiral Greenert, 
regarding procurement cost, how certain are you that reducing the 
number of tubes will have a significant impact on actually reducing 
procurement cost?
    Secretary Mabus and Admiral Greenert. The cost savings associated 
with a 16-Tube vs. a 20-Tube Ohio Replacement SSBN design is expected 
to be approximately $3 billion across the total class. Reducing the 
design by four missile tubes (one quad pack) is estimated to save $0.2 
billion per ship (average follow ship hulls 2-12) and approximately 
$0.5 billion of non-recurring engineering costs for the first ship. All 
costs are in fiscal year 2010 dollars.

    87. Senator Chambliss. Secretary Mabus and Admiral Greenert, 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?
    Secretary Mabus and Admiral Greenert. The plan to reduce deployed 
SLBMs is aligned with the April 2010 Nuclear Posture Review (NPR) and 
DOD policy objectives. While these reductions are necessary to meet the 
limits directed by the New START Treaty, they do not adversely impact 
our strategic deterrence against threats to the United States or our 
allies.

               MARINE CORPS EQUIPMENT RESET/REGENERATION

    88. Senator Chambliss. General Amos, in your prepared statement you 
discuss the Marine Corps strategy for resetting your equipment based on 
nearly 11 years of war. You have also redeployed equipment from Iraq to 
Afghanistan which resulted in deferring previously planned reset 
actions. You state that the reset of equipment retrograded to home 
station from Iraq is complete; however, the equipment density list that 
supports combat operations in Afghanistan totals approximately 95,000 
items. A large portion of that equipment is communications equipment 
and vehicles such as mine-resistant ambush-protected vehicles and all 
of your medium tactical vehicle fleet.
    I am extremely impressed with what the Marine Corps has been able 
to accomplish--with both your people and your equipment. It is a 
testament to your leadership and can-do attitude and as you state, 
``your proud . . . reputation for frugality.'' However, this bill is 
going to come due and--as you say in your statement--``while you have 
received a good portion of the required funding for reset . . . there 
is more to do at home stations [and depots to reset the forces].'' 
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?
    General Amos. The Marine Corps' $3.2 billion strategic reset 
liability is an end-of-war estimate that is continuously assessed 
against a myriad of costing variables associated with transportation, 
labor, contracted logistics and other costs associated to the repair 
and replacement of the equipment needed to meet enduring force 
structure requirements. Separate and distinct from the strategic reset 
liability is our request for operational reset funding of $1.1 billion 
in fiscal year 2013 to support/maintain ongoing operations in 
Afghanistan, stock rotation and in-theater reset actions. Strategic 
reset is executed as forces permanently retrograde from Afghanistan.
    Marine Corps Logistics Command and the newly established Marine 
Corps Depot Maintenance Command are planning to hire the necessary 
workforce to meet our reset demands. We anticipate the workload within 
our organic depots to increase steadily through fiscal year 2015 and we 
project over 80 percent of our strategic reset dollars will be executed 
within these same depots.
    As good stewards of the taxpayers' dollars, we are continuously 
revalidating our strategic and operational reset requirements with the 
most current planning factors available. Accordingly, we expect to make 
minor adjustments to ensure we request only the resources needed to 
reset the force. The continued support of the Congress will ensure we 
meet our ground equipment reset objectives and remain America's 
Expeditionary Force in Readiness.

                  NEW MARINE DEPOT MAINTENANCE COMMAND

    89. Senator Chambliss. General Amos, the Marine Corps recently 
activated Marine Depot Maintenance Command which combines Marine Corps 
Maintenance Centers at Albany, GA, and Barstow, CA, under a single 
headquarters with two operating plant locations. I understand that the 
purpose of the Marine Depot Maintenance Command is to provide 
innovative worldwide maintenance repairs and technical services for 
ground combat, combat support, and developmental projects. I know this 
command has only been operating for a short time, but I would 
appreciate any thoughts you have on how it is operating so far as well 
as any additional explanation you have regarding the efficiencies and 
improvements that the Marine Corps hopes to achieve through this new 
command.
    General Amos. The consolidation of our two maintenance centers 
under the single Marine Depot Maintenance Command was a strategic 
initiative to increase the efficiency and effectiveness of our organic 
depot maintenance program. Marine Depot Maintenance Command began 
operations during the first quarter of fiscal year 2012, and is 
aggressively working to achieve full capability by the fourth quarter 
of fiscal year 2013.
    Under the new model, our two organic plants will provide 
maintenance and maintenance-related services, while the production 
planning, business operations, engineering, and material management 
will be performed at the single headquarters element. This initiative 
reduces the duplicative business overhead functions inherent with two 
separate commands.
    Marine Depot Maintenance Command is expected to yield significant 
efficiencies and improvements in two key ways: cost savings and 
standardization of business and production processes. Beginning in 
March 2013, we anticipate a net annual savings of $14 million to $16 
million and an overall net savings of $65 million to the Department of 
the Navy Working Capital Fund across the FYDP. Further, the 
standardized business and production processes resulting from a 
consolidated command structure will lead to greatly reduced variability 
in end products and services.

                                  F-35

    90. Senator Chambliss. Secretary Mabus, Admiral Greenert, and 
General Amos, affordability is the underlying premise of the F-35 
program--yet this budget proposes for the 4th year in a row a flat 
production rate of 30 aircraft per year. In your opinion, what can be 
done in the near-term to help drive down costs and ensure an efficient 
ramp rate to make certain the F-35 program will be affordable in the 
long-term?
    Secretary Mabus and Admiral Greenert. The reason we reduced LRIP 
rates is that we wish to reduce F-35 program concurrency until there is 
higher aircraft design maturity. Continuing at higher production rates 
at this stage of development would only result in higher numbers of 
aircraft that would have to be retrofitted in the future at an overall 
higher cost to the U.S. Government and the taxpayer. This production 
strategy decision was informed by the OSD's `Quick Look Review' in the 
fall of 2011 that affirmed that DOD is still in the `discovery' portion 
of F-35 testing with a design that is no more mature than other 
aircraft at an equivalent point. Towards balancing overall program cost 
and risk, while implementing a strategy leading to long-term 
affordability and efficiency, we developed a production ramp to support 
the prime contractor and supplier base that leads to a projected full 
rate production decision in the fiscal year 2019/fiscal year 2020 
timeframe, following successful completion of Initial Operational Test 
and Evaluation.
    General Amos. An efficient JSF ramp rate as presented in the fiscal 
year 2013 budget submission represents an effective approach to 
controlling cost growth. Furthermore, it avoids concurrency costs 
associated with development and production occurring at the same time, 
yet retains a rational ramp rate that preserves industrial base 
investments made to date and leverages the capacity to optimize 
production growth when appropriate.

    91. Senator Chambliss. Secretary Mabus, Admiral Greenert, and 
General Amos, please speak to the importance of international 
participation to controlling costs on the F-35 program.
    Secretary Mabus and Admiral Greenert. In addition to the important 
national security and coalition warfare benefits and synergies, 
international participation in the F-35 program is also important to 
DOD for the affordability benefits such participation enables. With 
additional international procurements, program costs can be shared over 
a higher production quantity base--thereby enabling lower overall costs 
to the U.S. Government as the Department moves down the aircraft cost 
curve. While higher quantities enable lower costs through production 
efficiencies, controlling overall program costs have many additional 
components, to include, productivity improvements, elimination of low-
value added tasks contributing to program cost, and similar cost 
reduction initiatives that are also being implemented in the F-35 
program.
    General Amos. The international partners, to include the United 
States, are keenly engaged in seeing the JSF enter into service as soon 
as practicable and affordable. Adjustments based on affordability and 
need are the prerogative of each JSF partner. As such when and how many 
aircraft are procured affect the procurement cost of the aircraft in 
both the short and long term. The decisions of each partner, including 
the United States, directly affect the consortium of nations involved 
with this program. We can expect our fiscal year 2013 decisions to have 
an impact on procurement plans of our international partners.

    92. Senator Chambliss. General Amos, Secretary Panetta recently 
visited Naval Air Station (NAS) Patauxent River where he announced the 
removal of the F-35B STOVL from probationary status. I understand he 
also visited with some of the test pilots and other test program 
personnel during his visit. What feedback are you getting from pilots 
and crew on the F-35B performance and flight characteristics?
    General Amos. Feedback from the aircrew and maintenance personnel 
at our primary test facility at NAS Patuxent River, MD, has been 
extremely positive and favorable. As demonstrated in 2011, flight tests 
are proceeding in accordance with current planning and results are as 
expected for this stage of development.

                COMMERCIAL ULTRA-HIGH FREQUENCY CAPACITY

    93. Senator Chambliss. Secretary Mabus and Admiral Greenert, I 
understand the existing satellite constellation providing ultra-high 
frequency (UHF) capacity for U.S. Government agencies is nearing the 
end of its lifespan, and the Mobile User Objective System (MUOS) 
satellite program includes legacy capacity which, in time, will 
ultimately replace the existing constellation. However, the initial 
MUOS satellite orbits are not projected to cover North and Latin 
America which creates a capability gap, especially if one of the aging 
satellites fails. How many of the existing UHF follow-on (UFO) 
satellites, in percentage terms, are within 12 months of their nominal 
design life?
    Secretary Mabus and Admiral Greenert. Seventy-five percent (six of 
the eight) of UFO satellites currently on orbit are at or beyond their 
14 year design life. The remaining two have been on orbit for 12.4 and 
8.3 years. Despite projected losses in the UFO constellation, current 
predictions indicate that the UFO constellation augmented by the MUOS 
legacy payloads will likely provide the required legacy UHF capacity in 
all Areas of Responsibility (AORs) through at least 2018. MUOS wideband 
code division multiple access (WCDMA) terminals are projected to be 
available in 2013 and will start fielding in 2014. Extended 
availability of legacy capacity will allow the MUOS WCDMA-capable 
constellation to reach Full Operational Capability and the 
corresponding terminal programs to synchronize fielding timelines.

    94. Senator Chambliss. Secretary Mabus and Admiral Greenert, since 
the MUOS advanced waveform terminals are likely to be slow to roll out, 
even with the launch of MUOS-1, is it possible that our UHF systems 
might fail to deliver the currently stated requirement for UHF service?
    Secretary Mabus and Admiral Greenert. Statistical reliability 
analysis conducted by the Navy has shown that the launch schedule 
anticipated by the Navy for MUOS satellites (actual dates will be set 
by the Air Force Current Launch Schedule Review Board) will maintain 
the legacy UHF SATCOM requirements set by the JROC through 2018.
    In an effort to reduce the risk of an unplanned loss of a UHF 
satellite to acceptable levels, the Navy has aggressively implemented 
several mitigation activities to extend the service life of the 
existing constellation and increase on-orbit capacity. As a result, the 
current legacy UHF SATCOM capacity provides the warfighter with 
approximately 459 more accesses (111 more channels) worldwide than 
required by the stated Chairman of the Joint Chiefs of Staff (CJCS) 
capacity requirement. This additional capacity is equivalent to three 
UFO satellites, provides a buffer against unplanned losses in the 
future, and minimizes the training and mission impact to a manageable 
level.

    95. Senator Chambliss. Secretary Mabus and Admiral Greenert, what 
is the status of the MUOS-1 advance waveform terminal program?
    Secretary Mabus and Admiral Greenert. The Joint Tactical Radio 
System (JTRS) Network Enterprise Domain (NED) program office is 
projecting Formal Qualification Testing (FQT) of the MUOS WCDMA 
waveform v3.1 (a.k.a. Red/Black Waveform) in August 2012. This waveform 
will then be ported on the Handheld Manpack and Small Form Fit (HMS) 
Manpack radio, via an applique to the existing form factor. The HMS 
Manpack will then be the first radio to have the MUOS capability. This 
would mean that an operationally representative user terminal would be 
available in time for the MUOS Developmental Testing (DT)/Operational 
Testing (OT) period in early fiscal year 2014.

    96. Senator Chambliss. Secretary Mabus and Admiral Greenert, when 
will these terminals be available for global deployment?
    Secretary Mabus and Admiral Greenert. The JTRS NED program office 
is projecting FQT of the MUOS Waveform v3.1 (a.k.a. Red/Black Waveform) 
in August 2012, which would enable it to be ported to the JTRS HMS 
Manpack radio by February 2013. This would mean that an operationally 
representative user terminal would be available in time for the MUOS 
Developmental Testing (DT)/Operational Testing (OT) period in early 
fiscal year 2014. The Navy currently intends to buy 202 JTRS HMS 
Manpack radios across the FYDP, including 50 radios in fiscal year 2013 
to support MUOS testing, as part of an inventory objective of 
approximately 450. The Navy does not have the details of the current 
MUOS terminal fielding plan for the other services.

    97. Senator Chambliss. Secretary Mabus and Admiral Greenert, how 
long will DOD be reliant on legacy UHF satellite services?
    Secretary Mabus and Admiral Greenert. The Navy anticipates the 
legacy capability will meet and exceed the current requirement levels 
through 2018. Legacy capacity is expected to decline after 2018 due to 
the expiration of the UFO satellites, but the legacy payload on MUOS 
satellites, each of which provide legacy capacity equivalent to one UFO 
satellite, will continue to maintain legacy capability throughout the 
lifetime of the MUOS program.
    The level of DOD reliance on legacy UHF satellite services depends 
on the fielding of MUOS capable terminals. The Navy currently intends 
to buy 202 JTRS HMS Manpack radios across the FYDP, including 50 radios 
in fiscal year 2013 to support MUOS testing, as part of an inventory 
objective of approximately 450. The Navy does not have the details of 
the current MUOS terminal fielding plan for the other services.

    98. Senator Chambliss. Secretary Mabus and Admiral Greenert, will 
coalition forces also be adopting the advanced waveform?
    Secretary Mabus and Admiral Greenert. The National Security Agency 
currently restricts the MUOS WCDMA waveform from being released outside 
of the United States.

    99. Senator Chambliss. Secretary Mabus and Admiral Greenert, recent 
stories published in defense and aerospace professional journals 
describe a shortfall in existing UHF capacity, citing that only 10 to 
20 percent of requests are filled. Today, there are commercial 
companies who are prepared to manufacture and launch UHF satellites at 
no cost to the U.S. Government, except in return to have the 
opportunity to sell capacity if it is needed via the Government 
Services Administration schedule. The United States made the decision 
in 2010 to partner with the Australians on a commercially-provided, 
UHF-hosted payload in the Indian Ocean region. Now that the private 
sector intends to launch an identical payload into the Atlantic Ocean 
region, what U.S. and allied plans are being made to take advantage of 
this capability?
    Secretary Mabus and Admiral Greenert. The DOD partnered with the 
Australian Minister of Defense (not the commercial provider) for access 
to 250 kHz of UHF narrowband satellite communications (SATCOM) on a 
commercial satellite payload that Australia is leasing over the Indian 
Ocean Region from 2012 to 2027. In exchange, the United States will 
provide the Australians access to 200 kHz of spectrum over the Pacific 
and 50kHz of spectrum globally from 2018-2033.
    Since all DOD requirements for UHF SATCOM capacity are projected to 
be met over the Atlantic Ocean Region through 2018, the U.S. DOD is not 
planning to take advantage of this commercially-provided UHF hosted 
payload in the Atlantic Ocean region.
    Through a combination of the implemented gap mitigation actions, 
commercial leases, international partnerships, and the MUOS legacy 
payloads, the DOD UHF SATCOM leadership is maximizing technical and 
fiduciary efficiencies to ensure the warfighter has access to legacy 
UHF SATCOM capacity that meets the CJCS requirements and provides a 
buffer against unplanned losses. Despite projected losses in the UFO 
constellation, current predictions indicate that the UFO constellation 
augmented by the MUOS legacy payloads will likely provide the required 
legacy UHF capacity in all AORs through at least 2018. MUOS WCDMA 
terminals are projected to be available in 2013 and will start fielding 
in 2014. Extended availability of legacy capacity will allow the MUOS 
WCDMA-capable constellation to reach Full Operational Capability and 
the corresponding terminal programs to synchronize fielding timelines. 
Because DOD requirements are met for the foreseeable future, the U.S. 
Navy is not pursuing any additional commercial UHF SATCOM capacity at 
this time. The Navy will continue to monitor the health of the current 
UHF SATCOM constellation for any signs that it is degrading more 
rapidly than currently projected. If it appears the level of legacy UHF 
SATCOM service will fall below CJCS requirements, the Navy will revisit 
all options, including commercial leases and hosted payloads, to 
maintain the current level of legacy service to the warfighter until 
the transition to the MUOS WCDMA capability is complete.
    Additional details are available in the Report to the Senate Armed 
Services Committee on ``Ultra High Frequency (UHF) Satellite 
Communications (SATCOM) Requirements and Options for Additional 
Capacity'' submitted on March 19, 2012.

    100. Senator Chambliss. Secretary Mabus and Admiral Greenert, given 
that a commercial capability would not cost anything upon launch, 
wouldn't its augmentation and license to launch act as insurance should 
another UFO satellite reach a point of failure?
    Secretary Mabus and Admiral Greenert. UHF SATCOM payloads currently 
available on commercial satellites provide less than 3 percent of the 
capacity of a MUOS WCDMA payload due to the inherent limitations of 
their design and the UHF SATCOM spectrum. The Navy has evaluated the 
use of hosted UHF payloads on commercial satellites, is currently 
leasing capacity on two commercial satellites, and has access to 
additional commercial capacity through partnerships with foreign 
governments. The current military and leased commercial legacy UHF 
SATCOM capacity provides the warfighter with approximately 111 more 
channels worldwide than required by the CJCS capacity requirement, 
which is equivalent to three UFOs and provides a buffer against 
unplanned losses in the future. Because DOD requirements are met for 
the foreseeable future, the U.S. Navy is not pursuing any additional 
commercial UHF SATCOM capacity at this time. The Navy will continue to 
monitor the health of the current UHF SATCOM constellation for any 
signs that it is degrading more rapidly than currently projected. If it 
appears the level of legacy UHF SATCOM service will fall below Chairmen 
Joint Chief of Staff requirements, the Navy will revisit all options, 
including commercial leases and hosted payloads, to maintain the 
current level of legacy service to the warfighter until the transition 
to the MUOS WCDMA capability is complete.
    Navy does not approve or disapprove spectrum licensing requests. To 
obtain a license for any commercial UHF payload, the commercial vendor 
must formally submit the application to operate their UHF payload to 
the Federal Communications Commission (FCC). The FCC would forward the 
application to the National Telecommunications and Information 
Administration (NTIA). The NTIA would then request a formal response 
from the DOD. The DOD would evaluate the application and provide the 
NTIA with a formal response. The Navy is not currently aware of any 
pending UHF SATCOM licensing requests.
    Additional details are available in the Report to the Senate Armed 
Services Committee on ``Ultra High Frequency (UHF) Satellite 
Communications (SATCOM) Requirements and Options for Additional 
Capacity'' submitted on March 19, 2012.

    101. Senator Chambliss. Secretary Mabus and Admiral Greenert, 
according to COCOMs and other Services, the demand for UHF SATCOM is 
very high and many requests are denied. Can you address this problem?
    Secretary Mabus and Admiral Greenert. Chairman, Joint Chief of 
Staff sets requirements for Narrowband MILSATCOM for all DOD users 
based on warfighter needs, and the Navy fills those as the DOD 
Acquisition Agent for Narrowband SATCOM. CJCS legacy UHF SATCOM 
requirements are met, and are projected to be met or exceeded through 
2018. The follow on MUOS CJCS requirements are captured in the MUOS 
Capabilities Production Document dated 15 January 2008, and the MUOS 
program is on track to meet all key performance parameters given in 
that document. Increased capacity requirements, combined with inherent 
limitations of the military UHF SATCOM spectrum, drive the need to move 
beyond legacy UHF waveforms found in current military and commercial 
UHF SATCOM systems to the new WCDMA capability found in MUOS.

                          VIRTUALIZED NETWORKS

    102. Senator Chambliss. Secretary Mabus and Admiral Greenert, a 
promising and cost-effective new cybersecurity technology is that of 
virtualized networks which use virtual machines inserted between the 
operating system and the network interface to provide a capability 
analogous to spread-spectrum frequency-hopping radios for internet 
protocol (IP)-based networks and devices. This capability allows for a 
multitude of cybersecurity options, including: creation of stealthy 
networks; permitting multiple peers to relay traffic; isolating attacks 
and rerouting them for analysis and response; and allowing rapid 
changes to a device's network identity. In addition, multiple robust 
offensive options are also available. Please comment on any work the 
Naval Research Laboratory (NRL) is doing regarding assessing 
virtualized network technologies to reduce hardware requirements and 
costs.
    Secretary Mabus and Admiral Greenert. As the Department of the Navy 
Corporate Laboratory, NRL continuously investigates all areas of 
information technology security to best leverage successful 
technologies for Naval use. NRL works closely with the authoritative 
cyber elements of the Navy, to include OPNAV N2/N6, Commander 10th 
Fleet, and Navy Cyber Defense Operations Command to help develop and 
select technologies to better defend our cyber assets. NRL has reviewed 
many concepts, including IP agility, and virtualization, and will 
continue to evaluate any new technology with respect to scaling and 
security concerns inherent to military architectures.
    The fact of the matter is that commercial industry is driving the 
technology and capabilities for virtualized networks and virtual 
machines. With the assistance of NRL, the Navy has been and will 
continue to leverage this commercial industry investment to reduce our 
per-unit costs across the Navy's networking and computing enterprise. 
Specific initiatives to date include:

Navy Marine Corps Intranet (NMCI)/Next Generation Network (NGEN)
    The Navy through the existing NMCI infrastructure and systems and 
the replacement services of NGEN have incorporated server 
virtualization on nearly all key IT services, eliminating over 2,000 
servers and reducing its infrastructure footprint by approximately 40 
percent. This not only reduced per-unit costs but also improved the 
reliability and availability of the affected systems by approximately 
30 percent. More recent efforts are now underway to bring these same 
virtualization capabilities to the NMCI/NGEN desktop computers to 
further expand these services improvements and efficiencies.

OCONUS Navy Enterprise Network (ONE-NET)
    Technical refresh of all ONE-NET data center infrastructure is 
underway and has been completed in 5 of 11 data centers at the Local 
Network Service Centers (LNSC) and 2 of 3 of the Theater Network 
Operations Security Centers (TNOSC) data centers. This refresh provides 
reduction in physical server count and data center footprint by 
implementation of virtualization capabilities for core services as well 
as centralization of email services to the TNOSC. This has resulted in 
an average 30 percent reduction in physical servers at completed 
locations in addition to providing a flexible, scalable architecture to 
allow the platform to accommodate the OCONUS rapidly changing 
environment and provide a means for further consolidation of services.

Consolidated Afloat Network And Enterprise Services
    The Navy recently awarded a contract to Northrop Grumman to replace 
our existing shipboard networks and computer systems with a system that 
uses virtual machines and virtual networks. This system will establish 
a standard computing environment across ship classes, reducing the 
number of hardware variants within the Navy's inventory. This enables 
the Navy to reduce both acquisition and life-cycle costs.

Regarding virtualization related to consolidating equipment hardware 
        for cost savings:
    CENTRIXS-Virtualization was recently implemented at the Pacific 
Regional Network Operating Center (NOC) during migration to the new P-
173 facility. This resulted in significant operational cost-savings and 
a more dynamic, flexible architecture capable of supporting increased 
cyber-security through the use of rapid addition of virtual machines in 
the near future. As reference the original 77 servers supporting seven 
different networks were reduced to 21 servers now running almost 100 
virtualized machines consistent with the DOD guidelines for distributed 
application. The P-173 implementation has become the accredited 
virtualized standard to be implemented at other Naval NOCs.
    The major challenge for leveraging virtualization to reduce 
hardware requirements and cost is a policy issue--not a science and 
technology issue. Virtualization allows for the abstraction of software 
from hardware, turning hardware into a commodity that could be 
purchased Navy-wide. However, current programs of record are still 
buying dedicated hardware for their software, which defeats the cost 
savings potential of virtualization. The consolidation of hardware and 
rapid hardware refresh are policy issues that will need to be 
addressed. Furthermore, current policies (or at least their current 
interpretations) do not allow the certification and accreditation (C&A) 
of software divorced of a specific hardware implementation. C&A, as 
well as testing and evaluation, policies will need to be updated to 
enable software to be hosted on a wide range of hardware platforms and 
also ensure that software can be rapidly updated to deliver new 
capabilities.

    103. Senator Chambliss. Secretary Mabus and Admiral Greenert, would 
virtualized networking significantly and economically enhance the 
cyberwarfare capabilities of the Navy by simultaneously providing 
defensive and offensive capability?
    Secretary Mabus and Admiral Greenert. Yes, virtualization will 
enable the Navy to enhance our cyber warfare capabilities.
    On the defensive side, the Navy currently employs multiple security 
products (both hardware and software) at each of our tactical Network 
Operating Centers. As part of our information dominance strategy, we 
are investigating migration to a common hardware environment that 
supports virtual network defense capabilities. Our goals include 
lowering infrastructure costs and providing a more robust platform to 
rapidly integrate emerging defense capabilities to counter both main-
stream and advanced persistent cyber security threats to the Navy's 
networking and computing enterprise.
    As stated in the National Institute of Standards and Technology's 
SP800-125: ``Full virtualization has some negative security 
implications. Virtualization adds layers of technology, which can 
increase the security management burden by necessitating additional 
security controls. Also, combining many systems onto a single physical 
computer can cause a larger impact if a security compromise occurs. 
Further, some virtualization systems make it easy to share information 
between the systems; this convenience can turn out to be an attack 
vector if it is not carefully controlled. In some cases, virtualized 
environments are quite dynamic, which makes creating and maintaining 
the necessary security boundaries more complex.'' The benefits of 
virtualization need to be balanced against these challenges to assess 
its overall utility from a network defense perspective.
    Pacific Fleet is actively engaged in the Computer Adaptive Network 
Defense in Depth (CANDID) Joint Capability Technology Demonstration 
(JCTD) to examine these issues and improve the overall security of the 
networks used to support operational forces.
    On the offensive side any discussion of this topic needs to be 
addressed in a classified environment.

    104. Senator Chambliss. Secretary Mabus and Admiral Greenert, what 
is NRL doing with respect to virtualized networking to establish 
stealth and maneuver in the cyber arena?
    Secretary Mabus and Admiral Greenert. The Navy is aggressively 
assessing and investing in stealth and maneuver in the cyber arena from 
the perspective of mission assurance in a cyber contested environment 
that needs both a ``fight tonight'' and long-term enterprise strategy. 
The ability to defend and sustain our command and control at the 
tactical, operational and strategic tiers and supporting operations 
such as logistics is a key tenant to any warfighting operation which 
will be Joint and most likely an allied coalition effort. Virtual 
networks for the protection of critical functions through cryptographic 
isolation from broader enterprise network access is a part of a 
holistic approach that also encompasses terrestrial and space 
transport, sensors, and risk management mechanisms for access to 
information.
    The Navy has several ongoing efforts that have the combined effect 
of creating ``cyber terrain'' for which principles of war in the 
physical space can be applied by the operational commander for 
defending and obfuscating critical infrastructure, deterrence by 
denying an adversary intelligence, and having a clear view of any 
adversary actions that can be used for situational assessment and 
future exploitation. These efforts include:

         The service lead for the fiscal year 2011 2-year 
        CANDID JCTD for Joint Command and Control (C2) mission 
        assurance in the PACOM area of responsibility that is providing 
        the ``fight tonight'' solution for implementation of a C2 
        virtual secure enclave on existing service networks and data 
        boundary sharing devices for COCOM risk managed access from the 
        broader enterprise. CANDID is utilizing commercial internet 
        protocol (IP) security strategies that have been validated by 
        NSA, server virtualization and secure client access methods to 
        the protected data services, such as CITRIXS, that can be used 
        on existing services' information technology (IT) 
        infrastructure. This all provides the benefits of reduced cost, 
        scalability to implement today on service networks and 
        increased security.
         Investing in an aligned computer network defense 
        approach for sensing and responding to network threats that 
        attempt to disrupt, alter, or compromise our lines of 
        communication.
         Employing new long haul DISA network transport 
        services that are cryptographically separated from end-user 
        networks to prevent denial of service threats.
         Investing in virtualization and cloud computing 
        technologies that will inherently provide CANDID virtual 
        networking capabilities in future enterprise networks ashore 
        and at the tactical edge.
                                 ______
                                 
             Questions Submitted by Senator Roger F. Wicker

                              SHIPBUILDING

    105. Senator Wicker. Secretary Mabus and Admiral Greenert, the 
current FYDP has the Navy investing an average of $13 billion annually 
in shipbuilding over the next 5 years. This will result in the new 
construction of 41 ships, a decrease of 16 ships from 57 ships in last 
year's FYDP. Moreover, the Navy's Long-Term 30-Year Shipbuilding Plan 
indicates we will build ships at ``minimum sustaining rates''. The 
relatively low orders for new ships proposed in this plan may 
jeopardize our ability to support our shipbuilding industrial base over 
the intermediate- to long-term. I am particularly concerned that the 
postponed construction of new ships will lead to job reductions. I am 
also concerned about the follow-on impacts on our supplier base that 
cannot be quickly resolved when new construction is initiated. This 
will raise costs and make it difficult to realize desired shipbuilding 
cost efficiencies over the long-term. It is irresponsible to think one 
can lay off skilled workers/engineers and expect them to be immediately 
available when future contracts are awarded. Is the Navy concerned 
about the employment valleys that will emerge when ships are delayed in 
the budget?
    Secretary Mabus and Admiral Greenert. Despite the constraints of 
the congressionally passed Budget Control Act, the Fleet will be at the 
same level at the end of FYDP as it is today, and will continue to grow 
outside the FYDP as the shipbuilding plan delivers three to four 
littoral combat ships, two to three destroyers and two to three 
submarines per years. Under this plan, Navy will reach 300 ships by 
2019. It should be pointed out; however, that ship levels did shrink in 
the 8 years before I took office. The fleet stood at 316 on September 
11, 2001, but dropped to 283 by 2008.
    Over the past several years, the Navy has placed a priority on 
increasing shipbuilding rates and providing stability for the 
shipbuilding industrial base. Stability translates into retention of 
skilled labor, improved material purchasing and workforce planning, 
strong learning curve performance, and the ability for industry to 
invest in facility improvements, all resulting in more efficient ship 
construction and a more affordable shipbuilding program which will 
minimize the impact on employment when ships may be delayed in the 
budget.

    106. Senator Wicker. Secretary Mabus and Admiral Greenert, what is 
the Navy's plan to help mitigate any such impacts on the industrial 
base?
    Secretary Mabus and Admiral Greenert. The Navy's fiscal year 2013 
shipbuilding plan supports a stable shipbuilding industrial base. The 
Navy recognizes that level loading of ship procurement to help sustain 
minimum employment levels and skill retention promotes a healthy U.S. 
shipbuilding industrial base. Consequently the ship construction plan 
has been adjusted to reduce year-to-year budget fluctuations as much as 
possible while maintaining the best feasible procurement sequence to 
help stabilize shipyard loading.
    The shipbuilding plan effectively accounts for and supports both 
the anticipated combatant commander demands and those of the national 
shipbuilding design and industrial base to build and sustain tomorrow's 
Navy. In the near-term the Navy has a good understanding of 
requirements, costs and capabilities and the construction plan is based 
on actual contract costs or, at the least, well founded cost estimates 
based on this understanding. The Navy's construction plan assesses 
those costs to the greatest extent possible to ensure the industrial 
base remains evenly loaded and the workforce levels can be sustained at 
profitable levels within the individual shipyards. New construction 
will be funded consistent with balanced investment profiles and 
expected future budgets.

                          AMPHIBIOUS SHIP GAP

    107. Senator Wicker. Admiral Greenert, from an operational 
perspective, the Navy budget calls for a decrease in the number of 
deployable battle forces to 284 ships in fiscal year 2013, including 11 
aircraft carriers and 31 large amphibious ships. Force structure 
changes will result in a Navy fleet size of more than 280 ships over 
the next 5 years. According to the Congressional Budget Office (CBO), 
the Navy's fiscal year 2012 30-Year Shipbuilding Plan's stated minimum 
number of amphibious warships available for deployment is 30, while the 
Marine Corps' objective is to have 34 amphibious warfare ships 
available for deployment. These reduced numbers of amphibious ships 
will pose challenges to fulfilling the amphibious force requirements, 
and give rise to a sea-lift capability gap and aviation-lift gap as 
early as 2015. Combatant commanders' requests for amphibious ships have 
increased over 80 percent over the last 5 years. How does the Navy's 
30-Year Shipbuilding Plan address these combatant commanders' requests, 
given the fact that approximately 1 out of 10 amphibious ships are 
always in cycle for scheduled maintenance?
    Admiral Greenert. The Navy's PB2013 force structure and readiness 
investments will deliver forces to meet the fiscal year 2013 Global 
Force Management Allocation Plan (GFMAP). The GFMAP is the Secretary of 
Defense-approved plan for allocation of forces to the combatant 
commanders. The GFMAP addresses the most urgent combatant commander 
requirements and manages risk within the DOD's resource and force 
structure constraints. Navy supplies forces to combatant commanders 
using the Fleet Readiness and Training Process (FRTP). The FRTP ensures 
ships, aircraft, and their crews complete required training, 
maintenance, and certification prior to deployment. Amphibious ship 
maintenance is part of the FRTP and is factored into the commitments 
for presence identified in the GFMAP. Going forward, the shipbuilding 
program described in the 30-Year Shipbuilding Plan builds and maintains 
a battle force inventory of approximately 300 ships and achieves an 
inventory of 31 amphibious ships by 2020.

    108. Senator Wicker. General Amos, with a pivot to the vast Asia-
Pacific region and given the Navy's inability to meet its own 
requirement of 313 ships, currently at 284, how will this affect your 
ability to protect American security interests?
    General Amos. The Pacific Command (PACOM) Area of Responsibility 
(AOR) is dominated by the ocean and so is ideally suited to naval and 
amphibious forces. As such, amphibious shipping is optimal for the 
movement and employment of marines across the range of military 
operations. PACOM currently has four amphibious warships forward 
deployed, that are critical to day-to-day operations in the AOR. 
Refocusing the national security strategy on the Pacific requires an 
increase in mobility. Emergent requirements, such as the Australia 
Marine Air Ground Task Force, would benefit from additional amphibious 
shipping capacity. Other lift options, such as the Joint High Speed 
Vessel, somewhat mitigate the lack of mobility, but do not replace all 
of the capabilities inherent in amphibious shipping. Decreasing the 
number of amphibious warships in the inventory reduces the number of 
vessels available to support an increased U.S. presence in the Asia-
Pacific region and elsewhere for that matter. Furthermore, it stresses 
the ability to support CENTCOM Amphibious Ready Group/Marine 
Expeditionary Unit (ARG/MEU) rotation.
    Within the Navy's total ship inventory, the Marine Corps has an 
enduring requirement for 30 (10 LHA/D, 10 LPD, 10 LSD) operationally 
available ships needed to execute geographic combatant commander 
operational plans requiring joint forcible entry, conduct rotational 
deployments (e.g. Marine Expeditionary Units at sea) and respond to 
crisis around the world. When considering the term ``operationally 
available,'' it is important to note that it implies a ship that is 
able to deploy immediately or on relatively short notice. Factoring 
maintenance cycles and other prevailing conditions, the amphibious 
warship fleet typically requires an inventory above 30 vessels to meet 
a day-to-day deployable threshold in support of the previously 
mentioned, required mission profiles. If this inventory were to fall 
below 30 warships, Marine forces would still be able to respond around 
the world, but the rate of response might vary. As a means to mitigate 
this risk, the geographic combatant commanders may place a heavier 
demand on ISR, prepositioning, forward deployed forces, and strategic 
air and sea lift to ensure forces are available in the timings 
required. Shortfalls in these types of critical warships will require 
personnel, equipment and sustainment to transit strategic distances via 
TRANSCOM and will be subject to prioritization of limited assets to 
meet competing demands. Having 30 amphibious ships operationally 
available at the time and place needed by the geographic combatant 
commanders will significantly reduce these risks.

                               BOW DOMES

    109. Senator Wicker. Admiral Greenert, as the ranking member of the 
Subcommittee on Seapower of the Senate Armed Services Committee, I 
closely monitor all facets of the Navy's shipbuilding plan. 
Specifically, with respect to the Seawolf program, what is the status 
of the Seawolf spare bow dome?
    Admiral Greenert. During the USS Seawolf (SSN-21) Depot 
Modernization Period at Puget Sound Naval Shipyard and Intermediate 
Maintenance Facility (PSNS&IMF), significant de-laminations were found 
in the SSN-21 bow dome which required repair. A repair was conducted on 
the de-laminations in March 2011 using a vacuum assisted resin transfer 
molding process.
    Concurrent with repairs to the USS Seawolf bow dome, the spare 
Seawolf-class dome was shipped to PSNS&IMF to be available if needed. 
With all three Seawolf-class submarines homeported in the Pacific 
Northwest, PSNS&IMF is logistically the best location to store the 
Seawolf class spare bow dome.
    During the transit along the northern coast of California, the 
shipment encountered high sea states and damage occurred to the bow 
dome and fixture. In the current state the spare Seawolf dome is not 
usable.
    Navy experts are analyzing the damage to the spare dome and 
evaluating several options to repair or replace the spare bow dome.

    110. Senator Wicker. Admiral Greenert, can the neoprene boot be 
removed from the Seawolf spare dome and reused?
    Admiral Greenert. While removing the neoprene boot may be possible, 
it has never been done before and there is a risk that the boot would 
be damaged to the point that it would be unusable as a result of such a 
procedure. Prior to considering such a procedure, a rigorous technical 
evaluation would be required. NAVSEA is evaluating the damage and 
options to repair or replace the spare bow dome, no decision has been 
made at this time. If a decision is made to repair the spare bow dome, 
a technical evaluation of removing the boot will be considered at that 
time.

    111. Senator Wicker. Admiral Greenert, does the Navy have plans to 
build additional spares if the current spare cannot be repaired?
    Admiral Greenert. No decision has been made at this time. Navy 
experts are analyzing the damage to the spare dome and evaluating 
several repair or replacement options. If the spare bow dome cannot be 
repaired, the Navy will weigh the cost and schedule for replacement 
options against the risks to determine if maintaining a risk mitigation 
spare bow dome is required.

    112. Senator Wicker. Admiral Greenert, will there be a competitive 
solicitation for Block IV and beyond for Virginia-class bow domes?
    Admiral Greenert. Currently, there is a single vendor that provides 
Virginia-class bow domes and boots. Although the development of an 
alternate method and source for dome fabrication has been demonstrated, 
it does not yet include a process for installing a boot over the glass 
reinforced plastic dome. Until further development of the alternate 
method has been completed and technically approved, a competitive 
procurement is not planned. Currently the shipyard procures the bow 
domes.

    113. Senator Wicker. Admiral Greenert, what is the time table for 
Block IV solicitations for bow domes?
    Admiral Greenert. The Request for Proposal to Electric Boat (EB) 
for the Block IV ships is planned to be released in August 2012. The 
bow dome is contractor furnished equipment so the exact time table for 
solicitations is not known, however it is anticipated EB will begin 
issuing Requests for Information (which are the basis for the 
shipbuilder proposal) to vendors starting in April 2013.

    114. Senator Wicker. Admiral Greenert, the current autoclave 
infrastructure will only work on Virginia-class size domes and boots. 
What are the Navy's plans for building bow domes and boots for sizes 
larger than Virginia-class?
    Admiral Greenert. The Ohio Replacement SSBN will have a bow dome 
larger than the Virginia-class. The Navy has not made a decision on the 
type of bow dome that will be used.

                              NATURAL GAS

    115. Senator Wicker. Secretary Mabus, in 2009, the Navy paid $424 a 
gallon for 20,000 gallons of biodiesel fuel made from algae. The Navy 
now requires 330 million gallons per year of alternative fuels to meet 
the Secretary's stated goal of having 50 percent of the Navy's energy 
needs supplied from alternative sources by 2020. What efforts are 
ongoing or will start in fiscal year 2013 with DOE on developing new 
technologies for improving biodiesel fuel?
    Secretary Mabus. The referenced algae R&D program, which was funded 
through a congressional add, involved many labor hours conducting 
research on the algal pathway and the 20,055 gallons of fuel was the 
result of this rigorous R&D work. Therefore, it is inaccurate to divide 
the total project cost by the amount of fuel delivered to determine 
total fuel cost.
    Regarding the question on biodiesel, the term biodiesel applies 
strictly to FAME fuel, which is not suited for use on Navy platforms 
due to its inferior energy density, cold flow properties, oxidative 
stability, and the issues created when it is used in seawater-
compensated fuel tanks. The Navy has been testing fuel from a different 
family of fuels known as hydrotreated esters or fatty acids (HEFA) that 
can serve as a drop-in replacements for Navy fuels. HEFA fuels do not 
have the performance issues of biodiesel, and are categorized into what 
industry calls ``advanced drop-in biofuels,'' or fuels that function 
the same as the product they are intended to replace with no changes to 
infrastructure, engines, or performance.
    The Navy will be working closely with the DOE (as well as USDA) in 
fiscal year 2013 on advanced drop-in biofuels as partners in the 
Defense Production Act Title III Advanced Drop-in Biofuels Production 
Project, to which each agency will eventually contribute $170 million. 
This effort is dedicated to advancing the domestic drop-in biofuels 
industry to commercial maturity.
    Various offices within the DOE, including Advanced Research 
Projects Agency-Energy, work in collaboration with the Office of Naval 
Research and the Navy Research Lab on next generation advanced drop-in 
biofuels pathways, on subjects ranging from using seawater to produce 
syngas, to electrofuels.

    116. Senator Wicker. Secretary Mabus, when will Congress be briefed 
on the results of the Navy's $170 million portion of the $510 million 
effort to construct or retrofit biofuel refineries?
    Secretary Mabus. We will provide progress updates upon achieving 
major milestones in this effort. On March 29, the DPA title III 
executive agent issued a draft notice to industry and we anticipate 
Broad Agency Announcement for phase one this summer. When utilizing the 
DPA authority DOD generally employs a multi-phased approach and the 
advanced biofuels effort will do the same. In phase one, companies will 
complete rigorous technical, architectural/engineering, business case 
and financing deliverables. This data will be evaluated by both a team 
of government experts and a third party reviewer and only those 
companies deemed competitive from this process will be eligible for 
funding in phase two.

                       DOD GREEN BUILDING POLICY

    117. Senator Wicker. Secretary Mabus, in December, Congress passed 
and the President signed the NDAA which directed DOD to produce a 
report on the cost of building certification under Leadership in Energy 
Environmental Design (LEED) and other green building rating systems. 
The enacted law also included a strict ban on the use of funds to 
obtain LEED Gold or Platinum certification for any DOD construction 
that would increase costs. Not long after Congress passed this ban, a 
Navy official claimed, as quoted by the Federal Times, that ``the Navy 
is moving ahead with its plan to certify all of its buildings as LEED 
Gold by the end of fiscal year 2013.'' Can you give me an update on 
your plans to address the specific language we included in the NDAA 
bill last year?
    Secretary Mabus. The Department of the Navy has taken steps to 
ensure full and immediate compliance with NDAA for Fiscal Year 2012 
language pertaining to expenditure of funds for achieving LEED Gold or 
Platinum certification. In coordination with OSD and the other 
Services, the Navy is finalizing formal LEED policy reflecting the NDAA 
language and its limitations. As required by the NDAA, the Navy is 
reviewing energy-efficiency and sustainability standards. The results 
of that review will be consolidated into the OSD report due to the 
congressional defense committees later this year.

    118. Senator Wicker. Secretary Mabus, are you moving forward with a 
LEED policy despite congressional direction to look at all green 
building rating systems and the ban on LEED Gold and Platinum 
certifications?
    Secretary Mabus. The Navy has taken steps to ensure full and 
immediate compliance with the NDAA for Fiscal Year 2012 language 
pertaining to expenditure of funds for achieving LEED Gold or Platinum 
certification. In coordination with OSD and the other Services, the 
Navy is finalizing formal LEED policy reflecting the NDAA language and 
its limitations. As required by the NDAA, the Navy is reviewing energy-
efficiency and sustainability standards. The results of that review 
will be consolidated into the OSD report due to the congressional 
defense committees later this year.

    119. Senator Wicker. Secretary Mabus, are you considering other 
green building rating systems or alternative approaches to your green 
building policy?
    Secretary Mabus. The report on cost-benefit, return on investment, 
and long-term payback of LEED and other green building rating systems 
affects all the Services. Office of the Deputy Under Secretary of 
Defense for Installations and Environment (DUSD I&E) is leading the 
services in evaluating green building rating systems including LEED.

    120. Senator Wicker. Secretary Mabus, I understand that the Navy is 
under pressure to reduce costs. My State is a leader in the processing 
and availability of construction materials, which are recognized by 
several green building rating standards. I will also note that some 
rating standards (e.g. National Green Building Standard and Green 
Globes) equally recognize construction materials certified under the 
Sustainable Forestry Initiative, Forest Stewardship Council, American 
Tree Farm System, and Programme for the Endorsement of Forest 
Certification systems. Their recognition helps to promote sustainable 
forestry, protect jobs, and keep costs low. Do you have a plan to 
ensure that requests for proposal (RFP) for future construction 
projects explicitly allow forestry certification standards to equally 
compete?
    Secretary Mabus. It is the Department's understanding that the 
Forest Stewardship Council certification is an open industry 
certification standard, available to the entire timber industry, and 
there are many available timber sources complying with this standard.
    The Department is changing the language in RFPs which currently 
mandate LEED Materials and Resources Credit 7 with the Federal mandate 
associated with this issue, Guiding Principle V. ``Reduce Environmental 
Impact of Materials.'' The new language will effectively make the LEED 
Credit 7 ``optional'' for certification and allow the contractor to 
choose wood products from forests certified by other timber certifying 
agencies.

                   TRAINING COSTS AND SCHEDULE DELAYS

    121. Senator Wicker. Secretary Mabus, the time between receiving a 
commission to when the servicemember reports for duty can often be a 
lengthy period, especially in the aviation community. My office has 
been working with OSD on determining cost and schedule delays for newly 
commissioned military officers. Given the current austere fiscal 
environment, how much money is being spent by the Navy on personnel 
between their post-commission and pre-specialty training?
    Secretary Mabus. The majority of officer pipeline training ``down 
time'' occurs in the production of naval aviators and flight officers. 
The cost associated with officers Not Under Instruction (NUI) was $52.1 
million in fiscal year 2011, a 27 percent reduction from fiscal year 
2010. This figure includes time spent Awaiting Instruction (AI), 
Awaiting Transfer (AT), on Medical Hold (HM), on Legal Hold (HL) and 
during Interruption of Instruction (II). Each is tracked and 
appropriate measures taken to minimize time lost in each category, 
which reduces total time NUI. It is far less costly for sailors to 
remain in an AI and AT status than to construct, operate, and maintain, 
new facilities along with instructor, simulator and labs that have 
large funding tails.

    122. Senator Wicker. Secretary Mabus, additionally, what measures 
has the Navy implemented to reduce the amount of time and costs 
associated with this down time?
    Secretary Mabus. Measures being implemented within the Navy 
Manpower, Personnel, Training and Education (MPT&E) Enterprise to 
reduce the amount of time and costs associated with this ``down time'' 
(i.e., time not under instruction (NUI)) include:

         Naval Aviation Schools Command coordinates directly 
        with accession sources to smooth the flow of students following 
        graduation by adjusting reporting dates on permanent change of 
        station orders to minimize wait time.
         The 1-week Division Officers Leadership Training 
        Continuum, previously conducted during other phases of aviation 
        pipeline training, is now administered while student naval 
        aviators await Aviation Preflight Indoctrination (API).
         We are maximizing available training seats to reduce 
        or eliminate missed training opportunities (MTO), which 
        represent a more significant risk than time spent awaiting 
        instruction.
         We have increased focus on reducing time Awaiting 
        Transfer (AT) following training since the investment is far 
        greater later in the student training path.
         Local commanding officers assign some officers to 
        collateral duties while awaiting instruction as specific needs 
        arise.

                           MILITARY EDUCATION

    123. Senator Wicker. Admiral Greenert, there is a growing trend 
within DOD to conduct joint military education. However, each military 
department has its own military academy and own war college. I continue 
to be concerned about redundancy and lack of efficiency with regard to 
our professional military education programs. What are the operating 
costs for the Navy War College (NWC) and the U.S. Naval Academy (USNA)?
    Admiral Greenert. NWC and USNA are unique education institutions 
that develop Navy's future maritime leaders for service in a seagoing, 
military organization. USNA sea-centric disciplines include naval 
architecture, ocean engineering, naval mechanical engineering, and 
oceanography. Its undergraduate education prepares newly commissioned 
officers for fleet service as members of the submarine, surface, and 
aviation communities. NWC builds leaders and commanders who integrate 
maritime capabilities into joint and combined operations and plans. It 
develops leaders with attributes necessary to innovate, adapt and 
succeed in planning and delivering maritime warfighting and support 
capabilities to assure naval dominance on, under, and over the seas.
    NWC operating costs were $86.5 million in 2011. Operating costs for 
the USNA were $328.0 million in 2011.
    USNA operating cost includes Operation and Maintenance (O&M,N), 
Other Procurement (OPN) and facilities funding. It also includes 
Military Personnel (MP,N) for commands that exist solely for support to 
USNA.
    Funding information in this response is not directly comparable to 
responses to similar questions that addressed only direct operating 
costs because this funding information includes facility costs for USNA 
and military personnel costs.

    124. Senator Wicker. Admiral Greenert, what measures are being 
implemented to ensure efficiency and reduce redundancies among the 
Services with regard to undergraduate and postgraduate professional 
military education?
    Admiral Greenert. The Navy works to promote efficiency and 
eliminate redundancy both with our Service-specific education and 
within Joint Professional Military Education. Within the Navy, the USNA 
and the NWC are accredited institutions that efficiently develop Navy's 
future maritime leaders. In 2009, the Vice Chief of Naval Operations 
(VCNO) was appointed as Navy's Education Executive Agent to guide 
Navy's investment in education by providing the vision and direction to 
enable unity of effort through coordinated policy, validated 
requirements, prioritized resources, and standardized processes. The 
VCNO-chaired Advanced Education Review Board (AERB) was also 
established in 2009. The AERB meets semi-annually under the VCNO's 
personal direction to evaluate educational policies, goals, and 
practices of the USNA, NWC, and Naval Postgraduate School for 
effectiveness and efficiency. Additionally, the AERB ensures that 
advanced education policy, programs, long-range objectives and resource 
investments are in keeping with Chief of Naval Operations (CNO) 
guidance and implementation of A Cooperative Strategy for 21st Century 
Seapower.
    There is a common core of Joint and Service professional military 
education requirements over an officer's military career. For the Navy, 
those requirements are expressed as learning outcomes designed for each 
level of professional military education.
    The USNA offers an undergraduate curriculum accredited by the 
Middle States Commission on Higher Education that concentrates on both 
undergraduate academic education and undergraduate-level Professional 
Military Education (PME) appropriate to develop newly commissioned Navy 
and Marine Corps officers. Best practices and efficiencies are shared 
between the Service Academies annually on a formal basis.
    For commissioned officers and warrant officers, the faculty at the 
Naval War College is responsible for developing and executing four 
levels of professional military education: Primary, Intermediate (with 
Joint Professional Military Education Phase I), Senior (with Joint 
Professional Military Education Phase II), and Flag-level. Using a 
single faculty to design and execute these programs ensures that the 
education is progressive and efficiently designed to build knowledge 
and skills over a career.
    Likewise, the faculty at the Naval War College designs and executes 
all Service-wide Navy Professional Military Education for enlisted 
personnel through four levels of educational programs: Introductory, 
Basic, Primary (all distance learning delivered via Navy Knowledge 
Online), and the Senior Enlisted Academy (SEA). The Senior Enlisted 
Academy is an integral element of the Naval War College and the 
enlisted faculty there provides expertise and perspective necessary for 
developing enlisted education. Again, the single faculty working in a 
single geographic location helps ensures curricula are designed most 
efficiently.
    The Chairman of the Joint Chiefs of Staff publishes two directives 
for joint professional military education: the Officer Professional 
Military Education Policy and the Enlisted Professional Military 
Education Policy. These directives contain common educational polices, 
standards and educational outcomes expressed in terms of learning areas 
and learning objectives. This common core of instruction taught in all 
service schools and colleges accredited by the Chairman of the Joint 
Chiefs of Staff provides focus and promotes efficiency of the joint 
education system. In addition, the CJCS issues annually a list of up to 
10 special areas of emphasis to highlight the concerns of OSD, the 
Services, the combatant commands, and the Joint Staff regarding 
coverage of specific current joint subject matter.
    The Chairman's directives on joint professional military education 
establish organizational structures, processes and venues described 
below to ensure joint education is delivered efficiently and is current 
and relevant to the needs of the joint force and the Nation.

         The Military Education Coordination Council (MECC) 
        serves as an advisory body to the Director, Joint Staff on 
        joint education issues and consists of the presidents, 
        commandants, and directors of the joint and Service 
        universities and colleges, heads of other accredited 
        institutions, and the Joint Staff J7. The purpose of the MECC 
        is to address key educational issues of interest to the joint 
        education community, promote cooperation and collaboration 
        among MECC members institution, improve efficiency, and 
        coordinate joint education initiatives. The MECC meets at least 
        once annually.
         The Joint Faculty Education Conference for officer 
        joint professional military education meets twice annually. The 
        purpose of these conferences is to present emerging concepts 
        and other material relevant to maintaining curricula currency, 
        assessing proposed special areas of emphasis, comparing 
        curricula content/delivery and sharing best practices.
         Intermediate-level and Senior-level colleges 
        accredited by the Chairman of the Joint Chiefs of Staff for 
        delivery of congressionally-mandated Joint Professional 
        Education Phases I and II periodically undergo an 
        accreditation--the Process for Accreditation of Joint Education 
        (PAJE). The accreditation serves three purposes: oversight, 
        assessment, and improvement. This process is generally guided 
        by accepted civilian accreditation standards and practices 
        tailored to the needs of joint professional military education. 
        Most members of the accrediting team are peers from sister 
        professional military education institutions and their 
        expertise assures quality and assists with program improvement. 
        This accreditation mechanism also facilitates the 
        identification of best practices, minimizing redundancy, and 
        provides a forum for leveraging lessons learned and sharing 
        effective and efficient means of curricula development and 
        delivery.
         The Enlisted Military Education Review Council (EMERC) 
        serves as an advisory body to the Deputy Director, Joint Staff, 
        for Military Education on enlisted joint education issues and 
        consists of the senior enlisted representatives from each 
        Service or institution. The EMERC addresses key educational 
        issues of interest to the joint education community and 
        promotes cooperation and collaboration among EMERC member 
        institutions and coordinates joint educational initiatives. The 
        EMERC meets at least once annually.
         The Joint Faculty Education Conference for enlisted 
        joint professional military education meets annually. Sponsored 
        by the Joint Staff J-7, this conference presents emerging 
        concepts and other material relevant to maintaining curricula 
        currency, comparing curricula content/delivery and sharing best 
        practices.

    We believe the Navy's professional military education system for 
officers and enlisted personnel in both the service-specific and Joint 
PME arenas is efficient and effective. The system of collaboration and 
oversight mechanisms described above provides an array of opportunities 
to address redundancy and ensure efficiency in the design and delivery 
of Navy and Joint professional military education.

                                SEABEES

    125. Senator Wicker. Admiral Greenert, for over 60 years Seabees 
have had a presence in Gulfport, MS, with four naval construction 
battalions based in Gulfport. Their skills will be in demand for future 
combat, humanitarian assistance, and partnership-building missions. 
What do you see as the current contribution of the Seabees?
    Admiral Greenert. Naval Construction Forces (NCF) continue to be 
forward deployed to critical areas throughout the world. They provide a 
full spectrum of contingency engineering capabilities, participate in 
critical theater engagement exercises and provide responsive military 
support for disaster preparation and recovery.
    During the past 10 years, the NCF has been a key enabler in all 
phases of Operations Enduring Freedom (OEF) and Iraqi Freedom (OIF). At 
the outset of OEF, Seabees deployed into Airbase Rhino with Task Force 
58 in support of initial operations in Afghanistan while simultaneously 
providing support to Joint Special Operations Task Force-Philippines in 
the southern Philippines in 2001.
    Navy Seabees supported both the Navy ashore at Kuwait Naval Base 
and the marines with the First Marine Expeditionary Force (IMEF) during 
initial operations in OIF. Seabee engineering and construction teams 
have provided enduring support to the joint warfighting effort in OIF/
OEF. In addition to supporting the joint fight in OIF/OEF, Seabees have 
answered the call from the Navy as part of its response to every major 
humanitarian assistance/disaster recovery mission during the same 
period, to include Hurricane Katrina relief, the 2009 Pakistan 
earthquake, 2010 Haiti earthquake, and most recently Operation 
Tomodachi following the Great East Japan earthquake in Japan.

    126. Senator Wicker. Admiral Greenert, what role do you see the 
Seabees playing in your vision of the future of the Navy?
    Admiral Greenert. As a scalable, deployable force, the NCF provides 
command and control of expeditionary engineer forces in support of the 
Navy, Marine Corps, and the joint force across the full range of 
military operations. As a peacetime expeditionary force, the NCF will 
continue to be forward deployed to critical areas throughout the world 
including the Asia-Pacific and Horn of Africa. They will provide a full 
spectrum of contingency engineering capabilities, participate in 
critical theater engagement exercises and provide responsive military 
support for disaster preparation and recovery enhancing our global 
partnerships and aiding to maintain regional stability.
    During wartime, military construction (MILCON) is a necessary 
component of the modern joint force and most military operations. The 
Seabees and NCF are mobile and self-sufficient, able to deploy quickly 
into harsh or unsecured environments and build what needs to be built 
while defending themselves. Their ability to build logistics bases, 
provide berthing for deployed troops, or construct needed roads, 
bridges and airfields in support of joint combat operations is a 
critical enabler of the modern joint force.

    127. Senator Wicker. Admiral Greenert, do you see their role 
diminishing in the future or increasing in the future?
    Admiral Greenert. The NCF role in wartime operations will remain 
the same. Consistent with the Secretary of Defense's new strategic 
guidance, the Seabees are postured to transition from an emphasis on 
winning today's wars to preparing for future challenges, protecting the 
broad range of U.S. national security interests. This includes a 
peacetime role that increasingly emphasizes a focus on the Asia-Pacific 
region and continued ability to support stability and counterinsurgency 
operations, humanitarian assistance efforts, and disaster relief 
response around the globe.

    128. Senator Wicker. Admiral Greenert, what impacts to the Seabees 
community will be felt from the fiscal year 2013 budget?
    Admiral Greenert. Navy Expeditionary Combat Command (NECC) forces, 
including the Naval Mobile Construction Battalions (NMCB), will 
continue to deliver Navy core capabilities integral to executing the 
new Defense Strategic Guidance. During fiscal year 2012, two active 
NMCBs will be decommissioned. Although smaller with reduced capacity, 
the remaining construction forces will still meet combatant commanders' 
warfighting and engagement requirements as described in wartime 
operational plans and the Secretary of Defense-approved Global Force 
Management Allocation Plan.

                    BROAD AREA MARITIME SURVEILLANCE

    129. Senator Wicker. Admiral Greenert, the Broad Area Maritime 
Surveillance (BAMS) Unmanned Aerial System (UAS) is a DOD Acquisition 
Category 1D program that received approval from the Under Secretary of 
Defense for Acquisition, Technology, and Logistics to enter System 
Development and Demonstration (SDD) on April 18, 2008. Following a full 
and open competition, Northrop Grumman Corporation was selected as the 
best overall value solution to meet the Navy's persistent maritime ISR 
requirements. The BAMS UAS program successfully conducted its System 
Functional Review in June 2009 and is progressing toward future program 
milestones utilizing the Systems Engineering Technical Review process. 
SDD aircraft delivery is anticipated in 2012 with IOC planned for 2015. 
The MQ-4C BAMS program is on track to deliver IOC to the fleet by 
fiscal year 2015, including a scheduled first flight this year. BAMS 
will operate as an adjunct to the P-8A Poseidon and is a key piece of 
the overall replacement strategy for the P-3C Orion. Can you please 
describe the key mission of BAMS?
    Admiral Greenert. The BAMS UAS will complement the Navy's Maritime 
Patrol and Reconnaissance Force by providing persistent maritime ISR to 
supported commanders. BAMS will enhance battlespace awareness, deepen 
understanding of high-interest activity in the maritime/littoral 
environment, provide long dwell coverage in zones of interest, and 
contribute to indications and warning. BAMS will vastly increase 
situational awareness of operational commanders and provide 
surveillance coverage when and where no other naval or joint forces may 
be present. In a combat environment, BAMS will track adversary 
operations, shorten sensor-to-shooter kill chains, and provide battle 
damage assessment. BAMS has a secondary role as an airborne 
communications relay node. Navy currently plans on assigning five BAMS 
orbits (each comprised of four air vehicles, a ground station, and a 
support system). IOC is estimated to be December 2015.

    130. Senator Wicker. Admiral Greenert, what is the Navy's plan for 
the development and procurement of BAMS?
    Admiral Greenert. The MQ-4C BAMS UAS is an Acquisition Category 
(ACAT) 1D program that entered SDD based on a Milestone B Acquisition 
Decision Memorandum issued on April 18, 2008. Following a full and open 
competition, an SDD contract was awarded to the Northrop Grumman 
Corporation on April 22, 2008 based on a best value source selection 
process.
    BAMS UAS SDD test aircraft first flight is scheduled for fall 2012 
and will commence flight test activities culminating in OPEVAL in 
fiscal year 2015, supporting initial operational capability in 
December, 2015. Navy plans to procure a total of 70 BAMS Unmanned 
Aerial Systems, with 2 being dedicated test assets and the remaining 68 
supporting operational force structure requirements. BAMS UAS program 
of record assumes a 4-year ramp-up, followed by a 20-year program 
service life with 20 aircraft continuously deployed around the world in 
support of 5 orbits. The remaining procurement will provide replacement 
UASs for service life and attrition loses.

    131. Senator Wicker. Admiral Greenert, what is the current status 
of the program?
    Admiral Greenert. The MQ-4C BAMS UAS program is executing within 
the Acquisition Program Baseline cost, schedule and performance 
parameters. First aircraft production has been underway since 
completion of the critical design review in February 2011. Two SDD test 
aircraft are in final production. Aircraft rollout is scheduled for 
June 14, 2012 at Northrop Grumman Palmdale, CA, facility. BAMS UAS 
first flight is scheduled for fall 2012, which will be followed by a 
30-month integrated test plan culminating in OPEVAL in fiscal year 
2015.
    All major subsystems are currently undergoing component 
qualification testing. The BAMS UAS multi-function active sensor radar 
system has commenced testing on a surrogate aircraft. Long lead funding 
to produce three system demonstration test articles (formerly LRIP 1) 
has been awarded. These aircraft will initially support capstone 
developmental test events and initial operational test and evaluation 
before being transferred to the fleet to help establish the first BAMS 
UAS orbit in CENTCOM in the first quarter of fiscal year 2016 (at which 
time initial operational capability will be declared). Milestone C is 
on schedule to meet the APB threshold requirement. A successful 
Milestone C will support a full-rate procurement decision in December 
2015.

    132. Senator Wicker. Admiral Greenert, what are the specific 
requirements for the program?
    Admiral Greenert. The BAMS UAS provides a multiple-sensor, 
persistent maritime and littoral ISR data collection and dissemination 
system with a secondary capability to serve as an airborne 
communication relay. The mission sensors provide 360 degree radar, 
electro-optical/infrared, automatic identification system and 
electronic support measures with specific emitter identification 
coverage. The BAMS UAS program of record assumes a 20 year program 
service life with 20 aircraft continuously deployed around the world in 
support of 5 continuous orbits.

                                RAIL GUN

    133. Senator Wicker. Admiral Greenert, has the Navy looked at the 
uses of a rail gun system that is less than 32 megajoules (MJ) that 
could be used for ship self-defense and a direct fire capability, and 
if so, what is the status of that system?
    Admiral Greenert. Yes. Navy's conceptual electro-magnetic railgun 
(EMRG) system will be capable of operating at muzzle energies up to 32 
MJ. The EMRG would be multi-mission capable, including direct fire ship 
self-defense against surface craft and anti-ship cruise missiles and 
could also contribute to a layered anti-ship ballistic missile defense 
system. Systems operating at less than 20 MJ can provide support for a 
smaller subset of this mission set. Navy is examining the platform 
impact related to the installation of a small (3-7 MJ) railgun onboard 
LCS from a space, weight and power allocation perspective. This system 
size will be examined to determine potential operational missions and 
the business case for the system.

    134. Senator Wicker. Admiral Greenert, the NDAA for Fiscal Year 
2012 requires the Navy to report on a multi-mission rail gun system. 
Has the Navy consulted with industry on this system, and if not, why 
not?
    Admiral Greenert. The Navy continues to incorporate and rely 
heavily upon industry partners in all aspects of the EMRG effort. 
Industry provided valuable insights and system perspectives at the 
multi-mission workshops hosted at John's Hopkins University's Applied 
Physics Laboratory (JHU/APL) in 2010 and 2011. Industry partners also 
provided input into the final workshop report that was signed by Chief 
of Naval Research in 2011. The Navy has established integrated product 
teams with key industry team representation. Contracts with industry 
have been awarded for pulsed power and energy storage, launchers, and 
projectile development. One industry 32 MJ launcher prototype has been 
delivered to the Navy and is in testing at the Naval Surface Warfare 
Center, Dahlgren Division railgun facility. Another industry launcher 
is to be delivered and tested from May 2012-July 2012. These tests are 
a collaborative effort between Navy and Industry with all data openly 
exchanged within the program's information assurance guidelines.

    135. Senator Wicker. Admiral Greenert, OSD is working on a study of 
point defenses for forward operating bases in the western Pacific. Has 
the Navy been consulted on that study?
    Admiral Greenert. Yes. The Navy is working with OSD on the point 
defense study by providing Railgun analysis. Members of the Navy staff 
meet twice a week with OSD to provide updates.

    136. Senator Wicker. Admiral Greenert, is industry involved in that 
study as well?
    Admiral Greenert. Industry is aware of this ongoing study at OSD. 
Industry provided insights and technical options which are included in 
our analysis. This study currently centers on defining the system 
operational requirements based on an ongoing analysis of the threats 
and a range of sensitive engagement scenarios. The output of this 
effort will form the basis of system performance requirements. Due to 
the nature of this analysis, Johns Hopkins University/Applied Physics 
Lab, a University Affiliated Research Center, is currently the only 
outside government organization involved. We fully intend to integrate 
our railgun industry partners into the process as we approach the 
preliminary design phase of the prototype systems to meet the 
requirements to engage the threats of interest.
                                 ______
                                 
             Questions Submitted by Senator Scott P. Brown

                   MARINE CORPS CUTS IN END STRENGTH

    137. Senator Brown. Secretary Mabus, how much risk does the Marine 
Corps inherit by reducing its Active Duty end strength by 20,000 
marines and what is the Marine Corps' plan to come down responsibly 
without breaking faith with its marines and their families?
    Secretary Mabus. The risk will be in our capacity to respond to 
multiple large scale crises. The Marine Corps will still have the 
capacity to respond to a single Major Combat Operation (MCO) with a 
swing force capability. We will also accept risk in sustained major 
combat operations, irregular warfare and capacity for forward 
engagement. As well, we will accept a small amount of incremental risk 
in the manning levels of our active duty units. In comparison to the 
pre-9/11 force there will be fewer battalions and squadrons.
    In order to responsibly reduce the size of the Marine Corps, we 
will use a gradual 4-year drawdown ramp, making maximum use of 
voluntary measures to include natural attrition and early separation/
retirement authorities. In order to maintain faith with our marines we 
do not plan on using a reduction-in-force and will minimize the use of 
involuntary separations. OCO funding will be required from fiscal year 
2013 through fiscal year 2016 in order to enable a 4-year drawdown ramp 
that keeps faith with marines and enables reversibility. This plan will 
ensure personnel readiness to meet operational requirements; honor 
obligations to those who serve and have served; and retain necessary 
noncommissioned officer and field grade officer experience to enable 
reversibility.

    138. Senator Brown. Secretary Mabus, has the Marine Corps 
considered increasing end strength in the Marine Corps Reserve 
component as a way to limit the number of Active Duty reductions, 
preserve readiness, and save money; and if not, please tell me why.
    Secretary Mabus. During the Marine Corps' 2010 Force Structure 
Review a comprehensive assessment of the Marine Corps Total Force was 
reviewed to determine how the Marine Corps would meet its future 
wartime missions. As a result, the Marine Corps determined it did not 
need to increase the Reserve component end strength of 39,600, but did 
realign some capability from the active to the Reserve component as 
well increase current Reserve capability. These capabilities included 
civil affairs, counter-intelligence, unmanned aerial vehicles, 
amphibious assault vehicles, combat engineers, artillery/naval gunfire 
capability, as well as bridging capability.

                             SEXUAL ASSAULT

    139. Senator Brown. Secretary Mabus, please comment on the Navy's 
sexual assault prevention program.
    Secretary Mabus. The Department of the Navy is committed to 
eliminating sexual assaults Department-wide and to ensuring 
compassionate support of sexual assault victims. We seek a culture of 
gender respect where sexual assault is never tolerated. The Department 
established the Navy Sexual Assault Prevention and Response Office 
(SAPRO), which reports directly to the Secretary of the Navy.
    In addition to the SAPRO office, I have introduced the 21st century 
sailor and marine initiative. This comprehensive initiative 
consolidates objectives and policies to maximize sailor and marine 
personal readiness. One important portion of this initiative works to 
remove the stigma of reporting sexual assault incidents. This includes 
eliminating requirements to report post-assault counseling on some 
Federal security clearance forms, and improving victims' abilities to 
quickly transfer from a command. Since alcohol is shown to be a common 
factor in sexual assault and domestic violence, the Navy is instituting 
breathalyzer tests for sailors as they report for duty.
    The Navy-level prevention strategy has three main components. The 
first involves the progressive dissemination of a clear, consistent, 
top-down leadership message that sexual assault is never acceptable 
anywhere in the Department of the Navy, and that all sailors and 
marines have a shared responsibility to protect each other from sexual 
assault. The second component involves the broad application of updated 
Service-level training tools across the Navy and Marine Corps 
respectively. Our goal is to effectively reach all sailors and marines 
with information that is current and relevant. Our third main strategy 
component involves pilot demonstration initiatives at selected sites to 
objectively assess additional new approaches to sexual assault 
prevention. Underlying the Department's concepts is our commitment to 
candid self-assessment.
    The Department of the Navy is unique among the military departments 
in having created a dedicated Sexual Assault Prevention and Response 
Office (Navy-SAPRO), led by a senior civilian executive who reports 
directly to the Secretary. Since its beginnings in late 2009, Navy-
SAPRO's activities have been broad-based and include the following:

         Conducted the first Department-wide prevention summit 
        in 2010 for Navy and Marine Corps Sexual Assault Response 
        Coordinators (SARCs); then expanded that format in 2011 to 
        include installation commanders and regional military leaders; 
        and this year is engaging operational leaders through mini-
        forums at force concentration areas worldwide.
         Visibly underscored our commitment to combating sexual 
        assault through extensive world-wide site visits--each 
        typically include senior leader briefings, meetings with SAPR 
        program managers and other key stakeholders, and focus-group 
        discussions with individual sailors and marines.
         Since 2010, Navy-SAPRO has applied data-driven 
        insights in partnering with the Navy to pilot simultaneous 
        prevention initiatives, including new formats of large-group 
        and small-group training, at Training Support Center Great 
        Lakes--a concentration of the Navy's youngest, most junior, and 
        at-risk sailors. This rigorous approach uses anonymous surveys 
        and careful tracking of reported cases to candidly assess 
        efficacy in reducing the underlying incidence of sexual 
        assault. Results are still preliminary, but exciting in 
        suggesting positive impacts--documented nowhere else.
         Conducted a world-wide, anonymous, web-based, sexual 
        assault survey to begin tracking in a standardized way the 
        underlying incidence of sexual assault among sailors and 
        marines. Over 115,000 active duty personnel participated. We 
        plan to repeat this effort every 2-3 years to assess our 
        progress.
         Published a 22-page Commander's Guide booklet with key 
        background points, a summary of commanding officer core 
        responsibilities in preventing and responding to sexual 
        assaults, and additional detail on aspects of personal 
        leadership, victim response, and offender accountability. The 
        Guide has been well-received and widely distributed in a top-
        down manner by senior leaders of the Navy and Marine Corps to 
        emphasize its importance.

    In addition to these Department-level efforts, both the Navy and 
Marine Corps are engaged in coordinated Service-level activities. Both 
services operate extensive Sexual Assault Prevention and Response 
(SAPR) programs for victim support, both are actively reviewing their 
numerous levels of sexual assault prevention and response training 
curricula. Flag/general officer managers of the Service-level programs 
meet weekly with Navy-SAPRO to coordinate and share insights. Both 
Services have openly addressed sexual assault issues in special senior 
leader forums and various regional mini-summits and workshops. In these 
endeavors, both Services, along with Navy-SAPRO, have worked 
extensively with civilian subject matter experts. Some specific 
accomplishments include the following:

         Both Services have worked with the Naval Audit Service 
        to track the responsiveness of first-contact SAPR phone lines 
        used for victim support and assistance, resulting in dramatic 
        improvements in service and reliability.
         The marines have begun Service-wide implantation of 
        their new ``Take a Stand'' training that targets junior marines 
        through interactive sessions facilitated by small-unit leaders, 
        using professionally produced video segments.
         The Navy has implemented its own ``Bystander 
        Intervention'' program at ``A'' Schools Navy-wide. This 
        training utilizes local facilitators in a structured curriculum 
        involving junior sailors in three sequential, interactive, 
        small-group sessions.

                          FLEET MODERNIZATION

    140. Senator Brown. Secretary Mabus, rebuilding and modernizing the 
Navy's fleet is obviously one of your top priorities, and you've said 
the Navy must ``carefully define program requirements, drive 
affordability, and pursue aggressive cost oversight and competition.'' 
I understand the Navy is leveraging the strategic weapons system on the 
current Ohio-class submarine as a cost efficient means to develop the 
strategic weapons system on the Ohio-class replacement. Please discuss 
this.
    Secretary Mabus. To lower development costs and leverage the proven 
reliability of the Trident II (D5) strategic weapon system (SWS), the 
Ohio-replacement SSBN will enter service with the Trident II (D5) SWS 
and D5 life-extended missiles onboard. The Navy is extending the life 
of the Trident II (D5) SWS to match the Ohio-class submarine service 
life and to serve as the initial baseline mission payload for the Ohio-
replacement submarine platform. These D5 life extended missiles will be 
shared with the existing Ohio-class submarine until the current Ohio-
class retires. Maintaining one SWS during the transition to the Ohio-
class replacement is beneficial from a cost, performance, and risk 
reduction standpoint.

                              COMMONALITY

    141. Senator Brown. Secretary Mabus, please discuss if and how the 
Navy is utilizing commonality in the acquisition process to drive down 
life cycle cost.
    Secretary Mabus. Commonality is used to drive down life cycle cost 
in the development, production, and sustainment phases. For 
development, commonality reduces costs compared to each program 
developing unique solutions. In some cases, common subsystems already 
exist, which further reduces the development cost and risk. In the 
production phase, the main cost savings is achieved by the increased 
yearly production quantity, spreading the overhead costs across 
multiple customers and sharing engineering changes. Similar factors 
apply to the sustainment phase, with the addition of shared 
obsolescence and diminishing parts management.
    Some examples of commonality include the main propulsion gas 
turbines where the LM 2500 is used among the LCS-2, DDG-51, CG-47, FFG-
7 classes and the former classes of DD-963, DDG-993 (173 vessels). The 
application of this common main propulsion turbine has supported 
acquisition, logistics, training and maintenance savings for the Navy. 
The Joint Mission Planning System (JMPS) is designated by a CNO 
memorandum dated 21 Feb 2006 as the Navy's sole aviation mission 
planning system to reduce redundancy and promote cost-sharing. Thirty 
type/model/series (T/M/S) aircraft (with 10 more T/M/S to be added by 
2016) are supported by JMPS through government integration and 
logistics shared across the platforms. For tactical-wheeled vehicles, 
the Navy and Marine Corps utilize several common platforms, including 
the Medium Tactical Vehicle Replacement.

                           STRATEGIC GUIDANCE

    142. Senator Brown. Admiral Greenert, with respect to our forward 
posture in the Asia-Pacific region and the Middle East, you've 
prioritized readiness over capacity, which perhaps is a good thing. How 
does the Navy's acquisition plan for the LCS reflect the President's 
strategic guidance, specifically in these regions?
    Admiral Greenert. The LCS will fulfill broad mission requirements 
where the capabilities provided by high-end multi-mission ships are not 
required. LCSs meet warfighting demands in the areas of mine 
countermeasures, anti-submarine warfare, and surface warfare to counter 
adversary A2/AD efforts. These ships will also be called upon to 
conduct maritime interdiction operations; provide a stabilizing 
presence by building partner capacity, strengthening alliances and 
increasing U.S. influence; and conduct stability and counterinsurgency 
operations through security force assistance and other engagement 
missions. LCS will use the concepts of forward stationing and 
rotational crewing to maximize the presence provided by each ship. We 
continue to make necessary investments in LCS readiness to ensure each 
ship has the right maintenance, crew size, and crew training. We will 
deploy USS Freedom (LCS-1) to Southeast Asia in 2013 to evaluate the 
operational concept for LCS and refine its readiness requirements.
                                 ______
                                 
              Questions Submitted by Senator Susan Collins

                              SHIPBUILDING

    143. Senator Collins. Secretary Mabus, in his testimony before the 
committee last month, Secretary Panetta expressed his unequivocal 
support for the multi-year procurement plan for the DDG-51 destroyer 
program. He said the plan is important for the size of the Navy's fleet 
of ships, the sustainment of the fragile industrial base, and to 
achieve cost savings for American taxpayers. In comparison to single-
year procurement for the DDG-51, the Navy estimates that the multi-year 
procurement will result in cost savings of $1.5 billion during the next 
5 years, a net savings of 8.7 percent. Please describe how the Navy 
reached the estimated savings for the multi-year procurement request 
for the DDG-51 program.
    Secretary Mabus. Savings are detailed below:
       
    
    
      
    144. Senator Collins. Secretary Mabus, I want to thank you for the 
Navy's ongoing effort to reduce the $3 billion backlog of sustainment, 
restoration, and modernization funding at its four public shipyards. 
Last week a $38 million contract award that is the first of four 
modernization contracts for projects at Portsmouth Naval Shipyard 
during fiscal year 2012 was awarded. With that award, the Navy has 
invested about $440 million during the last 5 years to sustain, 
restore, and improve energy efficiency at Portsmouth Naval Shipyard. I 
want to note, however, that all of the new MILCON projects funded 
during the last 5 years were added by Congress. In the committee report 
accompanying last year's Military Construction/Veterans Affairs (VA) 
Appropriations Act, the Senate Appropriations Committee urged the Navy 
to evaluate and accelerate MILCON projects in the FYDP that could 
improve the safety, effectiveness, or efficiency of the work performed 
at the Navy's public shipyards. However, the only MILCON project at any 
naval shipyard I could identify in this year's budget request was a $32 
million project at Norfolk Naval Shipyard. Given the concern expressed 
by the Senate Appropriations Committee regarding MILCON at the 
shipyards, what review did DOD conduct to evaluate the acceleration of 
MILCON projects that could improve the safety or efficiency at our 
shipyards?
    Secretary Mabus. As part of our fiscal year 2013 President's budget 
submission process, the Navy assessed all MILCON requirements to 
balance risk across the Navy and provide the most capability within 
fiscal constraints. This review evaluated each MILCON project for 
overall alignment with the Chief of Naval Operations' Guiding 
Principles to include mission support and quality of service (includes 
safety) and overall cost reduction (efficiency).
    As a result of this review process, the Navy's PB13 submission 
accelerated a MILCON project, P286 Portsmouth Naval Shipyard Berth 11/
13 Waterfront Support Facility ($14.4 million), from outside the FYDP 
to fiscal year 2015. This project will improve the efficiency of 
processes for SSN-688 and -774 class depot availabilities.
    The Navy remains committed to investing in the Naval Shipyard 
infrastructure within today's fiscally constrained environment through 
sustainment, restoration, and modernization, and MILCON. We will 
continue to assess all MILCON requirements to balance risk across the 
Navy and provide the most capability within fiscal constraints.

    145. Senator Collins. Admiral Greenert, every one of your 
predecessors since 2006 has called 313 ships the minimum necessary to 
meet our national security requirements. We are now at 285 ships and 
under this budget request, the Navy fleet will remain constant during 
the next 5 years rather than increasing towards the 313-ship goal. The 
looming cruiser-destroyer gap, which remains the largest shortfall 
among any class of ships, will widen rather than shrink under this 
budget proposal. The Navy fleet currently consists of 84 large surface 
combatants when we were told by the Navy last year that 94 large 
surface combatants are necessary to meet BMD requirements. Excluding 
the proposal in the President's budget request to retire seven cruisers 
early, the Navy was on course to meet the requirement of 94 large 
surface combatants in only 7 of the 30 years covered by the 30-Year 
Shipbuilding Plan. How many ships short of the minimum large surface 
combatants do we need to be before we have crossed a red-line as it 
relates to our maritime national security interests?
    Admiral Greenert. The 94 large surface combatant requirement is a 
result of a previous force structure assessment which was superseded by 
the new Defense Strategic Guidance issued in January 2012. The Navy is 
currently conducting an updated force structure assessment that will 
address both peacetime and wartime requirements in support of the 
Defense Strategic Guidance. This assessment will include large surface 
combatants and the need to meet BMD requirements, and will guide our 
future shipbuilding plans.
    We anticipate our shipbuilding plans will deliver enough surface 
combatants to meet our updated requirements until the 2030s, when 
Arleigh Burke destroyers begin to decommission in large numbers. We are 
evaluating a range of options to alleviate this anticipated shortfall. 
For example, forward deploying 4 DDGs to Rota, Spain, replaces the need 
for 10 rotational CONUS-based DDGs to meet Secretary of Defense-
directed GFMAP requirements. This reduces the overall requirement for 
large surface combatants by six ships.
                                 ______
                                 
               Questions Submitted by Senator John Cornyn

                                  V-22

    146. Senator Cornyn. Secretary Mabus, it is my understanding that 
the Navy is considering using at least some of the 48 V-22 Osprey tilt 
rotors in the current program of record to replace the aging C-2A 
Greyhound carrier on-board delivery aircraft and has looked closely at 
the V-22 in their analysis of alternatives (AOA). What is the decision 
time-line for that replacement aircraft?
    Secretary Mabus. The timeline for the decision is dependent on the 
results of the AoA Update which is expected to be completed in May 
2012. The AOA Update could conclude that additional risk reduction or 
competitive strategies are appropriate which would impact the timing of 
the final decision on the replacement aircraft. Therefore, a definitive 
decision timeline for the C-2A replacement aircraft is not presently 
available.

    147. Senator Cornyn. Secretary Mabus, how risky would interruptions 
in the production line be based on what you currently know about the 
Marine Corps multi-year negotiations for the V-22?
    Secretary Mabus. An interruption in the V-22 production line is 
unlikely to occur. The Department is confident that it will be able to 
complete negotiations and award the follow-on multi-year contract in 
time to avoid interruptions to the production line.

                             SHIP RECYCLING

    148. Senator Cornyn. Secretary Mabus, it took the Navy more than 18 
months to award the contract to dispose of the USS Saratoga. What 
accounts for this delay?
    Secretary Mabus. The length of time to contract for the disposal of 
ex-Saratoga by dismantling is governed by the Federal Acquisition 
Regulations and attracted significant competition, requiring a 
significant amount of time for each technical and price proposal 
received to be evaluated in accordance with the RFP. Additionally, 
weaknesses in all of the initial proposals received required the 
contracting officer to issue discussion questions to each offeror in 
the competitive range. Time was required for offerors to respond to the 
questions and for the Government to evaluate their responses. Upon 
completion of the evaluation of responses to discussion questions, the 
offerors in the competitive range were requested to submit final 
proposal revisions, which were then evaluated upon receipt. Following a 
best-value evaluation and determination of the ``apparent awardee'', an 
unsuccessful offeror protested the determination to the Government 
Accountability Office (GAO). In addition, two unsuccessful offerors 
submitted size protests to the Small Business Administration (SBA). 
Following resolution of the three protests--one with GAO and two with 
SBA, the current apparent awardee was designated. Additionally, a 
protest challenging the current apparent awardee's status as a small 
business was recently submitted and is awaiting a decision by SBA. The 
award of the contract is, therefore, awaiting both the SBA size protest 
decision and the apparent awardee's acquisition of the required 
security clearances from DSS.
    A dismantling contract for ex-Saratoga (CV-60) has not yet been 
awarded. However, an ``apparent awardee'' was recently identified. As 
specified in the request for proposal (RFP) for ex-Saratoga, the 
successful offeror must have a facility security clearance at the 
confidential level at minimum, and key personnel must have personal 
security clearances at the confidential level as a minimum, prior to 
contract award. Therefore, NAVSEA has sponsored the ``apparent 
awardee'' to the Defense Security Services (DSS) to obtain the 
necessary security clearances.

    149. Senator Cornyn. Secretary Mabus, what will the Navy do to 
expedite the award process of the USS Forrestal and the other aircraft 
carriers that are now decommissioned and ready to be recycled?
    Secretary Mabus. On January 26, 2012, the Navy issued a pre-
solicitation notice at https://www.fbo.gov/
index?s=opportunity&mode=form&id=ce6de50e17d6f1e16841b 
33603f8ee26&tab=core&--cview=0 announcing the intent to issue a 
solicitation for the dismantling of ex-Forrestal (AVT-59), ex-
Independence (CV-62) and ex-Constellation (CV-64). While the 
solicitation of ex-Saratoga will result in a contract for that ship 
only, the follow-on CV dismantling solicitation anticipates the award 
of multiple 5-year indefinite-delivery, indefinite-quantity (IDIQ) 
contracts. Additional CV-59/63 class aircraft carriers may be solicited 
under the IDIQ contracts during the 5-year period if required. The RFP 
is expected to be released in May 2012.

    150. Senator Cornyn. Secretary Mabus, each day the Navy maintains a 
decommissioned vessel represents a cost to U.S. taxpayers. How much 
does it cost per day to maintain an average decommissioned Navy vessel?
    Secretary Mabus. The direct cost to maintain a stricken CV-59/63 
class aircraft carrier in the Navy's inventory of inactive 
conventionally-powered ships is approximately $411.00 dollars per day, 
less for a smaller vessel.

    151. Senator Cornyn. Secretary Mabus, how much does it cost per day 
to maintain a decommissioned aircraft carrier?
    Secretary Mabus. The direct cost to maintain a stricken CV-59/63 
Class aircraft carrier in the Navy's inventory of inactive 
conventionally-powered ships is approximately $411.00 per day.

    152. Senator Cornyn. Secretary Mabus, how much could the Navy save 
each year by expediting the ship disposal process?
    Secretary Mabus. The Navy is expediting the ship disposal process. 
For example, the Navy successfully reduced its inventory of inactive 
conventionally-powered ships from nearly 200 in 1997 to 57 ships as of 
April 26, 2012; only 15 of which were in the inventory in 1997. Further 
expediting is limited by the dispositions assigned to inactive ships 
and the need to remove equipment and material from ships designated for 
dismantling in order to support active Fleet requirement. Thus, savings 
from expediting the ship disposal process beyond what the Navy is 
already doing cannot be achieved without sacrificing other Navy policy 
objectives or losing the savings that are obtained by harvesting 
equipment and material from ships designated for dismantling before 
they are scrapped.
    Of the 57 inactive ships in the inventory, 23 are designated for 
dismantling. The remaining 34 are retained for other policy objectives 
including ships in reserve for future reactivation, foreign military 
sale transfer, logistic support, donation as museums/memorials, and 
Fleet training use.
    Before a ship can be solicited for dismantling, the Navy 
accomplishes disposal preparations on each ship, including 
environmental surveys and extensive equipment removals to support other 
Navy requirements. 10 of the 23 ships designated for dismantling are 
currently undergoing equipment removals. Another 3 ships designated for 
dismantling are subject to Environmental Assessment development in 
order to comply with the National Historic Preservation Act because 
they are eligible for listing in the National Register of Historic 
Places.
    The following actions have been taken to expedite the disposal of 
the remaining 10 ships designated for dismantling that have completed 
pre-disposal preparations and equipment removals:

         Ex-Saratoga (CV-60) is pending contract award for 
        dismantling upon the apparent awardee obtaining a facility 
        security clearance at the confidential level from the Defense 
        Security Service.
         On January 26, 2012, the Navy issued a pre-
        solicitation announcement for the dismantling of additional 
        aircraft carriers, including ex-Forrestal (AVT-59) and ex-
        Independence (CV-62). A RFP is planned for issuance in May 
        2012.
          September 2011, the Navy executed a Memorandum of 
        Agreement with the Maritime Administration (MARAD) for the 
        scrap sale of Navy-owned merchant-type ships over 1,500 tons. 
        MARAD solicited the ex-Mount Baker (T-AE 34) in February 2012 
        and contract award is pending. A bidders' inspection period is 
        advertised for April 30 to May 11, 2012 for the scrap sale of 
        four additional ships.
         The Navy is working with the DLA to develop a similar 
        Memorandum of Agreement for the scrap sale of two frigates.

                         AIR-SEA BATTLE CONCEPT

    153. Senator Cornyn. Secretary Mabus and Admiral Greenert, your 
prepared testimony highlights the importance of the Air-Sea Battle 
Concept, which seeks to improve integration of air, land, maritime, 
space, and cyberspace forces to combat growing A2/AD threats. Admiral 
Greenert, you note some of the new investments required to implement 
this concept include the LCS, as exemplified in the fiscal year 2013 
budget, new weapons such as the Small Diameter Bomb, Joint Standoff 
Weapon, Mark-54 torpedo, and a focus on unmanned systems. Please detail 
the impact sequestration will have on the Navy's ability to make these 
investments.
    Secretary Mabus and Admiral Greenert. The Department has not begun 
planning for sequestration because any planning for sequestration would 
be a government-wide effort guided by OMB. If sequestration occurs, 
automatic percentage cuts are required to be applied without regard to 
strategy, importance, or priorities, resulting in adverse impact to 
almost every contract and operation within the Department. 
Sequestration would adversely impact the components of the Air-Sea 
Battle through contract cancellations, contract terminations, 
undetermined cost increases caused by inefficient contracting and 
schedule delays. A detailed review directed by OMB would be required to 
determine specific impact to the Navy's Air-Sea Battle concept.
    Assuming the Fiscal Year 2013 Defense Appropriations Act conference 
report contains sequester provisions similar to those in the Fiscal 
Year 2012 Act, the Department would be forced to reduce each line item 
within each appropriation by a percentage of the available funding. 
This percentage would be calculated based on the ``budgetary 
resources'', primarily the enacted 2013 appropriation and any 
unobligated balances carried forward at the end of fiscal year 2012. We 
currently estimate the reduction would be between 5 and 10 percent. 
Obvious examples of the problems this method causes are fractional cuts 
to major acquisition items like ships or aircraft, which could not be 
delivered with partial funding. With several thousand individual line 
items in our accounts, the Department could not fix all of these issues 
with the transfer authority which Congress typically provides. This 
would leave broken programs across all accounts and similarly impact 
the programs that apply the tenets of the Air-Sea Battle Concept.

    154. Senator Cornyn. Secretary Mabus and Admiral Greenert, please 
comment on the importance of the F-35 to the Navy's implementation of 
the Air-Sea Battle Concept.
    Secretary Mabus and Admiral Greenert. The fifth generation F-35 is 
a key joint program with direct application within the Air-Sea Battle 
Concept--the integration of air and naval forces to counter and shape 
the A2/AD environment.
    The Joint Strike Fighter represents unprecedented multi-service, 
allied and coalition cooperation. It is the first aircraft to be 
developed within the Department of Defense to meet the needs of three 
Services simultaneously and will replace three different legacy 
aircraft for the Air Force, Navy, and Marine Corps. In addition, the 
United Kingdom, Italy, the Netherlands, Australia, Canada, Denmark, 
Norway, Turkey, Israel, and Singapore are either partners or 
participants in the aircraft's development program and the Japanese 
Government recently announced it would purchase 42 of the fighters.
    The F-35 provides fifth generation technology and capabilities, 
which are critical enablers for the joint force of the future that may 
be required to overcome access challenges in the global commons. 
Bringing maneuverability, survivability, advanced avionics and stealth 
technology to the battlespace, the aircraft is able to operate against 
adversaries across the spectrum of conflict, fighting air-to-air and 
air-to-ground missions. The aircraft's sensors improve and leverages 
many other, already existing systems and capabilities across the 
Services.
    These capabilities, bonded jointly across all U.S. Military 
Services and with coalition and allied nations provide a key platform 
from which to maintain domain dominance and execute effective 
networked, integrated, attack in depth to disrupt, destroy and defeat 
adversaries' A2/AD threat capabilities--the central idea of the ASB 
Concept.
                                 ______
                                 
              Questions Submitted by Senator David Vitter

                                 VAW-77

    155. Senator Vitter. Admiral Greenert, under the proposed 2013 
spending plan released by the Navy, the Navy Reserve's Carrier Airborne 
Early Warning Squadron 77 (VAW-77) would cease to exist September 30. 
The squadron was created in 1995 as a result of the United States 
escalating the war on illegal drug trafficking, and employs 
approximately 100 Active Duty and Reserve Navy aircrews, and about 55 
civilian contractors. In the documents presented to my office, the Navy 
has stated that these choices were made within the limits of the 
resources available to the Navy due to the Budget Control Act to 
balance direct warfighting capability against missions like those 
assigned to VAW-77. However, earlier this week, the commanders of U.S. 
Southern Command (SOUTHCOM) and U.S. Northern Command testified to this 
committee that there is increased drug activity in the region, and that 
with the current resources, we are only capable of interdicting 30 
percent of the material illegally transported into the United States. 
If the Navy remains committed to missions within the strategic reserve, 
including counternarcotics and human trafficking interdiction, does the 
Navy still have a need for the capability that these squadrons provide?
    Admiral Greenert. Although the programmed force structure does not 
meet all COCOM peacetime demands, the Navy remains committed to 
countering illicit trafficking. Our fiscal year 2013 budget submission 
meets the presence requirements in the Secretary of Defense-approved 
GFMAP, which includes forces for these missions.

    156. Senator Vitter. Admiral Greenert, what will the Navy use to 
replace the VAW-77 to fulfill the ongoing need to combat increasing 
cartel activity and illegal drug trafficking?
    Admiral Greenert. Although the programmed force structure does not 
meet all COCOM peacetime demands, the Navy must balance risk in a 
fiscally confined environment informed by the new defense strategy. The 
Navy is not replacing VAW-77 for this mission, but will continue to 
counter illicit trafficking operations with ships, helicopters, and 
aircraft assigned to Naval Forces SOUTHCOM in accordance with the 
Secretary of Defense-approved Global Force Management Allocation Plan.

    157. Senator Vitter. Admiral Greenert, in your opinion, does this 
decision limit U.S. capabilities beyond where they should be to 
adequately address the future challenges?
    Admiral Greenert. No. Although the current force structure does not 
meet all COCOM peacetime demands, the Navy continues to meet the 
requirements of the Secretary of Defense-approved Global Force 
Management Allocation Plan, which includes counter illicit trafficking 
operations.

    [Whereupon, at 12:32 p.m., the committee adjourned.]


DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR 
               2013 AND THE FUTURE YEARS DEFENSE PROGRAM

                              ----------                              


                        TUESDAY, MARCH 20, 2012

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

                      DEPARTMENT OF THE AIR FORCE

    The committee met, pursuant to notice, at 9:35 a.m. in room 
SD-G50, Dirksen Senate Office Building, Senator Carl Levin 
(chairman) presiding.
    Committee members present: Senators Levin, Lieberman, 
Akaka, Nelson, Webb, Hagan, Begich, Manchin, Shaheen, 
Gillibrand, Blumenthal, McCain, Chambliss, Wicker, Brown, 
Portman, Ayotte, Graham, and Vitter.
    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; Peter K. Levine, 
general counsel; and Michael J. Noblet, professional staff 
member.
    Minority staff members present: Ann E. Sauer, minority 
staff director; 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: Mariah K. McNamara, Brian F. 
Sebold, and Bradley S. Watson.
    Committee members' assistants present: Nick Ikeda, 
assistant to Senator Akaka; Ryan Ehly, assistant to Senator 
Nelson; Gordon Peterson, assistant to Senator Webb; Mara Boggs, 
assistant to Senator Manchin; Chad Kreikemeier, assistant to 
Senator Shaheen; Elana Broitman, assistant to Senator 
Gillibrand; 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; Brent Bombach, assistant to Senator Portman; 
Brad Bowman, assistant to Senator Ayotte; and Charles 
Brittingham, assistant to Senator Vitter.

       OPENING STATEMENT OF SENATOR CARL LEVIN, CHAIRMAN

    Chairman Levin. Good morning, everybody. I want to welcome 
our witnesses, Secretary Donley and General Schwartz, back to 
the committee this morning to testify on the plans and programs 
of the U.S. Air Force in our review of the fiscal year 2013 
annual budget and Overseas Contingency Operations (OCO) 
request.
    Mr. Secretary and General, please extend on behalf of our 
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, and thanks to the both of you for your 
long careers of leadership and service.
    The Defense Department's most recent defense strategic 
guidance issued in January refocuses the U.S. military on the 
Asia-Pacific. We will be interested to see how the refocusing 
has been reflected in the Air Force budget and plans.
    Last year we saw how Air Force personnel and equipment 
could support national goals on short notice in Libya. Among 
those forces, we had: first, tankers supporting coalition air 
operations; second, strike aircraft providing strikes against 
important ground targets; and third, manned aircraft and 
unmanned aerial vehicles (UAVs) providing intelligence, 
surveillance, and reconnaissance (ISR) support.
    Air Force assets also played a significant role in aiding 
the Japanese tsunami relief effort.
    A number of ongoing critical issues confront the Air Force. 
We know the Air Force is providing forces to the Central 
Command war efforts in a number of traditional roles, but it's 
also providing airmen in support of land component tasks. We 
look forward to hearing this morning about how the Air Force is 
supporting these current operations while preparing its forces 
to deal with future demands.
    This committee has sought to ensure that our combatant 
commanders have what they need to succeed in those conflicts, 
including advanced technologies for ISR. I would note that in 
particular the new budget will continue the expansion of air 
operations, or ISR support, within theater. The committee 
appreciates 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 committee has also encouraged the Air Force to look at 
ways to buy space systems that reduce cost and technical risks 
in very complicated systems. The Air Force has developed and 
fielded one spacecraft in the Operationally Responsive Space 
(ORS) Program, that was developed in less than 3 years, for a 
fraction of the cost of normal imagery. In that regard, I have 
questions as to why the Air Force is proposing to cancel that 
program.
    Another acquisition challenge facing the Department is the 
stretching out of production lines which delays modernization 
programs and increases unit costs.
    Foremost among these is the Joint Strike Fighter (JSF) 
program. Given the continuing troubles and delays with the 
system design and demonstration phase of the JSF program, the 
Air Force will be extending the service lives for existing 
fighters, including the F-16 and F-15 fighter fleets.
    One acquisition program that appears to be moving forward 
as planned is the strategic tanker modernization program. The 
Department of the Air Force announced a winner of the tanker 
competition in late February last year. We find it concerning 
that the contractor has already announced that the contract for 
engineering and manufacturing development of the tanker will 
likely go to the ceiling price. We look forward to receiving 
more details on the Air Force's plans for executing that 
program.
    Underlying all of these major acquisition concerns is an 
acquisition management issue. Secretary Donley, we look forward 
to hearing from you about your continuing efforts to bolster 
the quantity and the quality of the Air Force acquisition 
corps, how this effort is progressing and if it has been 
impacted by recent hiring and salary freezes.
    In addition, the Weapons Systems Acquisition Reform Act 
(WSARA) of 2009 has required the Defense Department to make 
significant changes in its regulations and procedures governing 
the acquisition system and we look forward to hearing how the 
Department of the Air Force is proceeding to implement the 
provisions of the WSARA.
    Now, the major Air Force budget issue this year is likely 
to be Air Force plans to downsize the current force and to make 
significant changes in almost every area of the force 
structure. A very troubling aspect of the budget proposal is 
that within these force structure changes the cuts in manpower 
and aircraft are falling disproportionately on the Air National 
Guard.
    The Air Force is proposing to make major shifts in both 
strategic and tactical airlift programs, many of which hit the 
Air National Guard hard. Here are some examples:

         The Air Force wants to retire the remaining C-
        27A aircraft, which are all in the Guard and Reserves, 
        and to lower the minimum number of strategic aircraft 
        to 275 aircraft, down from the 301 level that we 
        adopted just last year.
         The Air Force also wants to retire 65 older C-
        130 aircraft, mostly in the Guard and Reserves, leaving 
        318 aircraft to support tactical operations, roughly a 
        17 percent force reduction.
         Finally, the Air Guard wants to eliminate the 
        planned 38-aircraft program for the C-27s, all of which 
        were going to the Guard, and rely instead on the 
        remaining C-130 fleet to provide direct support for 
        Army operations.

    In the fighter forces, the Air Force is planning a cut of 
almost one-third in the A-10 force, with that cut weighted 
heavily toward the Air National Guard. I have serious doubts 
and many questions about the wisdom of doing that and the 
disproportionate impact of these proposed cuts on the Air 
National Guard.
    The Air Force is planning to increase the size of Active 
Duty A-10 training squadrons at a time when the overall force 
will be shrinking by almost one-third. That makes no sense to 
me.
    The Air Force asserts that the cut to the A-10 force falls 
more heavily on the Air National Guard forces because the Air 
Force will need to keep more of the force in the Active 
component because of forward deployments and dwell time 
considerations. However, as general purpose ground forces are 
withdrawn from Afghanistan, there will be less and less demand 
for forward-deploying A-10 forces to provide close air support. 
The Guard has shown their extreme capability and ability to 
deploy A-10 forces to provide that close air support, including 
in Afghanistan.
    In airlift, we have similar questions. The Air Force budget 
would reduce strategic airlift forces, with no apparent plan 
for how such forces could be reconstituted if needed in the 
future.
    Now look at the C-27s. The Air Force had established a 
requirement, validated by the Joint Requirements Oversight 
Council (JROC), for 38 C-27 aircraft to provide direct support 
to Army ground forces. Again, all of those aircraft were going 
to the Guard.
    Nobody forced the Air Force to join with what was a joint 
program with the Army and then take sole ownership of it. No 
one forced the Air Force to testify that they needed to pursue 
the C-27 because the C-130s could not meet requirements when 
the committee questioned why the Air Force couldn't rely on the 
C-130 fleet and instead had to start the C-27 program. Now the 
Air Force says that the C-130 is perfectly fine for meeting the 
direct support mission.
    In the area of ISR, the Air Force is proposing a couple of 
major changes: terminating the Global Hawk Block 30 program and 
retiring all Block 30 aircraft already in the force; and 
shifting all 37 operational MC-12 ISR aircraft to the Air 
National Guard. The Air Force rationale behind the shift of all 
MC-12s to the Air National Guard is that with the withdrawal of 
general purpose ground forces from Afghanistan the demand for 
the MC-12 ISR mission will be reduced so much that the Air 
National Guard will be able to support the ISR demand without 
breaking guidelines for dwell time. Now, that position ignores 
the facts that, unlike the A-10, Special Operations Forces 
(SOF) are relying heavily on the MC-12 to support their 
activities and, unlike general purpose ground forces, SOF are 
not leaving Afghanistan or other areas of the region where they 
are currently operating any time soon.
    Just last June, Under Secretary Carter certified, as part 
of a Nunn-McCurdy breach in the Global Hawk program, that the 
Global Hawk Block 30 program was both essential to national 
security and there was no other alternative that would provide 
acceptable capability to meet the joint military requirement at 
less cost. If that were true, how could the situation change so 
rapidly that the Air Force now wants to drop the program?
    So we will look forward to exploring these and other issues 
with our witnesses this morning. We again thank them for their 
attendance and their service, and I call upon Senator McCain.

                STATEMENT OF SENATOR JOHN McCAIN

    Senator McCain. Mr. Chairman, thank you. I join you in 
welcoming our witnesses to discuss the President's budget 
request for fiscal year 2013 for the Department of the Air 
Force. We all appreciate the outstanding service and sacrifice 
of all the men and women who are serving in the U.S. Air Force 
today.
    Secretary Donley, I understand that the Department of 
Defense (DOD) may be preparing to implement force structure 
changes in 2012 that could restrict Congress' ability to 
consider and act on related proposals in the fiscal 2013 budget 
request. Chairman Levin and I have sent a letter to the 
Secretary of Defense, which I ask to be made part of the 
record, that requests the Department take no action that would 
be difficult or impossible to reverse if Congress disapproves a 
related proposal in the fiscal year 2013 request. I request 
that you also refrain from taking such actions.
    [The information referred to follows:]
      
    
    
      
    Senator McCain. Given the proposed reduction of nearly 
10,000 airmen over the next 5 years, I ask that our witnesses 
address the capability and readiness risk the Air Force is 
prepared to accept as a result of these manpower reductions and 
your plans to lessen any negative impacts on affected airmen 
and their families.
    I've been pleased with the stewardship of our witnesses of 
the Air Force's acquisition portfolio. I have questions 
regarding your largest procurement programs. On the KC-46A 
aerial refueling tanker, we continue to closely monitor the 
aerial refueling tanker program to assure that it achieves 
intended results on cost, schedule, and performance. I think 
you conducted a very sound competition on this program last 
year and are executing a viable acquisition strategy. But 
integration of military software and hardware with a commercial 
derivative aircraft continues to be a significant risk. Our 
witnesses should address how the Air Force is addressing this 
aspect of the program.
    The F-35 JSF program. As we all know, I've been frustrated 
by the fundamental disconnect between how many aircraft the 
Department signs up to buy and the program's slow progress in 
developmental testing. This has created excessive concurrency 
between testing and production that has resulted in incredibly 
costly, excessive design changes and retrofits in production. I 
hope that your decisions now to flatten out production, 
allowing the program to get heavy learning before committing to 
higher production rates, will work out.
    The Air Force budget included $16 billion to modernize its 
inter-theater airlift fleet of C-17s and C-5s. In addition, the 
Air Force plans to retire 27 older C-5As. Last year, at the Air 
Force's request, Congress approved the retirement of 14 C-5As, 
in part because the Department had 44 more C-17s than needed. 
These C-17s were earmarked by the Appropriations Committee 
without authorization and at a cost to the taxpayer of over $13 
billion. I would request that the witnesses comment on the 
right number and mix of large cargo aircraft based on the 
mobility capabilities requirements study for 2016 and a cost-
benefit analysis.
    The Government Accountability Office (GAO) recently found: 
``Space launch acquisition processes from the National 
Aeronautics and Space Administration (NASA) and DOD are not 
formally coordinated, duplicate one another, and may not fully 
leverage the government's investment because the government is 
not acting as a single buyer.'' The GAO also expressed concern 
recently regarding the adequacy of analysis supporting the Air 
Force's proposed block buy strategy for the Evolved Expendable 
Launch Vehicle program.
    I recently wrote to Secretary Panetta requesting that he 
look at 16 areas of duplication in the DOD budget, including 
space launch. I look forward to hearing our witnesses' views on 
the costs of space launch and how they are facilitating 
competition to ensure continued affordable access to space.
    Finally, on readiness, at about this time last year we 
first learned that the Department estimated that the cost of 
owning and operating JSFs could amount to as much as $1 
trillion over the program's life. I understand that the 
Department is trying to drive this cost down. However, this 
whole issue highlights the larger problem of whether the 
acquisition process is ensuring that new aircraft, weapons, and 
other systems are sufficiently reliable and don't become too 
expensive to operate.
    I'd like to conclude with a comment on sequestration. 
Secretary of Defense Panetta has repeatedly stated that defense 
sequestration, required under the Budget Control Act, would be 
``catastrophic.'' I'd like for our witnesses to provide us with 
their assessment of just how severe across-the-board cuts would 
be to the U.S. Air Force.
    I thank the witnesses and I thank you, Mr. Chairman.
    [The prepared statement of Senator McCain follows:]

               Prepared Statement by Senator John McCain

    Mr. Chairman, I join you in welcoming our witnesses to discuss the 
President's budget request for fiscal year 2013 for the Department of 
the Air Force. Our thoughts and prayers are with all our deployed 
airmen, particularly those who are currently engaged in combat 
operations in Afghanistan.
    Secretary Donley, I understand that the Department of Defense (DOD) 
may be preparing to implement force structure changes in 2012 that 
could restrict Congress' ability to consider and act on related 
proposals in the fiscal year 2013 budget request. Chairman Levin and I 
have sent a letter to the Secretary of Defense that requests that the 
Department take no action that would be difficult or impossible to 
reverse if Congress disapproves a related proposal in the fiscal year 
2013 request. I request that you also refrain from taking such actions.
    Given the proposed reduction of nearly 10,000 airmen over the next 
5 years, I ask that our witnesses address the capability and readiness 
risks the Air Force is prepared to accept as a result of these manpower 
reductions, and your plans to lessen any negative impacts on affected 
airmen and their families.
    I have generally been pleased with the stewardship of our witnesses 
of the Air Force's acquisition portfolio, but I have a few questions 
regarding your largest procurement programs.
    On the KC-46A aerial refueling tanker: I continue to closely 
monitor the multi-billion KC-46 aerial refueling tanker program, to 
ensure that it achieves intended results on cost, schedule and 
performance. The Air Force conducted a very sound competition on this 
program last year and, from all reports, is executing a viable 
acquisition strategy. But integration of military software and hardware 
with a commercial derivative aircraft continues to be a significant 
risk. Our witnesses should address how the Air Force is addressing this 
aspect of the program.
    Next, the F-35 Joint Strike Fighter (JSF) program: For several 
years, I have been frustrated by the fundamental disconnect between how 
many F-35 jets the Department signs up to buy and the program's slow 
progress in developmental testing. This has created excessive 
`concurrency' between testing and production, and has resulted in 
costly design changes and retrofits in production. I am pleased that 
the Department has now decided to `flatten-out' production, allowing 
the program to get `heavy learning' under its belt before committing to 
higher production rates. I fully support the Air Force's new 
acquisition strategy, starting with the sixth and seventh lots of early 
production, to link the number of production aircraft on contract with 
actual program performance.
    On Air Mobility Programs: The Air Force budget request includes $16 
billion to modernize its inter-theater airlift fleet of C-17s and C-5s. 
In addition, the Air Force plans to retire 27 older C-5As. Last year, 
at the Air Force's request, Congress approved the retirement of 14 C-
5As, in part because the Department had 44 more C-17s than needed. 
These C-17s were earmarked by the Appropriations Committees without 
authorization and at a cost to the taxpayer of over $13 billion. I ask 
that the witnesses comment on the right number and mix of large cargo 
aircraft, based on the Mobility Capabilities Requirements Study 2016 
and a cost-benefit analysis.
    Next, on Space Policy: The Government Accountability Office (GAO) 
recently found that `[s]pace launch acquisition processes for the 
National Aeronautics and Space Administration and DOD are not formally 
coordinated, duplicate one another, and may not fully leverage the 
government's investment because the government is not acting as a 
single buyer.' GAO also expressed concern recently regarding the 
adequacy of analysis supporting the Air Force's proposed block-buy 
strategy for its Evolved Expendable Launch Vehicle program. I recently 
wrote to Secretary Panetta requesting that he look at 16 areas of 
duplication in the DOD budget, including space launch. I look forward 
to hearing our witnesses' views on the cost of space launch and how 
they are facilitating competition to ensure continued, affordable 
access to space.
    Finally, on Readiness: At about this time last year, we first 
learned that the Department estimated that the cost of owning and 
operating JSFs could amount to as much as $1 trillion over the 
program's life. I understand that the Department is actively trying to 
drive this cost down and that this estimate will change based on data 
from actually operating and sustaining these aircraft. This, however, 
highlights the larger issue of whether the acquisition process is 
ensuring that new aircraft, weapons, and other systems are sufficiently 
reliable and don't become too expensive to operate. I would like to 
hear from the witnesses how they intend to address this very important 
issue.
    I will conclude with a comment on sequestration. Secretary of 
Defense Panetta has repeatedly stated that defense sequestration 
required under the Budget Control Act would be `catastrophic.' I ask 
our witnesses to provide us with their assessment of just how severe 
across-the-board cuts would be for the Air Force.
    The Air Force faces many difficult challenges, but the leadership 
of today's witnesses has helped position the Air Force to deal with 
them effectively and decisively. I look forward to your testimony 
today.
    Thank you, Mr. Chairman.

    Chairman Levin. Thank you very much, Senator McCain.
    Mr. Secretary.

STATEMENT OF HON. MICHAEL B. DONLEY, SECRETARY OF THE U.S. AIR 
                             FORCE

    Secretary Donley. Chairman Levin, Senator McCain, and 
members of the committee, it is a pleasure to be here today 
representing more than 690,000 Active Duty, Guard, Reserve, and 
civilian airmen. I'm also honored to be here with my teammate, 
the dean of the Joint Chiefs of Staff and one of America's 
finest public servants, General Norty Schwartz. We are joined 
today by the Director of the Air National Guard, Lieutenant 
General Harry M. ``Bud'' Wyatt, USAF, and the Chief of the Air 
Force Reserve, Lieutenant General Charles E. Stenner, Jr., 
USAF.
    For fiscal year 2013, the U.S. Air Force requests $110.1 
billion in our baseline budget and $11.5 billion in the OCO 
supplemental appropriation to support our work. This budget 
request represents the culmination of many hard decisions taken 
to align our fiscal year 2013 budget submission with the new 
strategic guidance and with the cuts required by the Budget 
Control Act over the next 10 years.
    Finding the proper balance between force structure, 
readiness, and modernization has been our guiding principle. In 
short, we determined that the Air Force's best course of action 
is to trade size for quality. We will become smaller in order 
to protect a high quality and ready force, one that will 
continue to modernize and grow more capable in the future.
    The capabilities resident in the Air Force mission set are 
fundamental to the priorities outlined in the new strategic 
guidance and in assessing how to adjust Air Force programs and 
budgets in the future. We've taken care to protect the 
distinctive capabilities we bring to the table: control of air, 
space, and cyber space; global ISR; rapid global mobility, and 
global strike, all enabled by effective command and control.
    The Air Force and our Joint Interagency and Coalition 
teammates and partners rely on these capabilities and, though 
we will be smaller, we intend to be a superb force at any size, 
maintaining the agility and flexibility that is inherent in our 
air power capabilities and ready to engage a full range of 
contingencies and threats.
    This budget protects the Air Force's top priorities. We 
protect the size of the bomber force. We are ramping up our 
remotely piloted aircraft (RPA) force to a goal of 65 combat 
air patrols (CAP), with the ability to surge to 85 CAPs. We 
protect our Special Operations Forces capabilities, largely 
protect space programs, and protect our cyber capabilities.
    But as we get smaller, it is not possible to protect 
everything. Our proposed force structure changes include the 
reduction of 286 aircraft over the Future Years Defense Program 
(FYDP), including 123 fighters, 133 mobility aircraft, and 30 
ISR platforms.
    Many of these changes correspond to adjustments in the 
overall size of the Armed Forces, especially the Army and 
Marine Corps ground forces, which is the case for the proposed 
reduction in A-10s. Our smaller force structure has also led us 
to favor divesting smaller niche fleets, such as the C-27J, and 
emphasizing multi-role capabilities that will provide 
operational flexibility across the spectrum of conflict, 
demonstrated by our C-130s and by our choices in fighter force 
structure, which include a smaller A-10 fleet and plans for the 
F-16 service life extension.
    We also emphasize common configurations, which can be seen 
in adjustments to C-5 and C-17 mobility fleets and in our 
ongoing efforts to seek common configuration within the F-22 
and F-15C fleets.
    Because force structure changes have a ripple effect on 
manpower needs, our budget proposal calls for a reduction of 
9,900 Air Force military personnel. By component, this amounts 
to reductions of 3,900 Active Duty, 5,100 Air National Guard, 
and 900 Air Force Reserve personnel. Fighter, mobility, and 
other force structure changes have been strategy-driven based 
on changed requirements and consistent with that strategy, 
especially where the Air National Guard units have been 
affected, we have proposed to remission units where feasible. 
We've carefully balanced our Active and Reserve component 
changes to make sure we can meet the demanding operational 
tempos, including both surge and rotational requirements, that 
are part of the current and projected strategic environment.
    As our force gets smaller, all of our components get 
smaller together and will become even more closely integrated. 
We remain fully committed to our total force capability and 
have proposed several initiatives to strengthen integration of 
effort, including increasing the number of Active/Reserve 
component associations from 100 to 115.
    Our intention is to protect readiness at any force level 
because if we're going to be smaller we have to be prepared. To 
that end, we put funds in critical areas, such as flying hours 
and weapons systems sustainment. We also support the Air 
National Guard readiness reset, which balances manpower across 
the States from lower demand units to new, high demand ISR 
missions, and increases readiness in 39 units. We are committed 
to ensuring that our military forces do not go hollow and 
readiness bears close watching as we move forward.
    Mr. Chairman, modernization is our most significant 
concern, especially as our fleets age and new technologies 
drive new investment needs. In this year's budget proposal, we 
slow modernization as we protect programs that are critical to 
future capabilities. We also restructure or terminate some 
major programs to protect key priorities. Protected 
modernization priorities include: the long-range strike bomber, 
the KC-46 refueling tanker, and key space programs, such as the 
Space-Based Infrared System and Advanced Extremely High 
Frequency Satellites, follow-On Global Positioning System work, 
and advanced ISR.
    We remain fully committed to the F-35 JSF, which is the 
future of the fighter force. But we reduce the rate of 
procurement for a few years because in our judgment, Lockheed 
Martin is not ready to  ramp  up  to  full-rate  production.  
Due  to  recent  delays  in  the  F-35 program, we also proceed 
with an F-16 service life extension program.
    Among the programs slated for termination are: the Global 
Hawk, RQ-4 Block 30 aircraft, because, among other reasons, we 
could not justify the cost to improve the Block 30's sensors to 
achieve capability that already exists in the U-2; and the 
Defense Weather Satellite System, a termination initiated by 
Congress, one we can accept for now because the program is 
early to need.
    As noted earlier, we decided to divest the C-27J, but we 
have a good alternative to this aircraft with the multi-role 
capable C-130, which has demonstrated its ability to provide 
the direct support mission in Iraq and Afghanistan. We remain 
committed to providing this support to the Army.
    In other cases, we eliminated programs that were judged to 
be non-essential in the current budget environment, such as the 
Light Mobility Aircraft and the Light Attack and Armed 
Reconnaissance Aircraft.
    Through more disciplined use of resources, the Air Force 
continues to wring savings out of overhead, to squeeze 
discretionary spending, and find more efficient ways of doing 
business. In fiscal year 2012, we committed to $33.3 billion in 
efficiencies across the FYDP. In this year's budget we 
identified about $3.4 billion in efficiencies and another $3.2 
billion in programmatic adjustments to add on top of the 
original $33.3 billion.
    In keeping with our enduring obligation to take care of our 
people, we will keep faith with airmen and their families. 
Doing right by our servicemembers is key to our ability to 
recruit and retain a high quality force. Nevertheless, the 
impact of increasing personnel costs continues to be a serious 
concern. Therefore, we support the military compensation 
program reforms in the President's budget, which include a 
modest pay raise, proposals to control health care cost growth, 
and calls for a commission to recommend reforms in retired pay. 
We must continue to seek and develop reforms to ensure the 
long-term sustainability of the benefits our men and women in 
uniform have earned.
    Identifying $487 billion in defense cuts to comply with the 
current requirements of the Budget Control Act has been 
difficult. Our Air Force will get smaller, but we are confident 
that we can build and sustain a quality force that is ready for 
the contingencies ahead and that will improve in capability 
over time. However, further cuts through sequestration or other 
means will put at risk our ability to execute the new strategy. 
To get this far, we have made tough decisions to align, 
structure, and balance our forces in a way that can meet the 
new strategic guidance. If substantially more reductions are 
imposed on DOD, we will have to revisit the new strategy. We 
cannot afford the risk of a hollow force.
    Mr. Chairman, General Schwartz and I feel deeply that our 
leadership team has inherited the finest Air Force in the 
world. It is our obligation to keep it that way so that our 
joint and coalition partners know that they can count on the 
U.S. Air Force to deliver the capabilities that we need to meet 
the security challenges ahead, and so that our future airmen 
remain confident, as we are today, that they are serving in the 
world's finest Air Force. That is our obligation going forward 
and it is our intention to meet that obligation.
    Mr. Chairman, we remain grateful for the continued support 
and service of this committee and we look forward to discussing 
our proposed budget. Thank you.
    Chairman Levin. Thank you, Mr. Secretary.
    General Schwartz.

 STATEMENT OF GEN. NORTON A. SCHWARTZ, USAF, CHIEF OF STAFF OF 
                       THE U.S. AIR FORCE

    General Schwartz. Thank you. Mr. Secretary, Mr. Chairman, 
Senator McCain, and members of the committee, I'm privileged to 
be here today with Secretary Donley once again representing the 
men and women of the U.S. Air Force. I begin by noting, as the 
Chairman did earlier, that a year and one day ago America's 
airmen commenced operations to help enforce the United Nations-
sanctioned no-fly zone over Libya. Throughout the month of 
March 2011 and beyond, our airmen, along with their joint 
teammates, impressively conducted concurrent major operations 
ranging more than 5,500 miles apart and spanning the entire 
spectrum of operations, from ongoing combat operations in Iraq 
and Afghanistan, to surge operations in Japan to provide 
humanitarian disaster relief, to a third major front, a 
predominantly air-focused campaign in North Africa.
    These simultaneous operations were most assuredly by not 
trivial. Indeed, they were to become yet another dramatic 
example of the professionalism and skill of America's airmen 
and their capacity to act and to shift focus on short notice, 
leveraging air power's unparalleled versatility and 
tailorability, all critical attributes that are emphasized by 
the new defense strategy guidance.
    As we prepare for the future, we know that maintaining a 
ready force that exhibits these and other important attributes 
will remain vital to addressing potential similar scenarios and 
will continue to be extremely important to our Nation's broader 
success in the future security environment.
    But in light of fiscal circumstances both presently and for 
the foreseeable future, helping to ensure America's success 
requires carefully calibrated choices by America's Air Force 
and our Armed Forces. This budget request therefore supports 
our airmen in our continuing efforts to structure the force for 
maximized versatility and minimized risk, in a sustainable 
tempo for all components across the full spectrum of 
operations.
    Due to evolving geopolitical trends and anticipated 
security requirements, the new defense strategic guidance 
emphasizes Air Force capabilities as fundamental to its major 
priorities, such as defeating and deterring aggression, 
projecting power in anti-access and area denial environments, 
conducting space and cyber operations, and operating, 
maintaining, and securing two of the three legs of the Nation's 
nuclear deterrent.
    As we balance our military forces toward a more air and 
maritime posture, our broader strategic partnership between the 
Nation's air and sea services, as articulated in the Air-Sea 
Battle concept, will be ever more important to our national 
interests. We must maintain the ability to project power in 
areas where burgeoning capabilities could increasingly threaten 
our access and freedom to operate, threats such as ballistic 
and cruise missiles, advanced submarines and fighters, 
electronic warfare systems, mines, and advanced air defense 
systems.
    As innovative airmen, we remain committed to working with 
our Navy, Marine Corps, and Army teammates to develop highly 
integrated and tightly coordinated schemes of maneuver and to 
conceive cross-domain approaches to full-spectrum challenges. 
To achieve our goals, we continue to support joint strategies 
in all of the Air-Sea Battle's dimensions--institutional, 
conceptual, as well as material--enabling enhanced teaming of 
advanced air and naval assets, including important subsurface 
assets, to gain and exploit access, deter adversary preemption, 
and dissuade coercion of our partners--all contributing to 
increasing regional stability.
    As Secretary Donley mentioned, the wide array of Air Force 
capabilities which remain vital to our Nation's diplomatic, 
economic, and military interests fall into four general 
categories of enduring and core contributions: air and space 
control, global ISR, rapid global mobility, and global strike, 
plus the Air Force's high-volume command and control of air, 
space, and cyber systems, integrating and harmonizing our four 
core contributions across multiple operating domains.
    As part of the defense strategic guidance, we are 
structuring our force to be agile and responsive across these 
four areas even as we accept risks with a smaller force. While 
still maintaining quality, we will divest nearly 230 fighter, 
mobility, and ISR aircraft in fiscal year 2013, toward a total 
of 286 aircraft retirements and a projected savings of $8.7 
billion over the FYDP.
    These savings can be applied to our modernization strategy, 
as Secretary Donley discussed, as well as to all important 
operations and sustainment accounts. We have no illusions about 
the road ahead being easy, but we do have confidence in our 
ability to execute and manage a $487 billion cut in defense 
spending over the years. I must echo, however, Secretary 
Donley's concern that across-the-board cuts driven by 
sequestration would dramatically change the complexion of our 
thoroughly deliberated defense strategy. We effectively would 
be sent back to the drawing board because indiscriminate 
salami-slicing of the budget would nullify our carefully 
considered and responsible reductions that preserve our 
readiness and effectiveness notwithstanding fiscal constraints 
and a smaller force.
    Finally, please allow me to make one comment concerning 
military compensation. I appeal to the committee to carefully 
consider those initiatives in our budget proposal that begin to 
tackle escalating personnel costs--compensation, health care, 
and retirement. Among all the other challenges facing us, the 
reality of fewer members of the Armed Forces costing 
increasingly more to recruit, train, and retain for promising 
careers is, I think, the monumental defense issue of our time. 
Our inability to address this issue properly will place other 
areas of the budget, including force structure and 
modernization, under yet more pressure, forcing out needed 
military capability at a time when we are already right-sized 
for the likely missions ahead.
    Mr. Chairman, Senator McCain, members of the committee, the 
Air Force remains committed to providing global vigilance, 
reach, and power for America's needs today and for our 
aspirations and the challenges that the Nation will face 
tomorrow. We look forward to your questions, sir. Thank you.
    [The joint prepared statement of Mr. Donley and General 
Schwartz follows:]

 Joint Prepared Statement by Hon. Michael B. Donley and Gen. Norton A. 
                             Schwartz, USAF

                              INTRODUCTION

    Since the first clash of battle, warriors have relied on breaking 
through the lines to achieve victory. However, once the airplane was 
used over the battlefields of World War I, the battle itself was 
forever revolutionized. In the 65 years since the establishment of the 
United States Air Force as a separate Service, its technological, 
strategic, and tactical innovations have been elemental in shaping the 
way the United States engages in war, deters aggression, and maintains 
peace. Because America's airmen characteristically view defense 
challenges differently, our Air Force has pioneered advancements that 
have been essential in ensuring our Nation's security while reducing 
the overall casualty counts inflicted by war. As the Department of 
Defense (DOD) faces fiscal pressures and an evolving strategic 
environment, America will continue to depend on the Air Force to 
contribute innovative strategies and systems to conduct our most 
important military missions.
    During the past decade, the United States has engaged in a 
prolonged war aimed at disrupting, dismantling and defeating al Qaeda 
and its network. A major part of this effort involved long-term and 
large-scale presence on the ground. The withdrawal of combat forces 
from Iraq and the drawdown in Afghanistan signal the beginning of a new 
chapter for America in which we will rely more heavily on airpower to 
complement innovative, lower-cost, lighter footprint approaches around 
the world. As the Nation sustains its global presence with a renewed 
emphasis on the Asia-Pacific region, in addition to continued focus on 
the Middle East, we must maintain the best military in the world--a 
force capable of deterring conflict, a force capable of projecting 
power, and a force capable of winning wars. We will preserve the 
capability and expertise in irregular warfare that we developed over 
the past decade and we will invest in fielding appropriate amounts of 
new and existing military capabilities in order to meet the national 
security challenges of today and the future.
    Despite new challenges and fiscal stress, America is and will 
unquestionably remain the global leader. The strategic choices embodied 
in the proposed fiscal year 2013 budget reflect 21st century defense 
priorities and will enable your Air Force to play a critical role in 
sustaining that leadership. As DOD's recently released strategic 
guidance articulates, the Joint Force of the future must be smaller and 
leaner--but agile, flexible, ready, and technologically advanced. The 
Air Force will leverage the innovative ability and technological acumen 
of its airmen as we conduct the military missions that protect our core 
national interests: defeating al Qaeda and its affiliates and 
succeeding in current conflicts; deterring and defeating aggression, 
including those seeking to deny our power projection; countering 
weapons of mass destruction; operating effectively in cyberspace and 
across all domains; maintaining a safe and effective nuclear deterrent; 
and protecting the homeland. Air Force contributions to total Joint 
Force effectiveness make us indispensable in carrying out these 
missions and overcoming existing and emerging threats in this strategic 
environment.

                         STRATEGIC ENVIRONMENT

    After 10 years of sustained large scale overseas operations, major 
changes in the strategic environment required a reshaping of defense 
strategy and priorities. Over the last several months, the Air Force, 
together with our joint partners, has reassessed our future military 
strategy and posture to determine how the Air Force will best 
contribute to achieving U.S. security objectives, including freedom of 
action in the global commons.
    The major factors and trends of the strategic environment 
identified in the 2010 Quadrennial Defense Review (QDR) continue to 
affect the security environment and inform its trajectory. The rise of 
new powers, the growing influence of non-state actors, the 
proliferation of weapons of mass destruction (WMD), the proliferation 
of conventional arms, and the transfer of other destructive enabling 
technologies are all trends that still require focused attention when 
considering how the Air Force will execute America's national security 
strategy.
    Since the release of the QDR, however, we have witnessed events 
that further inform our strategy. The Arab Awakening in the Middle East 
and North Africa has brought about regime changes in some nations in 
the region and challenged the stability and security of others. The 
global economic crisis has made some nations reluctant to support 
international cooperative military efforts as they have shifted their 
focus towards domestic issues. The economic crisis continues to 
contribute to the economic and political shift toward the Asia-Pacific 
region; although we will continue to place a premium on U.S. and allied 
military presence in--and support for--partner nations in and around 
the Middle East. The demise of Osama bin Laden and other senior al 
Qaeda leaders has led to deterioration in the organization's leadership 
and impaired its strategic coherence, although the threat of extremism 
remains. We are also transitioning out of the post-Cold War world where 
our military could easily gain access to the battlefield and operate 
major systems unimpeded. Today, adversaries are developing ways to 
prevent our access to the battlefield and deny our freedom of action 
once there.
    As a result of these factors, DOD undertook a comprehensive 
strategic review and recently released new strategic guidance, 
Sustaining U.S. Global Leadership: Priorities for 21st Century Defense. 
The new guidance notes the importance of recalibrating Joint Force 
capabilities and investments to succeed in the following key military 
missions: counter terrorism and irregular warfare; deter and defeat 
aggression; project power despite anti-access/area denial (A2/AD) 
challenges; counter weapons of mass destruction; operate effectively in 
cyberspace and space; maintain a secure and effective nuclear 
deterrent; defend the homeland and provide support to civil 
authorities; provide a stabilizing presence; conduct stability and 
counterinsurgency operations; and conduct humanitarian, disaster 
relief, and other operations. In determining development of the force 
required to meet these missions, the Secretary of Defense has directed 
that we maintain a broad portfolio of capabilities that, in the 
aggregate, offer versatility across this range of missions. Other 
factors that are important to the implementation of the new strategy 
include understanding which investments must be made now and those that 
can be deferred, maintaining a ready and capable force, reducing ``the 
cost of doing business,'' examining how the strategy will influence 
existing campaign and contingency plans so that more limited resources 
are better tuned to their requirements, determining the proper Active 
and Reserve component mix, retaining and building on key advances in 
networked warfare on which the Joint Force has become truly 
interdependent, and maintaining the industrial base and investment in 
promising science and technology.
    Airpower--the ability to project military power or influence 
through the control and exploitation of air, space, and cyberspace to 
achieve strategic, operational, or tactical objectives--has been a 
necessary component of successful U.S. military operations for many 
decades, and a reasonable assessment of the strategic environment 
suggests an even greater role for those capabilities. Since the end of 
the Cold War, the Air Force's contributions to national security have 
evolved with the times. We have become not only more effective, but 
also increasingly intertwined with the successful operation of the 
Joint Force. We have now reached a point where no other Service 
operates independently of the Air Force; we are a necessary catalyst 
for effective U.S. and coalition military operations. As we realign our 
resources to support the new strategic guidance, the capabilities that 
underpin these contributions on which the Joint Force depends will be 
protected.

           REALIGNMENT TO THE NEW DEFENSE STRATEGIC GUIDANCE

    The Air Force has made the hard choices to closely align with the 
new strategic guidance by trading size for quality. We will be a 
smaller, but superb, force that maintains the agility, flexibility, and 
readiness to engage a full range of contingencies and threats.

New Concepts
    One way in which the Air Force is posturing itself for the future 
in light of the strategic guidance is through our pursuit of the Air-
Sea Battle concept in partnership with our sister Services. The rise of 
near peer capabilities--such as fifth-generation fighters, air defense 
systems and ballistic missiles--evince emerging A2/AD threats. The Air-
Sea Battle concept will guide the Services as they work together to 
maintain a continued U.S. advantage against the global proliferation of 
advanced military technologies and A2/AD capabilities. Air-Sea Battle 
will leverage military and technological capabilities and is guiding us 
to develop a more permanent and better-institutionalized relationship 
between the military departments that will ultimately shape our Service 
organizations, inform our operational concepts, and guide our materiel 
acquisitions.

Enduring Air Force Contributions
    The Air Force will also continue to bring four enduring and 
distinctive contributions to the Nation's military portfolio to support 
the new strategic guidance: (1) air and space control; (2) global 
intelligence, surveillance, and reconnaissance (ISR); (3) global 
mobility; and (4) global strike. These four core contributions--plus 
our ability to command and control air, space, and cyberspace systems--
will sustain our Nation's military advantage as the Joint Force becomes 
smaller and as we face emerging A2/AD threats.

Air and Space Control
    From the World War II Pacific island-hopping campaign, to the 
success of liberation forces in Libya, control of the air has been and 
remains an essential precondition for successful land and maritime 
operations. Today, control of the air and space, along with assured 
access to cyberspace, allows U.S. and coalition forces to take 
advantage of unique capabilities in mobility, strike, and ISR and 
permits surface forces freedom of action without the threat of 
adversarial attack from above. Whether friendly naval forces are 
helping to secure vital lines of communication and transit, marines are 
conducting amphibious operations, Special Operations Forces (SOF) are 
executing counterterrorism missions, or ground forces are engaged in 
combined-arms maneuvers, these operations all fundamentally depend on 
the Air Force to provide mission-essential control of air and space. In 
the coming decade, our ability to assert control in all domains will be 
increasingly at risk as sophisticated military technology proliferates. 
The new strategic guidance demands that we forge ahead and maintain the 
air and space power advantages that will enable our entire Joint Force 
to deter and defeat aggression, operate effectively in space and 
cyberspace, defend the homeland, and conduct stability operations.

Global ISR
    Combat experience over the last decade has shown how important ISR 
capabilities are to the counterterrorism and irregular warfare 
missions, and has also made it increasingly clear that these 
capabilities will be required in contested environments in future 
conflicts and as we take an active approach to countering extremist 
threats. Through a mix of aircraft and satellite sensors and 
corresponding architecture for exploitation and dissemination, Air 
Force ISR affords U.S. leaders an unparalleled decisionmaking advantage 
on which commanders rely--from supporting national strategic 
decisionmaking to successful outcomes in life-and-death tactical 
situations. Moreover, airmen provide expert processing and exploitation 
of staggering volumes of raw data and timely dissemination of usable 
intelligence. In the past 10 years, Air Force ISR contributions have 
been ascendant, particularly from our space-enabled remotely-piloted 
systems. But power projection in the future strategic environment will 
require extending today's ISR capability into contested battle spaces. 
This demands significant and sustained attention to modernization of 
our ISR capabilities.

Global Mobility
    The capability to get friendly forces to the fight and to extend 
the range of airborne strike platforms is a unique Air Force 
contribution that not only enhances Joint effectiveness, but also 
embodies the Nation's global reach and power. The military's ability to 
deter and defeat aggression, project power, provide a stabilizing 
presence, conduct stability operations, and conduct humanitarian and 
other relief operations depends on the airlift and in-flight aerial 
refueling that the Air Force provides. We ensure that joint and 
coalition assets get to the fight and remain in the fight, posing a 
potent threat to adversaries and a persuasive presence to allies. Our 
airlift fleet transports massive amounts of humanitarian-relief 
supplies and wartime materiel to distant locations around the world in 
impressively short time periods. Furthermore, in-flight aerial 
refueling is the linchpin to power projection at intercontinental 
distances. Global mobility also provides for persistent pressure and 
over-watch once we arrive, as demonstrated last year in the skies over 
Libya.

Global Strike
    Finally, the Air Force's ability to conduct global strike--to hold 
any target on the globe at risk--will be of growing importance in the 
coming decade. Our conventional precision strike forces compose a 
significant portion of the Nation's deterrent capability, providing 
national leaders with a range of crisis response and escalation control 
options. Our nuclear deterrent forces provide two-thirds of the 
Nation's nuclear triad, quietly and competently forming the foundation 
of global stability and underwriting our national security and that of 
our allies. However, increasingly sophisticated air defenses and long-
range missile threats require a focused modernization effort 
exemplified by the long-range strike family of systems. A key element 
of this effort is the long-range strike bomber (LRS-B) which will 
strengthen both conventional and nuclear deterrence well into the 
future.
    Collectively, these capabilities, and the Air Force's ability to 
command and control the air, space, and cyber systems, provide the 
Nation with the global vigilance, global reach, and global power 
necessary to implement the new strategic guidance.

                   ADAPTING TO CONSTRAINED RESOURCES

    Although the contributions that the Air Force provides to the Joint 
Force have increased in relevance over time, there has not been a 
corresponding increase in resources. The Air Force has entered this era 
of fiscal austerity significantly smaller, with older equipment, and 
with a smaller budget share than any military Department in half a 
century. The Air Force has been continuously engaged in combat for over 
two decades and has taken on a range of new missions. Yet over that 
same time period, our aircraft inventory and end strength declined. 
Since 2001, we have reduced our inventory by over 500 aircraft and have 
added new missions, while end strength has come down by thousands of 
airmen, leaving us next year with the smallest force since our 
inception in 1947. Meanwhile, the average age of Air Force aircraft has 
risen dramatically: fighters stand at 22 years; bombers, 35 years; and 
tankers, 47 years. Reduced manpower, full-scale operations, and reduced 
training opportunities have pushed our readiness to the edge. The 
budget increases that have occurred in the last decade were primarily 
consumed by operational expenses, not procurement. There is a 
compelling need to invest in next-generation, high-impact systems so 
that the Air Force can continue to provide the capabilities on which 
our Nation relies. The failure to make the proper investments now will 
imperil the effectiveness of the future force and our ability to 
execute the new strategic guidance for decades to come.
    We are mindful, however, of the current fiscal situation and 
recognize that we must contribute to government-wide deficit reduction 
as a national security imperative. Our ability to make proper 
investments to modernize and sustain the capabilities of the Air Force 
is directly tied to the economic health of the United States. In 
addition, as respectful stewards of the American taxpayer's dollars, 
the Air Force is committed to achieving audit readiness and meeting 
Secretary Panetta's accelerated goal to achieve auditability of the 
Statement of Budgetary Resources by 2014. Over the last year, the Air 
Force has made real progress, receiving clean audit opinions on two 
important components of our budget and accounting processes from 
independent public accounting firms. In the coming year, the Air Force 
expects to have independent auditors examine the audit readiness of our 
military equipment inventories, our base-level funds distribution 
process, and our civilian pay process.
    The Air Force fiscal year 2013 budget request reflects aggressive 
prioritization of limited resources, heavily informed by the new 
strategic guidance, with regard to both capability and capacity of our 
forces--that is, both what capabilities we should buy and how much of 
them. The budget brings together strategic guidance with fiscal 
constraint. Its guiding principle was balance. To retain critical core 
Air Force capabilities and the ability to rapidly respond to mission 
demands, the Air Force balanced risk across all mission areas.
    Although we will be smaller and leaner, we will not sacrifice 
readiness. Selected reductions in force structure and modernization 
programs were based on careful assessments reflecting the requirements 
to address potential future conflict scenarios and to emphasize the 
Middle East and Asia-Pacific regions. Force and program development 
choices were also influenced by the need to protect our ability to 
regenerate capabilities to meet future, unforeseen demands. Our budget 
request seeks to leverage strong relationships with allies and 
partners, including the development of new partners. Finally, the 
fiscal year 2013 budget request honors and protects the high quality 
and battle-tested professionals of the All-Volunteer Force.

                            FORCE STRUCTURE

    The fiscal reality and strategic direction mean that the Air Force 
will continue the long-term trend of accepting a smaller force to 
ensure high quality. In planning for a smaller force, our decisions 
favored retention of multi-role platforms over those with more narrowly 
focused capabilities--for example, F-16s over A-10s and F-15Cs, and C-
130s over C-27s. Where feasible, we sought to divest smaller fleets 
with niche capabilities and stressed common configurations for key 
platforms in order to maximize operational flexibility and minimize 
sustainment costs.

Aircraft
    In meeting the force sizing requirements of the new strategic 
guidance, and to remain within the constraints of the Budget Control 
Act, the Air Force made the difficult choice of divesting 227 aircraft 
from our combat and combat support aircraft fleets in the fiscal year 
2013 budget request. Total divestitures rise to over 280 aircraft over 
the fiscal year 2013-2017 Future Years Defense Program (FYDP) period. 
These divestitures will result in $8.7 billion in savings across the 
Active and Reserve components.
    In order to balance current and future requirements in the Combat 
Air Forces (CAF), we are reducing the total number of combat-coded 
fighter squadrons from 60 to 54 (31 Active squadrons and 23 Reserve 
component squadrons). As part of a broader strategy to reshape the Air 
Force into a smaller, yet capable force, we divested 21 F-16 Block 30 
aircraft in the Reserve component and 102 A-10s in the Reserve 
component from the total aircraft inventory. In making these difficult 
choices, we considered several factors: the relative operational value 
of weapon systems to counter capable adversaries in denied 
environments; fleet management principles, such as retiring older 
aircraft first and prioritizing multi-role aircraft; and operational 
flexibility, forward-basing, and host-nation commitments. The 
allocation of reductions between the Active and Reserve components took 
into consideration the Air Force's surge requirements as directed by 
the new strategic guidance, the expected future deployment tempo, the 
need to increase means to accumulate fighter pilot experience, and the 
imperative to ensure that the Reserve component remains relevant and 
engaged in both enduring and evolving missions.
    In the Mobility Air Forces (MAF), we sized the fleet to a total of 
275 strategic airlifters--52 C-5Ms and 223 C-17s. We will seek 
legislative approval to retire 27 C-5As across fiscal year 2013-2016, 
going below the National Defense Authorization Act for Fiscal Year 2012 
strategic airlift floor of 301 aircraft. This will avert higher 
sustainment costs for aircraft with substantially less reliability than 
the C-17 or C-5M. For our intra-theater airlift, the fleet was sized to 
meet the airlift requirements of the new strategy, including our direct 
support requirements of ground forces. We will retire 65 C-130Hs across 
fiscal year 2013-2017 and are divesting the C-27J fleet. After these 
retirements, we will maintain a fleet of 318 C-130s (134 C-130Js and 
184 C-130Hs). Our air refueling fleet is being reduced to 453 tankers 
after retiring 20 KC-135s. The development and procurement of the KC-
46A is on-track for initial delivery in fiscal year 2016 with the 
strategic basing process underway.
    In our ISR aircraft fleet, we plan to divest all 18 RQ-4 Global 
Hawk Block 30 aircraft and retain the U-2S Dragon Lady program. Due to 
the reduction in high altitude ISR combat air patrol (CAP) 
requirements, the need for RQ-4 upgrades to meet current U-2 sensor 
operational performance levels, and the high operational costs of the 
RQ-4, continued investment into the U-2 is both the fiscally and 
operationally responsible choice. Transferring the MC-12W Liberty from 
the Active component to the Air National Guard (ANG) reflects the 
assessment that the ANG is the appropriate place for long-term, 
scalable support of medium altitude ISR. The Active component will 
retain association with the ANG units. The MC-12W will also perform the 
mission of the divested RC-26 fleet. Finally, we will retire one E-8C 
Joint Surveillance Target Attack Radar System (JSTARS) aircraft that is 
damaged beyond economical repair.
    Air Force leaders recognize that proposals to retire aircraft are 
often contentious and that Congress has at times written legislation 
blocking or delaying proposed retirements. We are committed to 
faithfully executing the law; however, we urge the congressional 
defense committees and Congress as a whole to be especially cautious 
about proposals to block or delay aircraft retirements that do not 
provide the additional human and financial resources needed to operate 
and maintain those airframes. Retaining large numbers of under-
resourced aircraft in the fleet in today's fiscally constrained 
environment will significantly increase the risk of a hollow force. 
After the intense efforts to find efficiencies over the past few years, 
the Air Force has only a limited ability to reallocate resources and 
personnel to uncovered operations without creating major disruption in 
other critical activities.

End Strength
    In correlation to the reductions in our aircraft force structure, 
we are also adjusting our end strength numbers. Since 2004, our Active, 
Guard, and Reserve end strength has decreased by over 48,000 personnel. 
By the end of fiscal year 2013, end strength will be reduced a further 
9,900 from 510,900 to 501,000. This will result in a reduction in 
Active Duty military end strength from 332,800 to 328,900, Reserve 
military end strength will decrease by 900 to 70,500, and Air National 
Guard military end strength will decrease by 5,100 to 101,600. Although 
the reductions in aircraft and personnel carry risk, we are committed 
to managing that risk and ensuring successful execution of the new 
strategic guidance.

Reserve Component
    The Air Force has enjoyed great success in leveraging our Total 
Force Enterprise to present our enduring core capabilities to the joint 
warfighter. The Air National Guard (ANG) and Air Force Reserve are 
integrated into all major Air Force mission areas, train to the same 
high standards as the Active component, and are invaluable partners in 
helping us meet our many and varied commitments. This will not change--
we will rely on our Air Reserve Component (ARC) as both a strategic and 
operational reserve. A strategic reserve can be employed to mobilize 
significant numbers of airmen in the event of a significant national 
crisis while an operational reserve will still be used to augment day-
to-day operations.
    Maintaining the appropriate mix of forces between the Active and 
Reserve components is critical to sustaining Air Force capabilities for 
forward presence, rapid response, and high-rate rotational demands 
within a smaller overall force. Over the years, we have adjusted the 
mix between Active and Reserve components to ensure we maintained a 
ready and sustainable force and could meet our surge and rotational 
requirements. The Air Force has successfully met the demand of 
increased operations tempo through a combination of volunteerism, 
selective mobilization, and the establishment of classic, Active, and 
ARC associations to better manage high activity rates. However, 2 
decades of military end strength and force structure reductions in our 
Active component have shifted the ratio of Active to Reserve component 
forces. In 1990, the Reserve component represented 25 percent of Total 
Force end strength; today that percentage is at 35 percent. Reserve 
component aircraft ownership also increased from approximately 23 
percent to 28 percent over the same period.
    The Total Air Force leadership carefully considered the ratio 
between the Active and Reserve components for the proposed force 
structure reductions in the 2013 budget request. The expected 
deployment tempo and the need to increase pilot seasoning drove the 
allocation of reductions between components. The proper ratio between 
components must be achieved to maintain acceptable operations tempo 
levels within each component and to preserve the ability of a smaller 
Air Force to meet continued overseas presence demands and the rapid 
deployment and rotational force requirements of the strategic guidance.
    While the Air Force Reserve and ANG are significantly affected by 
the proposed 2013 Air Force budget request, they remain essential 
elements of our Total Force. Due to the magnitude of the budget 
decline, our programmed reductions are wide-ranging, directly impacting 
over 60 installations. Thirty-three States will be directly impacted, 
but all 54 States and territories will be affected in some way by the 
proposed aircraft and manpower reductions. Although some squadrons will 
actually grow larger, it is unlikely that there will be a 100 percent 
backfill of personnel or alternative mission for every location. 
Without the Total Force re-missioning actions we are proposing, these 
reductions would have significantly affected 24 units and left 8 
installations without an Air Force presence.
    In close coordination with our ANG and Air Force Reserve leaders, 
we have developed a detailed plan that will mitigate the impact by 
realigning missions to restore 14 of the 24 units. Nine of the 
remaining 10 units have existing missions, or the mission will transfer 
from the Air National Guard to the Air Force Reserve. Our plan also 
maintains an Air Force presence on seven of the eight affected 
installations. This plan will allow us to preserve an appropriate 
Active to Reserve component force mix ratio and minimizes the 
possibility of uncovered missions. The aircraft force structure changes 
also presented an opportunity for the ANG to realign manpower to ensure 
proper mission resourcing while simultaneously bolstering ANG 
readiness. The fiscal year 2013 adjustments in strategy, force 
structure, and resources allowed us to realign manpower within the ANG 
to properly source its growing MC-12W and MQ-1/9 missions.
    After the proposed force reductions and mitigations, Reserve 
component end strength will make up 33 percent of Total Force military 
personnel, a reduction of 2 percent from the fiscal year 2012 numbers. 
Within the CAF, the Reserve component will have 38 percent of total 
aircraft which is 4 percent lower than fiscal year 2012. For the MAF, 
the Reserve component shares shifts from 51 percent to 46 percent. In 
order to maintain capability, the Air Force intends to grow the number 
of Total Force Integration associations from 100 to 115. This will 
enable the seasoning of our Active Duty personnel while improving the 
combat capacity of our Reserve component.

                               READINESS

    Readiness is comprised of complementary components, such as flying 
hours, weapon system sustainment, and facilities and installations. A 
good readiness posture depends on health in all of these key areas. In 
spite of aircraft divestments and reduction in personnel, we are 
committed to executing the defense strategy and will ensure America's 
Air Force remains ready to perform its mission every day. High 
operations tempo has had some detrimental effects on our overall 
readiness, particularly in the context of aging weapons systems and 
stress on our personnel. Since September 11, 2001, the Air Force has 
flown more than 455,000 sorties in support of Operations Iraqi Freedom 
and New Dawn and more than 350,000 sorties in support of Operation 
Enduring Freedom. In 2011, our airmen averaged approximately 400 
sorties every day, with December 17, 2011, marking the first day in 20 
years that the Air Force did not fly an air tasking sortie in Iraq. 
Maintaining our ability to be ready across the full spectrum of 
operations has been challenging in recent years, especially for the CAF 
and certain limited-supply/high-demand units. We will continue to 
revise our readiness tracking systems to provide increasingly accurate 
assessments and mitigate readiness shortfalls. Preserving readiness and 
avoiding a hollow force was a non-negotiable priority for the Air Force 
and the DOD in developing the 2013 budget.

Weapons System Sustainment
    During previous budget cycles, the overall Air Force weapons system 
sustainment (WSS) requirement increased each year due to sustainment 
strategy, the complexity of new aircraft, operations tempo, force 
structure changes, and growth in depot work packages for legacy 
aircraft. In fiscal year 2013, although the Air Force is retiring some 
combat, mobility, and ISR force structure, our overall weapon system 
sustainment requirements continue to increase. These cost increases, 
along with a reduction in the Service's Overseas Contingency Operations 
(OCO) request, resulted in a slight decrease in the percentage of 
weapons systems sustainment requirements funded from fiscal year 2012 
to fiscal year 2013. WSS is funded at 79 percent of requirement in the 
fiscal year 2013 budget.
    We maintained our readiness capability in the portfolio areas most 
directly affecting readiness such as aircraft, engines, and missiles, 
while taking some risk in areas that are less readiness related in the 
short-term such as technical orders, sustaining engineering, and 
software. Additionally, the Air Force continues to conduct requirements 
reviews and streamline organizations and processes to reduce 
maintenance and material costs, develop depot efficiencies, and manage 
weapon system requirements growth. The goal of these efforts is to 
sustain fiscal year 2012 weapon system sustainment performance levels 
for fiscal year 2013.

Facility Sustainment, Restoration, and Modernization
    The sustainment portion of facilities sustainment, restoration and 
modernization (FSRM) was funded just over 80 percent of the Office of 
the Secretary of Defense (OSD) facility sustainment model. Due to 
current fiscal realities the revised strategic guidance, the Air Force 
is also taking a deliberate pause in its military construction (MILCON) 
program, resulting in a nearly $900 million reduction from fiscal year 
2012 enacted levels. To manage the risk associated with these actions 
we continue civil engineering transformation to employ an enterprise-
wide, centralized, asset management approach to installation resourcing 
which maximizes each facility dollar.

Flying Hour Program
    The emphasis on readiness in the new strategic guidance reinforced 
Air Force focus on the importance of maintaining our flying hour 
program (FHP). The fiscal year 2013 budget removes flying hours where 
associated with the retirement of some of our oldest aircraft and 
divestiture of single-role mission weapon systems. In the remainder of 
the FHP, however, levels are consistent with fiscal year 2012 levels to 
prevent further erosion of readiness. The fiscal year 2013 baseline FHP 
remains optimized as we continue to fly a significant portion of our 
hours in the Central Command (CENTCOM) area of responsibility (AOR), 
but still poses a measured risk to our full spectrum training and 
readiness levels. As operations in the CENTCOM AOR decrease, these OCO 
hours will migrate back to our baseline program to ensure peacetime FHP 
requirements are met. We are also committed to a long-term effort to 
increase our live, virtual, and constructive operational training (LVC-
OT) capability and capacity by funding improvements in our LVC-OT 
devices (e.g., simulators and virtual trainers) and networks.
    Although the Air Force has no single rollup metric to measure FHP 
requirements, we are working toward a set of metrics that clearly 
articulate the training requirements needed to support desired 
readiness levels. Our challenge is that the diversity of our missions 
does not lend itself to yardsticks like ``hours per crewmember per 
month.'' The Air Force operates a wide variety of aircraft--including 
multi-role aircraft--that require differing training requirements in 
amount and type for each aircrew member. In addition, we have critical 
space and cyber units that involve no aircraft at all. As we develop 
FHP metrics, we will dovetail our efforts with the work being done at 
the Cost Assessment and Program Evaluation (CAPE) office at the Office 
of the Secretary of Defense to study the relationship between defense 
funding and military readiness and mature necessary metrics and 
assessment tools.
    Even though the Air Force will be smaller in capacity, we will 
remain highly capable and lethal, as well as ready, agile, and 
deployable.

                             MODERNIZATION

    Looking ahead, the Air Force faces two primary strategic 
challenges. In the face of declining budgets, we must still provide the 
essential force structure and capabilities on which the Joint Force 
depends. Historical and projected uses of U.S. military forces, and our 
inability to accurately predict the future, make the complete 
divestment of the capability to conduct any 1 of the 12 Air Force core 
functions imprudent. Yet, the new strategic guidance also requires 
continuing modernization of our aging force to address the 
proliferation of modern threats. Finding the right balance requires a 
long-range plan that begins with a strategic vision. Implementing 
across the board cuts will not produce the envisioned Joint Force of 
2020.
    Accordingly, we carefully scrutinized all our weapons systems and 
capabilities to determine which require investment today and those that 
can be deferred. We then made the tough choices to maximize our 
military effectiveness in a constrained resource environment. Combat 
and combat support aircraft force structure reductions, coupled with 
reduced development and procurement of preferred munitions and other 
key modernization programs, were essential to achieving the Air Force 
fiscal year 2013 budget targets.
    In fiscal year 2013, we have programmed $35.8 billion for 
modernization, approximately 33 percent of the Air Force total 
obligation authority. We are slowing the pace and scope of 
modernization while protecting programs critical to future warfighter 
needs. Focused investment in high priority programs such as the F-35 
Joint Strike Fighter, long-range strike bomber, KC-46A refueling 
tanker, service-life extension of the F-16, Space-Based Infrared and 
Advanced Extremely High Frequency Satellites (AEHF), and our space 
launch capability is critical to the Department's overall strategy. 
Access and continued freedom of maneuver within cyberspace is an 
essential requirement for our networked force, therefore the 
development of offensive and defensive cyber capabilities remains a top 
Air Force priority. Additionally, in coordination with the Navy, the 
Air Force will fund modern radars, precision munitions, and other 
priorities to support the Air-Sea Battle concept and ensure worldwide 
power projection despite increasing A2/AD challenges.
    To continue funding these high priority investments, we made the 
hard choices to terminate or restructure programs with unaffordable 
cost growth or technical challenges such as the RQ-4 Block 30, B-2 
Extremely High Frequency radio improvements, and the Family of Advanced 
Beyond Line of Sight Terminals. We eliminated expensive programs with 
more affordable alternatives that still accomplish the mission, such as 
the C-130 Avionics Modernization Program, the C-27J program, and 
Defense Weather Satellite System (DWSS). Likewise, we discontinued or 
deferred programs that are simply beyond our reach in the current 
fiscal environment, such as the Common Vertical Lift Support Platform, 
Light Mobility Aircraft, and Light Attack and Armed Reconnaissance 
aircraft. The fiscal year 2013 budget also accepts significant near-
term risk in military construction for current mission facilities, 
limiting ourselves to projects required to support new aircraft bed 
downs and emerging missions.
    Underpinning the Air Force's ability to leverage and field these 
crucial technologies is America's aerospace research and development 
infrastructure--a national asset that must be protected to ensure 
future U.S. advantages in technology and civil aerospace. Therefore, 
the Air Force's budget protects science and technology funding as a 
share of our total resources.

                MORE DISCIPLINED USE OF DEFENSE DOLLARS

    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 in an effort 
to identify $100 billion in DOD savings for reinvestment. Our fiscal 
year 2013 budget continues to depend on successfully managing and 
delivering the $33.3 billion in Air Force FYDP efficiencies associated 
with the fiscal year 2012 PB submission. We are actively managing and 
reporting on these, as well as the Air Force portion of DOD-wide 
efficiencies. In light of the current budget constraints, the Air Force 
continues to seek out opportunities for additional efficiencies.
    The fiscal year 2013 budget request includes additional savings of 
$6.6 billion from our more disciplined use of defense dollars. This 
represents $3.4 billion in new efficiency efforts as well as $3.2 
billion in programmatic adjustments. These reductions continue to focus 
on overhead cost reductions and spending constraints consistent with 
Executive Order 13589, ``Promoting Efficient Spending,'' and specific 
Office of Management and Budget (OMB) spending guidance. Areas in which 
we are seeking major efficiencies and spending reductions in this 
budget submission include information technology, service contracts, 
travel, and inventory.
    We are identifying and eliminating duplicate information technology 
applications across our business and mission system areas. Policies and 
better spending controls will be placed within modernization and legacy 
systems sustainment areas. We have committed to save $100 million in 
fiscal year 2013 and $1.1 billion across the FYDP in this area. We 
continue to put downward pressure on service support contract spending 
and are committing to an additional $200 million reduction in fiscal 
year 2013 and $1 billion across the FYDP. These efforts are consistent 
with Secretary of Defense-directed efficiencies across the DOD and OMB 
guidance to reduce spending by 30 percent from a 2010 baseline. 
Executive Order 13589 also directs reductions in travel across 
Departments. The Air Force budget for travel has steadily declined from 
actual spending of $984 million in fiscal year 2010 to a budgeted-level 
of $810 million in fiscal year 2012. Between Air Force budget 
reductions and DOD-directed travel reductions, the fiscal year 2013 PB 
reflects an additional $116 million travel savings in fiscal year 2013 
and $583 million across the FYDP. Finally, a bottom-up review of base-
level inventory is planned, with the intent of identifying consumable 
and repairable items that are excess, including Government Purchase 
Card-procured excess inventory. We estimate $45 million savings in 
fiscal year 2013 and $225 million across the FYDP.

                       TAKING CARE OF OUR PEOPLE

    Regardless of any strategy realignment or future mission 
commitment, the hallmark of our success as an Air Force has always 
been, and will remain, our people. Our mission effectiveness depends 
first and foremost on the readiness and dedication of our airmen. 
Nearly two decades of sustained combat, humanitarian, and stability 
operations have imposed extraordinary demands on our force. As we look 
to the future of reduced funding and fewer manpower positions, we are 
working hard to continue meeting the needs of a 21st century force. The 
Nation owes a debt of gratitude for the sacrifices made by our airmen 
and their families.
    Despite the difficult budgetary environment, we are committed to 
our Air Force community. Therefore, quality of service programs must 
continue as one of our highest priorities. We are sustaining cost-
effective services and programs to maintain balanced, healthy, and 
resilient airmen and families so that they are equipped to meet the 
demands of high operations tempo and persistent conflict. As our force 
changes, we must adapt our programs and services to ensure we meet the 
needs of today's airmen and their families. Developing our airmen will 
be a key focus as we continue efforts to reduce the ``cost of doing 
business'' and develop lighter-footprint approaches to achieving 
security objectives. We will do this by developing expertise in foreign 
language, regional, and cultural skills while also ensuring our 
educational programs focus on current and anticipated mission 
requirements.
    Even as Air Force end strength continues to be reduced, 
requirements for some career fields--like special operations, ISR, and 
cyber--continue to grow. We will continue to size and shape the force 
through a series of voluntary and involuntary programs designed to 
retain the highest quality airmen with the right skills and 
capabilities. As we take steps to reduce our end strength, we will 
offer support programs to help separating airmen translate their 
military skills to the civilian workforce and facilitate the transition 
in a way that capitalizes on the tremendous experience in technical 
fields and leadership that they accrue while serving.
    Although retention is at a record high, we must sustain accessions 
for the long-term and utilize a series of recruiting and retention 
bonuses to ensure the right balance of skills exist across the spectrum 
of the force. Enlistment bonuses are the most effective, responsive, 
and measurable tool for meeting requirements growth in emerging 
missions, while retention bonuses encourage airmen to remain in, or 
retrain into, career fields with high operational demands.
    We recognize the unique demands of military service and want to 
ensure that our airmen are compensated in a way that honors that 
service. Accordingly, the President has announced a 1.7 percent 
increase in basic military pay for fiscal year 2013. The costs of 
military pay, allowances, and health care have risen significantly in 
the last decade. These costs have doubled DOD-wide since fiscal year 
2001 while the number of full-time military personnel, including 
activated Reserves, has increased only 8 percent. As budgets decrease, 
we must find ways to achieve savings in this area to prevent overly 
large cuts in forces, readiness, and modernization. As part of a DOD-
wide effort, we are looking at a gamut of proposals, including health 
care initiatives and retirement system changes, to meet deficit 
reduction targets and slow cost growth. Proposed health care changes 
will focus on working age retirees and the retirement commission will 
address potential future changes, with the current force grandfathered 
into the current system. As we consider these options, we must go 
forward with balanced set of reductions in the military budget that not 
only implements the strategic guidance, but also does our part to 
alleviate the Nation's economic difficulties. Any solutions to this 
problem will be deliberate, will recognize that the All-Volunteer Force 
is the core of our military, and will not break faith with the airmen 
and families who serve our Nation.
    With this as a backdrop, the Air Force has approached its 
investment strategy in a way that seeks to apply our resources to the 
people, programs, and systems that will best contribute to the new DOD 
strategic guidance.

                        AIR FORCE CORE FUNCTIONS

    The Air Force Core Functions provide a framework for balancing 
investments across Air Force capabilities and our enduring 
contributions as we align our resources to the new defense strategic 
guidance. However, none of these core functions should be viewed in 
isolation. There is inherent interdependence among these capabilities 
within the Air Force, the Joint Force, and in some cases, throughout 
the U.S. Government. The Air Force's budget request of $110.1 billion 
reflects the difficult choices that had to be made as a result of Air 
Force fiscal limitations, while still providing an appropriate balance 
of investment across our core functions in a way that best supports key 
DOD military missions. Additional detailed information about each core 
function, including specific investment figures, can be found in the 
Budget Overview Book and in the detailed budget justification documents 
provided to Congress.
Air Superiority
    U.S. forces must be able to deter and defeat adversaries in 
multiple conflicts and across all domains. In particular, even when 
U.S. forces are committed to a large-scale operation in one region, 
they must also be capable of denying the objectives of--or imposing 
unacceptable costs on--an opportunistic aggressor in a second region. 
Securing the high ground is a critical prerequisite for any military 
operation to ensure freedom of action for the Joint Force and the 
Nation. In making operational plans, American ground forces assume they 
will be able to operate with minimal threat of attack from enemy 
aircraft or missile systems. For nearly 6 decades, Air Force 
investments, expertise, and sacrifice in achieving air superiority have 
ensured that condition. The last time any American ground forces were 
killed by an enemy air strike was April 15, 1953.
    But while the United States has enjoyed this control of the air for 
the last 60 years, there is no guarantee of air superiority in the 
future. Airspace control remains vitally important in all operating 
environments to ensure the advantages of rapid global mobility, ISR, 
and precision strike are broadly available to the combatant commander. 
Fast growing, near-peer capabilities are beginning to erode the legacy 
fighter fleet's ability to control the air. Likewise, emerging 
adversaries are developing significant air threats by both leveraging 
inexpensive technology to modify existing airframes with improved 
radars, sensors, jammers and weapons, and pursuing fifth-generation 
aircraft. Simultaneously, current operations are pressing our legacy 
systems into new roles. As a result, the legacy fighter fleet is 
accumulating flying hours both faster and differently than anticipated 
when they were purchased decades ago.
    Given these realities, the Air Force's fiscal year 2013 budget 
request of $8.3 billion includes initiatives to address current and 
future air superiority needs. We continue incremental modernization of 
the F-22 fleet, including Increment 3.2A, a software-only upgrade 
adding new electronic protection (EP) and combat identification 
techniques. The fiscal year 2013 budget request includes approximately 
$140.1 million for Increment 3.2B, which includes the integration of 
AIM-120D and AIM-9X capabilities, data link improvements, and faster, 
more accurate target mapping. We are continuing the F-15 active 
electronically scanned array radar modernization program, funding the 
F-15 Advanced Display Core Processor, and funding the development and 
procurement of an Eagle Passive/Active Warning and Survivability 
System. We are also investing in fourth-generation radar upgrades to 
ensure their continued viability, sustaining the development and 
procurement of preferred air-to-air munitions and select electronic 
warfare enhancements, and resourcing critical readiness enablers, 
including training capabilities and modernized range equipment.
    As part of our air control alert mission, the Air Force, working 
closely with U.S. Northern Command, reduced full-time Air National 
Guard requirements at two sites while maintaining overall surveillance 
and intercept coverage.

                        GLOBAL PRECISION ATTACK

    A critical component of the broader mission to deter and defeat 
aggression is the Air Force's ability to hold any target at risk across 
the air, land, and sea domains through global precision attack. Global 
precision attack forces perform traditional strike and customized ISR 
roles to support joint and coalition ground forces every day. However, 
as A2/AD capabilities proliferate, our fourth-generation fighter and 
legacy bomber capability to penetrate contested airspace is 
increasingly challenged.
    The A2/AD threat environment prescribes the type of assets that can 
employ and survive in-theater. While the Air Force provides the 
majority of these assets, success in this hazardous environment will 
require a combined approach across a broad range of assets and 
employment tools. Even then, these will only provide localized and 
temporary air dominance to achieve desired effects. Simultaneously, 
ongoing contingency operations in a permissive, irregular warfare 
environment at the lower end of the combat spectrum require adapted 
capabilities, including longer aircraft dwell times and increasing use 
of our platforms in unique intelligence gathering roles. Our fiscal 
year 2013 budget request of $15.5 billion applies resources that will 
help the Air Force best meet threats in evolving A2/AD environments.
    To enhance our global strike ability, we are prioritizing 
investment in fifth-generation aircraft while sustaining legacy 
platforms as a bridge to the F-35 Joint Strike Fighter, the centerpiece 
of our 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 
between Services and partner nations. The fiscal year 2013 budget 
includes approximately $5 billion for continued development and the 
procurement of 19 F-35A conventional takeoff and landing (CTOL) 
aircraft, spares, and support equipment. In fiscal year 2013 we 
deferred 98 CTOLs from the F-35A program.
    As we move toward fifth-generation recapitalization, we are funding 
fourth-generation fighter modernization to ensure a capable global 
attack fleet. Reserve Component recapitalization will begin based on F-
35 production rates, basing decisions, the F-16 service life extension 
program (SLEP), and combat avionics programmed extension suite. The Air 
Force will continue to plan and program for approximately 350 F-16 
service life extensions and capability upgrades over the FYDP to ensure 
a viable F-16 combat capability across the total force and to mitigate 
the effects of F-35 procurement rate adjustments on the total fighter 
force capacity during completion of system development and low-rate 
initial production.
    In our fiscal year 2013 submission, we accepted risk by retiring 
102 A-10s and 21 F-16s. Although the A-10 remains essential for 
combined arms and stability operations, we chose to retire more A-10s 
because other multi-role platforms provide more utility across the 
range of the potential missions. We are retaining enough A-10s to meet 
the direction of the new strategic guidance to maintain readiness and 
capability while avoiding a hollow force.
    We are modernizing conventional bombers to sustain capability while 
investing in the Long-Range Strike Family of Systems. The bomber fleet 
was retained at its current size because we recognized the importance 
of long range strike in the current and future security environments. 
The Air Force is enhancing long-range strike capabilities by upgrading 
the B-2 fleet with an improved defensive management system (DMS) and a 
new survivable communication system, and is increasing conventional 
precision guided weapon capacity within the B-52 fleet. We are 
investing $191.4 million in modernizing the B-1 to prevent obsolescence 
and diminishing manufacturing sources issues and to help sustain the B-
1 to its approximate 2040 service life. In addition to aircraft 
modernization, we are upgrading our B-1 training and simulator systems 
to match aircraft configuration and ensure continued sustainability. We 
are also seeking legislative assistance to repeal Public Law 112-81 
Sec. 132 which limits the use of funds to retire six B-1s as proposed 
in the fiscal year 2012 budget. This repeal would allow the DOD and the 
Air Force to execute the retirement of three combat-coded and three 
training-coded B-1s in fiscal year 2012.
    Procuring a new penetrating bomber is critical to maintaining our 
long-range strike capability in the face of evolving A2/AD 
environments. The new long-range, penetrating, and nuclear-capable 
bomber (LRS-B), which will be capable of both manned and unmanned 
operations, will be designed and built using proven technologies, and 
will leverage existing systems to provide sufficient capability. It 
will also permit growth to improve the system as technology matures and 
threats evolve. We must ensure that the new bomber is operationally 
capable before the current aging B-52 and B-1 bomber fleets are 
retired. LRS-B is fully funded at $291.7 million in the fiscal year 
2013 budget.

    GLOBAL INTEGRATED INTELLIGENCE, SURVEILLANCE, AND RECONNAISSANCE

    Global integrated ISR includes conducting and synchronizing 
surveillance and reconnaissance across all domains--air, space, and 
cyber. These ISR capabilities produce essential intelligence to achieve 
decision superiority through planning, collecting, processing, 
analyzing and rapidly disseminating critical information to national- 
and theater-level decisionmakers across the spectrum of worldwide 
military operations. Air Force ISR growth and improvement over the last 
decade has been unprecedented. Because of the dynamic nature of the 
operating environment, the Air Force conducted an extensive review of 
the entire Air Force ISR enterprise in 2011 to inform future planning 
and programming decisions. Even as the United States plans to reduce 
our military presence in CENTCOM AOR, combatant commands will continue 
to use our ISR capabilities to combat global terrorism, provide global 
and localized situational awareness, and support future contingencies.
    Recognizing the need for continued and improved ISR capabilities, 
and based on the 2011 ISR review, the Air Force is investing $7.1 
billion in this core function in fiscal year 2013. We are continuously 
improving the current suite of capabilities and will field the MQ-9 
Reaper to meet delivery of 65 remotely piloted aircraft (RPA) combat 
air patrols (CAPs) by May 2014. We are actively managing our 
procurement rate of MQ-9s to efficiently increase RPA fleet size while 
allowing for necessary aircrew training. We are extending operations 
for the U-2 Dragon Lady manned aircraft, in lieu of investing more 
heavily in the RQ-4 Block 30 Global Hawk fleet. Despite early 
predictions, the savings anticipated by the use of Global Hawks have 
not come to fruition and we will not invest in new technology at any 
cost. Divesting the RQ-4 Block 30 fleet and extending the U-2 will save 
the Air Force $815 million in fiscal year 2013 and $2.5 billion across 
the FYDP. Sustaining the U-2 fleet will ensure affordable and sustained 
high altitude ISR for the combatant commanders and joint warfighters.
    We will maintain investment in the MC-12 Liberty as we transfer it 
to the Air National Guard, but we will establish Active unit 
associations to meet combat air patrol and surge requirements. The MC-
12 will also perform the mission carried out by the RC-26 as we divest 
11 of those aircraft from the Air National Guard (ANG). In the ANG, six 
RPA units have been or are currently being established, and an 
additional five units will stand-up in fiscal year 2013. An ANG ISR 
group with two squadrons will be established to conduct ISR in 
cyberspace and to conduct digital network intelligence and cyber target 
development.
    We are developing a more balanced and survivable mix of airborne 
platforms to enable continued operations in permissive environments and 
to enable operations in A2/AD environments. We are exploring innovative 
ways to leverage space and cyberspace capabilities as part of the 
overall mix of ISR capabilities and partner with joint, coalition, and 
interagency partners, including the use of Air-Sea Battle as a 
framework to develop required capabilities for the Joint fight. We are 
investing $163 million in fiscal year 2013 in our ground processing 
enterprise, the Distributed Common Ground System, and will continue 
migration to a service-oriented architecture to handle the increasing 
quantities of ISR data that is integrated and delivered from emerging 
sensors and platforms operating in all domains. We will also improve 
our ability to move information securely and reliably over information 
pathways. Finally, we are improving analyst capability through improved 
training, automation and visualization tools while we deliberately plan 
for future operations using a refined capability planning and analysis 
framework.

                         CYBERSPACE SUPERIORITY

    Access and continued freedom of maneuver within cyberspace is an 
essential requirement for our networked force. Today's modern forces 
require access to reliable communications and information networks to 
operate effectively at a high operations tempo. Air Force and DOD 
networks face a continuous barrage of assaults from individual hackers, 
organized insurgents, state-sponsored actors, and all level of threats 
in between. Our adversaries are also realizing gains from 
electronically linking their combat capabilities. This is creating new 
warfighting challenges that the Joint Force must be prepared to 
address. As we work to ensure our freedom of movement in cyberspace, we 
will also work with Service, Joint, and Interagency partners on 
additional and further-reaching cyberspace initiatives.
    We are using a cyber strategy which not only improves the Air 
Force's ability to operate in cyberspace, but also mitigates constantly 
increasing infrastructure costs. This approach focuses on near-term 
FYDP investments to automate network defense and operations which 
increase both combat capacity and effectiveness. This effort, led by 
24th Air Force, under Air Force Space Command, includes continued 
development of the Single Integrated Network Environment which provides 
a seamless information flow among air, space, and terrestrial network 
environments, and most importantly, mission assurance to the 
warfighter.
    Our fiscal year 2013 budget request for cyberspace superiority is 
$4.0 billion. With these funds, we are expanding our ability to rapidly 
acquire network defense tools, such as Host Based Security System, a 
flexible, commercial-off-the-shelf (COTS)-based application to monitor, 
detect, and counter cyber-threats to the Air Force Enterprise. We are 
also investing in advanced technologies to monitor and secure both 
classified and unclassified networks. We have made considerable 
progress in our efforts to meet the emerging challenges and threats in 
cyberspace by fielding a Total Force of over 45,000 trained and 
certified professionals equipped to ensure continuity of operations in 
cyberspace. The establishment of an additional ANG network warfare 
squadron (NWS) will enhance the Maryland ANG 175th NWS as they actively 
conduct cyber defense to protect networks and systems. The Air Force 
Reserve will also stand up an Active association network warfare 
squadron with the 33rd Network Warfare Squadron at Lackland AFB, TX.
    To keep with the rapid pace of technology, the Air Force is 
developing Joint standardization and acquisition strategies to enable 
quick delivery of cyber capabilities to address constantly evolving and 
more technologically advanced cyber threats and to improve intelligence 
capabilities in cyberspace. The Air Force is spending $27.3 million on 
the Air Force Wideband Enterprise Terminal, leveraging Army procurement 
efforts for significant quantity savings, Joint standardization, 
interoperability, and enabling wideband global satellite communication 
(SATCOM) Ka-band utilization, resulting in greater bandwidth for 
deployed warfighters. The Air Force continues efforts toward the single 
Air Force network, which increases Air Force network situational 
awareness and improves information sharing and transport capabilities. 
For future budget requests, the Air Force is working with DOD to define 
near- and long-term solutions to deliver warfighting communication 
capabilities, such as Family of Advanced Beyond Line of Sight Terminals 
(FAB-T) and upgrading the Air Force's wideband enterprise terminals to 
provide Joint standardization and greater bandwidth.

                           SPACE SUPERIORITY

    America's ability to operate effectively across the spectrum of 
conflict also rests heavily on Air Force space capabilities. Airmen 
provide critical space capabilities that enhance the DOD's ability to 
navigate accurately, see clearly, communicate confidently, strike 
precisely, and operate assuredly. General purpose forces, the 
Intelligence Community, and SOF depend on these space capabilities to 
perform their missions every day, on every continent, in the air, on 
the land, and at sea. In addition, space operations help ensure access 
and use of the global commons, enabling a multitude of civil and 
commercial activities such as cellular communications, commercial and 
civil aviation, financial transactions, agriculture and infrastructure 
management, law enforcement, emergency response, and many more. Like 
air superiority, space-based missions can easily be taken for granted.
    The Air Force has maintained its record of successful space 
launches, began on-orbit testing of the first AEHF military 
communications satellite, and launched the first Space Based Infrared 
System geosynchronous satellite. Our ability to deliver space 
capabilities is currently without equal. As we become a smaller, leaner 
force in accordance with the new defense strategic guidance, the 
leveraging and multiplying effects that space provides will become 
increasingly important. Improving space situational awareness will be 
key to protecting the unique advantage space provides.
    Rapid technology advancements and the long-lead time for 
integrating and fielding new space technology results in an ongoing 
need to plan, design, and implement space advancements. We must procure 
our space systems at the lowest cost possible while providing assured 
access to space. Our innovative acquisition strategy for the Efficient 
Space Procurement (ESP) \1\ of complex space systems is designed to 
identify efficiencies and use those resources to provide enduring 
capability and help provide stability to the space industrial base. 
While we are modernizing and sustaining many of our satellite 
constellations, funding constraints have slowed our ability to field 
some space capabilities as rapidly as is prudent. Therefore, as we 
continue to sustain our current level of support to the warfighter, the 
current fiscal environment demands that we explore alternate paths to 
provide resilient solutions. As we incorporate the tenets of the new 
National Security Space Strategy, we are actively developing 
architectures that take into consideration the advantages of leveraging 
international partnerships, commercial space capabilities, and hosted 
payloads. One example being tested is a commercially hosted infrared 
payload (CHIRP) launched from Guiana Space Center, Kourou, French 
Guiana, which begins to explore the utility of a dedicated payload for 
missile warning hosted on a commercial communications satellite.
---------------------------------------------------------------------------
    \1\ Previously known as Evolutionary Acquisition for Space 
Efficiency (EASE).
---------------------------------------------------------------------------
    With the $9.6 billion in funds for space programs in the fiscal 
year 2013 budget request, the Air Force is recapitalizing many space 
capabilities, fielding new satellite communications systems, replacing 
legacy early missile warning systems, improving space control 
capabilities, and upgrading position, navigation and timing 
capabilities with the launch of Global Positioning System (GPS) IIF 
satellites and the acquisition of GPS III satellites. Consistent with 
the 2012 National Defense Authorization Act (NDAA) and Department of 
Defense Appropriations Act, the Air Force is canceling the DWSS, saving 
$518.8 million in fiscal year 2013 and $2.38 billion over the FYDP. The 
Defense Meteorological Satellite Program (DMSP) will continue to 
fulfill this critical requirement as the Air Force determines the most 
prudent way forward.
    We are seeking legislative support in repealing the establishment 
of the Operationally Responsive Space (ORS) Program Office. Rather than 
funding a single organization with a very broad and diverse mandate, we 
have determined that embedding resilience and operational 
responsiveness in the architecture of individual space mission areas 
represents a better approach. The closure of this office will require 
repeal of 10 U.S.C. Sec. 2273a, the enabling legislation for ORS. Key 
personnel and capabilities, funded at lower levels, will become part of 
the Air Force Space and Missile Center.

                     NUCLEAR DETERRENCE OPERATIONS

    Credible nuclear capabilities are required to deter potential 
adversaries from attacking our vital interests and to assure our allies 
of our commitments. Although the threat of global nuclear war has 
become more remote since the end of the Cold War, the prospect of 
nuclear terrorism has increased. Proliferation of nuclear weapons, 
especially among regional power aspirants, is on the rise. Advanced air 
defenses increasingly threaten the survivability of current bombers. 
Area denial and ballistic missile threats reduce our basing options and 
challenge the responsiveness and survivability of long range strike. As 
a result, the United States must shape its deterrent forces to maintain 
the attributes which lead to stability among major powers and which 
extend deterrence for regional challenges and non-state actors while 
assuring allies.
    The Air Force is responsible for two of the three legs of the 
nuclear triad and continuing to strengthen the Air Force nuclear 
enterprise remains a top Air Force priority. Air Force investment in 
our bombers and intercontinental ballistic missile (ICBM) systems 
reflects our commitment to the nuclear deterrence mission well into the 
future. Our request of $5.1 billion for this core function in fiscal 
year 2013 increases sustainment for the Minuteman III ICBM through 2030 
with fuze component replenishment and replacement programs, as well as 
new transporter erectors. We are also enhancing long-range strike 
capabilities by upgrading the B-2s with an improved DMS and a new 
survivable communication system. These investments will ensure the Air 
Force maintains the capability to operate and sustain safe, secure and 
effective nuclear forces to deter adversaries, project power into 
denied environments, hold any target at risk, and respond appropriately 
if deterrence fails. In particular, the responsiveness of the ICBM leg 
and the flexibility of the bomber leg are valued attributes in the new 
strategic setting. We are committed to a future force that will have 
the flexibility and resiliency to adapt to changes in the geopolitical 
environment or cope with potential problems in the nuclear stockpile.
    The new Strategic Arms Reduction Treaty requires the United States 
to reduce warheads and delivery capacity by 2018. Our fiscal year 2013 
budget request includes $20.1 million to fund treaty preparatory 
actions that began in fiscal year 2012 and additional actions necessary 
to accomplish the treaty-required reductions by 2018. While final force 
structure decisions have not yet been made, we are continuing to 
develop detailed plans, working with the DOD and U.S. Strategic 
Command, for executing force reduction decisions which retain the 
attributes of the Triad needed for 21st century deterrence.

                         RAPID GLOBAL MOBILITY

    The Air Force provides unparalleled in-flight refueling and cargo 
carrying capacity in support of worldwide operations. Mobility forces 
provide vital deployment and sustainment capability for joint and 
coalition forces by delivering essential equipment, personnel, and 
materiel for missions ranging from major combat operations to 
humanitarian relief operations. Achieving unprecedented survival rates, 
our highly skilled aeromedical transport teams swiftly evacuate combat 
casualties, ensuring our wounded warriors receive the best possible 
medical care. A unique Air Force contribution, rapid global mobility 
must be maintained on a scale to support DOD force structure and 
national strategic objectives.
    On any given day, the Air Force fleet of C-17s and C-5s deliver 
critical personnel and cargo, provide airdrop of time-critical 
supplies, food, and ammunition, and enable rapid movement of personnel 
and equipment. Air Force air refueling aircraft will continue to play a 
vital, daily role in extending the range and persistence of almost all 
other Joint Force aircraft. The Air Force remains committed to fully 
funding the acquisition of the new KC-46A tanker with $1.8 billion in 
research, development, testing, and evaluation (RDT&E) in fiscal year 
2013, while also resourcing critical modernization programs for the KC-
10 and KC-135 fleets. This will ensure our Nation retains a tanker 
fleet able to provide crucial air refueling capacity for decades to 
come. The retirement of 20 KC-135s is consistent with our analysis of 
warfighting scenarios based on the strategic guidance and will results 
in savings of $22.5 million in fiscal year 2013. As part of our energy 
efficiency initiatives, we plan to begin upgrading 93 KC-135 engines in 
fiscal year 2013 and 100 more each year through the FYDP. We anticipate 
overall savings in fuel and maintenance of $1.5 billion from this $278 
million investment.
    In addition, with our fiscal year 2013 budget request of $15.9 
billion in rapid global mobility funds, the Air Force will continue to 
modernize its inter-theater airlift fleet of C-17s and C-5s. To move 
towards a common fleet configuration, the Air Force is investing $138.2 
million in fiscal year 2013 for the Global Reach Improvement Program 
(GRIP). The GRIP brings the multiple variants of C-17 to a standard 
configuration, designated the C-17A, that will provide efficiencies in 
operations and weapon system sustainment. We also plan to transfer 
eight C-17s from the Active component to the ANG in fiscal year 2013, 
and an additional eight in fiscal year 2015. We are modernizing the 
most capable C-5 airframes while retiring the final 27 of the oldest 
model, the C-5A. On the remaining 52 C-5s, the Air Force is investing 
$1.3 billion in modernization in fiscal year 2013 to improve capability 
and reliability, including $1.23 billion on the Reliability Enhancement 
and Re-engining Program. We currently have seven operational C-5Ms. The 
retirement of the last C-5A by fiscal year 2016 is timed to match the 
completion of the last C-5M upgrade.
    Because the strategic guidance reduced the overall requirement for 
intra-theater airlift, we are retiring C-130H aircraft (39 in fiscal 
year 2013 and a total of 65 over the FYDP). These older aircraft would 
require costly modification or modernization to remain viable. We will 
maintain the necessary intra-theater airlift capability and capacity by 
completing the recapitalization of older C-130E/H aircraft with the C-
130J. The remaining legacy C-130H aircraft are being modernized to 
reduce sustainment costs and ensure global airspace access.
    Finally, after rigorous mission analysis, we determined the mission 
performed by the C-27J fleet could be performed by the C-130 fleet 
which is fully capable of meeting direct ground support and homeland 
defense requirements.\2\ The fiscal constraints that demand we become a 
smaller Air Force also support the decision to retain aircraft that 
have multiple role capabilities, like the C-130. Therefore, all 21 C-
27Js in the current fleet will be retired and we are canceling 
procurement of 17 additional aircraft. Without question, the Air 
Force's commitment to support time-sensitive, mission-critical direct 
airlift support to the Army is unaltered by the divestment of the C-
27J.
---------------------------------------------------------------------------
    \2\ Six of the seven Air National Guard units that are affected by 
the divestment of the C-27J fleet are being backfilled with MC-12W 
Liberty, ISR/cyber, MQ-9, or C-130 units.
---------------------------------------------------------------------------
                          COMMAND AND CONTROL

    Command and control (C2) of our forces has never been more vital or 
more difficult than in the highly complex 21st century military 
operations that depend on close joint and coalition coordination. C2 is 
the key operational function that ties all the others together to 
achieve our military objectives, enabling commanders to integrate 
operations in multiple theaters at multiple levels through planning, 
coordinating, tasking, executing, monitoring and assessing air, space, 
and cyberspace operations across the range of military operations. No 
longer in a Cold War technological environment, the Air Force is 
transforming its C2 to an internet protocol-based net-centric 
warfighting capability. To do so, the Air Force must sustain, modify, 
and enhance current C2 systems, and develop deployable, scalable, and 
modular systems that are interoperable with joint, interagency, and 
coalition partners.
    The Air Force is focusing its attention to modernization efforts to 
operate in A2/AD environments with our fourth- and fifth-generation 
weapon systems. In doing so, the Air Force will continue to use a 
balanced approach across the C2 portfolio by investing in sustaining 
legacy platforms while modernizing our C2 aircraft fleet and ground 
operating nodes only as needed to sustain our capability. Our fiscal 
year 2013 budget request of $5.8 billion for C2 includes $200 million 
to support secure and reliable strategic level communications through 
the E-4 National Airborne Operations Center (NAOC). We are also 
spending $22.7 million to begin fielding a cockpit modernization 
development program to sustain the capability of the existing Airborne 
Warning and Control System (AWACS) platform and we will continue to 
modernize and sustain the Theater Air Control System Command and 
Control Centers (CRC). The modernization of the Air Operations Center 
(AOC) will move this weapon system to an enterprise system which can 
accept rapid application upgrades and enable future warfighting 
concepts.
    To reduce unnecessary cost, the Air Force will retire one JSTARS 
aircraft that is beyond economical repair, saving the Air Force $13 
million in fiscal year 2013 and $91 million over the FYDP. The JSTARS 
re-engining system development and demonstration (SDD) flight test 
program completed in January 2012; however, because the NDAA for Fiscal 
Year 2012 reduced re-engining funding, full completion of the re-
engining SDD is under review. The JSTARS re-engining program is not 
funded in fiscal year 2013. We also terminated our portion of the Army-
managed Joint Tactical Radio System (JTRS) small airborne radio program 
that was over cost and behind schedule and will instead leverage 
industry-developed hardware, while continuing the development of the 
required radio waveforms. The termination of this program and the 
associated non-recurring engineering will save $294 million in fiscal 
year 2013 and $3.2 billion over the FYDP.

                           SPECIAL OPERATIONS

    Success in counterterrorism and irregular warfare missions requires 
the ability to conduct operations in hostile, denied, or politically 
sensitive environments, using other than conventional forces. Air Force 
special operations capabilities continue to play a vital role in 
supporting U.S. Special Operations Command and geographic combatant 
commanders. SOF depend on a balanced force of air, sea, and land 
capabilities; Air Commandos bring specialized expertise for 
infiltration and exfiltration and the kinetic and non-kinetic 
application of airpower that are essential to joint special operations 
capabilities.
    Our investments in SOF must strike a balance between winning 
today's fight and building the Joint special operation force of the 
future, including the ability to act unilaterally when necessary. 
Despite the challenging fiscal environment, with our budget request of 
$1.2 billion, the Air Force was able to sustain nearly all of the SOF 
aviation improvements realized over the past several years. The 
programmed buy of 50 CV-22 Ospreys will complete in fiscal year 2014, 
and the procurement of MC-130Js for the recapitalization of 37 MC-130E/
Ps will also complete in fiscal year 2014. MC-130H/W recapitalization 
will begin in fiscal year 2015, a year earlier than scheduled in the 
fiscal year 2012 PB, which ensures a continued, more capable SOF 
mobility fleet. The Air Force is modernizing our SOF precision strike 
capability by procuring AC-130Js, on a one-for-one basis, to 
recapitalize our legacy AC-130Hs. We are also ensuring our Battlefield 
Airmen continue to receive first-class equipment and training by adding 
funds to operations and maintenance accounts.

                           PERSONNEL RECOVERY

    The Air Force remains committed to modernizing crucial combat 
search and rescue (CSAR) capabilities. The additional use of personnel 
recovery (PR) forces for medical and casualty evacuation, humanitarian 
assistance, disaster response, and civil search and rescue operations 
has steadily risen since the early 1990s. This increase in usage has 
taken its toll on the aircraft and significantly affected availability. 
Currently, Air Force PR forces are fully engaged in the CENTCOM and 
Africa Command AORs, accomplishing lifesaving medical and casualty 
evacuation missions. They are also supporting domestic civil land and 
maritime search and rescue, humanitarian assistance/disaster relief, 
and mass casualty evacuation missions. The dynamic geopolitical 
environment suggests that the continued need for PR forces to conduct 
non-permissive CSAR in contingency operations and permissive 
humanitarian assistance, disaster response, and civil search and rescue 
operations will remain.
    To ensure the Air Force is able to provide this vital core function 
in the future, we are recapitalizing our fixed wing aircraft, 
replenishing our rotary wing aircraft through the Operational Loss 
Replacement (OLR) program, and replacing aging rotary wing aircraft 
through the Combat Rescue Helicopter (CRH) program. The $1.4 billion 
fiscal year 2013 budget request for PR includes $152.2 million for the 
HC-130J and $183.8 million for the OLR and CRH programs. The fiscal 
year 2013 RDT&E funding for the CRH was reprogrammed to support the 
acquisition of two test aircraft. The program remains on track to 
produce a replacement for the HH-60G through a full and open 
competition, with initial operational capability planned for fiscal 
year 2018. The Air Force also continues to fund the HH-60G and HC-130 
sustainment programs while continuing to invest in the Guardian Angel 
program that provides first-class equipment and training for the rescue 
force.

                         BUILDING PARTNERSHIPS

    Building the capacity of partner governments and their security 
forces is a key element in our national security strategy. The 
establishment of strong, foundational aviation enterprises in our 
partner nations enables successful, sustainable security within their 
own borders while contributing to regional stability. Successful 
partnerships ensure interoperability, integration and interdependence 
between air forces, allowing for effective combined and coalition 
operational employment. These partnerships also provide partner nations 
with the capability and capacity to resolve their own national security 
challenges, thereby reducing the potential demand for a large U.S. 
response or support.
    The necessity for partnering is evident every day in Afghanistan 
where U.S. and coalition air forces provide flexible and efficient 
airpower support to International Security Assistance Force operations. 
In both Iraq and Afghanistan, airmen are building the capabilities and 
capacities of the Iraqi and Afghanistan air forces so that they can 
successfully employ airpower in their own right. In addition, the 
success of the Libya operations last year can be partly attributed to 
years of engagement that led to improved interoperability and highly 
capable and equipped partner nations.
    These international engagements require airmen to perform their 
duties effectively and achieve influence in culturally-complex 
environments around the globe. Fielding the Joint Strike Fighter and 
other platforms will help further our partnerships with more 
established allies. The U.S. role in the 12-nation Strategic Airlift 
Consortium enables a unique fully operational force of three C-17s to 
meet the airlift requirements of our European allies. The fiscal year 
2013 budget request of approximately $300 million in this core function 
continues to fully resource the Strategic Airlift Consortium effort at 
Papa AB, Hungary. The Air Force also committed to field a new aviation 
detachment in Poland.
    Due to fiscal constraints, the Air Force terminated the Light 
Attack Armed Reconnaissance and the Light Mobility Aircraft programs; 
however, the Air Force believes this requirement can be substantially 
met with innovative application of Air National Guard State Partnership 
Programs and Mobility Support Advisory Squadrons. We are working with 
partner nations to build and sustain ISR capacity and help them 
effectively counter threats within their borders. We are also pursuing 
international agreements to increase partner satellite communication, 
space situational awareness, and global positioning, navigation, and 
timing capabilities.
    The Air Force also recognizes that it cannot build effective 
international partnerships without effective U.S. Government 
interagency partnerships. To that end, we are a strong supporter of 
State-Defense exchanges and other programs that provide interagency 
familiarity and training.

                          AGILE COMBAT SUPPORT

    Underpinning our capacity to perform the missions in these core 
functions is the ability to create, protect, and sustain air and space 
forces across the full spectrum of military operations--from the 
training, education, and development of our airmen to excellence in 
acquisition. The fiscal year 2013 budget request includes $31.0 billion 
for agile combat support.
    We will continue to support our airmen and their families through 
quality of life and support services such as child care and youth 
programs and initiatives, medical services and rehabilitation for 
wounded warriors, improvements to dining facilities, food delivery, 
fitness centers, and lodging. We are partnering with local communities, 
where feasible, to provide the highest quality support, and we are 
changing the way that we provide services so that airmen and their 
families are more able to easily access and receive the support they 
need. To ensure we continuously focus on and improve readiness and 
build a more agile and capable force, we have strengthened technical 
and professional development by enhancing technical training, 
professional military education, and language and culture programs.
    The Air Force is committed to sustaining excellence with a smaller 
force. We remain attentive to force management efforts and continue to 
size and shape the force to meet congressionally-mandated military end 
strength. A series of voluntary and involuntary force management 
efforts have been successful in reducing Active Duty end strength. 
Force management programs in fiscal year 2012 include voluntary and 
involuntary programs which lessen the need for involuntary actions in 
fiscal year 2013. We are posturing accessions for the long-term and 
ensuring the right balance of skills exists to meet operational 
requirements. The Air Force will meet its OSD-directed civilian end 
strength target for fiscal year 2012 and the fiscal year 2013 PB makes 
minor adjustments to our civilian end strength. The Force Management 
Program is not a quick fix, but a tailored, multi-year effort to manage 
the force along the 30-year continuum of service.
    We are improving acquisition processes, recently completing 
implementation of the Acquisition Improvement Plan (AIP). We have also 
institutionalized the ``Better Buying Power'' (BBP) initiatives 
promulgated by the Under Secretary of Defense for Acquisition, 
Technology and Logistics and are expanding those improvements through 
our Acquisition Continuous Process Improvement 2.0 (CPI 2.0) effort. 
The major elements of the CPI 2.0 initiative--process simplification, 
requirements, realizing the value proposition, and workforce 
improvement--will build upon the BBP initiatives and continue our 
momentum in improving our acquisition workforce skills.
    We are ensuring the Air Force continues to have war-winning 
technology through the careful and proactive management of our science, 
technology, engineering, and mathematics (STEM) workforce and improving 
our means to attract and recruit future innovators for the Air Force. 
Properly funding our science and technology laboratories enables them 
to continue discovering, developing, and demonstrating high payoff 
innovations to address the changing strategic environment and sustain 
air, space, and cyberspace superiority. Therefore, the Air Force's 
budget protects science and technology funding as a share of our total 
resources.
    Science and technology investments are also a key toward enhancing 
our energy security and meeting our energy goals. The Air Force is 
requesting over $530 million for aviation, infrastructure, and RDT&E 
energy initiatives in fiscal year 2013 to reduce energy demand, improve 
energy efficiency, diversify supply, and increase mission 
effectiveness. A focus of these initiatives is to improve our energy 
security by diversifying our drop-in and renewable sources of energy 
and increasing our access to reliable and uninterrupted energy 
supplies. We are investing more than $300 million in energy RDT&E, 
which includes $214 million for the fiscal year 2013 Adaptive Engine 
Technology Development (AETD) initiative. This initiative will build 
upon the Adaptive Versatile Engine Technology (ADVENT) effort to reduce 
energy consumption and improve efficiency and reliability of future and 
legacy aircraft.
    We are continuing to support an important aspect of our readiness 
posture through weapons system sustainment, the requirements for which 
have grown due to the complexity of new aircraft, operations tempo 
increases, force structure changes, and growth in depot work packages 
for legacy aircraft. We are mitigating overall WSS growth through 
efficiency efforts and requirements reviews. WSS funding through OCO 
supplemental requests remains critical while we continue to be engaged 
in these global operations. For fiscal year 2013, we are seeking $11.6 
billion in WSS (including OCO). We are committed to retaining three 
strong organic depots. In fiscal year 2012, we are investing 
approximately $290 million in new technologies and infrastructure in 
all of our depots. Although we may have a short-term challenge to meet 
the Title 10, Sec. 2466 Depot 50/50 Rule requirements due to force 
structure changes, we have a robust plan in place to perform organic 
repair for future weapon systems like the KC-46A.
    As noted earlier, Air Force continues to emphasize the importance 
of maintaining readiness in support of our FHP. The Air Force's $44.3 
billion fiscal year 2013 operations and maintenance request supports 
1.17 million flying hours for new pilot production, pilot development, 
maintenance of basic flying skills, as well as training of crews to 
support combatant commander priorities.
    Facility sustainment, restoration and modernization and MILCON are 
essential tools for providing mission capability to our warfighters. 
The $441 million in MILCON funding, a $900 million decrease from fiscal 
year 2012 enacted levels, represents a conscious decision to take a 
deliberate pause in MILCON investment. During this pause, we will 
maintain funding levels for facility sustainment at $1.4 billion and 
restoration and modernization at $718.1 million. We will continue to 
fund the most critical construction priorities of our combatant 
commanders and the Air Force, including projects aligned with weapon 
system deliveries--supporting beddowns for the F-22, F-35, HC-130J/C-
130H, and MQ-9. In addition, our investment funds some much-needed 
support to our airmen, with $42 million in dormitory recapitalization.

                               CONCLUSION

    Given the continuing complexity and uncertainty in the strategic 
environment, and facing substantial budget reductions, DOD and Air 
Force resources are appropriately targeted to promote agile, flexible, 
and cost effective forces, and to mitigate strategic risks. The fiscal 
year 2013 Air Force budget request reflects the extremely difficult 
choices that had to be made that will allow the Air Force to provide 
the necessary capability, capacity, and versatility required to prevail 
in today's and tomorrow's wars, prevent and deter conflict, and prepare 
to defeat adversaries and succeed across the range of potential 
military operations--all the while preserving and enhancing the All-
Volunteer Force. Additional reductions would put at risk our capability 
to execute the new strategic guidance.
    We are confident in our airmen and their families. 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. As they have time and again, our airmen innovators will find 
new and better ways to approach future military challenges across the 
spectrum of domains and against nascent threats. We are committed to 
excellence and we will deliver with your help. We ask that you support 
the Air Force budget request of $110.1 billion for fiscal year 2013.

    Chairman Levin. Thank you very much, General.
    We'll start with 7-minute round.
    First, to both of you: DOD created a new defense strategy 
to guide creation of the fiscal year 2013 defense budget 
request. Did you both have an opportunity to provide input in 
the development of that strategy and in your view does the 
budget request support the strategy and do you support the 
budget request? Mr. Secretary?
    Secretary Donley. Yes, sir. The Chief and I both had 
opportunities to participate in all the Department's 
deliberations, which includes deliberations with the President 
on the strategic guidance, and we believe we are supporting 
that in our proposed budget proposal.
    Chairman Levin. Thank you. General?
    General Schwartz. I would agree with that, sir.
    Chairman Levin. Thank you.
    Now, the Air Force is proposing some major force structure 
reductions. The Air Force chose to apply these reductions more 
heavily to the Air National Guard. The Air Force plan would cut 
the end strength for Active-Duty Forces by 1.2 percent while 
the Air National Guard would be cut four times as much, 4.8 
percent, four times as much percentage-wise.
    I have some real problems with these proposed force 
reductions. For instance, the Air Force asserts that the cut to 
the A-10 force falls more heavily on the Air National Guard 
forces because the Air Force will need to keep more of the 
force in the Active component due to forward deployments and 
dwell time considerations. Here's the problem with that. First, 
the Guard's A-10s have more than shown their ability to support 
wartime operations, including in Afghanistan.
    Second, at the same time that you proposed these major cuts 
in the overall force and in the Guard particularly, you're 
going to be increasing the number of A-10 aircraft in Active 
Duty training squadrons, and you also have some new defense 
strategic guidance. Despite that guidance, the Air Force is 
reducing its forward-stationed fighter presence in Europe by 
only one squadron, and that would leave five to six fighter 
squadrons in Europe. These are F-15s and F-16s.
    Now, the Council of Governors has made a proposal to you to 
restore some end strength and force structure to the Guard. The 
specific question is, if you have discussed this matter with 
the governors, are you still in discussions with the governors?
    Secretary Donley. Yes, Mr. Chairman, we are.
    Chairman Levin. Are you willing to reconsider your proposed 
reductions in the Guard and the structure of the Guard if those 
discussions lead to that result?
    Secretary Donley. Well, I need to defer to the Secretary of 
Defense, who offered this opportunity to the Council of 
Governors about, I think about 2 to 3 weeks ago now. We have 
met with the Council of Governors or their representatives 
several times in the last couple of weeks and I would say those 
discussions are ongoing at this point.
    We have not yet had an opportunity to brief DOD leadership 
on the status of our work. We expect to do that later this 
week.
    Chairman Levin. So those discussions are ongoing?
    Secretary Donley. Yes, sir.
    Chairman Levin. Are you willing to reconsider the proposed 
reductions after the conclusion of those discussions? Is it 
possible, in other words, that those discussions will lead to 
some changes in your proposal?
    Secretary Donley. It's possible, sir. This is a decision 
for the Secretary of Defense, again, who opened up this 
opportunity to the Council of Governors and he will have to 
assess the progress and the value of whatever proposition is 
laid before him.
    Chairman Levin. Will you get back to us on this matter 
prior to markup on the defense bill, which is in about a month 
and a half?
    Secretary Donley. We will.
    [The information referred to follows:]

    From March 4, 2012, to date, Headquarters Air Force (HAF) and 
National Guard Bureau staffs conducted a comprehensive review of the 
Council of Governor's (CoG) proposal. Over 1,000 man-hours were 
expended by the two staffs to complete the necessary analysis. Based on 
criteria approved by the Secretary of the Air Force, and conveyed to 
the CoG representatives, they evaluated the impacts based on five 
criteria in the categories of demand, weapons systems, manpower, cost, 
and policy, consistent with the fiscal year 2012 Program Objective 
Memorandum development criteria. These criteria encompassed 
considerations such as meeting combatant commanders' demand 
requirements, fiscal implications, training requirements, and personnel 
effects to include rated manning and sustaining the force. The results 
of this analysis determined the CoG proposal did not meet any of the 
five criteria. In particular, the proposal retained combat force 
structure unnecessary to meet the Defense Strategic Guidance, produced 
an unacceptable impact to the combatant commanders (U.S. European 
Command and U.S. Africa Command), reduced the Total Force's capacity to 
meet worldwide rotational requirements, adversely impacted the 
sustainability of the force, and imposed an additional cost on the Air 
Force budget of between $528 million to $805 million, an amount we view 
as unaffordable. After discussing the analysis with The Adjutants 
General (TAGs) representing the CoG, the HAF and Air National Guard 
(ANG) Bureau teams met multiple times daily between March 6th and 9th 
to jointly evaluate three additional excursions with differing sourcing 
and/or numbers of F-16, KC-135, A-10, and C-130 aircraft. On March 9, 
the Secretary and Under Secretary of the Air Force, the Air Force Chief 
and Vice Chief of Staff, the Chief of the National Guard Bureau, and 
the Director of the ANG conducted a video teleconference with the CoG 
co-chair TAGs from Washington and Iowa when two additional excursions 
were discussed. All these options attempted to provide the ANG with 
combat and/or enabler missions sourced from various locations, to 
include reallocation of assets within the ANG. These options were not 
acceptable to the CoG. The Air Force's analysis is currently undergoing 
review by Office of the Secretary of Defense's (DOD) Cost Analysis and 
Program Evaluation office.
    The force structure programmed in the fiscal year 2013 President's 
budget, represents optimized capability and capacity to meet the new 
DOD strategic guidance while satisfying the fiscal restrictions imposed 
by the current Federal budget environment and meets combatant commander 
and foundational demands with increased but manageable risk. 
Ultimately, the Air Force will defer to the Secretary of Defense to 
decide this matter.

    Chairman Levin. Did you have recommendations from the 
National Guard as to which Air National Guard bases would lose 
A-10s? Did you get recommendations from the Guard?
    Secretary Donley. Yes.
    Chairman Levin. Did you follow those recommendations?
    Secretary Donley. Yes.
    Chairman Levin. Now let me go to the question of strategic 
airlift. General Schwartz, the Air Force plans would reduce 
strategic airlift forces from a level of 301 aircraft to 275 
aircraft by retiring the remaining C-5A aircraft. It's not 
clear to me that the Air Force has any plan for how such forces 
could be reconstituted if needed in the future and by having 
that responsiveness comply with the direction in the new DOD 
strategic guidance, which requires that responsiveness.
    How could you say that the Air Force plan is responding to 
the Secretary's strategic guidance when you don't apparently 
yet have such a plan?
    General Schwartz. Sir, the analysis indicated that, given 
the revised defense strategic guidance and the size of the 
ground forces, that the requirement for mobility in one of the 
metrics that we use routinely, in million ton-miles per day, 
was 29.4 million ton-miles per day. At 275 strategic 
airlifters, that is 223 C-17s and 52 modified, re-engined C-5s, 
now designated C-5Ms, produces between 30.4 and 30.6 million 
ton-miles per day.
    That is less than the 32.7 million ton-miles from the 
Mobility Capabilities Requirements Study 2016, which was done 3 
years ago, and there is an ongoing effort to renew and to 
perform a new study for the airlift fleet. But the analysis 
that we and the Department did reflected that 275 strategic 
airlifters was sufficient to perform the missions anticipated.
    Chairman Levin. My time is up. Senator McCain.
    Senator McCain. Thank you, Mr. Chairman.
    I thank the witnesses. As I understand it, Secretary 
Donley, the three major programs that the Air Force is looking 
forward to are the tanker program, the F-35, and the long-range 
strike aircraft. With sequestration in its present anticipated 
form if it were not changed, what would be the impact on those 
three major Air Force programs for the future?
    Secretary Donley. Well, Senator, if sequestration were to 
kick in, the Department would be required to take a 10 percent 
reduction in each of the accounts in the Air Force. If 
personnel were held neutral, if we protected personnel 
accounts, then those reductions would go up to 13 percent. So 
in the procurement accounts, for example, this would affect all 
of our major programs. It would affect the MQ-1/9 program, the 
KC-46 program, JSF. All these programs that have been 
continuing for a couple of years, some of which are on fixed-
price contracts, would be impacted by these across-the-board 
reductions.
    Senator McCain. Would you do us a favor and perhaps in 
writing give us a detailed, not minutely detailed, but 
certainly an assessment of the impact on Air Force to provide 
or be provided the necessary weapons systems to defend the 
country? We'd appreciate that. This issue is going to come to a 
head at some point sooner or later.
    [The information referred to follows:]

    The Department is not currently preparing for sequestration, and 
the Office of Management and Budget has not directed agencies, 
including the Department of Defense, to initiate plans for 
sequestration; therefore, we are unable to provide a detailed 
assessment at this time. However, sequestration would drive major 
additional reductions beyond the first phase of the Budget Control Act 
reductions to the Air Force fiscal year 2013 budget request. As Air 
Force leadership has testified, the proposed fiscal year 2013 budget is 
a balanced and complete package. Under sequestration, some 
modernization programs would need to be reduced and possibly 
restructured and/or terminated. Our readiness and operations would be 
impacted, as well as all investment accounts, including our high-
priority modernization efforts.

    Senator McCain. On the refueling tanker, is integration 
still a significant risk and are you confident that the program 
will remain on cost and on time?
    Secretary Donley. Currently we are confident that the 
program will remain on schedule. I think it will also remain on 
cost, but to the extent that it does not this is a risk to the 
contractor, because we have a fixed price development and 
procurement contract in place for this aircraft. So most of the 
risk is on the contractor if there are additional costs--if 
there are cost overruns above the ceiling.
    Senator McCain. Mr. Secretary and General Schwartz, it's 
now been judged that a major mistake was made in the F-35 JSF 
program of ``concurrency'' and now there's a new way of 
addressing it called a developmental approach that will let the 
program decide how many production aircraft the Department 
actually signs up for with how well the program actually does 
in development and testing; is that correct?
    Secretary Donley. I think that describes generally the 
status of the program where it's at, sir.
    Senator McCain. Did you know at the time of this 
concurrency that it was going to fail?
    Secretary Donley. Sir, I think----
    Senator McCain. I think it's been described by the 
acquisition czar in the Pentagon as ``acquisition 
malpractice.''
    Secretary Donley. This is the largest defense program that 
we have and it is extremely important that it succeed. I think 
all of us who stepped into the program in the last couple of 
years recognized that it needed to be restructured and that we 
were entering this period where the concurrency was extreme 
between the completion of development and beginning of 
procurement.
    Senator McCain. So you really had no idea that this whole 
concurrency idea was doomed to failure, as some of us here did?
    Secretary Donley. Certainly, I had not been involved in the 
program when it was initiated.
    Senator McCain. I see, it didn't happen on your watch. I 
can't tell you how many times I've heard that as a member of 
this committee.
    General Schwartz. Senator, may I add something, please?
    Senator McCain. Yes.
    General Schwartz. Sir, I think the reality is that there 
was a sense in the broader community, perhaps not here on the 
committee, but certainly in the aerospace industry, that with 
all the advanced computers and advanced design capacity and so 
on, that you could design and produce an airplane that would 
perform coming up on first flight. This was true in the 
military side. It was also true in the commercial side, 787 is 
a case in point. So I think we all have learned that the notion 
of perfect design is a dream.
    Senator McCain. I won't pursue this except to say that, 
what is your confidence that the F-35 will not experience 
further cost overruns, and are you going to have to procure 
other aircraft in order to make up for the shortfall or delays 
in providing these aircraft in an operational status?
    Secretary Donley. A couple of angles to that, sir. With 
respect to the status of the current program, we have slowed 
the program to get through this concurrency period with the 
least risk.
    Senator McCain. Does that mean you're going to have to 
acquire additional aircraft to make up for that shortfall?
    Secretary Donley. Again, two angles. One is that we've told 
the contractor and the program office that there is no more 
money to put against contract overruns or problems in this 
program. So to the extent that there continues to be cost 
growth or challenges, undiscovered issues in front of us as 
system development and demonstration completes, it's going to 
be paid for by tails. We'll have to take down the number of 
aircraft that we have planned in procurement to pay for that 
work, because no more money is going to be migrating into this 
program.
    The second part of the answer to your question is----
    Senator McCain. The ultimate result in reducing numbers of 
aircraft increases cost per aircraft.
    Secretary Donley. It does, and those aircraft would have to 
be bought later. Assuming we're going to buy those aircraft, 
they would be bought later in the procurement profile, or not 
bought at all.
    The second part, just if I may touch quickly, the results 
of this program have caused us to undertake a service life 
extension program for the F-16s.
    Senator McCain. But no additional purchases?
    Secretary Donley. No additional purchases.
    Senator McCain. I thank you, and I hope that the refueling 
tanker will be a much greater success than the F-35 was.
    One other issue, I understand, is you believe that there 
needs to be another base realignment and closure (BRAC). Could 
you briefly, General Schwartz, tell us why you think there 
needs to be another BRAC, as we've already had significant base 
closures in the past 10 to 15 years?
    General Schwartz. Sir, the reality is that since BRAC 2005 
the Air Force has retired almost 500 aircraft from the 
inventory, and the induction of that is that that created 
additional capacity. It's our belief that only through a BRAC-
like process where we definitively assess and determine where 
excess capacity exists can we get to a position where we reduce 
that capacity and then invest in those things that remain and 
are most important to us.
    The bottom line is that BRAC 2005 did not close major Air 
Force installations. It largely realigned installations. We 
have since had reductions and that needs to be addressed.
    Senator McCain. There's no doubt in your mind that we need 
to close additional Air Force installations?
    General Schwartz. I think that if we do not do that, sir, 
we will place the force again under more pressure to put 
spending into excess capacity when it should go into readiness 
and modernization.
    Senator McCain. Thank you.
    Thank you, Mr. Chairman.
    Chairman Levin. Thank you very much, Senator McCain.
    Senator Akaka.
    Senator Akaka. Thank you very much, Mr. Chairman.
    I want to welcome the Secretary and General Schwartz and to 
thank you so much for the leadership you have for the Air Force 
and their families. We're really grateful for that. General 
Schwartz, I'd also like to add my congratulations on your 
retirement later this year and wish you and your family well. I 
also thank the men and women of the Air Force, the Active, 
Guard, Reserve, civilians, as well as their families, for their 
service to our country.
    Secretary Donley, while the administration proposes to make 
a significant strategic commitment to the Asia-Pacific region, 
it also faces significant service-wide cuts, as has been 
discussed, to force structure and terminations or delays even 
in a number of weapons system programs. Mr. Secretary, can you 
talk about the potential risks and challenges facing the Air 
Force with the coupling of the new strategy and the proposed 
force reductions?
    Secretary Donley. Well, sir, I touched on a couple of these 
in my opening remarks, but I would like to come back to them. 
First is readiness. We have made a strategic-level decision to 
continue to trade size, that is to become a smaller Air Force, 
in order to protect its current readiness and to make sure that 
it can as a smaller force still modernize going forward, so we 
still have resources set aside for important investments like 
tanker, bomber, JSF, as just a few examples.
    We need to make sure that our forces are postured, Active, 
Guard, and Reserve, so that we are ready for the challenges of 
the current and future security environment that we're looking 
toward in the next decade. We face significant challenges in 
this international security environment and the Air Force can 
be called on in a very short period of time, as the chief and 
as the chairman mentioned in the Libya example, where we had 
only a few days to put together a coalition team to put 
aircraft over Libya, Libyan air space, as part of a North 
Atlantic Treaty Organization (NATO) operation.
    So we need to be prepared. We do not have a long 
opportunity to run up and slowly develop readiness over a 
period of time. We can be called on on just very short notice.
    The second thing is that, as I mentioned, our overhanging 
concern in the Air Force is modernization. Our force structure 
is aged, our aircraft are aged, and beyond where they should 
be. The average age of the fighters is 22 years. The average 
age of the airlifters is 35 years, and of the tankers it's 
north of 45 years, and the bombers are in the same kind of 
situation.
    So we have an extreme requirement for modernization that it 
will be very difficult to meet in this budget environment. But 
we must protect those core capabilities for the future so the 
Air Force continues to get better over time.
    Senator Akaka. Thank you, Mr. Secretary.
    General Schwartz, sexual assault continues to be a serious 
issue within our military. I know that the leadership within 
the Services is working hard to address the problem. In order 
to help prevention efforts, I believe it is very important to 
teach our newest recruits that this is absolutely unacceptable. 
My question to you: What is the Air Force doing in basic 
training, in the Reserve Officers' Training Corps (ROTC), and 
the Air Force Academy, to educate airmen on this very serious 
matter?
    General Schwartz. Sir, at all accession sources we have a 
course and a program of instruction which emphasizes, in my 
shorthand, that we don't beat up on our wives, we don't beat up 
on our kids, and we don't assault our teammates, our fellow 
airmen. That is the simple mandate.
    To enforce that, we have implemented changes that I think 
improve our likelihood of properly investigating cases and 
properly prosecuting them. We have 14 Office of Special 
Investigation agents who are dedicated to sexual assault cases. 
They understand the nuances of these investigations and the 
techniques that are associated that differ from other kinds of 
investigation. Likewise, we have 18 prosecutors, who are not 
dedicated, but who have special experience and skills to take 
on major difficult cases like this.
    The bottom line, sir, is that we're working the culture 
piece certainly at accession and throughout the career life 
cycle. We emphasize this through leadership, intervention, and 
enforcement.
    Senator Akaka. Thank you.
    General Schwartz, China's recent modernization efforts 
include an aircraft carrier, a stealth fighter, and advanced 
space programs, to name a few. General, at the unclassified 
level which of their modernization efforts concerns you the 
most?
    General Schwartz. I would say there are areas in not so 
much hardware, but in integration of electronic warfare 
techniques, of cyber capabilities, and so on, with more 
traditional tools of the trade. They are becoming more 
sophisticated in this respect and that is the thing that I am 
paying the most attention to.
    Senator Akaka. Thank you, Mr. Chairman.
    Chairman Levin. Thank you, Senator Akaka.
    Senator Brown.
    Senator Brown. Thank you, Mr. Chairman. Mr. Chairman, I 
also share your concerns to the disproportionate cuts to the 
Air Guard. Before I begin, I'd like to say that, while I have 
no doubt the leadership at the National Guard Bureau knew the 
cuts were coming, there were also a lot of folks in my State 
that were blindsided by these cuts and were really not provided 
any opportunity to provide input. The same with the Reserves, 
and that deeply concerns me.
    I'm trying to wrestle with a lot of what's going on, not 
only in Massachusetts, but throughout the country. For example, 
at Westover--I was there again yesterday, and the maintenance 
crews out there are incredible. For the last 36 months, they 
have a mission capable rate of 73 percent. In the last 12 
months they have a 78 percent mission capable rate, compared to 
40 percent for most Active Duty components, give or take.
    So yet you are looking in the proposal to cut half their 
fleet, even though you're cutting eight C-5Bs and turning them 
into C-5Ms, but you're basically dismantling, proposing 
dismantling, crews that have twice as high a mission capable 
rate than the Active Duty components. I don't get it. Can 
either one of you explain that?
    General Schwartz. Sir, the logic behind this is that the C-
5M will be an inherently more reliable and have higher 
utilization than its predecessor, the C-5 A or B.
    Senator Brown. How can that be when they have a 78 percent 
mission capable rate? It's already twice as high, so how do you 
justify that?
    General Schwartz. Those additional crews are going to 
maximize the availability of that airplane, of the eight 
aircraft that remain at Westover. We're increasing the crew 
ratios because we recognize that we will be able to get better 
utilization out of the C-5M than we did with its predecessor 
versions of the C-5.
    Senator Brown. Once again, sir, their turnaround time is 
about 16 days, compared to 30, 40 days in the Active component. 
Then you have 78 percent mission capable rate, which is pretty 
much almost twice as much as on the Active component. Yet 
you're taking half the fleet. Even if you say the C-5Ms are 
going to be a more capable aircraft, they're already getting 
that capability out of the aircraft that they're losing. So 
isn't there more value for the dollar not only on the aircraft 
savings, but keeping crews that are in place forever doing a 
great job by all respects? Not to say anything about the 
economic impact to Massachusetts in particular. Once again, I 
don't quite see the logic there. You say logic. I don't see it.
    Anything to add on that?
    General Schwartz. I would just indicate again that to 
achieve the additional crew ratios that we think are necessary 
with a 16-airplane fleet would drive the numbers of personnel 
well above those currently possessed at Westover. So the game 
plan here was to use those members of the organization already 
present against the fewer aircraft because of the increased 
crew ratios and redistribute the remaining M models to another 
Guard unit which has similar capability in order to maximize 
its potential as well.
    Senator Brown. Interesting. I'd like to explore that a 
little bit more, maybe offline, because I'm not quite sure why 
we don't take and put an Active component at Westover, like 
they did in Wyoming, if you're looking at getting more flight 
capabilities out of there and taking crews that are basically 
twice as much, twice as good, quite frankly, as the Active 
components.
    What's going to happen to those crew members that are there 
and the team and camaraderie, and really providing mission 
capable planes that are actually going from the line to the 
active, just going right overseas? What's going to happen to 
those folks?
    General Schwartz. The team will remain largely intact at 
Westover, with somewhat fewer aircraft, sir. I would just 
indicate, as the Secretary mentioned earlier, we agree with 
you. We favor Active Associations.
    Senator Brown. Okay. Well, maybe we can talk offline about 
doing that.
    General Schwartz. Very well, sir.
    Senator Brown. Is it true that there are Russian aircraft, 
cargo planes, delivering American goods to American soldiers in 
Afghanistan? Is that accurate? Am I getting good information?
    General Schwartz. There is contract lift from a number of 
entities that supports the military mission in Afghanistan.
    Senator Brown. Including Russians?
    General Schwartz. Actually, I'm not sure it's Russian. It 
might be.
    Senator Brown. It's Russian. So why wouldn't we use our own 
aircraft if we have, apparently, the capability to do so? Why 
wouldn't we be providing our own aircraft to do that, I'm 
presuming at a cost savings to us?
    General Schwartz. The reality is that it's not necessarily 
cheaper to operate organic aircraft on a routine basis relative 
to what's available from the commercial sector.
    Senator Brown. I know that it was already referenced, the 
Council of Governors have voiced specific concerns. Mr. 
Secretary, you said, well, it's up to Secretary Panetta. Well, 
he's going to basically rely on your recommendations. From what 
I'm hearing through the Council of Governors is that really 
there's just been lip service given to their very real and 
legitimate proposals.
    I know that on March 23rd you're going to discuss the 
matter internally with Pentagon officials. Is that accurate?
    Secretary Donley. That's correct.
    Senator Brown. Like the chairman and Senator McCain, I'd 
like to have an understanding as to if in fact you're not going 
to take any of their recommendations. I have said and it's been 
proven that we have--the Guard and Reserve units, you get a 
better value for the dollar. We're looking at cost savings. The 
fact that you can get that in the Guard and Reserves is 
something I think we really need to take into consideration.
    The chairman also brought up the Global Hawk, the Block 30. 
It's said in a DOD report that the U-2 would cost $220 million 
more per year than the Global Hawk Block 30. So can you state 
for the record, General Schwartz, what's changed since that 
report came out and whether the Air Force is considering giving 
the Global Hawk 30 aircraft to NATO, special forces, or the 
Navy, as opposed to putting them in storage where they'll just 
collect dust? Has there been any consideration on that?
    General Schwartz. Two things, sir. A major change was a 
JROC adjustment of the required number of orbits for the high 
altitude surveillance, which I would like to address the 
specific number with you offline. Decreasing that requirement 
enabled the U-2 to cover the requirement with the fact that it 
has 33 airframes available, even though it doesn't have the 
legs or the persistence of the Global Hawk. That was a key 
factor.
    Another factor was the reality that the airplane is not 
less expensive to operate as the U-2. It was not maturing as 
quickly as we had hoped and, importantly, that the sensor 
package on the Global Hawk needed significant improvements to 
match the capability on the U-2.
    So the bottom line was we opted, under the pressures of the 
budget, to rely on the proven U-2. With respect to the use of 
the aircraft, we'll have 18 airplanes, 6 of which will go into 
non-recoverable storage. The other 12 will go into recoverable 
storage and it is possible there will be other uses of them 
either domestically or with partners.
    Chairman Levin. Thank you very much, Senator Brown.
    Senator Nelson.
    Senator Nelson. Thank you, Mr. Chairman.
    Thank you, Mr. Secretary and General Schwartz, for your 
service and for being here today.
    As we all know, progress is currently being made toward 
constructing a new command headquarters for U.S. Strategic 
Command (STRATCOM) with military construction (MILCON) funds 
requested by the President, and authorized and appropriated by 
Congress in fiscal year 2012. Because of the nature and the 
size of it, it'll have to be phased funding over the next 
several years.
    In a hearing before this committee last month, General 
Dempsey made a statement regarding emerging threats as it 
relates to regional conflict in the future. He said, along with 
service chiefs and combatant commanders, that you all believe 
that the homeland will no longer be a sanctuary in 2017 and 
therefore commands like U.S. Cyber Command (CYBERCOM), 
STRATCOM, may become more important in that environment.
    Can the two of you speak to why we need a new headquarters 
at STRATCOM to take on the new commands and to be an effective 
fighting force for the years ahead?
    General Schwartz. Sir, I guess I would just summarize by 
saying that we're operating a command that has multiple 
responsibilities in cyber, in space, and the highest 
technologies we have, in a platform that's 50 years old, and 
it's not well suited to the demands of today's missions. So the 
commitment is to provide a facility that is appropriate to the 
mission and not gold-plate it, but to do what's needed.
    As you're aware, there's $160 million roughly in the fiscal 
year 2013 proposal to continue that effort for STRATCOM.
    Senator Nelson. Thank you. To oversimplify, but to put in 
layman terms, it's pretty hard to fight in cyber space, cyber 
and space commands, with drop cords. Modernization is 
absolutely essential for the technology as well as perhaps just 
the structure. Is that accurate?
    General Schwartz. I would agree with that, sir.
    Senator Nelson. Even no matter how long the drop cord is, 
right?
    I'm following up on the thoughts about BRAC. Obviously, 
it's easier to--and you're finding out this morning that it's 
easier to talk about cutting than it is to actually propose and 
defend cuts. But as we look at BRAC, are we spending enough 
time looking at our overseas military operations or are we 
focused here at home?
    It seems to me that our presence abroad in many respects 
continues to grow, as in the Pacific-Asia command, at a time 
when we're talking about more regional and more agile forces to 
be able to deal with the emerging threats. Could you relate to 
that?
    General Schwartz. Yes, sir. Clearly there are opportunities 
for base infrastructure reductions overseas, and that is almost 
as complicated a process as BRAC would be domestically because 
of interaction with allies and so on and so forth. But it is 
clear that there are opportunities, as the chairman mentioned 
earlier, in a number of areas, and we would pursue those on 
parallel tracks. That would certainly be my proposal.
    Senator Nelson. Well, as it regards to, let's say, Asia-
Pacific, our new national strategy calls for an increase in our 
presence. The three large developed democracies in the region, 
Japan, South Korea, and Australia, collectively have an economy 
that is 25 percent larger than China's and incalculably larger 
than North Korea's. As a percentage of gross domestic product, 
however, they spend less than half of what the United States 
does on defense.
    But a larger presence, if it's necessary in that region to 
deter or repel aggression from these threats--can you comment 
on what we would be doing to try to get a larger contribution 
from those that will most directly benefit from our presence in 
the region?
    General Schwartz. I think it's important to recognize that, 
in particular with our South Korean allies and our Japanese 
allies, over many decades they, in fact, have underwritten our 
presence to a substantial degree through allocations of 
resources for bases in Japan and Korea. Our partner in 
Australia, that is a team that fights above their weight.
    So, sir, I think you will not see recommendations to 
diminish our presence in the Asia-Pacific for good reasons, 
including the mandate from the defense strategic guidance.
    Senator Nelson. But we also, in addition to having them as 
allies, need to have them as financial partners. Can we work 
toward having their percentage of partnership costs increase?
    General Schwartz. I think that is a worthy objective and 
our interaction with the Japanese, for example they're 
seriously considering acquisition of the F-35, is an example of 
the Air Force to air force partnership and a manifestation of 
that partnership over many decades. Certainly we should support 
that, support the Republic of Korea air force, and likewise the 
Aussies and Singapore and others operate systems that are 
interoperable with ours and magnify our respective 
capabilities.
    Senator Nelson. I don't mean to imply that they're 
unwilling to help to a greater degree. But sometimes you have 
to make the ask or you don't get the offer.
    I also agree with the comments from my colleagues about 
reducing the size of our Guard and Reserve units at a time--and 
I'm referring back now to some comments by General Fogleman, 
former Chief of Staff of the Air Force, when he wrote an 
article suggesting that to reduce the personnel costs of DOD, 
maintain a smaller standing Army--he mentioned Army, but I 
suspect that it applies to the Air Force as well--and shift a 
lot of the responsibility to the Guard and Reserves. I noticed 
that my colleague Senator Brown made a comment about comparison 
between effectiveness of Guard versus Active Duty components.
    I hope that you'll take a very, very close look at this, 
whether it's the Council of Governors or just in general, to be 
sure that we're moving in the right direction. There's no real 
room for margin of error here if we make the decision, because 
the reduction will occur and then reestablishing the presence 
of the Guard and Reserve will be very difficult.
    General Schwartz. Sir, there is no difference between the 
Guard, Reserve, and the Active Duty. You cannot tell the 
difference between an airman in the field on what component 
they come from. So this is not an issue of who's more superb 
than another.
    The fundamental question here is with smaller air forces 
how do you manage the activity level across the entire 
portfolio in ways that don't produce adverse effects, on the 
Active Duty side activity levels, that in a better economy 
might cause people to move on, or on the Reserve and the Guard 
side activity levels that might make employers less hospitable 
to the support that they provide to our Guard and Reserve 
airmen.
    Senator Nelson. I know it's delicate, but is it a fact then 
that the total force is easier to operate on an integrated 
basis during, let's say, high operations tempo?
    General Schwartz. A total force clearly gives us more depth 
and more breadth and more experience, as Senator Brown 
suggested, particularly in the Guard and Reserve. The key thing 
is to get the balance right, and that depends on what do we 
think the activity level is likely to be and how much force 
structure we have left?
    My only appeal, Senator, to the committee would be that if 
our proposals or those amended proposals as a result of the 
Council of Governors' recommendations are not sustained and we 
get force structure back from this committee or others, that 
the appropriations come along with that force structure, 
because the fastest way I know to go hollow is to get force 
structure back without the resources to support them.
    Senator Nelson. That's a point well made.
    Thanks to both of you.
    Chairman Levin. Thank you, Senator Nelson.
    Senator Ayotte.
    Senator Ayotte. Thank you, Mr. Chairman.
    Thank you, General Schwartz. Thank you, Secretary Donley, 
for your service to our country.
    Secretary Donley, can you help me with the audit issue? 
Secretary Panetta has said that he wants DOD to be audit-ready 
by 2014. As I understand it, the Air Force may have the most 
difficulty in meeting this goal. With some of the tough choices 
you're asking us to make, having good financial data and making 
sure that our DOD is auditable I think has to be a top priority 
for us.
    So can you help me? What are the challenges that the Air 
Force faces on meeting the 2014 deadline and can we expect that 
you will meet the deadline?
    Secretary Donley. You are correct, Senator, that I think 
the Air Force probably has one of the tougher challenges among 
the Services in getting to this deadline. This is not a 
deadline for complete auditability of all our financial 
statements, but a statement of budgetary resources, which is a 
discrete piece, but nonetheless very important.
    We're going to have to work hard to get there. We have put 
additional auditing resources on this work and we're also 
contracting out to auditing financial firms to help us work 
through this, to make sure that we test ourselves along the way 
and are prepared as best we can be.
    We've already had clean opinions on both budget authority 
and the funds balance with Treasury down to the major command 
level, and our next steps are to take that down to the base 
level in fiscal year 2012 and to also assert readiness on spare 
engines and missile motors this year. So we have a fairly 
detailed plan for how to get there, but it's going to take a 
lot of focus and a lot of concentrated work to execute that as 
planned.
    Senator Ayotte. Do you both agree that this is important 
for us to do? Is this an important exercise?
    Secretary Donley. We do. We do. I think there are some 
aspects of the work, as Secretary Hale has testified, that are 
more important than others, and he has focused the Department 
on those aspects of our work that are the most important, not 
only to the taxpayers, of course, and to our stewardship of 
resources, but also to our management, internal management of 
resources, our ability to get greater efficiencies out of the 
things that we are doing internal to the Services.
    Senator Ayotte. Very good. I appreciate it.
    I had introduced an amendment to the NDAA that passed 
unanimously--it didn't end up getting adopted in the House--to 
basically say to DOD to meet the 2014 deadline that the 
Secretary has set for it. So this is I think very, very 
important, and I appreciate that both of you are looking at 
this as very helpful to the Air Force and also to making future 
financial decisions and management decisions for the Air Force. 
So thank you very much for your commitment to that.
    General Schwartz. Ma'am, if I could just say one thing 
quickly.
    Senator Ayotte. Sure.
    General Schwartz. At our last four-star meeting the four-
stars got the guidance that this is their business; this is not 
business for the suits. This is business for the uniforms, and 
that's part of our effort to make 2014.
    Senator Ayotte. Very good. Thank you, General. I appreciate 
that.
    Let me ask you, General Schwartz. The F-35 JSF, are the 
Chinese and Russians developing a fifth generation fighter?
    General Schwartz. They are working on it, yes, ma'am.
    Senator Ayotte. You know I'm a huge fan of the A-10 because 
I am married to an A-10 pilot. Our soldiers and marines love 
the A-10 and F-16s. But can you tell us, what is the difference 
in terms of capability between these legacy aircraft and the 
fifth generation fighter? Why is it so important to us?
    I know that the program has had difficulties, but as I 
understand there isn't an alternative and we need this fifth 
generation fighter.
    General Schwartz. The bottom line is that the operating 
environments that we will be required to operate in have become 
more contested, both by radar threats, by infrared threats, and 
even to some extent perhaps cyber threats. So the issue is you 
need an airplane, a design that allows you to survive in this 
more hostile environment.
    That is the principal aspect of generation five. Number one 
is stealth, that is low observability in a radar environment, 
but also highly integrated avionics that allow the pilot and 
the system to perceive a target, engage a target, and disengage 
rapidly, more rapidly than did the legacy platform--all for 
survivability.
    Senator Ayotte. What would the life cycle sustainment cost 
of the legacy fighters we just talked about that the F-35 is 
replacing be if the Air Force did not procure the F-35, because 
there's obviously significant legacy costs there that we're 
trying to address?
    General Schwartz. Yes, ma'am. I think, as a case in point, 
we're re-winging the A-10s that you referred to before. That is 
an effort that's ongoing and will continue with the 242 A-10s 
that remain in our inventory after the proposed reduction if 
you approve it.
    Likewise on the F-16, there are cockpit improvements for 
avionics, as well as structure on the F-16. The service life 
extension will do that. So no airplane ages without the need 
for investment. This is true in big airplanes and small 
airplanes, particularly high performance aircraft, though, 
where the margin of error is reduced. So that's the key aspect 
and why we answered to Senator McCain that we're not interested 
in buying generation 4.5 as substitutes, because it doesn't 
make sense to us, ma'am, that we would spend money on airplanes 
that are not as capable but would last as long as the 
generation five counterparts.
    Senator Ayotte. Thank you.
    The KC-46A. This is obviously very, very important, the 
next generation tanker. How long has the KC-135 been around?
    Secretary Donley. Average age of the KC-135s is 49 years.
    Senator Ayotte. Forty-nine years, that's right. I have to 
say, actually older than this Senator. So I appreciate the KC-
46A program, and I know that you're going to be going to the 
basing criteria soon. As I understand it, if you looked at the 
KC-135 right now it's based roughly 60 percent Guard and 
Reserve and 40 percent Active Duty. I know we've talked about 
this in the past; I talked about it with General Johns--that we 
have concurrent basing for the Active Duty and the Guard, 
because, let's face it, we wouldn't have been able to do what 
we need to do in Iraq and Afghanistan without our Guard.
    I'm very proud of our 157th Air Refueling Wing, because we 
have the highest utilization rate in the Air National Guard for 
the KC-135 and also we have very strategic refueling tracks. So 
it's my hope, as I reiterated before, that as you issue this 
basing criteria that it will be concurrent, that it'll be 
objective and transparent, because that's the way, of course, 
we want everything to be around here, and will look also to the 
experience of our Guard and Reserves, tremendous experience. I 
think that so many of our pilots in the Guard and Reserve have 
flown in the active duty also before they've served and have an 
amazing amount of experience, which I think will help us with 
this new tanker if we base it concurrently.
    So I appreciate your efforts in that and look forward to 
seeing the criteria as it comes forward.
    Thank you.
    Chairman Levin. Thank you, Senator Ayotte.
    Senator Hagan.
    Senator Hagan. Thank you, Mr. Chairman.
    Secretary Donley and General Schwartz, I just wanted to 
emphasize, like I'm sure everybody has, your service to our 
country, and we do thank you for that.
    General Schwartz, with the reduction of 9,900 airmen it's 
going to require a lot of diligence and exacting management of 
personnel to ensure that you have the right skills and the 
experiences in the right place at the right time. As the force 
perhaps becomes smaller, what type of force-shaping tools are 
you implementing to ensure that you do have the right people 
with the right specialties and that you retain and grow the 
skills that you need in adequate numbers?
    I just wanted to sort of focus on how many pilots you have 
now, what's the outlook for 3 to 5 years in the future, and 
then in particular with unmanned aircraft being used more, do 
you see a shift in focus from piloted aircraft to unmanned 
systems? Secretary Donley, feel free to weigh in.
    General Schwartz. Yes, ma'am. There's a whole range of 
tools that we use, most of which are voluntary, some of which 
are involuntary, which we are very reluctant to employ for 
obvious reasons. We have bonuses and incentives that--the 
bonuses primarily apply to enlisted career fields that are in 
high demand and short supply. The incentives relate to officer 
career fields like the pilots, where there is an aviation 
incentive program to maintain the pilot cadres in all of the 
Services. That is important and certainly will be more 
important as the economy recovers and there's greater demand 
for these kinds of skills in the private sector.
    With respect to the balance between manned and remotely 
piloted aviation, clearly the glidepath is to more remotely 
piloted capacity in our Air Force. We're currently training 
more RPA pilots than we are bomber or fighter pilots, I mean, 
just to give you a sense of how the scales have tipped here. 
That will continue----
    Senator Hagan. Percent and numbers? Do you have any 
specifics on that?
    General Schwartz. If I may, ma'am, if I can give that to 
you for the record. I don't have the exact numbers right off 
the top of my head. I should, but I don't today.
    [The information referred to follows:]

    Across the Total Force during fiscal year 2012, the Air Force plans 
to train 948 manned aircraft pilots, of which 364 will receive initial 
qualification as fighter and bomber pilots. The Air Force plans to 
train a total of 414 remotely piloted aircraft pilots during fiscal 
year 2012.

    General Schwartz. But I would say that the RPA pilots share 
in that incentive pay, and it's appropriate that they do. The 
idea here is not to balkanize one group of aviators from 
another, but rather to recognize that they're all contributing 
to the mission in different ways through different means and so 
on. So what we have tried to do is to normalize the RPA 
community, demonstrate their value both to the Air Force and to 
the joint team, and retain them for the important missions that 
they do.
    Senator Hagan. How about from the standpoint of other areas 
where there may be a shift in focus or emphasis that requires 
more of one skill set than another? I don't know if it's in the 
maintenance, and areas like that.
    General Schwartz. Sure. I mean, cyber is a rising area.
    Senator Hagan. I was definitely going to ask on cyber.
    General Schwartz. Clearly there are multiple opportunities 
for anyone with this skill set. So yes, we need to attract 
those people into our Air Force and keep them as they build 
experience. They can make much more money on the outside, 
there's no question. But the rewards of military service and so 
on I think can help us balance that out, given the very 
important missions that cyber professionals perform in our Air 
Force.
    I would just mention one thing quickly. Here's an area 
where the Guard and Reserve construct is even more valid, you 
know, is especially valid; let me put it that way. There are 
areas of the country which are sort of cyber-intensive--the 
Northwest, in Washington State, certainly the Valley in 
California, Austin, TX, and so on. We have attempted to 
establish Guard or Reserve units in those locales in order to 
give cyber professionals in industry the opportunity to serve 
as well and bring that expertise to bear.
    Senator Hagan. I think you left out North Carolina in that 
description.
    General Schwartz. Bad on me, ma'am.
    Senator Hagan. But what we're talking about now is science, 
technology, engineering, and mathematics (STEM) education, and 
that's an area that we as a country have to focus on in order 
to be competitive in the business world and in the military 
world while we're in the 21st century. Specifically, what is 
the Air Force doing to recruit and retain highly trained and 
qualified STEM professionals, and at the same time what is the 
Air Force doing to recruit, train, and retain the cyber airmen 
and encourage innovation in the cyber security operations?
    Secretary Donley. A couple of issues there, Senator, but 
I'll try to hit on a couple of them. First of all, we have put 
a great deal of emphasis on rebuilding our acquisition 
workforce in the last couple of years. So we've brought more 
than 8,000 personnel into the acquisition workforce, focused on 
cost estimating, on systems engineering, highly technical 
capabilities that support our weapons system managers and 
program managers. So this work has been ongoing.
    We continue to have dialogue internally about how to 
strengthen recruiting and officer development in the STEM 
career fields especially, how to shape our ROTC programs, how 
to shape the curriculum at the Air Force Academy, to emphasize 
this work.
    We also appreciate the support of others. There is a 
program that is sponsored by the Air Force Association known as 
Cyber Patriot, which has recruited youngsters into cyber 
competition at the high school level, has grown leaps and 
bounds over the past several years as youngsters come into 
these clubs and competitions and become aware of the importance 
of this work to our national security. This is future seed corn 
for the United States, not just for the military, but for our 
Nation at large. So many dimensions to this, but we appreciate 
very much the importance of developing, maintaining, and 
retaining that STEM expertise going forward.
    Senator Hagan. I see that my time is up. I'd like to follow 
up with you on the specific programs and learn more about it 
and do some follow-up on that. So thank you very much.
    Chairman Levin. Thank you very much, Senator Hagan. I would 
join Senator Hagan, by the way, General, in suggesting that the 
number of States on your list of those being potentially 
impacted by cyber attacks should be greatly expanded. I'll 
leave it at that.
    Senator Portman is next.
    Senator Portman. Thank you, Mr. Chairman. I appreciate it, 
and I appreciated your comments earlier, as well as Senator 
McCain's, about some of the challenges we face with the 
sequestration.
    Gentlemen, I know there's been a lot of discussion about it 
today, but the bottom line is, if you could tell me whether you 
think already in terms of your supply chain and your various 
contractors that, if you see adjustments being made already in 
light of the fact that on January 1, 2013, the sequestration 
under current law would take place?
    Secretary Donley. Certainly, Senator, sequestration is of 
concern to us, and it is of even more concern, I think, to the 
contracting community, which wants to better understand what 
the impacts would be as we are potentially compelled to just 
step in and cut funding in major accounts, including programs 
for which they have, if you will, a financial cash flow that 
they are working to pay their employees.
    So this is the concern of the industry, I think. They would 
prefer to get as far in front of these issues as they can. They 
would like to plan better for this, and so the uncertainty 
overhanging the Department and the defense industrial base is 
significant here.
    Senator Portman. This is what I'm hearing from the private 
sector and certainly hearing from you. We had similar testimony 
from the Army Chief of Staff and the Secretary of the Army last 
week. So the conclusion, of course, is that we need to move 
quickly on this, not wait until the end of the year, in fact do 
something before the end of the summer, if we are going to 
avoid some of this dislocation.
    General, you and I have talked about the C-27 before and I 
noted in the chairman's opening remarks he also addressed it as 
to why you changed your minds since you came to us and told us 
how great this program was and how it performed a mission that 
the C-130 could not. In fact, he also said that ``the Guard has 
shown their incredible value to the Air Force,'' which I agree, 
and he talked about why this joint program was something that 
seemed to make so much sense at the time.
    I have strong views on this. I think this is the right 
thing for the taxpayer to continue the program, because I think 
these planes will operate less expensively, and we'll talk 
about that in a minute. I think it's certainly the right thing 
for our military. They perform an incredible mission. We had 
General Odierno sitting in the seat where you are a week ago 
telling us about how he visited the 179th from Mansfield, OH, 
in theater in Afghanistan and the great work they're doing with 
the Army and how the Army really loves to have the ability to 
have you, through your Air National Guard, embedded with them 
and providing that service.
    I would like to start with just a general question: What's 
the cost to operate a C-27, which is the smaller, for those of 
you who aren't following this closely, air cargo plane, as 
compared to your alternative if you are to phase out this 
program that's just getting started, which would be to go to C-
130s? What are the costs to operate?
    General Schwartz. The latest numbers we have is about 
$9,000 per flying hour for the C-27, a little bit higher for 
the C-130J and about $10,400 for the C-130H.
    Senator Portman. Okay. Well, those are new numbers to me. I 
don't know what you're including in there, but the numbers 
you've given us before are $2,100 to $2,700 for the C-27, which 
is the smaller, more efficient aircraft, and the C-130 was 
$5,100 to $7,100 per hour. Of course, the CH-47, which is your 
other alternative, $11,000 per hour. So I don't know where 
those numbers come from.
    Let me just give you the opportunity to correct me and 
maybe say why those numbers have suddenly leapt up.
    General Schwartz. The $2,100 number is the number that's 
used for accounting purposes when the airplane is used in a 
direct support mode, what we call special assignment airlift. 
This is a list of costs that do not reflect necessarily the 
actual flying hour costs. So what I gave you was what is the 
current best assessment of actual flying hour costs, the point 
being that, yes, the C-27 is somewhat cheaper to operate on a 
per-hour basis than the C-130 because it has two versus four 
engines.
    But a key factor here is that the maintenance for the C-130 
is organic and the maintenance for the C-27 is contractor 
logistics support, and there's a considerable difference in 
relative expense there that goes into the flying hour 
calculation.
    [The information referred to follows:]

    Organizational (base) level maintenance and depot-level repairs for 
our legacy C-130E/H aircraft are largely provided by organic Air Force 
personnel. Our C-130J aircraft are maintained by a mix of organic Air 
Force and contractor logistics support personnel. Our C-27J aircraft 
are currently sustained entirely by contractor personnel.
    Air Force aircraft reimbursable cost-per-flight-hour (CPFH) rates 
published by SAF/FM are largely based on historical sustainment costs 
and projected cost growth factors such as inflation. Our C-130E/H/J 
aircraft are mature weapon systems, with fairly stable sustainment 
strategies and costs which result in well-understood CPFH estimates. 
However, the C-27J is a relatively new and immature weapon system, with 
evolving sustainment strategies and costs, and the influence of 100 
percent contractor logistics support for this platform is not well-
reflected in the currently published reimbursable CPFH for this 
platform. Because our C-130 and C-27J aircraft currently employ 
different sustainment approaches, and the sustainment costs for the 
latter are not as well-understood as the former, it is difficult to 
directly compare the CPFH for these aircraft using the traditional 
reimbursable CPFH lens. A more accurate CPFH comparison between these 
platforms would be based on normalized total life cycle costs, and the 
CPFH data provided to the committee staff reflect this normalized life 
cycle point of view.

    Senator Portman. I am finding out new information as we 
talk. This has been incredibly confusing for me, because I am 
trying to get to the facts, as I know you are. We had a private 
conversation about this and none of these data points on $9,000 
an hour were there then. I assume that you're talking about 
some of the maintenance costs, as opposed to organic costs, 
additional costs. I would say that other information we have 
indicates that there are a lot of organic costs because the C-
130 parts and maintenance and so on is often interchangeably.
    I think the real issue here is overall life cycle costs. 
The committee report for last year's defense authorization 
directed that there be a cost analysis for future C-27 buys. My 
understanding is we weren't going to be seeing that report from 
you, and instead we've gotten one or two Power Point slides 
with the analysis. What I've seen trickle out of the Air Force 
over the past 6 weeks is confusing, to say the least. The 
data's been inadequate and inconsistent. It's left us all with 
more questions than answers.
    I have in front of me here three different Air Force 
documents with life cycle costs ranging from $111 million per 
aircraft, and a couple weeks later to $308 million per 
aircraft, presented to my staff, then a few days later $270 
million. I understand your analysis shop recently came out with 
a comment saying that the $111 million was not part of a 
``formalized, authorized, signed document.'' Then it appears 
the Cost Assessment and Program Evaluation (CAPE) was directed 
not to be constrained by some of the assumptions, and we have 
life cycle costs dropping down to $166 million per aircraft, 
back below the C-130 costs.
    So frankly, it's been a dizzying 6 weeks going through 
these various numbers, and unfortunately it leaves me with the 
feeling that you're trying to get this analysis to match a 
budget decision that was made by the Air Force and, frankly, 
not based on some very important information that we're getting 
again from the Army and others about the performance side of 
it.
    So we'd love to see more than a Power Point slide. We'd 
love to see some consistent analysis. I will tell you also that 
when you look at the data in terms of the payloads that are 
being carried, as you know much better than I do, these C-130s 
often do not have a large payload. When you need a part, say a 
helicopter part, and you have to move it, having a smaller 
airplane makes a whole lot more sense, when you only have one 
pallet or two or a small number of special operators.
    According to the Operation Enduring Freedom data the 
committee has received from the Department regarding the C-27J, 
65 percent of the time C-27s have been tasked to move only one 
pallet of cargo. The remaining 35 percent, they've been tasked 
to move only two or three pallets of cargo.
    I guess I would ask, in your opinion would it be more 
efficient to move one, two, or three pallets of cargo with a C-
130H or with a C-310J, and if not why not?
    Secretary Donley. Sir, with respect to the numbers, we'll 
be happy to get back with you and discuss in whatever level of 
depth you would like to how those numbers are derived. As you 
appreciate, it's all about the assumptions. It's all about the 
assumptions. So I wouldn't have any more to add to your pile 
today on that subject.
    [The information referred to follows:]

    The C-27J service cost position (SCP) is displayed in the table 
below. It reflects total life cycle costs (LCC) associated with a 25-
year C-27J program of record (POR).
      
    
    
      
    Note: Development and production estimates include Army funded sunk 
costs ($14.6 million development and $494.4 million procurement for 13 
aircraft)
Ground Rules and Assumptions:
    The POR is documented in the March 14, 2011, Cost Analysis 
Requirements Description and an April 5, 2011, depot summit memorandum. 
This POR includes a fleet of 38 aircraft, based at 9 installations with 
4 primary aircraft assigned (PAA) per unit and two additional PAA at 
the training location. The manpower requirements for the POR were 
compiled by Air Mobility Command/A1 with inputs from Air Education and 
Training Command, Air National Guard, and Air Force Material Command, 
in accordance with the Department of Defense Instruction 5000.02, 
enclosure 8.
    The Air Force met with Mr. Brent Bombach, Military Legislative 
Assistant for Senator Portman, on April 17, 2012, to discuss the SCP 
and the cost benefit analysis (CBA). The following documents were 
provided: (1) USAF manpower estimate for the C-27J cargo aircraft 
(Spartan) dated August 31, 2010; (2) C-27J SCP operations and support 
estimate dated March 26, 2012; (3) a briefing describing production 
estimate details; and (4) a description of underlying assumptions used 
to develop the depot activation support program office estimate and 
SCP, dated April 5, 2011.
Cost Benefit Analysis (CBA):
    After the SCP was endorsed, the Air Force performed a CBA of 
procuring more C-27Js than the program of record vice recapitalizing C-
130s. To support this report requirement, the Air Force conducted 
analytic comparative launch and checkout capability (LCC) excursions 
based on the SCP data. These excursions departed from the program of 
record by consolidating aircraft into larger units, applying reduced 
personnel assumptions (less than both the manpower estimate and the Air 
National Guard unit manpower document), and reducing flying hour 
assumptions. Additionally, research, development, test, and evaluation 
and military construction were not included in the excursions in order 
to focus on incremental costs. Procurement cost of $32 million was used 
vice the $65 million average procurement cost, a 30-year life cycle was 
assumed, dollars were converted to base-year 2011, and a net present 
value discount rate of 2.3 percent was applied to reflect future value. 
These steps enabled the examination of comparative LCC representing 
high- and low-cost ``bookend'' values of expected costs for the next 
incremental buy beyond the program of record 38 aircraft. Similar 
manning, basing, and operation assumptions were applied to the 
comparative LCC for the C-130 which enabled a relative comparison of 
the next incremental C-27J procurement to the recapitalization of a C-
130H. These relative comparison LCC values do not represent the full 
LCC of either system.
    The CBA showed the comparative incremental costs to procure an 
additional C-27 or recapitalize a C-130 were nearly the same. The lack 
of a cost benefit for procuring additional C-27Js led to the conclusion 
that the more versatile and capable C-130 was the better option in 
today's constrained fiscal environment.

    Secretary Donley. But I would ask you to think about the 
strategic-level discussion that we had in the Air Force about 
how big the tactical airlift fleet is going to be going forward 
and how many fleets we're going to manage. I think we made the 
right strategic choice here. We're about to embark on a C-27 
capability which would be, I think, nice to have and does 
satisfy a very narrow piece of the direct support mission that 
we provide as support for the Army.
    But as you look at fleet management overall, the better 
strategic choice in our view was to go with the C-130 because 
it is more flexible across the broader range of tactical 
airlift requirements. As we go forward, it didn't make sense to 
us to commit to building a very small C-27 fleet that was going 
to be on contractor logistics support forever and to try to 
build and sustain that going forward in the context of a 
smaller tactical airlift fleet.
    So this was the strategic level choice that we made here.
    Senator Portman. Mr. Secretary, my time has expired, but 
could you give me an answer to the question about moving one, 
two, or three pallets? Is it more cost effective to do it with 
a C-27 or a C-130?
    General Schwartz. Clearly more cost effective to move one 
pallet on a C-27, if it's within range.
    Senator Portman. So if 65 percent of the time, based on 
what you've given us in terms of data, that's what the task has 
been and the other 35 percent of the time it's to move two or 
three pallets, it would seem to me that we'd need to look at 
this cost accounting in terms of the loads being carried.
    Mr. Secretary, I'd love to get into more detail. The Power 
Points have gone up, down, all around, and to understand what 
your assumptions are would be very helpful to me.
    I appreciate both of your service so much and I just think 
we have a fundamental disagreement here on this issue, and I'd 
hope that you'd be willing to look at some data that we can 
provide that maybe changes some of the assumptions and 
therefore some of the ultimate costs.
    Thank you, Mr. Chairman.
    Chairman Levin. Thank you, Senator Portman.
    Senator Gillibrand.
    Senator Gillibrand. Thank you, Mr. Chairman.
    Welcome, Mr. Secretary. Welcome, General.
    We've had a discussion on this topic before, but my 
greatest concern is the strategy that the Air Force is using 
for your restructuring. Specifically, nearly half of the Air 
Force personnel cuts come from the Guard, but they only cost 
taxpayers a third less to maintain them compared to active 
duty. Some of the other cuts in the other Services, they did 
not take them from Guard and Reserve; they took them from 
active duty. Even when the Joint Chiefs of Staff did a report, 
they found that Guard and Reserve provide capabilities at a 
lower cost and that they could be able to rely--and would be 
more flexible than just relying on full servicemembers.
    I'm also concerned about New York being a State that's 
receiving one of the largest percentages of cuts. We are 
bearing 19 percent of the overall Air National Guard cuts. I 
question that decision, largely because of the capabilities 
that New York has to offer. Not only do we excel at homeland 
security and cyber missions and unmanned vehicle missions, but 
we also are positioned with a northern border, an eastern 
seaboard, and New York City is arguably the number one terror 
target in the Nation. So a large military presence is 
warranted.
    It's also welcomed. New York has great respect for our 
military men and women and their families. We welcome their 
presence with open arms. We also have 100 percent staffing with 
our Guard units and we have no environmental issues that would 
concern the military for all of our different bases.
    So my concern is is that the strategy for cuts are 
disproportionately affecting the Guard and Reserve, are not 
taking advantage of known benefits and strengths. So I just 
wanted to ask whether you will reconsider this strategy in 
light of some of these concerns.
    Second, I know Chairman Levin talked about the work that 
the Council of Governors has done and they have an alternative 
proposal that will cut close to three-quarters of a billion 
dollars in savings beyond your proposal. In light of that as 
well, is there any room for reconsideration of your overall 
strategy about how to handle these cuts?
    Secretary Donley. Senator, I would just repeat that the 
discussions that the Secretary had set in motion a couple of 
weeks ago with the Council of Governors continue and we have 
not yet reached a conclusion, and we will get back to the 
committee as soon as that work is done.
    I know that you've raised a number of issues here, but just 
to make sure that at the highest strategic level the rationale 
was that the Department had concluded that we had excess 
tactical lift capabilities, and that is why C-130s have been 
put on the table. As we went through that assessment, the 
majority of this capability is already in the Guard and 
Reserve, I think. So the focus of our discussions internally 
has been how to balance the Active and the Reserve component 
force structure, as the Chief has articulated, to make sure 
that we do not break the Active Force or the Guard or Reserve 
as we consider Total Force management across this particular 
fleet, and each fleet assessed on its own.
    Senator Gillibrand. Specifically with regard to two areas 
that are receiving significant cuts, Rome Labs and Niagara. 
Now, the Air Force cyber science and technology funding is 
going down in fiscal year 2013 and 2014, and that's a very 
curious decision from my perspective, particularly in light of 
Secretary Panetta's earlier testimony, particularly also in 
light of the questions that Senator Akaka asked concerning 
China being our largest threat would be electronic warfare and 
cyber attack.
    So first, why is that cut being pursued? I would consider 
this to be one of our highest priorities for long-term national 
security, and I think investing now to make sure we have the 
brightest minds, the talent and resources necessary to build 
for future threats would be a preferable approach.
    Secretary Donley. Just a couple of points. Certainly the 
civilian manpower adjustments that the Air Force has been 
compelled to make over the last couple of years has affected a 
number of installations, and especially those that are heavy 
users of civilian personnel, if you will. So that is certainly 
part of the equation.
    With respect to cyber funding, I would also note for the 
committee's broader interest here that while this is a very 
critical area for our national security going forward, the 
numbers within our cyber spending and our cyber manpower are 
moving around quite a bit. So there's not a lot of dollar 
growth on the cyber side, in part because we are gaining 
information technology (IT) efficiencies as we move down the 
road. So we are programming reductions in spending for IT 
because we believe and have experience that we can do this work 
more efficiently. So you do not see a steep ramp of growth in 
spending for IT. In fact, you see a little decline. We are 
still working through the manpower implications of that as 
well.
    Senator Gillibrand. With regard to Rome Labs specifically, 
it's going to be cut 18.5 percent. Now, I think you're aware 
that Rome Labs has a very successful collaboration with 
universities and companies in terms of developing the most 
cutting-edge technology. It's a very technology-rich 
environment. In that 18.5 percent cut, the programs that are 
suffering the most are those that support command and control, 
planning, and communications, and with STRATCOM being one of 
the main consumers of this work.
    Is someone else going to fill this need, and if not how do 
you justify losing that capability?
    Secretary Donley. Senator, I'd like to get back to you on 
the record with a more complete answer on the internal dynamics 
of Rome.
    [The information referred to follows:]

    In the fiscal year 2013 force structure announcement, the Air Force 
announced net personnel changes that included a reduction of 13 
military positions and an increase of 3 civilian positions. This 
equated to a net 1 percent reduction in personnel--from 793 military 
and civilian personnel to 783 personnel. The addition of the three 
civilian positions was a previously announced action communicated to 
Congress via the November 2, 2011, and January 11, 2012, civilian 
announcements. The reduction in 13 military positions are attributed to 
efficiencies in support of the Secretary of Defense memorandum, dated 
June 4, 2010, on improving Department of Defense business operations 
through workload divestitures, reorganizations, and consolidations, and 
the Departments efforts to optimize resources within major commands.

    Senator Gillibrand. Fine.
    My time is up, but I will just say that we've discussed 
Niagara in depth and obviously it was to serve as a cost-
sharing model. So I would like you to relook at that issue and 
consider whether adding missions or adding other, expanding 
collaborations with Homeland Security would be something 
feasible.
    Thank you.
    Thank you, Mr. Chairman.
    Chairman Levin. Thank you, Senator Gillibrand.
    Senator Wicker.
    Senator Wicker. Thank you, Mr. Chairman.
    General Schwartz, Senator McCain mentioned BRAC and you 
said we're going to need to close additional installations. 
Senator Hagan had a conversation with you about the 
requirements for pilots. How do you see the requirement going 
forward for the next 5, 10 years with regard to undergraduate 
pilot training?
    General Schwartz. We'll maintain the 1,100 per year output 
for as far as I can see, sir.
    Senator Wicker. Okay. We train those at basically three 
bases right now, and then there's a fourth hybrid base. You 
don't see BRAC addressing that particular issue, do you?
    General Schwartz. Sir, I can't speculate on that, but we do 
not see reducing capacity of the pilot production.
    Senator Wicker. So that wouldn't be your recommendation.
    Now, Secretary Donley, we had a conversation earlier about 
the tanker and, very frankly, the leadership of this committee, 
Republican and Democrat, mentioned the tanker. The winner of 
the contract came forward with an astoundingly low bid. You've 
been asked about that today. I want you to clarify something 
you said, because I think you said that if there are cost 
overruns the overruns would be borne mostly by the 
manufacturer. What did you mean by the ``mostly'' and what part 
would the taxpayer bear?
    Secretary Donley. I don't have the numbers off the top of 
my head. The program has a target cost and it has a ceiling, 
and the bids that came in that were evaluated and based on the 
source selection of last year were evaluated at the ceiling, 
the higher of those two levels. This is a fixed price contract, 
so any costs above the ceiling belong to the contractor.
    Senator Wicker. Okay, but I do believe the record will show 
that you said ``mostly.'' Was that just a slip of the tongue?
    Secretary Donley. Above the ceiling, it's on the 
contractor.
    Senator Wicker. Above the ceiling, it's on the contractor. 
Well, let me just say, we're going to be looking at this very 
closely. There was a very low bid. I think you'll find that we, 
Congress, mean for it to be honored and we don't want to see 
any slippage there.
    With regard to the C-27Js, Senator Portman just said that 
he has a fundamental disagreement with the Air Force on this 
issue and we want to see more facts. I want to join him on that 
and observe, based on the testimony and the questions today, 
that there appears to be a fundamental bipartisan disagreement 
between a large number of members of this committee and the Air 
Force position.
    I think it was mentioned already that last week, in 
response to my question, General Odierno--I asked him, did the 
Air Force consult the Army? Was the Army included in this 
decision? Basically, his answer was that the Army was brought 
into the conversation after the decision was made. I quote from 
General Odierno: ``I would say we had a discussion about it as 
a joint group together once the decision was made.''
    There are some real problems with this decision and let me 
just observe that without asking you to comment.
    Also, with regard to the Global Hawk, I want to join myself 
with the comments of the chairman and also with Senator Brown. 
We need to be able to rely on what this committee is told and 
we shouldn't expect such a reversal in a short period of time.
    The number one unmet requirement of combatant commanders is 
the need for persistent ISR. Mr. Secretary, just 7 months ago 
Deputy Secretary Carter certified in writing to Congress that 
the Global Hawk was essential to national security, there was 
no other acceptable capability to meet the requirement, and 
that the Global Hawk was $220 million less expensive per year 
to operate than the U-2.
    Now essentially we're told that the requirements have 
changed, the assumptions have changed, the data is different. 
Seven months later, we're told: Never mind what the Under 
Secretary for Acquisition came and said in a certified 
statement.
    Mr. Secretary, is there a business case analysis in writing 
that is available to us that supports the termination of this 
$4 billion aircraft?
    Secretary Donley. Senator, I think I'm confident that we 
can provide you the analysis that ties to the changed 
requirement. As the Chief suggested earlier, some of this is 
classified and needs to be discussed offline. But there were 
changes in the requirement that allowed us to reconsider. When 
the certification came over on Global Hawk Nunn-McCurdy breach 
previously, the certification to which you referred, the 
question then was is there anything else that could provide the 
capability that the Global Hawk provides to meet that 
requirement? So it was a higher requirement, it was focused on 
the persistence of the Global Hawk capability, and the analysis 
at that time said it would require additional dollars, it would 
be more expensive to have the U-2 provide that persistence at 
that level of activity.
    But when the level of activity changed, the requirement 
changed, we concluded that the U-2, given its existing fleet, 
would be able to meet that requirement. Then the issue was in 
the cost comparison, what would it take to have any other 
aircraft operate as well as the U-2 with that requirement? At 
that point the comparison between the sensors became evident 
and the need for Global Hawk Block 30 to have an improved 
sensor adds cost to that program through the end of this 
decade. When you look at the costs of the two programs down on 
paper, it's cheaper for us to continue with the U-2 program. 
The airframe still has life through about 2040 and it needed 
minor upgrades to the weapons system, which we are undertaking.
    But taking all that into consideration, it's cheaper and we 
can get that mission done with the U-2 going forward.
    Senator Wicker. Well, we'll have a further conversation on 
that.
    Briefly, Mr. Secretary, let me just mention, you're 
proposing to take 10 C-310Js from Keesler, move them to 
Dobbins. We have provided considerable capability at Keesler 
for the C-130Js. The taxpayers have expended a considerable 
amount of money to accommodate the C-130J airframes and their 
air crew at Keesler, including state-of-the-art simulators.
    You're not going to be asking us to do some MILCON at other 
bases to replace this state-of-the-art MILCON that we have 
already available for these C-130s at Keesler, are you?
    Secretary Donley. Senator, typically when aircraft move, a 
different type aircraft moves from one location to the next, 
there are sometimes MILCON. We will have no major MILCON 
activities associated with this. There will be some minor what 
are referred to as add/alter adjustments to existing 
facilities.
    Senator Wicker. Well, if implemented this move would leave 
Keesler without a flying mission, and the taxpayers have 
expended considerable dollars for the C-130Js, and I'm very 
concerned about this proposal.
    Thank you for your indulgence, Mr. Chairman.
    Thank you, gentlemen, for your service.
    Chairman Levin. Thank you, Senator Wicker.
    Senator Blumenthal.
    Senator Blumenthal. Thank you, Mr. Chairman.
    I join my colleagues in thanking you for your service and 
note that the description that you gave earlier of trading, I 
think you put it, size or number or quantity for quality is a 
dilemma faced by many of your colleagues in DOD. Certainly we 
are sympathetic to not only the goal, but the difficulty of 
achieving it, and really thank you for your tremendous 
leadership in this time of austerity and needing to do more 
with less.
    I would like to focus first of all on the JSF and the delay 
in procurement schedule. I know you've talked about it a bit. 
But overall, doesn't the stretch-out or delay increase 
potentially the cost of procurement per plane?
    Secretary Donley. It probably does. Those details are being 
worked now and there is an updated systems acquisition report, 
which will come to Congress later this spring.
    Senator Blumenthal. Do you anticipate it will be this 
spring that we'll learn more about those costs?
    Secretary Donley. Yes, sir.
    Senator Blumenthal. Can you give us a rough estimate or 
description of what the impacts may be of this stretch-out or 
delay?
    Secretary Donley. Well, it adds time to the program and 
that usually means cost. So in simple terms that's what it is. 
But it is also important to recognize that part of the reason 
for this stretch-out is that we are consciously avoiding larger 
costs that we would have to incur sooner in the program if we 
had to take aircraft off the production line and send them 
right back in to be refitted or upgraded to the latest 
configuration. So we're trying to minimize the number of 
aircraft that we have to do that with by slowing this ramp.
    Senator Blumenthal. Thank you.
    Like others who've asked you for additional information on 
the C-27J, I'm very concerned about the impact on our active 
force and our National Guard. I wonder whether there is any 
consideration being given to modifying the decision on that 
program?
    Secretary Donley. Senator, as I mentioned, the Secretary of 
Defense had opened the window to provide the Council of 
Governors an opportunity to make suggestions, and that 
discussion with the Council of Governors continues. I haven't 
had a chance yet to brief the Secretary of Defense or the DOD 
leadership. That will occur later this week. We'll get back to 
the committee when that is done.
    But I would also note, if I might, that in recognizing the 
impact of the C-27 changes across the Guard and specifically 
the units that might be impacted, where we could we took 
mitigating action to bring in follow-on missions--MC-12 
missions, RPA, mission control units. So where we've been able 
to, we have put in mitigating issues behind the C-27.
    General Schwartz. I would only elaborate by saying that 
putting the C-27 back is a $1.4 billion proposition.
    Senator Blumenthal. Well, General Schwartz, since the 
Secretary mentioned it, would you comment on the MC-12 role in 
homeland security and crisis response and its potential mission 
in those areas of responsibility?
    General Schwartz. It is a very good platform which involves 
both electrooptical and infrared capability, as well as signals 
capability on the same platform and a capacity to support 
ground forces simultaneously with gathering of intelligence. 
Clearly, we have 37 airplanes presently. Five more are in the 
process of delivering. Thirty of those are deployed. Seven have 
remained stateside for training purposes The reputation that it 
has gained is that this is a platform that needs to remain in 
the enduring force structure, and it will.
    It clearly has applicability to domestic missions, properly 
executed, whether that be support to counterdrug missions in 
the south and southwest area, or other kinds of law enforcement 
sort of applications, again properly executed. So the MC-12 is 
a high utility platform, and the reason it started in the 
Active Duty was because we did it in 7 months. We fielded the 
capability in 7 months time and built the crew force and all 
that went along with it.
    Once we hit a steady state, it is a suitable mission and an 
enduring one for the National Guard, sir.
    Senator Blumenthal. So you would see it continuing?
    General Schwartz. Without a doubt.
    Senator Blumenthal. Finally before my time expires, I 
wonder if you could talk, General Schwartz, about the Pave Hawk 
helicopter and what the status of that program is?
    General Schwartz. We just recently released a draft request 
for proposal for the Combat Rescue Helicopter replacement. That 
acquisition process is underway, and here again this is an area 
of our Air Force that has very significant joint team support, 
for obvious reasons, and it is a core Air Force mission that 
we're going to sustain.
    So the program is underway. It is in the budget in the 2013 
recommendation and it is not something that we want to back 
away from, sir.
    Senator Blumenthal. So you would see a continued commitment 
to it?
    General Schwartz. Certainly would.
    Senator Blumenthal. Thank you.
    Thank you, Mr. Chairman.
    Chairman Levin. Thank you, Senator Blumenthal.
    Senator Graham.
    Senator Graham. Thank you, Mr. Chairman.
    Thank you both for coming. As you can tell from the 
questions here today, all of us, a lot of us, have different 
concerns about how you meet the budget requirements placed upon 
you. Maybe we should be thinking about are these requirements 
too severe, given the threats that we face and all the good 
programs are at risk.
    So, General Schwartz, you're right, we can't have it both 
ways. We can't rearrange the budget for you, send it back to 
you, your priorities, and say, now go do all we want, if we 
don't increase the money.
    But, having said that, I think the Global Hawk and the U-2 
discussion is really a fascinating one for me. This is 2012 and 
we're talking about how a manned aircraft can do a better job 
than a drone through now and 2040. I just don't get that when 
it comes to this kind of mission. It doesn't make common sense 
to me, and what I'm worried about is what happened to the 
Global Hawk in terms of cost? I mean, it's gone up just 
exponentially over what was proposed. Is that because we keep 
changing the requirements or because of problems with the 
contract?
    General Schwartz. Senator Graham, two things. First of all, 
it's important to appreciate we're not getting out of the 
Global Hawk business. We're going to retain the Block 40 Global 
Hawk capability for ground moving target indicator, as well as 
the communications platform for Block 20. So we're focused on 
the Block 30.
    A couple things. I think that reliability of the Global 
Hawk was an issue. Subsystems in the Global Hawk aircraft were 
problematic. The generators, for example, are a case in point, 
which the contractor has corrected, but it took time to do so, 
and resources.
    Senator Graham. Did they competitively bid for this 
program?
    General Schwartz. They did.
    Senator Graham. Shouldn't we have a hearing one day, Mr. 
Chairman, about how a system competitively bid could be so 
overrun with costs and find out where the problem lies? Is it 
the Air Force changing the requirements or is it the contractor 
not being able to fulfill their promise?
    General Schwartz. You will recall, Senator, that the 
original birth of this system was as a tech demonstrator.
    Senator Graham. Right.
    General Schwartz. So it had an unusual birthing process, to 
be sure.
    Senator Graham. Because we had a need, right?
    General Schwartz. This was a technology effort that proved 
out, and we're going to make use of the Global Hawk capability. 
NATO will with the Alliance Ground Surveillance, the Germans 
will with the Block 30 equivalent platform.
    Senator Graham. I guess what I'm saying is that we're 
shelving some of the Block 30 Global Hawks along with the idea 
it doesn't work as well as the U-2. I just find that hard to 
believe. The U-2 is a great platform and great crews and 
maintainers, but I just can't believe that a manned aircraft 
can do all the things that these drones are capable of doing 
for the next 25 or 30 years.
    General Schwartz. In the long run, Senator Graham, I would 
agree with you.
    Senator Graham. Let's see if we can.
    General Schwartz. I'm not dealing with the long run.
    Senator Graham. I know, I know. But somebody needs to be, 
and maybe that's what we're all up here for, is to try to find 
out the long run and not create budget crises that really make 
short-term decisions that are not long-term smart. So I'd like 
to use the Global Hawk/U-2 debate as a case study in why 
programs cost more than they should, why they take longer, and 
where are we as a Nation with a vision.
    I just envision more drones, fewer manned aircraft when it 
comes to surveillance, because the cost of losing a pilot in a 
war is a lot different than it is losing a drone.
    So now let's move on to the Air Guard. You've gotten a lot 
of questions about how we're going to meet our budget goals on 
the personnel side. I guess the problem I have, like a lot of 
us up here, is that on the Air Guard side we're losing 5,100 
people from the fiscal year 2012 enactment and 3,900 on the 
active duty side. There's 328,900 Active Duty airmen, there's 
7,500 active duty reservists in the Air Force Reserves, and 
101,600 Air National Guard. They get hit disproportionately 
harder than anybody else by a factor of three or four. Why is 
that?
    Secretary Donley. Senator, we have outlined the process 
that we went through based on changes in the strategy and 
adjustments in force structure that came from that, reductions 
in fighter force structure, reductions in mobility force 
structure. We then made decisions about which platforms to take 
additional risk in, and then we went from there to look at the 
Active Duty-Reserve component ratio in each of those platforms 
to make sure that we could sustain a ready force.
    Senator Graham. Is the basic premise that if you have less 
fighters you ought to take them out of the Air Guard and put 
them in the Active Force?
    General Schwartz. The logic, Senator, has to do with the 
anticipated tempo in each of the components. What we did was we 
said we did not want to operate the Active Duty on a routine 
basis below a one to two deploy to dwell, 6 months deployed, 1 
year home, and not less than one to four, ideally one to five, 
for the Guard and Reserve, given those are our management 
redlines.
    We looked at the available force structure and the expected 
activity level and worked the mix in order not to cross those 
thresholds.
    Senator Graham. I guess my concern is that the lessons 
learned from the last 10 years is you can't go to war without 
the Guard and Reserve. You all know that. it's not a slam on 
anybody. Our Active Air Force is the best in the world by a 
factor of many, and the Guard and Reserve does have capability 
and experience.
    This idea of using Guard units with active associates is a 
good idea, but only so far. I'm not trying to create a cheaper 
Air Force in the National Guard, Air Guard. I'm not trying to 
create more Air Guard wings where you have 80 associates from 
the Air Force making that Air Guard unit about two-thirds 
cheaper to maintain, equally deployable. That's a good concept, 
but only so far.
    I just think what you're hearing from the committee here is 
that we're losing a lot of capability in a part of our military 
force that's just cheaper to maintain, and these are pretty 
experienced folks and they've gone to war, they've done a good 
job, and they get home and a lot of their missions are going 
away. That talent pool that we're losing I think has to be 
factored in there.
    So I hope you can work something out with the governors and 
I would urge you to do that.
    My last inquiry is about Iran. How large is the Iranian air 
force?
    General Schwartz. It's a modest air force. I don't have 
specific numbers. I can give that to you for the record.
    [The information referred to follows:]

    The Islamic Republic of Iran operates two separate air forces, the 
Islamic Republic of Iran Air Force (IRIAF) and the Islamic 
Revolutionary Guard Corps Air Force (IRGCAF). In terms of assets, the 
IRIAF operates a wide range of tactical aircraft: U.S.-built aircraft 
such as the F-4, F-5, and F-14; fighters from Russia, China, and France 
such as the MiG-29, F-7, and Mirage F-1; as well as several types of 
indigenously-produced Iranian aircraft that appear to be based off of 
the U.S. F-5. The IRGCAF operates one type of jet-powered combat 
aircraft, the Russian-built Su-25 Frogfoot ground-attack plane, as well 
as various transport and utility aircraft. IRIAF missions include 
ground attack, air intercept, and long-range strike; however, the 
IRGCAF mission set is limited to missions such as ground attack and 
support of ground troops. The combined force of the IRIAF and IRGCAF is 
currently estimated to consist of roughly 600 operational aircraft, 
including about 330 combat aircraft. The combined personnel strength of 
the IRIAF and IRGCAF is estimated at around 30,000.
Sources:
    NASIC: 2012 Global Threat Estimate--Threats to the U.S. Air Force 
(released February 2012; accessed April 17, 2012).
    Jane's World Air Forces: Iran (updated April 4, 2012).

    Senator Graham. When you rate air forces in the world, it 
is an older, more modest air force; is that correct?
    How large is their navy?
    General Schwartz. I'm not an expert in that area, sir.
    Senator Graham. Is it fair to say from the Air Force side 
if you were asked to take the Iranian air force down, that it 
is well within our capabilities?
    General Schwartz. One on one, there would be no doubt about 
that. But it's not just airplanes against airplanes. This is, 
as you are very well aware, this is a more complex undertaking.
    Senator Graham. They have rockets, they have missiles.
    General Schwartz. They certainly do.
    Senator Graham. But my question is about their air force. 
Their air force would not fly long and it would not fly far; do 
you agree with that, in a fight with the United States?
    General Schwartz. If that was the mission, that would be 
the outcome.
    Chairman Levin. Thank you, Senator Graham.
    Senator Begich.
    Senator Begich. Thank you very much, Mr. Chairman.
    Thank you both for being here. I appreciate it.
    General Schwartz, we've had a lot of good discussions. 
First I want to thank you for coming up to Alaska regarding 
Eielson and trying to understand and help the people of Alaska 
understand what the intent of the Air Force is and the process 
of the Air Force.
    But here's my struggle, and I continue to struggle. First, 
in your analysis the savings that occur or the analysis that 
says here's how much savings will occur are put into the budget 
and then it's analyzed for us to all look at. But as we both 
know, you're just now sending up the on-site team--I think it's 
going to be second or third week of April--to actually do the 
full analysis.
    Here's my struggle: that we know, based on your statements, 
there are savings that need to be achieved in the budget. We 
understand that, both to the Secretary and the General. But the 
problem is you're now starting to do the full analysis to 
understand what the savings are. I understand you did tabletop, 
but what goes on in the Pentagon and what's real are sometimes 
very different on the ground.
    So I'm trying to understand how you get to these savings, 
and we received a letter recently with some information. But do 
you have a detailed analysis that you utilize to determine the 
savings that would be achieved by the Air Force in regard to 
Eielson? I'm going to use Eielson because my worry is there's 
40-some other States that are being affected with other types 
of reductions, and if you're now just going through this 
process of really fully doing the on-the-ground analysis, how 
are we to make a decision when our markup is occurring so soon?
    Secretary Donley. Senator, certainly we have programmed and 
budgeted for operations at Eielson, as we do for other bases 
and units. We understand generally the costs of operations for 
the infrastructure, for the personnel, for the aircraft, and 
that is programmed. So if we make force structure adjustments 
that move or reduce, we have a pretty good handle on what the 
personnel, flying hour, force structure, operational impacts 
are, and those numbers are used as the basis for our decisions.
    Senator Begich. Let me follow up on that. In the report 
that I saw, you're going to achieve savings in the base support 
of Eielson beginning in 2015. But you're starting the process 
now, and so I guess I want to ask two parts. We've heard some 
numbers in regards to personnel, and I want to dice this a 
little bit because I'm concerned the process and this is the 
exact same debate we had when BRAC occurred several years ago. 
It is the exact same debate.
    But we're not going through a BRAC process now. What you're 
going through is a realignment. Exactly the same debate. So my 
concern now is is this a process that's going to go around the 
loop.
    Why I want you to dice the personnel issue, you have 
uniformed personnel and you have civilian personnel. Can you 
tell me now what you anticipate the civilian reduction will be 
for Eielson? Whoever wants to answer this.
    General Schwartz. The total reduction of personnel is about 
660, based on reconfiguring Eielson to a support base rather 
than its current full-up configuration. I don't recall 
specifically the split between military and civilian, and we'll 
provide that for the record, Senator.
    [The information referred to follows:]

    In the fiscal year 2013 force structure announcement, the Air Force 
announced net personnel changes that included a reduction of 13 
military positions and an increase of 3 civilian positions. This 
equated to a net 1 percent reduction in personnel--from 793 military 
and civilian personnel to 783 personnel. The addition of the three 
civilian positions was a previously announced action communicated to 
Congress via the November 2, 2011, and January 11, 2012, civilian 
announcements. The reduction in 13 military positions are attributed to 
efficiencies in support of the Secretary of Defense memorandum, dated 
June 4, 2010, on improving Department of Defense business operations 
through workload divestitures, reorganizations, and consolidations, and 
the Departments efforts to optimize resources within major commands.

    Senator Begich. Let me pause you there, General. This is a 
question we've asked in our meeting down in the Visitors 
Center. We've had it out in Alaska. We've asked in writing. 
This is the fourth request. Why I ask this is because it's 
critical on the civilian piece, because under BRAC there are 
special requirements when you start touching civilian employees 
and the quantity, under the law.
    So the question I would have is, that number is critical 
and for that not to be supplied to us is problematic as we are 
going through this markup.
    General Schwartz. That's why it was a 2015 target, sir, and 
the result of which will be confirmed by the site survey that 
occurs next month.
    Senator Begich. I know, but here's the challenge, General. 
We're starting the process. I went through this with missile 
defense. They always talk about the year we're in. The 
decisions we make here at the markup have long-term impacts to 
the military deployment of services. It doesn't matter whether 
it's Air Force, Army, whatever. So for us to be in a narrow 
window is unacceptable.
    In other words, you should be able to say to me in 2013 
here's what it's going to be, 2014 it's going to be this, 2015 
it's going to be this, 2016 it's going to be this, because in 
order for you to make this decision that you brought to us I'm 
assuming someone in the Pentagon had these discussions. So it 
shouldn't be new information. It should be readily available 
like that, because anything you do in the DOD is long-term. 
Everything we do here, even though it seems like it's a 1-year 
pain in the neck at times because of the short-term process, it 
creates long-term implications.
    So that's what I want to know, because if you're saying to 
me in this narrow window, yes, nothing touched in 2013 
civilian, that's an unacceptable excuse, because what we do 
here will affect civilian employees in 2015, in 2016, 2017. I'm 
not even sure because I don't know that. But that's what you 
stated.
    So do you get my point there?
    General Schwartz. I do, sir.
    Senator Begich. Secretary, do you understand what I'm 
referring to?
    Secretary Donley. I do, and we'll do the best we can to get 
you the numbers available on the timeline you need.
    Senator Begich. I'm looking--not the best. I'm expecting an 
answer because we have to make these decisions, and it's very 
difficult. I'm a huge supporter of the military, but when I 
hear that the decision has been made on what it will save and 
now we have teams going up there to determine it, if I was any 
other Senator I'd be asking the exact same question from their 
own home States, because if the analysis is now being started 
for our State are we just the anomaly? Are we the unique State? 
My bet is no. I'm assuming it's happening in other States. So I 
expect that.
    The other thing, I know a month ago our team was up there. 
We have requests that are still due that we have not received. 
So I would hope that you would get that to us. It's critical.
    Then the last thing, if I can just tag on one item on the 
tankers, just a question because I want clarification on this. 
That is, you called it--I can't remember the phrase you used, 
but you have ceiling and you have bid. Or are they the same?
    Secretary Donley. They're not. Its target and ceiling are 
the terms.
    Senator Begich. What do you budget for?
    Secretary Donley. The ceiling.
    Senator Begich. So in your budgets--I'm just going to use a 
hypothetical--if a tanker is a dollar ceiling and it was bid at 
50 cents, you really budget for the dollar, correct?
    Secretary Donley. I believe we're covered for that.
    Senator Begich. Believe or yes? Confirm that. Because you 
see the difference?
    Secretary Donley. I do, I understand.
    Senator Begich. Okay, and I'll leave it at that, because I 
think that's what one member was trying to get to.
    Thank you, Mr. Chairman, for allowing me to extend a little 
bit there.
    Chairman Levin. Thank you very much, Senator Begich.
    Senator Vitter.
    Senator Vitter. Thank you, Mr. Chairman.
    Thank you, Mr. Secretary and General, for all of your 
service.
    I wanted to start by asking about the A-10s. The Air Force 
is proposing disbanding A-10 aircraft at the 917 Fighter Group 
at Barksdale Air Force Base and the Louisiana National Guard's 
259th Air Traffic Control Squadron at England Airpark. Now, 
they have been used extensively in joint training, specifically 
at the Joint Readiness Training Center (JRTC) at Fort Polk in 
the Green Flag East Exercises. 70 percent of all those 
exercises involve those A-10s, and that training is absolutely 
essential, the best training available for the sorts of 
conflicts we have been in.
    I'm concerned that the Air Force decision to cut that is 
being made in a narrow smokestack while the use is joint and 
that's not fully being appreciated or factored into the 
decision. Can you tell me what, specifically what consultation 
with the Army or with the Louisiana National Guard went on 
before that Air Force decision was made?
    Secretary Donley. Sir, back to the strategy-driven changes 
here, the adjustments in the strategic guidance impacted the 
second major contingency and directed us not to plan for 
extended operations, for stability operations, on an ongoing 
basis. That's what affected the force structure requirements 
for the second contingency most.
    Having come off of recent fighter force structure 
adjustments to the F-16 force and to the F-15 force, that 
strategic guidance focused on taking additional risk in the A-
10 force structure. So that is how we got to additional 
reductions in the A-10. Then we worked through, as the Chief 
and I have described, the more detailed analysis of inside the 
A-10 force structure the Active and Reserve component mix, 
making sure that we had the right balance so that we could meet 
the requirements of the strategy, we could meet surge 
requirements, and we could maintain ongoing expeditionary 
operations if required to do so, make sure we didn't break the 
Active Force----
    Senator Vitter. In all that strategic context, what was the 
consultation ahead of the decision with the Army regarding this 
specific decision, and the Louisiana National Guard?
    General Schwartz. The Army was certainly part and parcel of 
this conversation throughout. They were at the table when these 
decisions were taken. I'm not saying they liked them, but they 
understood them.
    Again, General McKinley was also at the table and was aware 
of this, and we interacted with him. I can't say for certain 
whether the The Adjutant General from Louisiana was informed.
    Senator Vitter. With regard to this JRTC training at Fort 
Polk, will anything replace those A-10s?
    General Schwartz. Just like at the National Training Center 
out in California, we'll support the training demand there as 
we do in California.
    Senator Vitter. Now, the nearest at least A-10s are a ways 
away. Was there a cost analysis done of what that involves 
compared to what we're doing now?
    General Schwartz. Senator, again we need to sort of 
remember that A-10 isn't the only airplane that can do close 
air support or do fast forward air controll, as we call it. The 
F-16 is certainly capable of doing that, the F-15E is. We have 
bigger planes, including the B-1, doing close air support, as 
you're aware. So the bottom line is here that, while history 
sort of encourages us to think in traditional terms, there is 
more variety out there to support the training and the close 
air support mission than just the A-10.
    Senator Vitter. Take the A-10 out of my last question. What 
will replace that aspect of training at JRTC and what's the 
cost analysis of that? Was that done prior to the decision?
    Secretary Donley. I don't recall whether there was a cost 
analysis of what replaces it. But back to the Chief's point, 
there are a number of assets available to support the JRTC. So 
it would depend on what the demand signal is for an exercise in 
terms of how the Air Force would support it, where those assets 
might come from to do that work.
    I would also add, in addition to the platforms the Chief 
has mentioned, the RPA that we have added have brought air-to-
ground capability that is being used extensively as well.
    Senator Vitter. Okay. On Global Strike Command, that was 
stood up in December 2009 to improve the safety and security 
and effectiveness of nuclear-capable assets, particularly 
following the 2007 nuclear weapons incident. Is there any 
discussion whatsoever now about reversing that decision and 
going to the pre-Global Strike Command model?
    Secretary Donley. No.
    Senator Vitter. Final focus, B-52 funding. B-52s continue 
to be very significant in so many ways. One of the proposed 
cuts that impacts them is the Connect program, which would 
provide digital communication and mission retasking capability. 
Give us a sense of why you think that's justified and what 
capability the B-52s will be left with absent that upgrade?
    General Schwartz. The B-52s will have an older, but 
sustainable, communications system both for tactical and 
strategic command. This was an affordability issue for us and 
that was the primary motivation, that we could perform the 
mission with the legacy system and that's what we decided to 
stay with.
    Senator Vitter. Just in layman's terms, one big difference 
would be that the planes have to sort of come back and land to 
be retasked in terms of a mission, compared to what the Connect 
capability would have been?
    General Schwartz. There is still an airborne retasking 
capability, not as versatile, not as broadband, but there's 
still an airborne retasking capability.
    Senator Vitter. Okay. Thank you, Mr. Chairman.
    Chairman Levin. Thank you very much, Senator Vitter.
    Senator Manchin.
    Senator Manchin. Thank you, Mr. Chairman.
    Thank you both for your service.
    Secretary Donley, I recently read a disturbing article that 
the Afghan air force officials may have been using aircraft to 
transport narcotics and illegal weapons. This report, combined 
with the actions of an Afghan air force colonel who killed 
eight of our Air Force officers, shows a troubling state of 
affairs for the Afghan air force. I understand that you don't 
have responsibility for the training of the Afghan air force.
    Also, I would like to know if we have established the 
Afghan air force with our money, American money, which I would 
assume we did? What types of missions are they flying and do 
these missions justify the investment we're making? Just an 
overall assessment from you of the Afghan air force in light of 
all of these troubling events?
    Secretary Donley. Some of these events, Senator, have been 
indeed troubling. But we remain committed to our continuing 
effort to help the Afghans develop an indigenous air force. 
They are flying a G-222 aircraft, which is the equivalent of a 
C-27-like aircraft. They've had several delivered. They 
continue to try to work up the operational capability, improve 
the reliability of that system. They fly MI-17 helicopters, MI-
35 helicopters as well.
    I would say that they have made important contributions at 
the national level. They've supported Afghan elections by 
moving ballots around the country to support the electoral 
process, and they've also provided leadership lift when that 
has been required. So especially in the remoter parts of this 
very rugged country, the contributions that they bring are 
important and we need to continue supporting that element.
    Senator Manchin. We are paying? We're basically footing the 
whole bill?
    Secretary Donley. Afghan national security funds are doing 
that. There are NATO funds involved. So we're doing this with 
partners.
    Senator Manchin. We're not training them? If we're putting 
all that money in, why would we not be training?
    Secretary Donley. We are training.
    Senator Manchin. Oh, we are training.
    Secretary Donley. We are training. We are responsible for 
the security of our airmen who are performing that mission.
    Senator Manchin. I think you would have to understand why 
some of us are so upset, when we're cutting, we're cutting our 
own Air Force by over 200 aircraft by 2013, while we're 
building up the Afghan air force. It's hard. It's hard for 
those of us in West Virginia to understand that logic.
    General Schwartz. Senator, I think the bottom line is if we 
want the Afghan National Army to provide for security so that 
the partners there can rely on that, that they need an air 
element in order to support the ground forces. One case in 
point is a recent event where they performed their first 
casualty evacuation event. The helo went out, recovered injured 
Afghan Army troops, and returned them to Level III care.
    Imagine the psychology of this, where the Afghan army 
begins to understand that if they're wounded it isn't over for 
them and they won't be left on the battlefield to bleed out. 
These are the kinds of things that the Afghan air force can do 
on behalf of the army that will reinforce their capacity to 
perform the defense mission.
    Senator Manchin. Will they be able to maintain that without 
our consistent help and constant help in perpetuity?
    General Schwartz. Sir, I can't say about perpetuity.
    Senator Manchin. Basically, you've assessed them and the 
quality of people that they are and what their mind set is.
    General Schwartz. Clearly we will need to have a continuing 
training mission over the years.
    Senator Manchin. That's my problem.
    General Schwartz. But it will not be a combat mission.
    Senator Manchin. I just believe we should be out of there, 
period.
    Thank you.
    Chairman Levin. Thank you, Senator Manchin.
    Senator Webb.
    Senator Webb. Thank you, Mr. Chairman.
    Secretary Donley, General Schwartz, I have to say this has 
been quite a lively hearing. I think from both of your 
histories you know what happens when rice bowls are at risk. 
It's been very interesting to watch this.
    I also would like to say, having spent time in the 
Pentagon, I don't think anybody, any of our compatriots up here 
or anybody, should walk away from this hearing believing that 
these issues aren't thoroughly argued and scrubbed inside the 
Pentagon. I think probably the toughest job would be at a 
higher level in the Pentagon, as on any given day you're 
working on three budgets. As you both well know, you're 
implementing one, you're arguing one over here, and you're 
developing one.
    It takes an enormous amount of time. I just recall this 
period when we had Gramm-Rudman--and Secretary Donley, you were 
in public service at the time, too, when Gramm-Rudman came in 
there in 1987-1988, when we had to take 10 percent out of a 
budget that had already been scrubbed by OMB. Very, very tough. 
I understand the attempts at fairness here that you're trying 
to put on the table. I just want to say that for the record.
    There's been a lot of discussion about BRAC. I have been 
one who has supported something, for lack of a better term, an 
overseas BRAC. With respect to Pacific-Asia, this is not a 
proposal at this point that would reduce in any way our 
presence or our effectiveness over there, and of course we're 
attempting to take on that. It's more an objective of gaining 
an efficient restructuring without reducing our overall 
capabilities and without messaging in a negative way what our 
strategic objectives are in that part of the world.
    In that regard, I have some questions that I've raised in 
other forums about the capacity in which a number of the Air 
Force installations are operating in that part of the world.
    General, what would you say the percentage capacity would 
be of permanently assigned Air Force units at Andersen Air 
Force Base, Guam?
    General Schwartz. Sir, except for base support, in terms of 
aviation there are no permanently assigned aviation units at 
Andersen.
    Senator Webb. Do you have one, a rotating unit that is 
permanently considered to be----
    General Schwartz. I mean, transitions. But we have a bomber 
presence, a continuous bomber presence at Guam, and we have a 
periodic fighter presence there as well.
    Senator Webb. But in terms of, let's just say, a 
permanently assigned rotational force, as a comparison a Marine 
battalion?
    General Schwartz. It's a squadron equivalent.
    Senator Webb. You have a squadron equivalent, which would 
be how many aircraft?
    General Schwartz. It's six to eight bombers, for example.
    Senator Webb. On any given day, you would assume that there 
would be six to eight at Andersen?
    General Schwartz. Or basing from Andersen going elsewhere, 
correct, sir.
    Senator Webb. How about Yokota?
    General Schwartz. Yokota has a squadron of 18 C-130s as the 
flying operation.
    Senator Webb. How about Misawa?
    General Schwartz. Misawa has two squadrons of F-16s. I 
think it's 54 aircraft, sir.
    Senator Webb. What would that be in terms of--those bases--
and if you're not comfortable doing this off the cuff, I'd 
appreciate having this within the next 10 days or so, because 
I'm going out there. Here's what I'm looking for: Andersen, 
Yokota, Misawa, Kadena, the number of rotionally assigned. I 
understand what you're saying when you say it's not permanent 
units, but rotational units that you could expect; and what 
percentage capacity that would be on these installations, 
number of aircraft, and maybe even a historical referent.
    I think when I was working out there in 1973-74 we saw the 
ultimate extreme in terms of capacity because they were running 
B-52s daily into Southeast Asia from Guam and it was really at 
max load.
    General Schwartz. Sir, we'll provide that to you before 
travel. The only thing that I would caution on, and we'll do so 
in writing as well, is that that the major bases, in particular 
Andersen and Kadena, are expansion locations in contingencies. 
That needs to be considered as well. With your permission, 
we'll provide that data.
    [The information referred to follows:]

    There are no permanently-assigned Air Force aviation units at 
Andersen Air Force Base. However, there is one permanently assigned 
U.S. Navy unit flying MH-60S helicopters with 14 aircraft assigned. In 
evaluating installation capacity, the Air Force considers numerous 
factors, such as runway operational capacity, ramp and hangar space, 
airspace and range availability and capacity, housing and base 
operating support, among others. Capacity also varies depending on type 
of missions being supported. In the event of contingency requirements 
in the Asia-Pacific region, a vast majority of required forces would 
rotate in from outside the region. Therefore, we must maintain the 
capacity to absorb those forces when the situation arises.

    Senator Webb. I understand that. Any way you want to 
present that's fine.
    I understand also we all understand if there really were a 
broadly based contingency situation in that part of the world 
there'd be a lot of other assets that would be put into play, a 
lot of other facilities that would be put into play as well. 
But I'd appreciate that. Thank you very much.
    Thank you, Mr. Chairman.
    Chairman Levin. Thank you very much, Senator Webb.
    Senator Chambliss.
    Senator Chambliss. Thanks, Mr. Chairman.
    Gentlemen, first of all, thanks for your service. Thanks 
for always being willing to talk about the various issues that 
you and I have in common and that we have discussed over the 
years. You have always responded to my inquiries.
    I was going to raise an issue relative to Global Hawk, 
which is a key asset to the intelligence community. I 
understand there have been several questions asked about that, 
so I'm not going to go into it. But just know that I am very 
concerned about the cancellation of a program that provides 
such a great asset to the community, and at the same time as 
one that's been certified by the Department through Secretary 
Carter to be virtually irreplaceable. So with that, I want to 
move on to something else.
    Mr. Secretary, one of the issues that we worked on very 
closely was the reorganization of Air Force Materiel Command 
(AFMC). I appreciate your willingness to accommodate many of 
the concerns that Senators had with respect to that, that 
reorganization. While I do not feel completely comfortable with 
everything the reorganization will do, I believe we have the 
procedures and reporting requirements in place to identify and 
correct problems should they arise.
    My main concern with the reorganization is the effect that 
it may have on sustainment of weapons systems, given that the 
sustainment program management and depot maintenance 
activities, which were formerly combined in a single chain of 
command, will now be separated into two separate chains of 
command. Now, can you just for the record explain why you think 
this new construct that separates sustainment program 
management and depot maintenance functions will help or at 
least not hurt the Air Force's ability to sustain weapons 
systems?
    Secretary Donley. Sir, our intent in this restructure was 
to support, better support the Commander of AFMC in his 
oversight of the procurement and the sustainment of weapons 
systems, and to strengthen the acquisition chain of command 
that helps support those systems, all the way from the system 
sustainment and the air logistics complexes all the way up 
through the major--through the program offices, and to develop 
a stronger acquisition chain to do that, and in the process 
reduce his direct reports from 12 to 5, and in that process 
help us to meet required reductions in overall size of our 
civilian strength in the Air Force.
    So that was the rationale for the proposals that we had put 
on the table and have discussed with you.
    Senator Chambliss. There are some reporting requirements in 
there and we look forward to monitoring this realignment as we 
go through it and continuing the dialogue with you and General 
Schwartz with respect to the issue, and fully expect that if 
it's not working that you're going to be willing to look at 
whatever changes might be necessary.
    General Schwartz. Absolutely, Senator. We're not backing 
into this. Changes like this require tweaking. I'm sure there 
will be tweaking and we'll be ready to act when that's 
required.
    Senator Chambliss. General Schwartz, you indicated in 
earlier testimony before this committee that the Air Force's 
ground moving target indicator analysis of alternatives (AOA) 
would be used beginning in fiscal year 2013 to guide Air Force 
investment in ISR weapons systems, such as the Joint 
Surveillance Target Attack Radar System (JSTARS). Can you give 
us an update on the AOA status and when we can see those 
results?
    General Schwartz. Sir, the AOA was approved by the Air 
Force and provided to the Office of the Secretary of Defense 
CAPE for their sufficiency review on January 25. That review is 
still underway and once they bless it, why, it'll clearly come 
forward to Congress.
    The substance of that AOA indicated that a blend of Global 
Hawk Block 40 and a business class ISR platform was the least 
cost, highest performing alternative. Notwithstanding the AOA, 
sir, the reality is that there's not enough space to undertake 
a new start business class ISR platform. We simply don't have 
the resources.
    So we will continue with the combination of the JSTARS 
ground moving target indicator (GMTI) capability with the 
companion Block 40 Global Hawk.
    Senator Chambliss. So there's still no change in the 
opinion of the Air Force about the GMTI mission and its 
criticality to the warfighters?
    General Schwartz. No, sir, there isn't. If there wasn't the 
resource crunch that we have, this would certainly be on our 
minds. But there are two areas in our Air Force that need 
attention that we don't have the resources for. One is GMTI, as 
you addressed, and also the trainer mission is also a concern. 
We simply don't have enough space to initiate a new start.
    Senator Chambliss. You mentioned that things have changed 
since 2005, the last round of BRAC, and that another round of 
BRAC is necessary, and particularly because you're flying fewer 
airplanes in the Air Force today than what you were flying even 
back in 2005. Can you define that a little bit further with 
respect to what types of facilities need to be looked at closer 
than others, i.e., what types of bases are we looking at? 
Fighter bases, transport bases?
    General Schwartz. I'd say yes to both probably. I think 
here's part of the issue. Not only do we have fewer, fewer 
aircraft on concrete throughout the country and overseas; there 
is also a fundamental question of right-sizing our squadrons 
for maximum efficiency. The reality is that larger squadrons 
are more efficient because of less support equipment required, 
because of overlap and so on.
    So another part of the question is what are we going to do, 
for example, with F-35s? Will the F-35 Active Duty squadrons be 
24, 30, or maybe even 36 aircraft? We haven't come to that 
decision yet because we don't have those airplanes. But when we 
do make that decision, that will have an effect on the 
infrastructure required to support it all.
    My view is that we need to have good assessments of 
capacity and we need to do that because if we don't, we're 
going to be expending resources in areas less important to us 
than others like readiness and modernization.
    Senator Chambliss. Thank you, Mr. Chairman.
    Chairman Levin. Thank you, Senator Chambliss.
    Senator Lieberman.
    Senator Lieberman. Thanks, Mr. Chairman.
    Secretary Donley, General Schwartz, thanks very much for 
your testimony. I appreciate the directness of the testimony, 
the honesty of your assessment of the Air Force at this time. 
Some of the language in your posture statement really jumps 
out, that, notwithstanding all that we've asked you to do in 
recent years, the aircraft inventory and end strength has 
declined and, well, strength has come down by thousands of 
airmen--here's the quote: ``leaving us next year with the 
smallest force since our inception in 1947.''
    That's a really powerful statement and one that we have to 
heed. Again, your testimony convinces me that the budget that 
has been submitted to us really does take unacceptable risks 
with our national security. Again, a lot of it is compelled by 
Congress through the Budget Control Act, but we have the 
ability and I'm viewing these hearings as the exercise of our 
responsibility to review that, this budget, in that context and 
do whatever we can through authorization and appropriations 
committees to make sure that we reduce the level of risk from 
unacceptable to acceptable and do whatever is necessary, 
including raising taxes, to make sure that we can afford that.
    I do want to say in passing that I was here when Senator 
Ayotte referred to one of the aircraft as older than she is. It 
strikes me that this should create the Ayotte rule, that no 
aircraft in the U.S. Air Force now is older than she is now. If 
you get close to the age of the chairman and me, our Air Force 
is really in trouble. But we don't think there's any danger of 
that.
    Let me ask you one current sort of topical question and 
then a larger question. The topical question is about Syria. 
There's ongoing repression, in my opinion slaughter, by the 
Assad government of its people. The President has condemned it 
and asked Assad to step down. The opposition forces there have 
now asked the world community for military assistance, 
including the possibility of using air power. I understand that 
no decision has been made, certainly not by our Commander in 
Chief, at this point.
    But I just wanted to ask you this question. In some ways 
it's like the one that Senator Graham asked about Iran, which 
is whether you believe it's within our ability to neutralize 
the Syrian Government regime's air defenses and achieve air 
superiority over Syrian territory?
    General Schwartz. It is doable.
    Senator Lieberman. Right.
    General Schwartz. But it would not be easy. This is not an 
unsophisticated adversary.
    Senator Lieberman. Why don't you talk about that a little 
bit?
    General Schwartz. I'd prefer, sir, frankly, to do this in 
another forum. But this is not a week's effort. Let me put it 
that way.
    Senator Lieberman. Right. But again, you have no doubt that 
the U.S. Air Force could do it?
    General Schwartz. I believe that's the case, and certainly 
if we had our major partners with us that would be beneficial 
as well.
    Senator Lieberman. I agree. I think the expectation is that 
if ever this did happen--and this is very theoretical at this 
point, or at least tentative--that the United States wouldn't 
go it alone. I certainly wouldn't want us to go it alone. I 
hope some of our major partners and some of our allies in the 
Gulf, who have increasingly sophisticated air capacity, would 
join with us as well, and I think there's some interest in 
that.
    The second question is broader, General Schwartz. I read 
with great interest the article that you wrote on air-sea 
battle with Admiral Greenert. I thought it was a great idea 
that the two of you came together. I very much appreciated your 
insights on how you see the development and implementation of 
this concept, which I personally think is crucial to ensuring 
our military advantage against growing anti-access and area 
denial challenges, particularly in the Western Pacific and the 
Persian Gulf.
    So I wanted to ask you at this hearing on your budget--and 
Secretary, I'm happy to urge you to join in--if you would 
highlight the areas of the proposed budget for fiscal year 2013 
that you think are most important to supporting the concept of 
air-sea battle? Why don't you just at the beginning give us a 
short form of what the concept of air-sea battle is and then 
talk to us about what's in this budget to support it?
    General Schwartz. Sir, the notion is that for the two 
Services that operate routinely in the global commons and have 
a rapid response expeditionary capability, that if we did our 
work together, if we teamed properly, that we could leverage 
each other's capability in ways that we hadn't really thought 
through well enough before. I mean, we have partnered, but it 
was irregularly. It was sort of the one-off, and the issue was 
how to normalize that level of collaboration, part one; how to, 
at the operational level, look at the way we provide mutual 
support, either in the air or even across domains.
    For example, there are two stealth platforms in DOD, the B-
2 and the submarines. By the way, we support Admiral Jon 
Greenert's effort to pursue the Virginia-class efforts, because 
that is important to the Air-Sea Battle portfolio.
    But finally, the third thing is at the materiel level. How 
do we coordinate how we do things in ways that use common data 
links? How do we use Global Hawk together, both Block 40 and 
Broad Area Maritime Surveillance in this instance? So at many 
levels, at the tactical level, at the operational concept 
level, at the materiel level, there are areas here where we as 
an Air Force and Navy can make our presence felt, that we can 
assure freedom of action, not without effort, but assure 
freedom of action and access to better collaboration and 
teaming of the capabilities we currently possess.
    What's important to us in this area? Electronic warfare, 
clearly. Long-range strike bomber is a case in point, and the 
family of systems more broadly.
    Senator Lieberman. You got some money for research, 
development, RDT&E, for the long-range bomber in the budget.
    General Schwartz. Absolutely, yes, sir, that's correct.
    The kinds of data link efforts that we have underway again 
to magnify individual assets to make them, network them in a 
way that's far more compelling.
    Senator Lieberman. Secretary, do you want to add anything 
to that?
    Secretary Donley. Just a couple of things. Obviously, the 
Chief mentioned the joint collection and passing of ISR data is 
of certainly a common interest. Missile defense is another area 
of common interest. Our mutual work on the F-35, the advanced 
air-to-air capabilities that will be developed to support that 
platform, the advanced air-to-ground capabilities, and also, as 
the Chief mentioned, the deep strike capability.
    So these are all areas where we share materiel, 
operational, and theater level interests in the joint fight.
    Senator Lieberman. These are supported in the budget before 
us.
    Thank you both. That was an excellent short description of 
the air-sea battle concept, and I really applaud you for 
working with the Chief of Naval Operations on developing this 
concept. It's not only cost effective, but obviously it'll 
maximize our capabilities against enemies.
    General Schwartz. For the record, sir, I'd like to 
compliment Admiral Gary Roughead, with whom this began, and 
Admiral Jon Greenert, who continues it.
    Senator Lieberman. Good. Thank you.
    Thanks, Mr. Chairman.
    Chairman Levin. Thank you very much, Senator Lieberman.
    Just two quick questions. One is the ORS program, which as 
I understand it was a program which was coming in below cost. 
Why was that program cancelled?
    Secretary Donley. Sir, our strategic-level decision with 
respect to the ORS program is that we likely have an 
unsustainable model going forward. The purpose of this program 
was to help us develop the operational concepts and the 
capabilities, the technical capabilities, to gain rapid access 
to space, to do rapid integration of payloads and launchers, 
and to demonstrate the capability to provide rapid response and 
augmentation to combatant commanders should they lose space-
based capabilities or need augmentation.
    However, ORS was taxed in its ability to meet competing 
demands with limited resources, to provide resilient 
capabilities for military satellite communications (SATCOM) 
capabilities, for ISR, and for missile warning, and all these 
areas of the space domain, all these different mission sets. We 
simply did not and probably could not put the resources forward 
necessary to support a robust ORS program from that one 
platform, if you will.
    At the strategic level, working with the Deputy Secretary 
and other members of the DOD team, we came to the conclusion 
that it would be a better approach to develop resiliency in our 
space programs through the individual architectures for missile 
warning, through the architecture for military SATCOM, and to 
figure out cost-effective ways to build in resiliency through 
hosted payloads, use of international partnerships, and other 
capabilities that we could add to the organic U.S. space 
capabilities.
    We do think there's value here, but this needed a major 
restructuring, and there is statutory language that would need 
to be adjusted for us to change course, and that's what we have 
proposed.
    Chairman Levin. Mr. Secretary, let me just wind up with a 
question, or a comment about the force structure changes that 
are in the budget request that we've all, or most of us, have 
discussed this morning. The letter which I wrote with Senator 
McCain to the Secretary of Defense has been already put in the 
record, formally requesting that the Department take no actions 
to implement decisions in this regard that anticipate 
Congressional approval of what may turn out to be contentious 
proposals before the committees have had an opportunity to 
produce bills reflecting their responses to the fiscal year 
2013 budget request.
    So from that request, but also from comments that you've 
made before the appropriators, am I correct in believing that 
you're not going to be making the force structure changes that 
were proposed in the fiscal year 2013 budget request until the 
congressional defense committees have had a chance to mark up 
that fiscal year 2013 budget request?
    Secretary Donley. That's correct, Mr. Chairman.
    Chairman Levin. Thank you. With that assurance, I think a 
lot of us will feel more comfortable as we proceed here, and we 
greatly appreciate your testimony this morning. We've covered a 
lot of ground, and I think all of us are very appreciative of 
the service that you two perform for us.
    So we thank you, and we'll stand adjourned.
    [Questions for the record with answers supplied follow:]

            Questions Submitted by Senator Claire McCaskill

                        FORCE STRUCTURE CHANGES

    1. Senator McCaskill. General Schwartz, the Air Force has announced 
plans to begin implementation of major force structure changes that 
will affect almost every State. Missouri will benefit from additional 
A-10s at Whiteman Air Force Base (AFB) and more advanced C-130s for the 
139th Airlift Wing located at Rosecrans Air National Guard Base in St. 
Joseph. However, the loss of a National Guard air control squadron from 
Jefferson Barracks in St. Louis will result in the loss of more than 
200 billets. As in Missouri, the reductions across the entire force 
fall most heavily on the National Guard. When determining the announced 
force structure changes, what factors did the Air Force consider?
    General Schwartz. The new Department of Defense (DOD) Strategic 
Guidance ``Sustaining U.S. Global Leadership: Priorities For 21st 
Century Defense'' directs the Services to build a force that will be 
smaller and leaner, flexible, ready, and technologically advanced. To 
deliver the capabilities required by this strategy, and remain within 
funding constraints, the Air Force made difficult choices in all 
service core functions. While remaining consistent with the new 
strategy, the Air Force fiscal year 2013 budget submission achieves 
$8.7 billion in savings across the Active and Reserve components by 
retiring over 200 aircraft in fiscal year 2013 and 286 aircraft over 
the Future Years Defense Program (FYDP). Our programmed force 
reductions are wide-ranging and affect over 60 installations.
    This was an integrated, Total Force effort--Active Duty, Reserve, 
and National Guard--working together to achieve our end state of a 
ready and sustainable force that can meet our surge and rotational 
requirements. The Air Force realigned our forces to better meet this 
new strategic guidance to: ensure the Total Force can fulfill surge 
requirements; maintain a balance between components that allows us to 
fulfill continuing rotational requirements at sustainable rates; retain 
the recruiting, training, and operational seasoning base required to 
sustain the Total Force's needs into the future; and ensure the Reserve 
component remains relevant and engaged in both enduring and evolving 
missions.
    To meet this end, the Air National Guard (ANG) developed five 
capstone principles to help guide this transition: allocate at least 
one flying wing with ANG equipment to each State; recapitalize 
concurrently and in balance with the Regular Air Force; manage ANG 
resources with ANG people; adopt missions that fit the militia 
construct; and, build dual-use capabilities (emergency support 
functions) relevant to the States. Similarly, the Air Force Reserves 
used the following four principles: ensure aircraft reductions do not 
negatively impact operational support to Combatant Commands; ensure 
force structure movements do not create any new Air Force bills; ensure 
risk is minimized by optimizing crew ratios to exploit expected 
increases in mission capability rates; and, consider locations that 
continue to have an Air Force mission due to the presence of another 
Air Force component. This Total Force approach allowed us to maintain 
the right Active/Air Guard/Reserve mix, and meet our operational 
demands with a leaner force while taking care of our airmen.

    2. Senator McCaskill. General Schwartz, did the relative cost of 
Active component versus Reserve component personnel weigh heavily on 
the final outcome?
    General Schwartz. No. Air Force force structure reductions were 
based on ensuring the plan could provide the capabilities needed to 
meet the new DOD strategy. Over the past two decades the Air Force has 
primarily reduced active duty end strength and force structure, causing 
an imbalance between Active and Reserve components. As the Air Force 
considered reductions in fiscal year 2013, the Air Force carefully 
considered the rationale between the Active and Reserve components and 
made choices to ensure the Total Force can fulfill the Air Force's 
surge requirements as directed in the new DOD strategy; achieve the 
balance between Active and Reserve components required to meet 
rotational requirements at deploy-to-dwell rates that are sustainable 
to both the Active and Reserve components; ensure the Active component 
retained the recruiting, training, and operational seasoning base 
required to sustain the Total Force into the future; and, ensure the 
Reserve component remains relevant and engaged in both traditional and 
evolving missions.

    3. Senator McCaskill. General Schwartz, how did dwell time 
considerations affect the Air Force's decisions?
    General Schwartz. The Air Force used specific rate of deployment 
assumptions for Active Duty, Air Force Reserve Command, and ANG during 
development of the fiscal year 2013 President's budget. In accordance 
with Secretary of Defense memorandum, ``Utilization of the Total 
Force,'' Jan 19, 2007:

         ``(Third,) the planning objective for involuntary 
        mobilization of the Guard/Reserve units will remain a 1 year 
        mobilized to 5 years demobilized ratio. However, today's global 
        demands will require a number of selected Guard/Reserve units 
        to be remobilized sooner than this standard. Our intention is 
        that such exceptions be temporary and that we move to the broad 
        application of the 1:5 goal as soon as possible. Continue to 
        plan your force structure on that basis.''
         ``The planning objective for the Active Force remains 
        1 year deployed to 2 years at home station.'' (1:2 ratio)

    This guidance has been repeated in numerous subsequent documents, 
including the 2010 Quadrennial Defense Review, current Guidance for 
Employment of the Force (S), and Air Force Instruction 10-401, among 
others, and is used for all Air Force force structure planning for 
post-surge operations.
    Current Office of the Secretary of Defense (OSD), Joint Staff, 
combatant commander, and Service developed integrated scenario 
constructs (ISC) used for force sizing require that all programmed Air 
Force fighter, bomber, tanker, and mobility aircraft be used during the 
surge (1:0 ratio).

    4. Senator McCaskill. General Schwartz, what capabilities will be 
lost due to the proposed elimination of the 121st Air Control Squadron?
    General Schwartz. The proposed elimination of the 121st Air Control 
Squadron (ACS) will not adversely affect the enterprise-wide air 
control capability. The Air Force currently has 10 control and 
reporting centers--5 Active Duty and 5 ANG--operating in the United 
States and overseas. The proposed force structure changes would reduce 
these numbers by one ANG unit and two Active Duty units. The 121 ACS 
would represent half of a single control and reporting center weapon 
system capability, about 10 percent of the total ANG control and 
reporting center capability, and about 7 percent of the proposed Total 
Force control capability. The Air Force can meet current air control 
commitments with this leaner force structure.

    5. Senator McCaskill. General Schwartz, what additional risk will 
the Air Force assume?
    General Schwartz. Taking into account current commitments both at 
home and overseas, the Air Force assumes minimal additional risk due to 
the closure of the 121st Air Control Squadron. The combined impact of 
all air control squadron (ACS) cuts (two Active Duty ACSs and one ANG 
ACS) is the elimination of three of the current ten control and 
reporting centers. The Air Force will have the capacity to have three 
control and reporting centers committed at any one time (two supporting 
deployed taskings and one supporting homeland defense missions) with 
four remaining, if required, elsewhere.

    6. Senator McCaskill. General Schwartz, with the movement of A-10s 
to Whiteman AFB, is the Air Force also considering moving A-10 
maintenance and repair operations to Whiteman?
    General Schwartz. The Air Force Reserve is moving three A-10s and 
applicable manpower for both maintenance and operations. The unit was 
previously a 24 primary aircraft authorized (PAA) unit as a result of 
2005 Base Realignment and Closure (BRAC); however, as part of the 
Combat Air Forces (CAF) force structure reductions in the fiscal year 
2010 PB, both the Whiteman and Barksdale units were reduced to 21 PAA. 
This fiscal year 2013 PB action will take the Whiteman unit back to 24 
PAA. There has been no discussion on moving the A-10 centralized 
intermediate repair facility (CIRF) for A-10 engines. Hill AFB, UT, is 
the depot repair facility, and Bradley Air National Guard Station 
maintains the engine CIRF.

                        LONG-RANGE STRIKE BOMBER

    7. Senator McCaskill. General Schwartz, DOD is pivoting to a 
strategy that focuses on the Asia-Pacific region. In that shift, the 
strategy calls for rebalancing toward the Asia-Pacific region and 
protecting freedom of access throughout the global commons. To 
accomplish these, the strategy says we must maintain the ability to 
operate in anti-access/area denial (A2/AD) environments and that 
development of a new stealth bomber is, therefore, needed. Also, 
increasingly sophisticated air defenses and long-range missile threats 
require a focused modernization effort. A key element of this effort is 
the long-range strike bomber (LRS-B) which will strengthen both 
conventional and nuclear deterrence. What capabilities do you need from 
a future penetrating bomber to address our shifting focus on the Asia-
Pacific region?
    General Schwartz. The LRS-B's unique capabilities include long 
range, significant payload capacity, operational flexibility, and 
survivability in anti-access environments. It is a key component of a 
family of systems which will make up the joint portfolio of deep-strike 
capabilities needed in the vast Asia-Pacific region.

    8. Senator McCaskill. General Schwartz, what capabilities do you 
need from a LRS-B to counter increasingly sophisticated air defenses?
    General Schwartz. The LRS-B's unique capabilities include long 
range, significant payload capacity, operational flexibility, and 
survivability in anti-access environments. It will employ a mix of 
standoff and direct attack munitions to provide effects within hours, 
across the spectrum of conflict and despite increasingly sophisticated 
air defenses. Specific operational and programmatic details are 
classified.
                                 ______
                                 
           Questions Submitted by Senator Richard Blumenthal

             JOINT SURVEILLANCE TARGET ATTACK RADAR SYSTEM

    9. Senator Blumenthal. Secretary Donley, the mission success of the 
Joint Surveillance Target Attack Radar System (JSTARS) program has been 
realized in the past 10-plus years of combat operations in Iraq and 
Afghanistan. Can you provide any feedback from end-users regarding 
JSTARS capabilities and its interoperability with ground forces or 
threat-based system performance capabilities?
    Secretary Donley. Feedback from end-users regarding the JSTARS 
capabilities and interoperability has been significant and positive. 
The Special Operations Task Force-South, Intelligence Officer (SOTF-
SOUTH S2) stated that with regards to ground moving target indicator 
(GMTI) support, the ``JSTARS ability to acquire and pass updated geo-
locations in near-real-time acts as a valuable force-multiplier for 
many of our assigned intelligence, surveillance, and reconnaissance 
(ISR) assets.'' The 603d Air Operations Center Dynamic targeting chief, 
commenting on information flow, emphasized that ``the 10 lines used to 
take 20 minutes to pass until you got here..now [take] 10 seconds.'' 
The Deputy Supreme Allied Commander Europe highlighted his satisfaction 
with JSTARS performance over Libya, stating, ``JSTARS is essential to 
the C2 [command and control] analysis and targeting cycle and their 
loss would significantly degrade NATO's ability to bring dynamic 
targeting strike assets to bear on Regime forces.'' Finally, the 
Operation Odyssey Dawn Combined Forces Air Component Commander called 
JSTARS ``a real game changer.''

    10. Senator Blumenthal. Secretary Donley, are there any 
capabilities or aircraft enhancements that should be added to JSTARS?
    Secretary Donley. JSTARS is currently undergoing several 
sustainment/modernization efforts to enable continued safe/effective 
operation of the E-8C beyond fiscal year 2020.

         Prime mission equipment/diminishing manufacturing 
        sources (PME/DMS) upgrades mission systems components and 
        updates aircraft to a Linux-based operating system.
         The avionics (DMS) program will modernize the E-8C 
        cockpit to incorporate military, civil, and international 
        flight certifications.
         The single channel ground-air radio system (SINCGARS) 
        entails voice communication radios/filters being retrofitted on 
        aircraft and trainers providing required off-board 
        communication links.
         The enhanced land maritime mode (ELMM) sensor system 
        improvement implements vastly improved maritime/land tracking 
        capabilities, with in-progress installation scheduled to 
        complete September 2012.
         The communication and networking upgrade (CNU) is 
        modernizing hardware for improved tactical network 
        communications; retrofits started in the second quarter of 
        fiscal year 2012.

                   REVITALIZING THE AGING C-130 FLEET

    11. Senator Blumenthal. General Schwartz, one key to revitalizing 
the aging C-130 fleet could be to replace the older four-bladed 
propellers with newer eight-bladed propellers that increase performance 
while providing significant operations and maintenance savings in the 
out-years. The Air Force has recently validated the performance of 
these new propellers on the C-130 and the Navy has validated the 
logistic benefits on their E-2 fleet. Can you provide any details or 
plans the Air Force has to repropeller the older C-130s and any 
potential savings involved in doing so?
    General Schwartz. The Air Force is dedicated to modernizing the C-
130H fleet. Currently, there is no requirement or plan to replace the 
C-130H propeller and we have not examined the costs. There is one unit, 
the 109th Airlift Wing, New York ANG, that is currently modifying two 
LC-130 aircraft with eight-bladed propellers to increase take-off 
performance and replacing the jet-assisted takeoff rockets needed to 
lift-off from ice and snow-covered runways under arctic conditions.
                                 ______
                                 
               Questions Submitted by Senator John McCain

                     KC-46A AERIAL REFUELING TANKER

    12. Senator McCain. Secretary Donley and General Schwartz, last 
year, the Air Force conducted a very sound competition on the KC-46 
tanker program and it seems to be executing a viable acquisition 
strategy. But, integration appears to be a significant risk to its 
finishing the development of this next-generation aircraft. How is the 
Air Force addressing this element of risk?
    Secretary Donley and General Schwartz. The Air Force determined the 
KC-46 development schedule is moderate risk. Boeing and the Air Force 
are closely monitoring several schedule risk issues to include: in-line 
provisioning of military capabilities on the 767-2C commercial assembly 
line; concurrency of Federal Aviation Administration certification 
processes; and flight test and software development. The Air Force and 
Boeing have implemented a robust risk management process to mitigate 
these risk items. The Air Force will continue to firmly manage program 
execution to ensure Boeing delivers KC-46 aircraft in accordance with 
the terms and conditions of the contract. DOD and the Air Force are 
closely monitoring the program cost, schedule, and performance 
baselines established at contract award.

    13. Senator McCain. Secretary Donley and General Schwartz, what are 
the other most significant elements of risk in this program and how is 
the Air Force addressing them?
    Secretary Donley and General Schwartz. Boeing's planned closure of 
the Wichita, KS, finishing center by the end of 2013 introduces 
additional schedule risk. However, if the transition of the operation 
to the Puget Sound area is executed efficiently and on schedule, 
overall risk is reduced due to collocated Federal Aviation 
Administration and military testing, collocated manufacturing 
expertise, and elimination of ferry flights from the commercial 
assembly line to the military finishing center.
    Several technical risk areas are also being closely monitored, to 
include: wing aerial refueling pod buffeting (an issue with previous 
767-based tankers); fly-by-wire boom integration; radar warning 
receiver integration; 3-D Remote Boom Operator Vision System; and 
aircraft empty weight projections (increased aircraft weight would 
reduce fuel/range offload performance). The overall technical risk on 
the program is considered low.
    The Air Force and Boeing have implemented a robust risk management 
process to mitigate these risk items. The Air Force will continue to 
firmly manage program execution to ensure Boeing delivers KC-46 
aircraft in accordance with the terms and conditions of the contract. 
DOD and the Air Force are closely monitoring the program cost, 
schedule, and performance baselines established at contract award.

    14. Senator McCain. Secretary Donley and General Schwartz, to what 
extent has the configuration of this aircraft changed since it was 
originally selected to replace the Air Force's legacy tanker fleet?
    Secretary Donley and General Schwartz. Since contract award, there 
have been no major engineering, design, capability, or configuration 
changes to the KC-46 affecting the cost, schedule, or performance 
baseline.

                        CEASE AND DESIST LETTER

    15. Senator McCain. Secretary Donley, will the Air Force comply 
with the request made by me and the Chairman in our letter dated March 
19, 2012, not to implement any of its proposed force structure 
reductions in 2012 before Congress has authorized it to do so?
    Secretary Donley. No force structure reductions will be implemented 
in 2012 prior to congressional concurrence. I am committed to wait for 
congressional deliberations before implementing the fiscal year 2013 
force structure changes proposed in congressional testimony earlier 
this year.

                             MILITARY SPACE

    16. Senator McCain. Secretary Donley and General Schwartz, the 
Government Accountability Office (GAO) recently found that ``[s]pace 
launch acquisition processes for the National Aeronautics and Space 
Administration (NASA) and DOD are not formally coordinated, duplicate 
one another, and may not fully leverage the government's investment 
because the government is not acting as a single buyer.'' How does the 
Air Force intend to address this concern?
    Secretary Donley and General Schwartz. We coordinate with NASA on 
many launch-related activities. For example, the Air Force, the 
National Reconnaissance Office, and NASA have jointly approved a new 
entrant strategy that provides a single approach for potential new 
entrant certification. We have also conducted several joint meetings 
with NASA and the National Reconnaissance Office to provide insight 
into each organization's acquisition strategies. We will continue to 
work with NASA to ensure full understanding of our programmatic 
decisions on the launch industrial base. However, the Air Force 
believes flexibility of separate acquisition approaches can be 
beneficial, and the unique mission requirements of DOD and other 
agencies may not be met most efficiently by a ``one size fits all'' 
contracting approach. Since NASA and the DOD have different mission 
needs, budget authorities, and appropriations, we have the need for 
each agency to have its own launch service contracts.

    17. Senator McCain. Secretary Donley and General Schwartz, GAO also 
conveyed concern about the adequacy of the analysis supporting the Air 
Force's proposed block-buy strategy for its Evolved Expendable Launch 
Vehicle (EELV) program. How does the Air Force intend to address the 
unsustainable level of cost-growth we've seen in the cost of space 
launch?
    Secretary Donley and General Schwartz. The Air Force's EELV 
acquisition strategy is based upon procuring a planned number of cores 
and launches needed in each fiscal year while concurrently infusing 
competition as soon as at least one certified new entrant launch 
vehicle is available to meet the government's risk requirements for 
placing critical national security payloads in orbit. We plan to 
execute this strategy through a series of phases.
    The first phase consists of a sole-source contract that allows for 
on-ramps for new entrants. Specifically, Phase I will entail procuring 
boosters at a steady rate over a 3- to 5-year period of time. This will 
allow the contractor to pursue economic order quantity procurements 
from subcontractors and vendors, make investments that reduce overall 
cost and achieve greater manufacturing learning curve reductions. The 
decision on the specific contractual commitment will be balanced based 
on price, operational requirements, budget realities (including all 
fiscal law constraints), and independent assessments of the potential 
for eventual competition. The Air Force will conduct its own analysis 
of the United Launch Alliance (ULA) proposed prices. The analysis will 
be based upon independent cost estimates in addition to thorough review 
of ULA's and suppliers' proposals. The results will inform the decision 
on the length and quantity of the buy as well as the government 
negotiation team's determination of fair and reasonable prices. We will 
invite the Defense Contract Audit Agency (DCAA) to fully participate in 
fact finding and negotiations.
    The Air Force plans for the follow-on phases to be full and open 
competition for launch services among certified providers, and the same 
diligence will be given to properly analyzing the costs for those 
launch services.

    18. Senator McCain. Secretary Donley and General Schwartz, how will 
the Air Force ensure the availability of competition to help drive 
costs down?
    Secretary Donley and General Schwartz. Currently, no new entrant 
has demonstrated the capability to launch EELV-class payloads. However, 
the Air Force is committed to certifying new entrants for EELV launches 
as soon as feasible. The current EELV acquisition strategy allows for 
competition following the certification of a new entrant. Once a new 
entrant is certified, launch services above the fiscal year 2013 Phase 
I Buy (a sole-source award beginning in fiscal year 2013 committing to 
3 to 5 years of steady rate production) baseline will be competed. 
Following Phase I, we plan to compete Phase II and beyond under full 
and open competition among certified launch vehicle providers. Phase II 
will immediately follow Phase I to provide continued access to space.
    In order to facilitate the certification of potential new entrants, 
the Air Force has identified and funded, with Congress' authorization 
and approval, two opportunities on which providers may bid: the Space 
Test Program-2 and the Deep Space Climate Observatory missions. These 
EELV-class missions have a higher risk tolerance and will provide an 
opportunity for potential new entrants to prove their capability for 
certification. The timeline for certification depends on the new 
entrants, specifically, their technical progress, the quality and 
sufficiency of the data provided to the Air Force, and their 
demonstrated successful flight history.

                   AIR FORCE STRIKE FIGHTER SHORTFALL

    19. Senator McCain. General Schwartz, is there a projected strike 
fighter shortfall for the Air Force? If so, what is that number?
    General Schwartz. There is no projected fighter shortfall. 
Approximately 1,900 total aircraft inventory and 1,100 primary mission 
aircraft inventory are required to accomplish warfighting scenarios, 
assuming an increased level of aggregate risk. Updated warfighting 
scenarios informed the new strategic guidance and how the Air Force 
determined force structure requirements. Specifically, the new 
scenarios allow the United States to rapidly respond and swiftly defeat 
a highly capable adversary as well as deter and defeat an opportunistic 
aggressor, if required, without conducting long-term stability 
operations. Increased risk means objectives may take longer and forces 
may accept more losses.

    20. Senator McCain. General Schwartz, in your opinion, what options 
would help mitigate the strike fighter shortfall?
    General Schwartz. The Air Force has no fighter shortfall and is 
sized at approximately 1,900 total and 1,100 primary mission fighter 
aircraft. This sizing assumes increased aggregate risk based on Air 
Force warfighting analysis that informed the Defense Strategic Guidance 
and accounted for fiscal realities. The new strategic guidance allows 
the United States to respond rapidly and swiftly defeat a highly 
capable adversary while deterring or defeating an opportunistic 
aggressor without conducting long-term stability operations. Increased 
risk means objectives may take longer and forces will accept more 
losses.
    Additionally, the Air Force took several steps to mitigate risk. 
Specifically, the Air Force has funded a scalable service life 
extension program (SLEP) and Combat Avionics Programmed Extension Suite 
for 300 Block 40-50 F-16s. The total effort is planned for 350 F-16s, 
but is scalable to 650 aircraft primarily to account for variables in 
F-35A procurement. Full-scale durability tests are underway for the F-
16, the F-15C, and the F-15E. These efforts have demonstrated higher 
service lives when combined with modernization efforts and ensure a 
viable and balanced mix of fourth- and fifth-generation aircraft. This 
risk mitigation plan assumes the Air Force realizes its planned F-35A 
procurement rates and quantities. Congress can help by fully funding 
Air Force fighter modernization and fifth-generation procurement 
efforts.

                        REDUCTIONS IN PERSONNEL

    21. Senator McCain. General Schwartz, I appreciate the difficult 
decisions the Air Force had to make to stay within the limits of the 
fiscal year 2013 budget. In its budget request, the Air Force proposes 
to reduce their ranks--by 3,900 from the Air Force's Active component; 
900 from the Air Force Reserve; and 5,100 from the ANG. Please explain 
the rationale for these decisions; the risk in capability and readiness 
that the Air Force is accepting with these decreases; and the Air 
Force's plans to lessen any negative impact on affected airmen and 
their families.
    General Schwartz. In light of the revised DOD Strategic Guidance, 
the Air Force conducted an analysis of core function requirements to 
inform force structure changes and develop a risk-balanced force. 
Additionally, the Air Force had to stay within fiscal constraints when 
considering future force structure options. To meet the force sizing 
requirements while remaining within the constraints of available 
funding, the Air Force made the difficult choice to retire 200 aircraft 
in fiscal year 2013 and an additional 59 across the FYDP. To meet 
mission requirements with this reduced force structure, the Active 
component to Reserve component ratio was evaluated and adjusted to 
ensure the resulting force was capable of meeting surge and rotational 
demands while preserving the symbiotic relationship of the Total Force. 
The Air Force considered multiple factors including the demands of 
foundational requirements, the long-term health of the enterprise, 
preserving force readiness while not exceeding operational temp goals 
of 1:2 ratio for the Active component and 1:5 ratio for the Reserve 
component, and preserving the continuum of service construct between 
the Active and Reserve components. This risk-balanced force allows the 
Air Force to stay within fiscal constraints while meeting surge, 
rotational, and forward presence demands and respond to events in the 
timeframe required to meet national defense requirements.
    More than 21 years of sustained combat operations have had an 
adverse impact on full-spectrum readiness. A smaller force combined 
with the need to reset to the new strategy creates a readiness 
imperative reflected in our fiscal year 2013 budget decisions, and we 
continue to emphasize readiness in fiscal year 2014 programming and 
budgeting processes. Our top readiness concern involves resetting to a 
force that is capable, agile, lethal and designed to make vital 
contributions to the joint team's portfolio and support the new 
strategy.
    The force structure reductions were determined using a deliberate 
and collaborative process that leveraged careful analytical review of 
warfighting scenarios consistent with the new strategic guidance. 
Overall, the new force structure is at an increased, but manageable 
risk of taking longer to meet mission objectives and incurring 
increased attrition.
    We understand the turbulence these reductions will cause our Airmen 
and their families and will exhaust all available measures to minimize 
negative impact to them. The Air Force is committed to using voluntary 
measures first, incentives as appropriate, and involuntary programs 
only if necessary to meet end strength requirements.
    The Active component has legislative authorities to offer voluntary 
early retirement and early separation measures to encourage voluntary 
actions. The Air Force plans to also offer incentives such as, Palace 
Chase transfers to the Air Reserve component to promote voluntary 
separation. For those affected by involuntary separation, our Airman 
and Family Readiness Centers will continue to provide support through 
the Transition Assistance Program and veteran's benefits seminars to 
help ensure a smooth transition to civilian life for Airmen who can no 
longer serve in uniform.
    The ANG and Air Force Reserve worked in concert to submit unified 
legislative budget proposals for four force shaping authorities: (1) 
temporary early retirement authority; (2) permanent change of station 
authority for Air Reserve component affected members; (3) extension of 
TRICARE for 6 months; and (4) continuation of GI Bill educational 
benefits for Air Force Selected Reserve members who were previously 
qualified, but were involuntarily separated due to end strength 
reductions or force management actions. If approved, these tools will 
help lessen the impact of force management efforts.
    To achieve the desired end strength, the Air Force Reserve is 
proposing to reduce accessions, especially non-prior service recruits. 
To ease the impact on affected personnel, Air Force Reserve Command is 
setting up a clearing house to match personnel against vacant/new 
positions brought on by mission changes. Also, inactive duty training 
travel pay will be authorized for affected members who fill a vacant 
position in a unit more than 150 miles from their home.

              FORCE SHAPING TOOLS NEEDED BY THE AIR FORCE

    22. Senator McCain. General Schwartz, what additional legislation, 
if any, would you need to achieve the cuts in end strength proposed by 
the Air Force?
    General Schwartz. The Air Force is currently pursuing four Active-
Duty Force management legislative proposals through the fiscal year 
2013 legislative process. The four proposals were combined into one 
omnibus proposal, 224(6), which is currently at Office of Management 
and Budget (OMB) for approval. Omnibus proposal 224(6) contains the 
following legislative proposals:

         Regular lieutenant colonels and commanders retirement 
        for years of service (YOS) - The proposal will provide the 
        Service Secretaries the temporary statutory authority to reduce 
        the maximum years of active commissioned service for officers 
        in the regular grade of O-5 from 28 to no less than 25 years 
        through 31 December 2018.
         Regular colonels and Navy captains retirement for YOS 
        - The proposal would provide the Service Secretaries the 
        temporary statutory authority to reduce the maximum years of 
        active commissioned service for officers in the regular grade 
        of O-6 from 30 to no less than 27 years through 31 December 
        2018.
         Enhanced Authority Selective Early Retirement Board 
        (SERB) - This proposal would provide the Service Secretaries 
        the temporary statutory authority to implement the following 
        four provisions through 31 December 2018: lieutenant colonels 
        would be SERB eligible following a single failure of selection 
        for promotion; colonels would be SERB eligible upon completion 
        of 2 years (vice 4 years) time-in-grade; expand eligibility 
        criteria and suspend the prohibition in 10 U.S.C. Sec. 638(c) 
        against SERB consideration more than once in 5 years; and 
        shorten the periods of continuation established under 10 U.S.C. 
        Sec. 637 for officers on Active Duty.
         Enhanced authority for selective early discharges - 
        This would provide the Service Secretaries the temporary 
        statutory authority to continue convening early discharge 
        (i.e., reduction-in-force) boards through 31 December 2018.

    Minimum commissioned service for voluntary retirement as an officer 
- This proposal would extend the expiration date of 10 U.S.C 
Sec. Sec. 3911(b), 6323(a)(2), and 8911(b) from 30 September 2013 to 30 
September 2016 and continue the authority for ``prior service'' 
officers to voluntarily retire with 8 years commissioned service 
instead of 10 years. The ANG is currently pursuing three force shaping 
legislative proposals through the fiscal year 2013 legislative process 
to support the fiscal year 2013 changes in ANG missions and end 
strength. Office of Legislative Counsel (OLC) proposals 292 and 294 are 
currently at OMB for approval; OLC 293 has been sent by OMB for 
legislative consideration. They are described below:

         OLC 292 - would allow members of the Selected Reserve 
        to qualify for non-regular service retirement with 15, rather 
        than 20, creditable years of Reserve service. The National 
        Defense Authorization Act (NDAA) for Fiscal Year 2012 provided 
        this authority for Active component members.
         OLC 293 - would extend the eligibility of members of 
        the Selected Reserve for TRICARE Reserve Select and TRICARE 
        dental insurance for 180 days at the discounted rate for 
        members of the Selected Reserve who are involuntarily separated 
        without cause due to end strength reductions or force 
        management actions.
         OLC 294 - would establish a new category of 
        eligibility for military permanent change of station moves of 
        family and household goods for traditional reservists displaced 
        by force drawdowns who are hired to fill a bona fide 
        traditional unit vacancy in another Reserve unit somewhere else 
        in the country.

                      JOINT STRIKE FIGHTER BASING

    23. Senator McCain. General Schwartz, it was reported that the Air 
Force has begun reducing the planned number of F-35 bases from over 40 
to around 30 in an attempt to rein in sustainment costs. What criteria 
are you using to reduce the number of potential F-35 bases?
    General Schwartz. While the Air Force has not yet finalized the 
planned number of F-35 bases, we are working to manage F-35 operations 
and sustainment costs. The Deputy Chief of Staff for Operations, Plans, 
and Requirements is operationalizing the process by commissioning a 
RAND Project Air Force study to evaluate F-35 basing, specifically 
squadron and wing size and number, based on three main criteria: combat 
capability, readiness, and force development. This study will expand 
and combine work in five areas: operations and sustainment costs, pilot 
absorption, force development, infrastructure and airspace 
requirements, and Active and Reserve component mix. These efforts will 
then inform the strategic basing process.

                        AIR FORCE PLANS FOR GUAM

    24. Senator McCain. General Schwartz, the Air Force has a plan to 
rotate global strike assets at Andersen Air Base. This plan calls for 
over $2.9 billion in new construction mostly on the north side of the 
runways to build hangars and squadron facilities that will be empty 
between deployments. Coincidentally, the Marine Corps is planning to 
build the same types of facilities right next door for Marine Corps 
aircraft being restationed from Okinawa. Considering the Air Force 
military construction (MILCON) request for fiscal year 2013 is the 
lowest in over 25 years, what is the status of this plan?
    General Schwartz. The Air Force has been rotating global strike 
assets to Joint Region Marianas-Andersen for roughly 10 years, and will 
continue to do so in the future, although due to lack of dedicated 
facilities, work-arounds have been required. Independent of the Marine 
Corps Pacific laydown and despite the deliberate pause in MILCON in 
fiscal year 2013, the Air Force still requires infrastructure to 
support assets at Andersen. While there may be some gaps in the Air 
Expeditionary Force rotation, there is a near-continuous deployment 
presence at Andersen. Marine facilities are being constructed to meet 
Marine requirements and are not redundant to Air Force requirements and 
vice-versa.
    Regarding the status of the Air Force plan, all facilities 
requested to date are necessary to operate from Andersen for the 
foreseeable future. The Air Force is evaluating the need to harden 
facilities, and to what level of protection, because there are vertical 
facilities that must be hardened. The Air Force is taking steps within 
the FYDP to do this. The $2.9 billion figure for new construction is 
only an estimate at this time.

    25. Senator McCain. General Schwartz, is it fully funded in the Air 
Force's 5-year spending plan?
    General Schwartz. No. The Guam Strike program is an important 
enduring requirement, but in fiscal year 2013, we took a deliberate 
pause in MILCON and absorbed a large reduction in the overall MILCON 
program across the FYDP. Depending on the ultimate number of facilities 
constructed at Guam and the level of hardening required, the Guam 
Strike program could potentially absorb a very large portion of the 
FYDP MILCON. For the short-term, the Air Force has placed $254 million 
in the FYDP against Guam Strike in fiscal years 2014 and 2015, and will 
adjust this amount in the future, as necessary.

    26. Senator McCain. General Schwartz, does the Air Force have a 
plan for strategic lift at Andersen Air Base to address the needs of 
the Marine Corps forces potentially coming to Guam in addition to Air 
Force requirements?
    General Schwartz. The Air Force will provide strategic lift of 
Marine Corps forces at Andersen AFB through the established priority-
based system managed by Air Mobility Command as the air component to 
U.S. Transportation Command (TRANSCOM). Peacetime movements of forces 
will be scheduled and paid for by the Marine Corps per business rules 
established in the Transportation Working Capital Fund. Contingency 
scheduling will be in accordance with time-phased force deployment 
document associated with the contingency or the combatant command's 
request for forces.

                        IMPACT OF SEQUESTRATION

    27. Senator McCain. Secretary Donley, the Budget Control Act 
requires DOD to reduce in January 2013 all major accounts over 10 years 
by a total of $492 billion through sequestration. This will result in 
an immediate reduction of an additional $55 billion to the fiscal year 
2013 defense program alone. Secretary of Defense Panetta has asserted 
many times that the impact of these cuts would be ``devastating'' and 
``catastrophic''--leading to a hollow force and inflicting serious 
damage to our national defense. But, this month, the Military Services 
must begin developing some type of guidance on developing a budget for 
fiscal year 2014. If sequestration were to occur, how would Air Force 
programs be impacted?
    Secretary Donley. If sequestration occurs, automatic percentage 
cuts are required to be applied without regard to strategy, importance 
or priorities, which would impact almost every program within the 
Department. Some programs could need to be reduced and possibly 
restructured and/or terminated to implement the across the board 2013 
reductions. All investment accounts would be impacted including our 
high-priority modernization efforts such as MQ-9, Joint Strike Fighter, 
and KC-46A. It is difficult to predict the effect such a major 
disruption would have on funding requirements for fiscal year 2014 and 
beyond.

    28. Senator McCain. Secretary Donley, how would sequestration 
specifically impact Air Force operations and readiness?
    Secretary Donley. Under sequestration, programs could need to be 
restructured, reduced and/or terminated. Sequestration would force an 
immediate percentage reduction in our operation and maintenance 
accounts which could damage readiness, for example through reduced 
flying hours or training, and make our ability to cover any emergent 
execution year requirements extremely difficult.

    29. Senator McCain. Secretary Donley, to what extent might 
sequestration lead to the Air Force's having to realize significant 
cancellation- or termination-liability or major cost increases or 
schedule delays in its major programs?
    Secretary Donley. Sequestration would drive major additional 
reductions beyond the first phase of the Budget Control Act reductions 
to the Air Force fiscal year 2013 budget request. As Air Force 
leadership has testified, the proposed fiscal year 2013 budget is a 
balanced and complete package. Under sequestration, some programs would 
need to be reduced and possibly restructured and/or terminated. All 
investment accounts would be impacted including our high-priority 
modernization efforts such as MQ-9, Joint Strike Fighter and KC-46A. 
Sequestration is likely to drive overall cost increases and schedule 
delays which cannot be quantified at this time.

    30. Senator McCain. Secretary Donley, is DOD currently conducting 
any planning for sequestration in your areas of responsibility? If so, 
please describe them.
    Secretary Donley. DOD is not currently preparing for sequestration, 
and OMB has not directed agencies, including DOD, to initiate plans for 
sequestration.

    31. Senator McCain. Secretary Donley, how will you assess the risks 
associated with each cut and communicate them to Congress in a timely 
manner?
    Secretary Donley. The Air Force assesses risks through a deliberate 
corporate process aligning each item and platform with the new DOD 
Strategic Guidance ``Sustaining U.S. Global Leadership: Priorities for 
21st Century Defense.''

    32. Senator McCain. Secretary Donley, to date, has the Air Force 
begun any planning that would ameliorate the impact of cuts required 
under sequestration, such as prioritizing programs in preparation for 
reprogramming actions or terminations? If so, please describe them.
    Secretary Donley. The Department is not currently preparing for 
sequestration, and OMB has not directed agencies, including DOD, to 
initiate plans for sequestration.

               AIR FORCE F-16 PILOT TRAINING EFFICIENCIES

    33. Senator McCain. General Schwartz, you stated on February 29, 
2012, that ``[y]ou can base the F-35 or any weapon system at multiple 
locations and that requires additional support equipment, it requires 
additional infrastructure, and so on and so forth. If, on the other 
hand, you choose to base at fewer locations and have larger squadrons--
24, 30, perhaps 36 aircraft per squadron--there are considerable 
savings and efficiencies associated with that.'' That seems to make 
sense. But at a time when the Air Force is looking for efficiencies in 
every phase of operations and training, you are still planning to spend 
over $50 million to split F-16 pilot training between Luke AFB, AZ, and 
Holloman AFB, NM. What is the current cost estimate for all costs to 
make this move and the additional costs over the 20 years for the 
longer F-16 training syllabus at Holloman AFB due to range 
restrictions?
    General Schwartz. The current estimate to move the two F-16 
squadrons from Luke AFB to Holloman AFB includes $37 million in MILCON 
and $19 million in operations and maintenance (O&M) construction costs, 
for a total of $56 million. The F-16 training syllabus at Holloman AFB 
will have the same requirements and not be longer than the syllabus at 
Luke AFB.

    34. Senator McCain. General Schwartz, can you update me on the 
rationale how this initiative will lead to more efficient F-16 pilot 
training?
    General Schwartz. Moving F-16 training squadrons from Luke AFB, AZ, 
to Holloman AFB, NM, was not designed as an efficiency initiative, but 
rather as a move to facilitate the upcoming beddown of the F-35 
training mission at Luke. This F-16 move is timed to occur almost 
simultaneously with the arrival of the first F-35 squadron at Luke AFB, 
which will minimize population fluctuations to the Glendale, AZ, 
community.
    The Air Force is currently making a concerted effort to increase 
our production and absorption of new fighter pilots and the F-16 is 
currently our largest fighter pilot absorption platform. In this effort 
to increase our fighter pilot inventory, we must synchronize our 
increased production capability with an increased absorption capacity. 
Moving the Luke AFB F-16 squadrons in fiscal year 2013 and fiscal year 
2014 is the best solution for maintaining this balance. While it will 
take a few years to grow our absorption capacity by forming Active-
Reserve Associations, we have already increased our production 
capability by reducing our F-16 syllabus. We will increase it even more 
by starting F-16 training at the ANG unit in Tucson in fiscal year 
2013. These two production increases more than offset the training 
reduction generated by moving the training squadrons.

    35. Senator McCain. General Schwartz, is it true that the transfer 
to Holloman AFB is having a significant impact on the production of F-
16 pilots at a time when the forecast for demand is a 250-pilot deficit 
over the next 3 years?
    General Schwartz. The Air Force F-16 training pipeline has the 
ability to absorb minor losses in training that will occur due to the 
movement of the two squadrons from Luke AFB to Holloman AFB and still 
meet future F-16 pilot requirements. Operational F-16 squadrons are 
limited in the number of new pilots they can accept and season, which 
is a determining factor in the number of students produced by training 
units. With the movement of these squadrons, the production of F-16 
pilots through Holloman AFB will continue to meet the demand requested 
by operational squadrons.
    The transfer of F-16 squadrons from Luke AFB to Holloman AFB will 
only result in the loss of one ``B-Course'' (16 Specialized 
Undergraduate Pilot Training graduates) for each squadron movement 
between fiscal years 2013 and 2012 (fiscal year 2013 and fiscal year 
2014). We are currently in the process of transitioning to a reduced 
syllabus, which is increasing our training capacity by 16 B-Course 
quotas per year. This will completely offset the production loss from 
the transfers in fiscal year 2013 and fiscal year 2014.

    36. Senator McCain. General Schwartz, are you still committed to 
your plan to prevent an operational pause at Luke AFB by not beginning 
to move any portion of the first of two F-16 squadrons until Luke AFB 
receives its first F-35 squadron?
    General Schwartz. While the Secretary and I remain committed to 
managing impacts from these moves at Luke, Holloman, and Tyndall AFBs, 
we never committed to not moving F-16s before the potential arrival of 
F-35s. Since the original announcement of the F-16 fighter moves, the 
plan has always been that the F-16s would depart Luke before the F-35s 
would begin to arrive at the Pilot Training Center (PTC-1). When we 
first announced these moves to Congress in July 2010, the F-16 
squadrons were planned to depart Luke almost 2 years before the F-35s 
began to arrive at PTC-1. In June 2011, we adjusted the movement 
timelines for various reasons and slipped the movement of the F-16s six 
quarters; but we continue to show an F-16 unit departing Luke before 
the F-35 arrives at PTC-1. The current schedule anticipates the first 
F-16 squadron will begin their move from Luke in the third quarter of 
fiscal year 2013 and the first F-35 arrival at PTC-1 in the fourth 
quarter of fiscal year 2013. Luke AFB is the preferred alternative for 
PTC-1.
                                 ______
                                 
             Questions Submitted by Senator Saxby Chambliss

                            C-5A RETIREMENTS

    37. Senator Chambliss. Secretary Donley and General Schwartz, many 
studies have examined the proper size of the strategic airlift fleet. 
Two years ago, 316 strategic airlifters were described as the sweet 
spot. Last year, the Air Force requested a reduction of the strategic 
fleet to 301, based on analysis of the most stressing scenarios--and 
Congress approved. Now the Air Force is proposing to further reduce 
their number of strategic airlifters to 275 by retiring the entire C-5A 
fleet. I understand the Air Force's desire to save money. However, I am 
still concerned about this decision. What objective studies has the Air 
Force done to show that 275 strategic airlifters is the right number, 
based on current and projected future requirements?
    Secretary Donley and General Schwartz. We carefully analyze each 
warfighting scenario laid out by OSD to determine the air fleet 
capacity required to support strategic guidance. We measure capacity in 
million ton-miles per day (MTM/D), which expresses a theoretical 
capacity of the fleet to move an amount of cargo over a set distance 
per day and is used as a common metric for quantifying airlift 
requirements as a basis for computing the size and optimal mix of 
airlift forces.
    The strategy that informed the decision to reduce the fleet to 301 
aircraft was supported by Case 1 in the Mobility Capabilities 
Requirements Study 2016, which required a fleet with a capacity of 32.7 
MTM/D. That fleet of 301 aircraft provided a capacity of 32.7 MTM/D, 
meeting the requirement at the time.
    However, the current strategy has reduced the requirement, and Case 
1 is no longer valid. Instead, Case 3 is consistent with the new 
strategic guidance. Case 3 requires a strategic airlift capacity of 
29.1 MTM/D. The removal of all 27 C-5As reduces the fleet capacity to 
30.4 MTM/D, which meets this current requirement.

    38. Senator Chambliss. Secretary Donley and General Schwartz, DOD 
has a long history of contracting with the Russians to use former 
Soviet-bloc AN-124s to carry U.S. military equipment. In fact, between 
2005 and 2009, DOD spent $1.7 billion on these contracts. Will DOD 
continue to contract with the Russians to fly AN-124s to meet U.S. 
military logistics requirements if the C-5A fleet is completely 
retired?
    Secretary Donley and General Schwartz. Based on current 
projections, we do not anticipate that retiring the C-5A fleet will 
have a significant impact on the United States' organic capacity to 
support operational requirements. TRANSCOM will continue to contract 
for the use of foreign carriers through our Civil Reserve Airlift Fleet 
(CRAF) partners, subject to policy limitations that limit the use of 
foreign carriers to situations where CRAF carriers are either unable or 
unavailable to perform missions. However, the Air Force cannot comment 
on how TRANSCOM will exercise its contracting options in the future. 
Such determinations will need to be based on policies, requirements, 
and capabilities at the time.

    39. Senator Chambliss. Secretary Donley and General Schwartz, 
offering retired C-5As to CRAF carriers could allow the United States 
to stop outsourcing these missions to the Russians at the cost of 
billions of dollars to U.S. taxpayers, and would also allow for 
retention of these aircraft which have significant service life 
remaining. In the event Congress grants you authority to retire C-5As, 
would you support offering the retired C-5As to the CRAF to establish 
the first ever U.S.-flagged outsized cargo carrier?
    Secretary Donley and General Schwartz. Not at this time. The C-5A 
is a ``Category C'' aircraft and is on the U.S. Munitions List. If 
authorized to retire, the aircraft carries a demilitarization code of 
``C,'' requiring removal or demilitarization of key points, including 
fuselage, tail assembly, and wing spars prior to transfer. Certain 
aircraft components carry a demilitarization code of ``D,'' requiring 
total destruction. Removal or destruction of code ``C'' and ``D'' 
components essentially renders the aircraft as scrap and useless for 
CRAF purposes.

    40. Senator Chambliss. Secretary Donley and General Schwartz, what 
would be the disadvantages of this course of action?
    Secretary Donley and General Schwartz. The benefits of transferring 
C-5A aircraft to CRAF are limited. The Air Force delivered the ``Report 
on Retirements of C-5A Aircraft'' to the congressional defense 
committees in October 2010. This report stated the transfer of these 
aircraft to the commercial fleet creates a capacity increase that is 
not required and that there is a high cost to demilitarize the C-5As. 
Moreover, any transfer of C-5A aircraft to a flying status for CRAF or 
with a foreign partner instead of storage would result in a continued 
demand for aircraft spares. This demand, in conjunction with a 
reduction of aircraft in aerospace maintenance and regeneration group 
storage, reduces the availability of the number of spare parts, 
burdening the Air Force supply chain and driving aircraft availability 
lower.
    The C-5As that are being retired under the NDAA for Fiscal Year 
2012, and prior years, are being put into type 1000 storage for 
reclamation and can be used for spare parts or can be restored.

             JOINT SURVEILLANCE TARGET ATTACK RADAR SYSTEM

    41. Senator Chambliss. General Schwartz, you mentioned in your 
testimony that although the initial findings of the Ground Moving 
Target Indicator (GMTI) analysis of alternatives indicate that a blend 
of Global Hawk Block 40 and a business class ISR platform is the least 
cost, highest performing alternative for carrying out the GMTI mission, 
there are not enough resources in the Air Force budget to pursue that 
approach and, therefore, the Air Force is recommending a blend of the 
current JSTARS platform and Global Hawk Block 40 instead. Does the Air 
Force have a recommendation regarding whether it is appropriate to 
reengine some or all of the JSTARS aircraft that would be part of the 
blended approach consisting of JSTARS and Global Hawk Block 40?
    General Schwartz. The Air Force recommends against re-engining any 
of the operational fleet. Re-engining only some aircraft would result 
in a split fleet and reduced efficiencies. Re-engining the entire fleet 
would exhaust funds that could potentially be used to enhance the 
JSTARS mission area's capability and efficiency.

    42. Senator Chambliss. General Schwartz, if you do not have a 
recommendation at this time, when do you expect the Air Force will have 
a recommendation in this regard?
    General Schwartz. The Air Force does not consider re-engining the 
operational JSTARS fleet a viable option.

                 COMMON VERTICAL LIFT SUPPORT PLATFORM

    43. Senator Chambliss. Secretary Donley and General Schwartz, the 
Common Vertical Lift Support Platform program was terminated in the 
President's fiscal year 2013 budget request. This platform was to be 
the replacement for the Air Force UH-1N Hueys that suffer from 
shortfalls in lift capability, speed, survivability, supportability/
maintainability, night/adverse weather capability, and avionics/human 
factors. The Air Force has stated that an urgent operational need has 
existed since 1996 to recapitalize these aircraft. Can you explain the 
rationale and justification for terminating this program?
    Secretary Donley and General Schwartz. Due to the current fiscal 
environment, the Air Force is taking an acquisition pause to explore 
more cost effective strategies to meet the nuclear security and 
continuity of government (COG) missions. Our UH-1N Huey helicopters 
will continue to operate and support the nuclear security and COG 
missions. Additionally, we have made physical security and surveillance 
upgrades at our missile launch facilities to reduce the risk during 
this acquisition pause.

    44. Senator Chambliss. Secretary Donley and General Schwartz, do 
you know what the cost to taxpayers will be to continue to fly and 
maintain 40-year-old helicopters as compared to the costs of 
recapitalization?
    Secretary Donley and General Schwartz. The cost to continue UH-1N 
operations is not fully captured at this time. UH-1N sustainment issues 
have been addressed to ensure the fleet will continue flying through 
2020. Air Force Global Strike Command is developing the UH-1N master 
plan to define the way ahead for the weapon system. In the near-term, 
our acquisition efforts focus on addressing identified safety and 
selected capability upgrades, obsolescence, and operational loss 
concerns.

    45. Senator Chambliss. Secretary Donley and General Schwartz, 
without the acquisition resources available to satisfy this urgent and 
compelling need, has the Air Force considered any more affordable 
alternatives, such as leasing aircraft to accomplish this mission?
    Secretary Donley and General Schwartz. The Air Force is taking an 
acquisition pause to explore more cost effective strategies to meet the 
nuclear security and COG missions. We are considering all alternatives 
to address these mission requirements, and no decisions have been made 
at this time.

                                  F-35

    46. Senator Chambliss. Secretary Donley and General Schwartz, 
affordability is the underlying premise of the F-35 program--yet for 
the 4th year in a row, the fiscal year 2013 budget proposes a flat 
production rate of 30 aircraft per year over concerns about concurrency 
costs that in this lot are estimated to be as low as only $1 to $3 
million per aircraft. However, the lower rate of production the Air 
Force is recommending increases the production cost of the aircraft by 
$10 to $20 million per aircraft. Are you satisfied that the production 
rate the Air Force is recommending is the best use of Air Force dollars 
over the long-term, given that the lower production rate will 
significantly drive up overall cost over the long-term?
    Secretary Donley and General Schwartz. We are satisfied the 
recommended production rate is the best use of Air Force funding. In 
large part, the Air Force deferred 98 F-35A conventional take-off and 
landing (CTOL) aircraft to outside the FYDP to mitigate increased 
concurrency costs. The Department's estimated concurrency costs for the 
low rate initial production (LRIP) Lot 7 aircraft in fiscal year 2012 
(fiscal year 2013) range from $7 million per aircraft, if only the 
``must fix'' changes are incorporated, up to $15 million per aircraft 
if all changes are incorporated. While the deferment of aircraft did 
result in a unit cost increase of approximately $10 million per 
aircraft in fiscal year 2013, we believe the realignment of the pace of 
production balances the need for a stable industrial base with the 
realities of increasing concurrency modification costs and a resource-
constrained fiscal environment.
                                 ______
                                 
             Questions Submitted by Senator Roger F. Wicker

                         AIR FORCE BUDGET CUTS

    47. Senator Wicker. General Schwartz, on January 26, the Secretary 
and Chief of Staff of the Air Force held a press conference to discuss 
the aircraft force structure overview. The budget proposes retiring 286 
aircraft in the FYDP including 227 in fiscal year 2013 alone. Some of 
these cuts include the divestiture of some C-130J aircraft, eliminating 
10 aircraft from Keesler AFB in fiscal year 2014 and divestiture of all 
C-27 aircraft, eliminating all six aircraft from Meridian in fiscal 
year 2013 and 20 KC-135s. One method that will help the Air Force deal 
with budget cuts is to re-mission bases and assets. What impacts will 
this have on the overall Air Force operational readiness and 
responsiveness?
    General Schwartz. The Air Force conducted an analysis across 
dissimilar portfolios to arrive at a balanced force with risk shared 
across the force. The new Defense Strategic Guidance states U.S. forces 
will no longer be sized to conduct large-scale, prolonged stability 
operations. Additionally, the USAF must stay within certain fiscal 
constraints when considering future force structure. To meet the force 
sizing requirements while remaining within the constraints of available 
funding, the Air Force made the difficult choice to retire one F-16 
squadron, five A-10 squadrons, the C-5A fleet (27 aircraft), divest the 
C-27 fleet, and retire twenty KC-135 aircraft. The Air Force will 
retire 39 C-130Hs in fiscal year 2013 and 65 C-130Hs in the FYDP which 
will impact 6 States. Ten C-130Js from Keesler will be moved to Dobbins 
AFB in fiscal year 2014; no C-130Js will be divested. Several of the 
squadrons listed as retired were backfilled with other missions and 
bases (like Keesler AFB and Naval Air Station Meridian) remain open. To 
keep risk at an acceptable level, this smaller force must be trained 
and ready for full-spectrum operations at all times. We made readiness 
investments a priority in our fiscal year 2013 budget decisions, and we 
continue to emphasize readiness in future programming/budgeting 
processes to ensure the Air Force is capable and ready.

                   SEQUESTRATION AND BUDGET PLANNING

    48. Senator Wicker. Secretary Donley and General Schwartz, the 
Budget Control Act passed by Congress and signed by the President last 
August requires sequestration to be implemented across all departments, 
including DOD beginning January 2013. Sequestration is not 
hypothetical; it will take place unless legislation is passed to undo 
it. Our national defense is solely a Federal responsibility. Defense 
spending is a twofer that supports our National security and our high-
tech manufacturing workforce. I hope the Air Force will make an 
aggressive effort to educate our Senate and House colleagues of the 
impact sequestration will have on our airmen and industrial base. I 
know you agree that sequestration will have grave consequences on our 
military. I am disappointed DOD's budget request assumes that 
sequestration will not take place when it is indeed the law of the 
land. Unless it is undone, sequestration will be implemented on January 
2, 2013--285 days from today. Has OMB provided the Air Force with 
specific guidance regarding when you will be required to submit a 
revised budget plan that takes sequestration into account?
    Secretary Donley and General Schwartz. At this time, the Air Force 
has not received any guidance with regard to submitting a revised 
budget that takes sequestration into account. We will work with OMB and 
DOD to comply with any guidance we receive.

                              GLOBAL HAWK

    49. Senator Wicker. Secretary Donley and General Schwartz, the Air 
Force budget proposes termination and divestment of the Global Hawk 
Block 30 in order to save $2.5 million over the next 5 years. Global 
Hawk is too expensive and Cold War era U-2 spy aircraft can still do 
the job, according to the administration. The Block 30 is proposed for 
termination and they remain committed to future Global Hawk models. 
Global Hawk models will be in the future for the Air Force, Navy, and 
foreign countries such as the United Kingdom. The other models will be 
produced for the Air Force, Navy, and foreign allies. Block 30 
advocates argue the United States should get some return on investment 
for the billions invested in the 14 drones the Air Force already has in 
its fleet--all added within the past 18 months, the 4 still in 
production, which would be retired before a mission is flown. Block 30 
advocates also note Global Hawk provided key situational awareness to 
enable the capture of Qaddafi as well as the successful raid on the Bin 
Laden compound in Afghanistan. How well is the Global Hawk currently 
performing in theater?
    Secretary Donley and General Schwartz. In Libya, Global Hawk 
provided electro-optical, infrared, and synthetic aperture radar and 
was used in a traditional ISR role with dynamic responsiveness due to 
its enhanced duration/dwell time and the ability to fill gaps between 
other ISR collects. Overall, Global Hawk was successful in Operation 
Odyssey Dawn and in its continued support for Operation Unified 
Protector. Assessment details can be made available at a higher 
classification. In the U.S. Central Command (CENTCOM) theater, Global 
Hawk continues to support the combatant command with both theater and 
tactical ISR. To date, RQ-4 has flown over 50,000 combat hours in 
support of CENTCOM operations.
    In a humanitarian/disaster relief support role, Global Hawk 
leveraged its range and endurance as an ISR first-responder. Following 
the Haiti earthquake, Global Hawk executed a response mission in 12 
hours effectively providing initial situational awareness information, 
highlighting earthquake damage, status of critical infrastructure and 
identifying food/aid drop zones and indicators of mass population 
migrations. Eight missions were flown, satisfying 2,621 targets.
    In Japan, Global Hawk capitalized on its range and endurance to be 
overhead in 21 hours. Imagery products were provided to the Secretary 
of State within 40 minutes of request. In addition to infrastructure 
damage assessment, supply route analysis, and real-time monitoring of 
evacuation support, Global Hawk collection focused on the Fukushima 
nuclear power plant. Because it is a remotely piloted aircraft, Japan 
allowed U.S. Pacific Command to use the Global Hawk within the 20 km 
nuclear engagement zone. Infrared imagery taken directly over the top 
of the reactors allowed engineers to frequently monitor core 
temperature levels. In 21 missions and 300 on-station hours, Global 
Hawk collected more than 3,000 images.

    50. Senator Wicker. Secretary Donley and General Schwartz, 
combatant commanders have an insatiable need for persistent ISR. While 
budget pressures require tough choices, the decision to pull 18 Global 
Hawk Block 30 aircraft out of the active inventory seems shortsighted. 
Can you tell me how the Air Force will meet this requirement without 
the inclusion of the Global Hawk assets?
    Secretary Donley and General Schwartz. In September 2011, the DOD 
Joint Requirements Oversight Council (JROC) reviewed recent adjustments 
in military strategy and determined conventional high-altitude ISR 
requirements could be reduced. With the divestiture of 18 Global Hawk 
Block 30 aircraft, the Air Force will satisfy the modified high-
altitude requirement with the U-2, which remains viable until 2040.

    51. Senator Wicker. Secretary Donley and General Schwartz, can you 
compare the operational capabilities and limitations of both the U-2 
and Global Hawk?
    Secretary Donley and General Schwartz. Both U-2 and Global Hawk are 
operationally capable platforms that offer various advantages and 
disadvantages. For instance, the U-2 does not meet the range and 
endurance of the Global Hawk aircraft, but has superior sensor range 
and resolution. The Block 30 benefits from the versatility of carrying 
both its electro-optical/infrared (EO/IR) sensor and its all-weather 
synthetic aperture radar (SAR) sensor concurrently, while the U-2 is 
more specialized, requiring it to swap out its sensors, depending on 
the mission planned, weather forecast, sensor availability, et cetera. 
In either case the U-2's multi-spectral sensor and its SAR each 
outperform the Block 30 in sensor range and image quality.

    52. Senator Wicker. Secretary Donley and General Schwartz, are 
there operational circumstances where a Global Hawk could be the Air 
Force's preferred choice for a mission over the U-2?
    Secretary Donley and General Schwartz. Global Hawk is better suited 
in operational scenarios that favor endurance (long travel distances, 
persistence overhead, et cetera), while the U-2 offers higher quality 
imagery at standoff ranges. Additionally, the U-2's defensive system 
offers the capability to operate in contested environments, while the 
unmanned Global Hawk avoids putting a pilot in harm's way. Although 
scenarios that leverage Global Hawk's advantages do exist, the U-2's 
capabilities satisfy the Department's existing high altitude ISR 
requirements within the context of the JROC's review of airborne and 
space-based assets in the ISR portfolio.

    53. Senator Wicker. Secretary Donley, just 7 months ago, Deputy 
Secretary Carter certified in writing to Congress that the Global Hawk 
system was ``essential to national security,'' there was no other 
acceptable capability to meet the requirement, and that the Global Hawk 
was $220 million cheaper per year to operate than the U-2. Your 
recommendation to terminate Block 30 contradicts Deputy Secretary 
Carter's recommendation. Can you explain how an asset can be critical 
to national security and cost less than the alternative, but just 7 
months later be terminated?
    Secretary Donley. In last year's Nunn-McCurdy certification, the 
RQ-4 was determined to be $220 million less expensive per year to 
operate than the U-2. However, OSD, Cost Assessment and Program 
Evaluation (CAPE), based this analysis on a high-altitude orbit 1,200 
miles from the launch base. During the analysis done in the fiscal year 
2013 budget review, the launch base for the RQ-4 and U-2 was assumed to 
be from their normal operating locations. Coupled with the fact that 
the cost per flying hour of the RQ-4 and U-2 is roughly equivalent at 
$32,000 per hour (as stated in the Air Force Total Ownership Costs 
Database), the RQ-4 did not offer a cost advantage over the U-2 in the 
fiscal year 2013 budget review.
    After the Nunn-McCurdy review, the DOD JROC reviewed recent 
adjustments in military strategy and determined that conventional high-
altitude ISR requirements could be reduced. The Air Force further 
determined the U-2, which remains viable until 2040, was sufficient to 
meet those national security requirements for high-altitude ISR with 
this newly reduced force structure.
    Ultimately, continued investment in the RQ-4 Block 30 was not 
prudent given that there is essentially no difference in the operating 
costs between the RQ-4 and U-2 when operating from their normal 
operating locations, and the U-2 meets the new strategy requirements. 
The decision to divest the RQ-4 Global Hawk Block 30 results in $3.8 
billion saved. Although money was saved with the decision to divest the 
Block 30s, $1.3 billion was needed to continue to operate and sustain 
the U-2 through the FYDP. This resulted in a net savings to the 
taxpayer of $2.5 billion.

    54. Senator Wicker. Secretary Donley, what business case analysis 
has been completed that supports the termination of the $4 billion 
newly-purchased aircraft?
    Secretary Donley. In September 2011, the DOD JROC reviewed recent 
adjustments in military strategy and determined that conventional high-
altitude ISR requirements could be reduced. With the divestiture of 18 
Global Hawk Block 30 aircraft, the Air Force will satisfy the modified 
high-altitude requirement with the U-2, which remains viable until 
2040.
    In support of the fiscal year 2013 President's budget request 
(PBR), the Air Force analyzed the operational output of both the RQ-4 
and the U-2 using existing contingency operations for both aircraft and 
determined that the U-2 capability was sufficient for operational 
needs. When analyzed in this context, the U-2 and RQ-4 operating costs 
were nearly equal. The Air Force Total Ownership Cost database figures 
in fiscal year 2011 show that both the U-2 and RQ-4 costs approximately 
$32,000 per flying hour.
    Ultimately, continued investment in the Global Hawk Block 30 was 
not prudent given that there is essentially no difference in the 
operating costs between the RQ-4 and U-2 when operating from their 
normal operating locations, and the U-2 meets the modified strategy 
requirement. The decision to divest the Global Hawk Block 30 resulted 
in $3.8 billion saved. Although money was saved with the decision to 
divest the Block 30s, $1.3 billion was needed to continue to operate 
and sustain the U-2 through the FYDP. This resulted in a net saving to 
the taxpayer of $2.5 billion.

                         GREEN BUILDING POLICY

    55. Senator Wicker. Secretary Donley, in December, Congress passed 
and the President signed an authorization bill for DOD which directed 
DOD to produce a report on the cost of building certification under the 
Leadership in Energy Environmental Design (LEED) and other green 
building rating systems. The enacted law also included a strict ban on 
the use of funds to obtain LEED Gold or Platinum certification for any 
DOD construction that would increase costs. Can you give me an update 
on the plans to address the specific language we included in the 
authorization bill last year?
    Secretary Donley. The Air Force will support OSD as it prepares the 
required report. Furthermore, the Air Force is complying with the 
requirement that no authorized funds be appropriated, obligated, 
expended, or otherwise made available for achieving any LEED gold or 
platinum certification by DOD in fiscal year 2012.

    56. Senator Wicker. Secretary Donley, are you moving forward with a 
LEED policy despite congressional direction to look at all green 
building rating systems and the ban on LEED Gold and Platinum 
certifications?
    Secretary Donley. In accordance with congressional direction, the 
Air Force is not pursing LEED Gold or Platinum certifications. The Air 
Force continues to pursue LEED Silver where it is appropriate pending 
completion of the congressionally-directed study by DOD. At that time, 
we will reevaluate our policy.

    57. Senator Wicker. Secretary Donley, are you considering other 
green building rating systems or alternative approaches to your green 
building policy?
    Secretary Donley. In conjunction with the congressionally directed 
study, the Air Force will work in concert with OSD to look at alternate 
approaches to the current green building policy.

    58. Senator Wicker. Secretary Donley, my State is a leader in the 
processing and availability of construction materials which are 
recognized by several green building rating standards. Some rating 
standards (e.g. National Green Building Standard and Green Globes) 
equally recognize construction materials certified under the 
Sustainable Forestry Initiative, Forest Stewardship Council, American 
Tree Farm System, and Program for the Endorsement of Forest 
Certification systems. Their recognition helps promote sustainable 
forestry, protect jobs, and keep costs low. Do you have a plan to 
ensure that requests for proposals for future construction projects 
explicitly allow forestry certification standards to equally compete?
    Secretary Donley. The Air Force will work in concert with OSD to 
identify and evaluate alternative green building rating standards as 
part of the report on the cost of building certification under the LEED 
and other green building rating systems directed in the NDAA for Fiscal 
Year 2012.

                   TRAINING COSTS AND SCHEDULE DELAYS

    59. Senator Wicker. Secretary Donley, the time between receiving a 
commission to when the servicemember reports for duty can take time, 
especially in the aviation community. My office has been working with 
OSD determining cost and schedule delays for newly commissioned 
military officers. Given the current austere fiscal environment, how 
much money is being spent by the Air Force on personnel between their 
post-commission and pre-specialty training?
    Secretary Donley. Assessment of costs involved in managing the 
annual accession surge is complex because of the interplay between the 
varied number of assignments, the large number of military training 
pipelines, and the number of personnel within those pipelines who may 
be delayed due to training seat availability and medical/security 
screening. However, regardless of the reasons for delays encountered by 
new officers between their commissioning and pre-specialty training, we 
work very hard to maximize the utilization of officers awaiting 
training through various assignments to create a valuable and 
productive period for newly commissioned officers as they are immersed 
into the operational Air Force.

    60. Senator Wicker. Secretary Donley, what measures has the Air 
Force implemented to reduce the amount of time and costs associated 
with this down time?
    Secretary Donley. The Air Force does not have the capacity to train 
all new accessions immediately; therefore, sequencing training of 
students throughout the year maximizes efficiencies and resources to 
support the training pipelines. The vast majority of newly accessed 
officers are accessed each year via the Air Force Academy and Air Force 
Reserve Officers' Training Corps (ROTC) programs in the May/June 
timeframe. In an attempt to maximize the efficient sequencing and 
smooth flow of more than 3,000 newly accessed officers into constrained 
specialty training pipelines, while minimizing the officers' time away 
from their primary assignments, the Air Force has implemented the 
following initiatives to maximize efficiencies:

         Stagger ROTC accessions: Law and policy allow the Air 
        Force to commission ROTC cadets and delay their active duty 
        start for up to 12 months while in an inactive status (unpaid) 
        in the Reserves. Officers are put on extended active duty about 
        30 days before training to allow time to travel, relocate, and 
        in process at the new base and unit;
         Temporarily assign new accessions to supplement 
        recruiting programs;
         Temporarily assign new accessions to augment staffs 
        and operations to cover workload increases or manning shortages 
        (caused by deployments);
         Assign new accessions to permanent duty stations while 
        awaiting training, during which time they can accomplish on-
        the-job training with their assigned units;
         Assign new accessions to training wings, which will 
        facilitate their interaction with experienced aviators and 
        provide the flexibility to allow last minute fills to what 
        would otherwise be vacant training seats; and
         Direct new accessions to use the time between their 
        accessioning and initiation of formal training programs to 
        complete administrative and ancillary training courses required 
        for their future assignment.

                           MILITARY EDUCATION

    61. Senator Wicker. General Schwartz, there is a growing trend 
within DOD to conduct joint military education. However, each military 
department has its own military academy and its own war college. My 
concern regarding redundancy and lack of efficiency continues with 
regard to our professional military education programs. What are the 
operating costs for the Air Force War College and the Air Force 
Academy?
    General Schwartz. The fiscal year 2012 appropriated operating cost 
for Air War College (AWC) is $26.29 million. This includes $12.3 
million for military pay and $13.99 million for operations and 
maintenance costs, including civilian pay. This amount includes mission 
operation and maintenance, base operations (BOS) and school personnel 
pay. The BOS dollars are comprised of costs from other program element 
codes (not professional military education - 84751F). The fiscal year 
2012 appropriated operating cost for the U.S. Air Force Academy is 
$479.9 million. This includes $198.3 million for military pay and 
$281.6 million for operations and maintenance costs, including civilian 
pay.

    62. Senator Wicker. General Schwartz, what measures are being 
implemented to ensure efficiency and reduce redundancies among Services 
with regard to undergraduate and postgraduate professional military 
education?
    General Schwartz. The Chairman of the Joint Chiefs of Staff (CJCS) 
convenes a group called the Military Education Coordinating Committee 
(MECC) twice a year, composed of key leaders from the professional 
military education (PME) service schools to discuss and coordinate 
Joint curriculum and administrative matters. CJCSI 1800.01, Officer 
Professional Military Education Policy (OPMEP), defines sets of 
learning areas and special emphasis items that should be common between 
each Services' programs to ensure consistency of Joint education. The 
OPMEP also delineates the learning objectives intended for junior, mid-
grade, and senior PME programs to reduce redundancy between those 
levels. Periodically, members of the service schools form teams and 
conduct a review of how they comply with and execute their programs. 
This is called the Process for Accreditation of Joint Education and 
schools must pass this review to retain their Joint PME certification 
capability.

                           ON BASE EDUCATION

    63. Senator Wicker. General Schwartz, under which authority are the 
for-profit schools allowed to advertise on a base?
    General Schwartz. The Department's policy in Department of Defense 
Instruction (DODI) 1344.07, Personal Commercial Solicitation on DOD 
Installations, gives clear and concise guidance to the Services 
regarding personal commercial solicitation and advertising procedures. 
This uniform policy is in place to safeguard the welfare of DOD 
personnel as consumers from potentially unscrupulous advertisers. The 
policy requires installation commanders to implement the procedures and 
take the appropriate action for individuals and firms which violate 
these requirements.

    64. Senator Wicker. General Schwartz, under which authority are 
for-profit schools able to actively recruit servicemembers and their 
families for their schools on a base?
    General Schwartz. The Department's policy in DODI 1344.07, Personal 
Commercial Solicitation on DOD Installations, gives clear and concise 
guidance to the Services regarding personal commercial solicitation and 
the advertising procedures.
    Personal commercial solicitation on-base by Academic Institutions 
(AIs) requires the permission of the local installation commander, or 
their designated representative with permission to conduct commercial 
solicitation extended to AIs on an equitable basis. Once approval is 
gained, specific appointments must be made with individuals concerned 
and the commercial agents must identify themselves as representing the 
specific AI. Those appointments will only be conducted in areas 
specified by the installation commander, or designated representative. 
Sales literature for AIs may only be displayed in locations specified 
by the installation commander, or designated representative. 
Presentations (such as school fairs or job fairs) are conducted by AIs 
without approved MOUs only with express permission of the local 
installation commander or designated representative.
    We also require very specific guidelines for advertisement:

         DOD personnel may not represent, or appear to 
        represent, an AI in any official capacity, with or without 
        compensation.
         DOD personnel may not designate themselves as a 
        counselor/advisor representing the AI.
         No AI display signs are permitted during appointments 
        at pre-arranged locations.
         Military official and unofficial notices, such as a 
        ``Daily Bulletin'' or e-mail, cannot announce the presence of 
        an AI agent or their availability.
         Commercial solicitation of DOD personnel in a mass or 
        captive audience is prohibited.
         Making appointments with, or soliciting military 
        personnel who are in an ``on-duty'' status, is prohibited. The 
        prohibition includes solicitation via electronic means over 
        government-provided telecommunications devices (telephone, 
        computers, Blackberries, fax machines, et cetera).
         Commercial solicitation of individuals without 
        appointment, even in areas approved by appointments by the 
        installation commander, or designated representative, is 
        prohibited.
         Use of official DOD identification by active, retired, 
        National Guard, or Reserve members for the purpose of access to 
        military installations or facilities to conduct, or to 
        facilitate personal introduction for the purpose of commercial 
        solicitation is prohibited.
         Release of listings of DOD personnel for purposes of 
        commercial solicitation except through the DOD Freedom of 
        Information Act Program covered in DOD Directive 5400.7 is 
        prohibited.
         Using any portion of a base installation as a showroom 
        of services without the permission of the installation 
        commander, or designated representative, is prohibited.

    65. Senator Wicker. General Schwartz, why are the for-profit 
schools allowed on a base when veterans service organizations who are 
capable of counseling veterans, while aiding them in the transition 
from military life to civilian life, not allowed the same courtesy?
    General Schwartz. Although I am not aware of instances where a 
veterans service organization has been denied access to an installation 
if proper protocol was followed, personal commercial solicitation on-
base by AIs must first have permission of the local installation 
commander, or their designated representative, to conduct commercial 
solicitation extended to AIs on an equitable basis. Once approval is 
gained, specific appointments must be made with individuals concerned 
and the commercial agents must identify themselves as representing the 
specific AI. Those appointments will only be conducted in areas 
specified by the installation commander, or designated representative. 
Sales literature for AIs may only be displayed in locations specified 
by the installation commander, or designated representative. 
Presentations (such as school fairs or job fairs) are conducted by AIs 
without approved MOUs only with express permission of the local 
installation commander, or designated representative.
    Our Education Center professionals encourage members to seek advice 
(e.g., legal, personal financial management counseling, and supervisory 
mentoring) before making a substantial financial commitment to an AI if 
part of the solicitation is beyond service benefits, such as tuition 
assistance of G.I. Bill benefits. We also established very specific 
guidelines for advertisement:

         DOD personnel may not represent, or appear to 
        represent, an AI in any official capacity, with or without 
        compensation.
         DOD personnel may not designate themselves as a 
        counselor or advisor representing the AI.
         No AI display signs are permitted during appointments 
        at pre-arranged locations.
         Military official and unofficial notices, such as a 
        ``Daily Bulletin'' or e-mail, cannot announce the presence of 
        an AI agent or their availability.
         Commercial solicitation of DOD personnel in a mass or 
        captive audience is prohibited.
         Making appointments with, or soliciting military 
        personnel who are in an ``on-duty'' status, is prohibited. The 
        prohibition includes solicitation via electronic means over 
        government-provided telecommunications devices (telephone, 
        computers, Blackberries, fax machines, et cetera).
         Commercial solicitation of individuals without an 
        appointment, even in areas approved by appointments by the 
        installation commander, or designated representative, is 
        prohibited.
         Use of official DOD identification by Active, retired, 
        National Guard, or Reserve members for the purpose of access to 
        military installations or facilities to conduct, or to 
        facilitate personal introduction for the purpose of commercial 
        solicitation is prohibited.
         Release of listings of DOD personnel for purposes of 
        commercial solicitation except through the DOD Freedom of 
        Information Act Program, covered in DOD Directive 5400.7, is 
        prohibited.
         Using any portion of a base installation as a showroom 
        of services without the permission of the installation 
        commander, or designated representative, is prohibited.

    The following practices by AIs are prohibited on all DOD 
installations:

         The offering of unfair, improper, and deceptive 
        inducements.
         The use of rebates or inclusion of prohibited military 
        tuition assistance benefits to facilitate transactions or 
        eliminate competition.
         The use of manipulative, deceptive, or fraudulent 
        devices, schemes or artifices, including misleading advertising 
        and sales literature.
         The use of oral or written representations to suggest 
        or give the appearance that DOD sponsors or endorses any 
        particular AI, its agents, or its commercial services.
         Entering into any unauthorized or restricted area.
         Soliciting door-to-door.

                              BLUE DEVIL 2

    66. Senator Wicker. Secretary Donley, the Air Force has received 
very positive feedback from the field regarding the success of the Blue 
Devil Block I surveillance program. On February 29, 2012, Steven 
Walker, the Deputy Assistant Secretary of the Air Force for Science and 
Technology, told a House Armed Services Subcommittee that ``since 
December 2010, Blue Devil ISR has been instrumental in identifying a 
number of high value individuals and improvised explosive device 
emplacements.'' The Air Force, with funding furnished by the Joint 
Improvised Explosive Device Defeat Organization (JIEDDO) and the DOD 
ISR Task Force, has executed over $150 million to develop the Blue 
Devil Block 2 (BD2) airship, which significantly extends the proven 
Blue Devil capability in support of CENTCOM priorities. Now that the 
BD2 airship is nearing completion, the Air Force has indicated to OSD 
leadership its intent to mothball the airship rather than deploy it to 
Afghanistan. The BD2 requirement was recently revalidated by CENTCOM in 
a February 2012 Request for Information. In light of this, why has the 
Air Force elected to place the BD2 airship in storage rather than 
deploy this capability to Afghanistan?
    Secretary Donley. After significant effort to fulfill the urgent 
need of U.S. Forces-Afghanistan for longer endurance ISR capabilities, 
the Air Force determined that, due to multiple technical challenges, 
BD2 could not reliably be delivered within acceptable cost, schedule, 
and performance risks. As a result, it no longer met CENTCOM 
requirements for long endurance ISR. Cost risk, coupled with a 9-month 
schedule delay made the deployment of BD2 an unaffordable and late 
solution for CENTCOM's long endurance ISR requirement. This resulted in 
CENTCOM supporting the decision to descope the program.

    67. Senator Wicker. Secretary Donley, the Air Force has been 
provided with $60 million in fiscal year 2012 funding from JIEDDO and 
the DOD ISR Task Force to fund completion of the airship and initial 
deployment costs. Why has the Air Force elected not to use these funds 
to support deployment of the BD2 capability?
    Secretary Donley. The BD2 long endurance ISR operational 
demonstration quick reaction capability is facing cost and technical 
performance challenges. Higher than expected deployment and sustainment 
costs, coupled with contractor cost growth, resulted in an estimated 
$189 million shortfall, making BD2 unaffordable. Additionally, the 
program is currently estimated to be 9 months behind schedule. As a 
result of these issues, the BD2 contract has been descoped to deliver 
the airship only, without a payload, and not to deploy to theater.
    Based on contractor proposals, the current cost estimate for 
deployment support is $150 million. As such, the $60 million of fiscal 
year 2012 funds that were appropriated to support deployment is 
insufficient to fund deployed operations. The Air Force remains 
committed to long duration ISR and is currently evaluating alternatives 
to accomplish this mission.

    68. Senator Wicker. Secretary Donley, the Air Force cost estimate 
for a 12-month deployment of the BD2 airship to Afghanistan is two 
times higher than the estimated deployment costs for comparable 
programs, to include the Army's Long Endurance Multi-Intelligence 
Vehicle Airship program. Has the Air Force solicited a competitive bid 
from industry for the BD2 airship deployment?
    Secretary Donley. The Air Force did not solicit a competitive bid 
from industry for BD2 because of the time-sensitive nature of deploying 
a quick reaction capability. The BD2 airship was initiated using rapid 
acquisition authority under which the Secretary of Defense determined 
the capability was urgently needed and designated the Secretary of the 
Army as the cognizant senior DOD official. In October 2010, the Army's 
Engineering Research & Development Center awarded a contract to MAV-6. 
Program management was redirected to the Air Force in November 2010, at 
which time the Air Force initiated a subsequent contract with MAV-6. 
The quick reaction nature of BD2 required the airship to be developed 
in parallel with the logistics support concept.

                         LIGHT ATTACK AIRCRAFT

    69. Senator Wicker. Secretary Donley, in 2009 the Air Force 
regained its source selection authority from the Secretary of Defense 
who had assumed those responsibilities due to concerns involving the 
Air Force's tanker competition. Since then, some troubling miscues have 
occurred in Air Force acquisitions ranging from mistakenly sending 
proprietary data to competing companies to improper advisory and 
assistance contracts in support of the Combat Search and Rescue 
helicopter program. On March 2, 2012, the Air Force set aside a 
contract for a light attack aircraft for the Afghan air force. I 
understand that after an 8-day review of an 18-month procurement, the 
Air Force has determined issues with the light attack aircraft 
procurement were isolated incidents associated with irregular 
paperwork. I applauded your effort to review the procurement to ensure 
it was handled properly, but in light of previous issues with other 
high profile contracts, what confidence do you have that this is, in 
fact, an isolated incident?
    Secretary Donley. The Commander of Air Force Materiel Command 
(AFMC) initiated a Commander-Directed Investigation (CDI). Part 1 of 
the CDI focused solely on execution of source selection processes/
procedures leading to original light air support (LAS) contract. Part 2 
of the CDI is ongoing and is reviewing two source selections from each 
AFMC product center and Air Force Space Command's Space and Missile 
Systems Center to assess the quality and consistency of source 
selection procedures implemented in other Air Force systems acquisition 
programs.
    The Air Force continues its steadfast commitment to ``Recapture 
Acquisition Excellence.'' In 2011, we completed the Acquisition 
Improvement Plan (AIP) chartered in 2009. This was the largest and most 
significant acquisition reform launched by the Air Force in the last 
decade. The AIP completed more than 170 process improvements and 
concentrated on improving our source selection process by strengthening 
source selection governance, improving source selection training, 
requiring multi-functional independent review teams, establishing on-
call source selection augmentation, identifying/tracking personnel with 
source selection experience, updating the acquisition planning process, 
and simplifying the source selection process. The success of this 
program is demonstrated by the accomplishment of 209,500 contracting 
actions by the Air Force in 2011 with only one sustained protest.
    In November 2011, I approved a follow-on effort to AIP called 
Acquisition Continuous Process Improvement (CPI) 2.0, which will 
further our efforts to improve the capabilities of our acquisition 
workforce. Among other efforts, CPI 2.0 continues improving our source 
selection process by re-engineering the competitive award process, 
implementing a more effective contract award process, and increasing 
source selection experienced personnel. Once the LAS report is 
finalized and released, we will incorporate any lessons learned into 
our CPI 2.0 effort.

    70. Senator Wicker. Secretary Donley, is the Air Force the entity 
best suited to lead this investigation?
    Secretary Donley. It is appropriate for the Air Force, specifically 
the AFMC, to conduct the investigation. Air Force commanders have 
explicit authority to direct initiation of investigations involving 
personnel and programs under their command. In the case of LAS 
aircraft, the individuals who conducted the initial LAS source 
selection were assigned to a center subordinate to AFMC. Regarding the 
complex source selection and acquisition issues that the investigation 
involves, AFMC has the greatest amount of expertise in the field of 
government acquisition and the largest numbers of qualified acquisition 
personnel available to shed light on any mistakes that may have 
occurred. Additionally, the CDI is being accomplished in cooperation 
with OSD (Acquisition, Technology & Logistics).

    71. Senator Wicker. Secretary Donley, please provide an update on 
the light attack aircraft procurement.
    Secretary Donley. The LAS contract that was originally awarded on 
December 22, 2011, to Sierra Nevada Corporation (SNC) was terminated by 
the Air Force on March 2, 2012, as part of the Air Force's corrective 
action in response to the suit filed by Hawker Beechcraft Defense 
Corporation (HBDC) in the U.S. Court of Federal Claims. The Air Force 
Service Acquisition Executive was not satisfied with the documentation 
supporting the original LAS source selection, which prompted 
termination of the contract with the SNC. Additionally, the Commander 
of AFMC ordered a CDI into the LAS contract process on February 27, 
2012. Part 1 of the CDI is complete, focusing solely on the execution 
of the source selection processes and procedures in the original LAS 
contract. However, release of the CDI report would compromise the 
integrity of the ongoing source selection process due to the source 
selection sensitive information contained in the report.
    After studying the circumstances prompting the corrective action 
and facts from the subsequent CDI, the Air Force decided to issue an 
amendment to the LAS Request for Proposal (RFP) to both offerors. Air 
Force officials met with both original offerors, SNC and HBDC, 
individually, to review the amended RFP changes line-by-line on April 
17, 2012. Both were provided the opportunity to submit comments on the 
draft RFP amendment, after which the Air Force released the final 
amended RFP on May 4, 2012. While the decision process will be event-
driven, the Air Force targets a source selection decision in early 
calendar year 2013. This would allow first aircraft delivery to 
Afghanistan in the third quarter of 2014.

    72. Senator Wicker. Secretary Donley, what specific issues have you 
found?
    Secretary Donley. The Air Force Investigating Officer findings/
recommendations were as follows:

         There was no criminal misconduct, intentional 
        violation of law, or abuse of authority;
         There was a failure to fully adhere to source 
        selection processes outlined in the Federal Acquisition 
        Regulation and Supplements, which affected both offerors;
         There was an inexperienced team, complacency, and 
        fractured team relationships; and
         Robust planning is needed for source selection 
        documentation management.

    73. Senator Wicker. Secretary Donley, when will a final report be 
available?
    Secretary Donley. Part 1 of the CDI has been completed, but will 
not be released. The CDI report contains source selection sensitive 
information, the release of which would compromise the integrity of the 
on-going source selection process. Part 2 of the CDI is still being 
conducted. A determination about the releasability of this information 
will be made once this part of the investigation has concluded.

    74. Senator Wicker. Secretary Donley, is it the Air Force's 
intention that light attack aircraft comply with U.S. weapons, 
communications, and anthropometric standards in order for U.S. military 
personnel and partners to work seamlessly?
    Secretary Donley. Ultimately, the aircraft is designed for use by 
the Afghan Air Force in support of Afghan operations, but will be 
capable of integrating effectively with other partner nations' forces. 
Since LAS is a security assistance effort for Afghanistan, North 
Atlantic Treaty Organization Air Training Command-Afghanistan (NATC-A) 
defined the weapons, communications, and anthropometric requirements 
based on Afghanistan Air Force (AAF) requirements. The LAS system 
requirements document (SRD) was developed using the memorandum of 
request developed by NATC-A. In accordance with the LAS SRD, the 
aircraft shall meet U.S. Government release and export requirements. 
The LAS communication suite will support voice communications with 
operational agencies and air traffic control facilities and have the 
capability to be upgraded to accommodate secure voice communications. 
The LAS aircraft will be able to employ a .50 caliber machine gun, 
2.75-inch rockets, and 250-pound and 500-pound laser-guided and 
conventional munitions as outlined in MIL-STD-8591. As for 
anthropometric standards, the memorandum of request did not specify 
compliance with MIL-STD-1472 and instead specified an accommodation of 
pilot seating heights of 34 to 40 inches.

    75. Senator Wicker. Secretary Donley, I understand that on March 5, 
2012, Deputy Secretary of State William Burns met with Brazilian 
government officials to reassure them the Embraer Super Tucano would 
still be in the light attack aircraft competition and explained that 
the cancellation of the contract was part of an internal Air Force 
process. That same day, the Brazilian External Affairs Ministry 
commented on the cancellation of the light attack aircraft contract and 
said, ``this development is not considered conducive to strengthening 
relations between the countries on defense affairs.'' What interaction, 
if any, has occurred between the Air Force and the Department of State 
(DOS) on the light attack aircraft procurement?
    Secretary Donley. Following the termination of the LAS contract, 
the Air Force Foreign Policy Advisor's office and the DOS Political-
Military Bureau discussed the status of the LAS contract. Additionally, 
the Air Force Public Affairs talking points were provided via OSD to 
the DOS.

    76. Senator Wicker. Secretary Donley, what was discussed during 
these meetings between the Air Force and DOS?
    Secretary Donley. Following the termination of the LAS contract, 
the Air Force Foreign Policy Advisor's office and the DOS Political-
Military Bureau discussed the status of the LAS contract.

    77. Senator Wicker. Secretary Donley, have the requirements for the 
light attack aircraft procurement in any way been shaped by 
considerations involving trade and the U.S. relationship with the 
Brazilians?
    Secretary Donley. No. The LAS program is a security assistance 
effort for Afghanistan. The aircraft requirements were defined by NATC-
A and have not been shaped by trade relationships with Brazil.

    78. Senator Wicker. Secretary Donley, do you believe the Brazilian 
Ministry of Defense views the U.S. Foreign Military Financing of light 
attack aircraft procurement for the Afghans and the Brazilian FX-2 
fighter competition as two separate matters?
    Secretary Donley. The LAS program is a security assistance effort 
for Afghanistan funded by Afghan Security Forces Funds. The Air Force 
cannot speak on behalf of the Brazilian Ministry of Defense, but there 
is no connection between the U.S. Government's advocacy for the F/A-18 
sale and the LAS contract.
                                 ______
                                 
               Questions Submitted by Senator Rob Portman

                   AIR FORCE INSTITUTE OF TECHNOLOGY

    79. Senator Portman. General Schwartz, I was pleased to see in your 
written testimony that despite the difficult budgetary environment we 
are faced with, the Air Force recognizes the importance of investing in 
its workforce by developing and educating its airmen. With that stated, 
I am concerned with the proposed reductions to your educational/
training institutions that could impede your ability to meet those 
goals. Does the Air Force maintain a commitment to the Air Force 
Institute of Technology (AFIT) as a fully-accredited, graduate degree 
granting education and research institution?
    General Schwartz. AFIT is the Air Force's graduate institute for 
science, technology, engineering, and mathematics. It is independently 
accredited by the Higher Learning Commission and has several degree 
programs accredited by the Accreditation Board for Engineering and 
Technology, Inc. (ABET). AFIT's research funding has grown steadily 
over the last decade (600 percent improvement since 2002). Several of 
AFIT's degree and research programs are one-of-a-kind within DOD. AFIT 
is integral to the Air Force's continued technical dominance in air, 
space, and cyberspace. Given our fiscally challenged environment, we 
plan to do everything possible to leverage this Air Force educational 
advantage as a means of stretching our dollars to obtain maximum 
benefit. Policy guidelines are in place requiring better utilization of 
AFIT assets and are consistent with my desire to maintain the viability 
of AFIT.

    80. Senator Portman. General Schwartz, do you have any additional 
plans to reduce the authorized positions at AFIT beyond the reductions 
that have been proposed in the fiscal year 2013 budget request?
    General Schwartz. At this time, the Air Force has no immediate 
plans to reduce the authorized number of positions at AFIT beyond those 
captured in the fiscal year 2013 force structure announcement (a 
reduction of 57 military and 50 civilians).

    81. Senator Portman. General Schwartz, with the proposed fiscal 
year 2013 reductions to AFIT, how will the Air Force meet its 
educational requirements in specialties such as nuclear engineering and 
cyberwarfare which are not taught at civilian institutions?
    General Schwartz. AFIT has completed a top-down prioritization of 
its academic and research programs with respect to its mission of 
providing defense-focused education and research. With regard to the 
graduate school, nuclear engineering, cyber warfare, and operations 
research are the top priorities. In fiscal year 2012, under Resource 
Management Decision (RMD) 703, AFIT reduced 49 support staff positions 
and 15 military positions. Through optimal prioritization, these 
reductions will have little impact on meeting the Air Force's technical 
student production and research needs.

    82. Senator Portman. General Schwartz, is the Air Force considering 
making a policy change that would move away from traditional 
instruction in favor of alternative methods such as distance learning?
    General Schwartz. Air Force course owners/sponsors are expected to 
analyze all potential delivery methods and select the method which 
achieves the desired learning objectives at the lowest cost. This is 
directed in Air Force Instruction 36-2201, Air Force Training Program, 
and is also directed by DOD policy in DOD Instruction 1322.26, 
Development, Management, and Delivery of Distributed Learning. The Air 
Force currently accomplishes a significant amount of training and 
education through distance learning (DL). For example, in calendar year 
2011, over 9 million training events were completed on the Air Force's 
Advanced Distributed Learning Service (ADLS). For professional military 
education (PME), the majority of the Guard, Reserve, and Active Duty 
force complete PME using DL methods. Only a fraction of mid-grade and 
senior officers (less than 20 percent) are selected to attend the 
traditional, resident version. The Air Force is actively tailoring the 
existing resident programs to incorporate blended learning (BL) 
techniques as a means of improving the quality, extending access, and 
reducing time away from home station.

    83. Senator Portman. General Schwartz, what do you feel are the 
appropriate qualifications for the position of AFIT commandant?
    General Schwartz. The AFIT commandant position has for the first 
time transitioned to a civilian position titled, the AFIT Director and 
Chancellor. I believe the AFIT Director and Chancellor should possess a 
number of qualifications. For example, he or she should possess a 
resume that reflects a wide breadth of leadership experiences both in 
and outside of academia. He or she must possess exceptional 
demonstrated skill in implementing a long-term vision and strategic 
plan, a proven track record of promoting the development of educational 
and research programs, and a history of providing value-added 
consultations that have contributed to the advancement of national 
defense. The incumbent must also demonstrate the ability to develop 
policies and programs to achieve long-range strategic plans and 
continuously assess the compliance and effectiveness of such programs 
and policies. Serving as the senior civilian in AFIT, the incumbent 
must also demonstrate successful human resource management, to include 
performing a full range of personnel decisions, fostering professional 
development, and exercising strong interpersonal communication skills.
    In addition to the specialized experience required for the Director 
and Chancellor of AFIT, there are additional factors that must be 
considered, such as the academic leadership and the contribution and 
professional reputation of the incumbent. The incumbent must also 
demonstrate widely recognized contributions that significantly impacted 
their organization as evidenced by achievements that set a standard or 
established best practices for the professional community. The 
incumbent must have received recognition at the service- or department-
level as a technical expert through activities in academia or by the 
receipt of honors, awards, or other peer recognition external to their 
organization or agency.
                                 ______
                                 
             Questions Submitted by Senator Kelly A. Ayotte

                            TRIAD OF BOMBERS

    84. Senator Ayotte. Secretary Donley and General Schwartz, you 
write in your posture statements that ``the United States must shape 
its [nuclear] deterrent forces to maintain the attributes which lead to 
stability among major powers and which extend deterrence for regional 
challenges and non-state actors while assuring allies.'' To what extent 
is a triad of bombers, submarines, and intercontinental ballistic 
missiles (ICBM) necessary to maintain the attributes which lead to 
stability?
    Secretary Donley and General Schwartz. The triad produces the 
attributes of responsiveness, survivability, and flexibility which are 
needed to deter nuclear-armed adversaries and provides credible 
assurances to allies. In addition, the Nuclear Posture Review concluded 
each leg of the triad provides unique attributes that combine to create 
a synergistic deterrent effect, greater than just the sum of the parts, 
and a hedge against uncertainty. Thus, the triad underwrites both 
global and regional stability.

    85. Senator Ayotte. Secretary Donley and General Schwartz, would it 
be advisable to maintain a nuclear triad should the United States 
pursue further negotiated nuclear arms reductions with Russia beyond 
New START force levels?
    Secretary Donley and General Schwartz. Yes, it is advisable to 
maintain the triad beyond New Strategic Arms Reduction Treaty (START) 
force levels. The Nuclear Posture Review concluded the United States 
should retain a nuclear triad under the New START treaty. It examined 
possible ``dyads'' and determined there was substantial value in 
retaining a diverse triad force structure to hedge against any 
technical or geopolitical problem or operational vulnerability in one 
leg. Moreover, analysis indicates the complementary attributes of the 
triad are important in the complex, multi-nodal security environment we 
face. For the foreseeable future, the triad will continue to provide 
the best mix of unique attributes necessary to maintain stability.

    86. Senator Ayotte. Secretary Donley and General Schwartz, are 
there scenarios where lower numbers of deployed nuclear forces could 
lead to the abandonment of one of the legs of the triad? If so, what 
could be the consequences for stability and extended deterrence?
    Secretary Donley and General Schwartz. Stability is the preeminent 
goal of any future force structure. For the foreseeable future, the 
triad will continue to provide the best mix of attributes necessary to 
maintain stability. Elimination of one leg of the triad would move the 
Nation into uncharted territory. In the emerging complex, multi-nodal 
security environment, potential future reductions must be grounded in a 
strategy-based understanding of the attributes needed to provide and 
extend deterrence and assurance while supporting both global and 
regional stability.

                           PRIORITY PROGRAMS

    87. Senator Ayotte. Secretary Donley and General Schwartz, in your 
prepared statements, you cite the following as high priority programs: 
(1) KC-46A; (2) F-35; (3) LRS-B; (4) service life extension on the F-
16; (5) space-based infrared and advanced extremely high frequency 
(AEHF) satellites; and (6) space launch capability. What impact would 
defense sequestration have on these six high priority programs?
    Secretary Donley and General Schwartz. Sequestration would drive 
major additional reductions beyond the first phase of the Budget 
Control Act reductions to the Air Force fiscal year 2013 budget 
request. As Air Force leadership has testified, the proposed fiscal 
year 2013 budget is balanced and complete. Under sequestration, all 
investment accounts would be impacted. Some modernization programs 
would need to be reduced and possibly restructured and/or terminated. 
All investment accounts would be impacted, including our high-priority 
programs. The KC-46A, F-35, LRS-B, service life extension on the F-16, 
space-based infrared and (AEHF) satellites, and space launch capability 
would all be subject to reductions that could impact contracts and 
result in increased costs and potential delays.

                                  F-35

    88. Senator Ayotte. Secretary Donley and General Schwartz, what is 
the cost of maintaining the legacy fleet, if we do not move forward 
with F-35? Some suggest it would be a least two to three times, perhaps 
more, than the estimated operations and sustainment cost for F-35 and 
in an advanced threat environment, the legacy 4th generation aircraft 
may not survive. While I asked this question in the hearing, I would 
appreciate a more specific response in writing. I am not seeking 
details on current fiscal year 2013 proposals; instead, I am seeking a 
specific number for the operations and sustainment cost for the 
aircraft that would be used in lieu of the F-35 if the program were 
canceled.
    Secretary Donley and General Schwartz. The Defense Strategic 
Guidance states that, ``the U.S. military will invest as required to 
ensure its ability to operate effectively in anti-access and area 
denial (A2/AD) environments.'' While 4.5-generation fighters offer 
improved capabilities over legacy fourth-generation fighters, 4.5-
generation fighters cannot successfully operate in an A2/AD 
environment. No matter what upgrades we incorporate, the 4.5-generation 
fighters will not possess the required survivability in this emerging 
threat environment. The advanced capabilities and survivability 
inherent in fifth-generation fighters is necessary to successfully 
operate against A2/AD threats.
    SLEPs and capability modifications for legacy fourth-generation 
fighters are less costly than producing new aircraft and could mitigate 
quantity shortfalls in the near- to mid-term. Therefore, funding SLEP 
and capability modifications for legacy fourth-generation fighters is a 
crucial part of the Air Force fiscal year 2013 President's budget (PB), 
building a bridge to a necessary fifth-generation fleet. The capability 
of the 4.5-generation and legacy aircraft is inadequate to counter 
emerging A2/AD threats in the mid- to far-term. It would be fiscally 
irresponsible to invest resources procuring a force structure (i.e., 
procuring 4.5-generation aircraft) that is deficient in meeting the 
demands of the new strategic guidance.
    Without new aircraft (F-35s, F-Xs) to replace legacy fighters, the 
size of the Air Force fleet would significantly diminish as they run 
out of service life. Under current projections, reductions would be 10 
percent by 2020, 46 percent by 2030, and 96 percent by 2040. For fiscal 
year 2013-2017, the Air Force plans to spend approximately $9 billion 
per year to operate legacy fighters, to include F-22s, that will be 
part of our fleet for the foreseeable future. The Air Force will spend 
approximately $1.8 billion per year in investments on these fighters to 
extend service life and make necessary capability improvements. Beyond 
the FYDP, sustainment costs will appropriately decrease as legacy 
fighters run out of service life and inventories shrink.

    89. Senator Ayotte. Secretary Donley and General Schwartz, what 
investments have been made in the development and design of the F-35 to 
reduce operations and sustainment costs over the life of the program?
    Secretary Donley and General Schwartz. The F-35 Joint Program 
Office (JPO) is currently implementing an affordability strategy by 
developing an affordability management plan focused on: reducing the 
costs of support products, such as support equipment, spare parts, and 
training devices; baselining requirements with the Services and 
leveraging increased efficiency opportunities; and addressing 
reliability and maintainability. The JPO is creating contract and 
pricing opportunities to reduce the cost of Joint Strike Fighter 
support products by leveraging economic order quantity buys for spare 
parts in conjunction with production buys and implementing pricing 
improvement curves that leverage learning opportunities. By creating a 
common sustainment baseline which harnesses the F-35 support system 
design, the JPO is articulating the optimum level of infrastructure and 
products required to support operations of the global fleet. By 
optimizing the amount of equipment procured early, we are able to 
affect the lifecycle operations and support (O&S) costs. In parallel, 
the program office is actively managing the reliability and 
maintainability of systems/subsystems and components. Where they fall 
short of meeting their design specifications, the implementation of 
appropriate modifications will enable us to control cost growth.
    In 2011, the JPO implemented a number of technical changes and 
affordability initiatives which resulted in an over $30 billion 
reduction, in base year 2002 dollars, in the 2011 O&S estimate. This 
helped to offset externally-driven increases in areas such as military 
and contractor labor rates. Additionally, the JPO conducted sustainment 
baseline deep dives into support equipment, spares, and manpower, as 
well as the initial phase of a business case analysis on supply chain 
management, field operations, sustaining engineering, and fleet 
management.
    The 2012 efforts will include a manpower review into the 
appropriate labor mix and contractor rates, a review of competitive 
options for the long-term provision of support equipment and spares, 
enterprise software licensing, engine life improvements, reprogrammed 
laboratory requirements, and additional Service planning factors such 
as aircraft utilization rates, contingency planning, and squadron 
manning requirements. In addition, the Air Force is studying the 
impacts to maintenance manpower, support equipment, and spares 
requirements by varying squadron size and number of F-35 bases.

    90. Senator Ayotte. Secretary Donley and General Schwartz, are 
these investments accounted for in the operations and sustainment cost 
estimate in the Selected Acquisition Reports?
    Secretary Donley and General Schwartz. The F-35 JPO works closely 
with the Office of the Director, CAPE. Following completion of CAPE's 
independent cost estimate (ICE), the then Principal Deputy Under 
Secretary of Defense for Acquisition, Technology, and Logistics, Mr. 
Frank Kendall, directed CAPE's operations and support (O&S) estimate be 
used for planning purposes in the new acquisition program baseline 
(APB) and the December 2011 Selected Acquisition Report (SAR). As JPO 
cost estimates are updated to reflect the investment made to reduce 
costs, that information is provided to CAPE and their estimate will 
likely be updated. The annual SAR will continue to reflect the CAPE O&S 
estimate, with updates as required.

    91. Senator Ayotte. Secretary Donley and General Schwartz, the F-35 
was designed to be an international program from its inception. We have 
formal, binding agreements with our international partners that have 
been cemented over the past 11 years. The F-35 is not only our largest 
defense program, but the largest program for many of our closest allies 
as well. Your predecessors, their deputies, and acquisitions executives 
have all taken different approaches to how they managed these critical 
relationships. I hope you will take an active and personal role with 
our international partners on the F-35 program to keep them informed on 
and committed to the program. Can you tell me what your plans are in 
this regard?
    Secretary Donley and General Schwartz. The Air Force will continue 
to engage with program partners and posture for continued training and 
potential operations. Air Force senior leaders continuously engage our 
counterparts during regularly scheduled meetings, such as the Chief 
Executive Officer (CEO) Conference, the Joint Strike Fighter Executive 
Steering Board (JESB) meeting, and the Senior Warfighter Group (SWG), 
in addition to various bilateral meetings that occur throughout the 
year.

                LOW RATE INITIAL PRODUCTION CONTRACTING

    92. Senator Ayotte. Secretary Donley and General Schwartz, in light 
of the March 13, 2012, JSF program memorandum titled: ``Low Rate 
Initial Production (LRIP) 6/7 Contracting Strategy,'' has anyone in DOD 
consulted with the international partners on the proposed LRIP 6/7 
procurement strategy?
    Secretary Donley and General Schwartz. The JPO informed the 
international partners of the proposed LRIP 6/7 strategy in early 
spring 2012 and has provided regular updates, to include ensuring they 
have seen the draft requests for proposal. The JPO will keep the 
partners informed as the strategy progresses.
                                 ______
                                 
               Questions Submitted by Senator John Cornyn

                               C-130 MOVE

    93. Senator Cornyn. Secretary Donley, Representative Kay Granger 
asked you at a House hearing on March 6 whether the Air Force had made 
a determination of the costs associated with relocating the eight C-
130s of the 136th Airlift Wing in Fort Worth from Texas to Montana. You 
responded that the Air Force ``had not completed all our work.'' How 
much savings in the FYDP does the Air Force anticipate will result from 
the proposed move of eight C-130s from Texas to Montana?
    Secretary Donley. The Air Force does not expect to realize any 
savings from the movement of C-130s from Fort Worth, TX to Great Falls, 
MT. The move better postures Total Force lift capabilities within the 
United States and fills an existing requirement for lift in the 
Northwest, specifically Federal Emergency Management Agency (FEMA) 
Regions VIII, IX, and X.

    94. Senator Cornyn. Secretary Donley, how do you justify the 
proposal to move these aircraft when no thorough cost analysis has been 
conducted?
    Secretary Donley. The transfer of eight C-130s from Carswell, TX, 
better postures Total Force lift capabilities within the United States 
and fills an existing requirement for lift in the Northwest, 
specifically FEMA Regions VIII, IX, and X.
    The new Defense Strategic Guidance reduced the overall requirement 
for intra-theater airlift. Using scenarios similar to the Mobility 
Capabilities Requirements Study (MCRS-16, Case 3), the Air Force 
determined excess capacity existed in the fleet. The reduced 
requirement permits the retirement of 65 older C-130H aircraft and the 
divestiture of the entire C-27J fleet.

    95. Senator Cornyn. Secretary Donley, the following quote appeared 
in the March 2012 issue of National Guard magazine: ```I'm extremely 
pleased that we are going to retain a flying mission for Montana,' said 
Brigadier General John E. Walsh, the Montana adjutant general, but 
moving aircraft from one State to another, providing appropriate 
infrastructure, and training pilots and maintainers is not cheap, he 
points out. When the F-15s were transferred from Missouri to Montana in 
2009, it cost about $40 million. `The one concern I have with all the 
movement of all this aircraft is the cost,' he says.'' I find these 
statements troubling, and I agree with his concerns. Was the Montana 
adjutant general consulted about the cost of this move prior to the 
plan being announced?
    Secretary Donley. Direct coordination with individual State 
Adjutants General does not occur during the Air Force budgeting 
process. However, the National Guard Bureau represented ANG concerns 
during Air Force budget deliberations, and participated throughout the 
Air Force's fiscal year 2013 Program Objective Memorandum process.

    96. Senator Cornyn. Secretary Donley, if the Montana adjutant 
general is concerned about how much this will cost, why does the Air 
Force not appear to be concerned?
    Secretary Donley. The transfer of eight C-130s from Carswell, TX, 
is a decision based on mission leveling within the ANG and Air Force 
Reserve. It better postures Total Force lift capabilities within the 
United States and fills an existing requirement for lift in the 
Northwest, specifically FEMA Regions VIII, IX, and X.
    In particular, Congressmen Denny Rehberg, of Montana's at-large 
district, has stated, ``This mission is a perfect fit for Montana. Not 
only do we have one of the largest international boarders among the 
United States, but the vast open space is susceptible to natural 
disasters including fires, floods, and tornados.''

    97. Senator Cornyn. Secretary Donley, I note that the Air Force 
budget request for fiscal year 2013 includes $3 million in funding to 
construct temporary shelters for these C-130s, as Montana is not 
currently equipped to house them. The Air Force has also requested $20 
million in MILCON funding for fiscal year 2014 for conversion of 
Montana's existing F-15 facilities to support the C-130s. According to 
DOD Form 1391 requesting this fiscal year 2014 funding, the C-130 
cannot fit inside Montana's existing hangars for maintenance, thus 
negatively impacting the C-130 mission. It is my understanding that 
until this proposed MILCON project is completed, the lack of a fuel 
cell control facility will cause maintenance delays, forcing fuel cell 
work to be done on the ramp in harsh winter conditions, delaying the 
availability of the aircraft, and thus negatively impacting mission 
readiness. This construction project would not be completed until 2016. 
How do you plan to address the obvious risk to mission readiness for 
these C-130s until the project is completed?
    Secretary Donley. The risk to mission readiness due to the absence 
of a fuel cell hangar until 2015 is minimal. Actual aircraft groundings 
due to fuel-related problems needing a fuel cell hangar are not common. 
Risk mitigation to scheduled fuel cell maintenance, which normally 
occurs as part of an isochronal inspection once every 540 days, can be 
accomplished by servicing aircraft at other wings. Risk mitigation to 
unscheduled fuel cell maintenance problems includes working outdoors, 
weather conditions permitting, and a one-time flight waiver to a 
facility with a fuel cell.

    98. Senator Cornyn. Secretary Donley, how do you justify assuming 
such risk that would be nonexistent if the C-130s were left in Texas?
    Secretary Donley. Moving the C-130s from Texas does not garner any 
additional risk nor does it impact the Gulf States' ability to respond 
to natural disasters. The Gulf region will continue to receive coverage 
from C-130s in Little Rock, AR, and C-17s from Jackson, MS. Active 
component forces remain available to respond to contingencies and 
disasters worldwide through the Global Force Management Process. The 
Air Force will remain trained and ready to provide assistance and 
support to civil authorities, to include those in Texas and her 
neighbors, should such a need arise.

    99. Senator Cornyn. Secretary Donley, moving the C-130s from Texas 
would eliminate the only ANG unit on the Gulf Coast with a C-130 
airlift capability. The 136th has been used multiple times in hurricane 
evacuation and Defense Support to Civilian Authorities (DSCA) 
operations. On March 5, all five Governors of the Gulf Coast States 
sent a letter to President Obama strongly advising against the 
relocation of these aircraft, stating that: ``losing the C-130s takes 
away a powerful airlift asset for saving the lives of Gulf Coast States 
citizens.'' These are Governors who have relied heavily on the 136th 
Airlift Wing in response to Hurricanes Gustav and Ike in 2008, 
Hurricane Dean in 2007, and Hurricanes Katrina, Rita, and Wilma in 
2005. The 136th has flown 423 sorties in response to storms, safely 
evacuating 3,143 passengers and delivering 989 tons of emergency aid. 
Were you aware of this?
    Secretary Donley. The Air Force has mitigated risks and maintains a 
strong position to support the Gulf States. The transfer of C-130s is a 
decision based on mission leveling within the ANG and Air Force 
Reserve. It better postures Total Force lift capabilities within the 
United States and fills an existing requirement for lift in the 
Northwest, specifically FEMA Regions VIII, IX, and X. The Gulf region 
will continue to receive coverage from C-130s at Little Rock, AR, and 
Savannah/Hilton Head International Airport, GA.
    Specifically, Arkansas hosts the 189th Airlift Wing which provides 
formal training to upgrading aircrews and operates nine C-130s at 
Little Rock AFB. In Georgia, the 165th Airlift Wing operates eight C-
130s at Savannah, GA. While not C-130 aircraft, in Mississippi, the 
172d Airlift Wing operates nine C-17s at Jackson International Airport, 
providing both tactical and strategic airlift and airdrop capabilities. 
Although these airlift wings are under control of their respective 
States, they remain available to assist in regional emergencies under 
the Emergency Management Assistance Compact (E-MAC). Additionally, when 
an incident becomes a federally-declared emergency, Air Mobility 
Command steps in to provide airlift support via the Global Force 
Management process which pulls from any and all available forces, 
including the 189th, the 165th, and 172d Airlift Wings.

    100. Senator Cornyn. Secretary Donley, do you believe Montana has a 
greater need for these aircraft than the Gulf Coast States?
    Secretary Donley. Air Force assets are aligned to provide maximum 
capabilities to meet both assigned and ad hoc missions. In FEMA Regions 
VIII, IX, and X, covering the northwestern part of the United States, 
including Montana, there has been a need for lift capabilities postured 
to meet potential natural disasters. The Gulf region has lift 
capabilities to meet any homeland defense crisis that may arise.
    Additionally, the Secretary of Defense asked Air Force leadership 
to work with the Council of Governors on various options regarding the 
ANG force structure. The Air Force determined we can mitigate impacts 
to affected States with a $400 million package that would maintain an 
additional 24 C-130 aircraft in the ANG.

    101. Senator Cornyn. Secretary Donley, how do you plan to 
accommodate the requirement in the Gulf States for these aircraft, 
often in emergency circumstances with immediate needs?
    Secretary Donley. The Gulf region will continue to receive coverage 
from C-130s in Little Rock, AR, and C-17s from Jackson, MS. 
Specifically, Arkansas hosts the 189th Airlift Wing which provides 
formal training to upgrading aircrews and operates nine C-130s at 
Little Rock AFB. In Georgia, the 165th Airlift Wing operates eight C-
130s at Savannah, GA. In Mississippi, the 172d Airlift Wing operates 
nine C-17s at Jackson International Airport, which can provide both 
tactical and strategic airlift and airdrop capabilities. While these 
airlift wings are under control of their respective States, they remain 
available to assist in regional emergencies under E-MAC. Additionally, 
when an incident becomes a federally-declared emergency, Air Mobility 
Command steps in to provide airlift support via the Global Force 
Management process which pulls from any and all available forces, 
including the 189th, the 165th, and 172d Airlift Wings.
    Moving C-130 aircraft from Texas does not impact the Gulf States' 
overall ability to respond to natural disasters. The Air Force will 
remain trained and ready to provide assistance and support to civil 
authorities, should such a need arise.

    102. Senator Cornyn. Secretary Donley, how will the Governors 
respond to future emergencies if there are no longer National Guard C-
130s on the Gulf Coast?
    Secretary Donley. During emergencies, the Gulf Coast Governors can 
call upon the C-130 support in the bordering States of Georgia and 
Arkansas. Specifically, Arkansas hosts the 189th Airlift Wing which 
provides formal training to upgrading aircrews and operates nine C-130s 
at Little Rock AFB. In Georgia, the 165th Airlift Wing operates eight 
C-130s at Savannah, GA. In Mississippi, the 172d Airlift Wing operates 
nine C-17s at Jackson International Airport, which can provide both 
tactical and strategic airlift and airdrop capabilities. While these 
airlift wings are under control of their respective States, they remain 
available to assist in regional emergencies under E-MAC. Additionally, 
when an incident becomes a federally-declared emergency, Air Mobility 
Command steps in to provide airlift support via the Global Force 
Management process which pulls from any and all available forces, 
including the 189th, the 165th, and 172d Airlift Wings.

    103. Senator Cornyn. Secretary Donley, what is your preference in 
these disaster situations--for State Governors to employ the Air Guard 
or for U.S. Northern Command to wait for assigned Active or Reserve 
components C-130s to execute missions as ordered by the President, 
which could add at least several days of delay?
    Secretary Donley. In accordance with the national response 
framework, States have the primary responsibility to plan and execute 
response operations to mitigate effects from disasters. Should a 
State's resources become overwhelmed, or the state anticipates 
insufficient internal resources, it may request aid through E-MAC from 
surrounding States. Considerable lift capability exists through this 
congressionally-approved interstate mutual support system. Should the 
disaster exceed E-MAC-provided resources, the Federal Government can 
provide assistance as stipulated in the Stafford Act. Experience has 
shown with a Presidential declaration and a validated request for 
assistance (RFA) or mission assignment (MA) from FEMA, the Air Force 
can have personnel and equipment ready for mission execution within 4 
hours of the authorization. For activities covered under the current 10 
U.S.C. Sec. 12302 (Ready Reserve) recall authority, we have recalled 
and readied forces for deployment in as little as 4 hours.

    104. Senator Cornyn. Secretary Donley, with the elimination of C-
130s on the Gulf Coast, it seems that it could now take days before 
DSCA operations could be fully implemented. What is your assessment of 
which force is more capable, historically, of responding in the 
shortest amount of time?
    Secretary Donley. History has shown the Governor has immediate 
authority and access to the ANG. If the situation cannot be mitigated 
using State resources, the State may request aid through E-MAC from 
surrounding States. Through this approved interstate mutual support 
system, E-MAC offers assurances that capable airlift exists. Experience 
has shown with a presidential declaration and a validated RFA or MA 
from FEMA, the Air Force can have personnel and equipment ready for 
mission execution within 4 hours of the authorization.

    105. Senator Cornyn. Secretary Donley, would you agree that history 
shows a Governor can mobilize ANG assets within hours, while execution 
of a Federal response could take days?
    Secretary Donley. In most cases, the Governor has greater and more 
rapid daily access to National Guard assets within his or her State. 
Because DOD isn't designated as a first responder, situations where 
action is not essential to preserve life and property require us to 
wait for appropriate activation authorities to employ National Guard 
assets in a Federal capacity. At the same time, for major events where 
Federal assets are clearly required and needs have been anticipated, 
the Federal response, including the use of Title 10 forces, can be 
immediate.
    Having the State Adjutant Generals qualified as dual-status 
commanders also contributes to a rapid response capability.

    106. Senator Cornyn. Secretary Donley, when did the decision 
process begin to relocate these C-130s?
    Secretary Donley. The DOD Strategic Guidance, ``Sustaining US 
Global Leadership: Priorities For 21st Century Defense,'' was released 
in January 2012 and directs the Services to build a force that will be 
smaller and leaner, flexible, ready, and technologically advanced. The 
proposed fiscal year 2013 President's budget was developed to satisfy 
this new strategic guidance and to meet the requirements of the Budget 
Control Act of 2011. The transfer of eight C-130s from Fort Worth, TX, 
better postures Total Force lift capabilities within the United States 
and fills an existing requirement for lift in the Northwest, 
specifically FEMA Regions VIII, IX, and X.

    107. Senator Cornyn. Secretary Donley, was the obvious pressure 
from the Montana delegation the biggest factor behind this decision?
    Secretary Donley. No. The transfer of C-130s to Great Falls, MT, 
better postures Total Force lift capabilities within the United States 
and fills an existing requirement for lift in the Northwest, 
specifically FEMA Regions VIII, IX, and X.
    The proposed plan for Montana is consistent with the new DOD 
Strategic Guidance, ``Sustaining U.S. Global Leadership: Priorities For 
21st Century Defense,'' which directs the Services to build a force 
that will be smaller and leaner, flexible, ready, and technologically 
advanced. It is an integrated, Total Force effort to achieve our end 
state of a ready and sustainable force that can meet our surge and 
rotational requirements, and reflects the ANG's Capstone Principles: 
allocate at least one flying wing with ANG equipment to each State; 
recapitalize concurrently and in balance with the Regular Air Force; 
manage ANG resources with ANG people; adopt missions that fit the 
militia construct; and, build dual-use capabilities (emergency support 
functions) relevant to the States.

                       FORCE STRUCTURE IN EUROPE

    108. Senator Cornyn. Secretary Donley and General Schwartz, 
according to DOD's new strategic guidance released in January a 
``strategic opportunity to rebalance the U.S. military investment in 
Europe has been created and in keeping with this evolving strategic 
landscape, our posture in Europe must also evolve.'' It goes on to 
state that: ``whenever possible, we will develop innovative, low-cost, 
and small-footprint approaches to achieve our security objectives, 
relying on exercises, rotational presence, and advisory capabilities.'' 
The Army has adjusted to this approach by announcing the elimination of 
two heavy brigades forward-stationed in Europe, while also establishing 
and maintaining a new rotational presence in Europe. Yet, this concept 
of rotational forces is not mentioned in the Air Force's strategy. 
There are currently 69 F-16s, 96 F-16s, 15 KC-135 tankers, and a number 
of other Air Force aircraft throughout Europe. Yet, the only 
substantial change to the Air Force posture in Europe seems to be the 
inactivation of a squadron in Germany, resulting in the retirement of 
20 A-10s and deactivating an air control squadron at Aviano Air Base, 
Italy. At the same time, the Air Force is proposing reductions of 
nearly 200 aircraft in fiscal year 2013 from installations across the 
United States. Please explain this discrepancy and expound on why the 
Air Force is not more deliberately adjusting its European footprint in 
accordance with the Secretary of Defense's strategic guidance.
    Secretary Donley and General Schwartz. The Air Force is reducing 
our aircraft assigned in Europe by 10 percent; our overall reduction of 
200 aircraft in fiscal year 2013 represents around 4 percent of our 
Total Force. In relative numbers, we are taking a much larger reduction 
in Europe than in the rest of the world. We believe this is consistent 
with the Defense Strategic Guidance. At the same time, this was not an 
easy decision. Our Europe-based force is the cornerstone of our 
commitment to our NATO allies.
    The U.S. Air Forces in Europe (USAFE) footprint has continuously 
evolved to meet the strategic needs of the Nation. In the past, this 
has translated to a significant drawdown of forces and infrastructure, 
including the reduction of multiple fighter squadrons and ancillary 
units in theater. USAFE currently uses rotational forces to augment its 
capability and meet war fighting requirements. USAFE's forces meet NATO 
requirements and provide a limited, but strategic mission capability to 
U.S. European Command (EUCOM) and U.S. African Command (AFRICOM) as 
recently demonstrated during the operations in Libya. Since 2006, USAFE 
has reduced manpower by 3,884 personnel (11 percent), realigned 17 
units, and closed 2 installations and 44 sites. The command is 
currently working two major installation streamlining actions and 
continues to pursue other efficiency efforts. Existing installations 
support EUCOM operations, but are directly tied to the ability of the 
United States to prosecute and sustain global operations through 
logistics, mobility, communications, and intelligence supported by 
USAFE installations which directly enable operations in CENTCOM and 
AFRICOM.

    109. Senator Cornyn. Secretary Donley and General Schwartz, the Air 
Force currently has 14 C-130J aircraft at Ramstein AFB, Germany. It is 
my understanding that the number of C-130Js in Europe will not change 
even though the Army will be pulling back half of its brigade combat 
teams (BCT) (two of four) from Europe. Why did the Air Force find it 
acceptable to balance missions across the States, as General Schwartz, 
you testified before the Subcommittee on Defense of the House 
Appropriations Committee, but did not find it acceptable to balance 
missions for the same aircraft across Europe, even though the Army will 
be substantially reducing its European presence?
    Secretary Donley and General Schwartz. Permanent forward based 
mobility forces are required to execute steady state operations within 
a given theater and preserve strategic flexibility in time of crisis. 
USAFE is the air component for EUCOM and AFRICOM, an area of 
responsibility spanning two-thirds of the Earth's surface and 105 
countries. However, USAFE only holds 4 percent of the theater airlift 
force and 3 percent of the tanker force, represented by a single C-130 
squadron and a single KC-135 squadron, respectively. EUCOM and AFRICOM 
airlift studies from 2010 state that the current EUCOM mobility force 
structure is less than required to respond to crisis in the European 
and African theaters and execute the enduring requirements that dictate 
persistent (365 days/year) presence.
    The USAFE force size in Europe is not based on the Army's 
footprint. C-130 Joint airdrop/air transportability training with the 
173d Airborne Brigade Combat Team (ABCT) is an integral part of the 
training required to maintain the combat-ready status of U.S. Forces. 
The 173 ABCT requires 13,500 jumps per year, in addition to any 
deployment preparation. However, the BCTs being removed from Europe are 
heavy BCTs, a minor mission set for the EUCOM assigned C-130Js.

                          JOINT STRIKE FIGHTER

    110. Senator Cornyn. Secretary Donley, on March 13, 2012, the JSF 
Program Executive Officer (PEO) sent a memo to the Air Force Service 
Acquisition Executive regarding the F-35 JSF LRIP 6/7 contracting 
strategy. It is my understanding that the F-35 program is implementing 
a contracting strategy that attempts to link development and test 
progress in 2012 to the number of aircraft that can be purchased in 
these LRIP lots. This is a novel and somewhat unusual concept, which 
necessitates close consultation with Congress. Is it your understanding 
that DOD is asking for formal approval of this proposal from each of 
the congressional defense committees via letter prior to moving forward 
on a joint F-35 LRIP 6/7 contract? If not, please explain.
    Secretary Donley. It is the intention of the Air Force and the DOD 
to ensure the defense committees are kept apprised of our plans as we 
move forward in the procurement of the LRIP Lots 6 and 7 aircraft. The 
congressional defense committees were first briefed on the strategy on 
February 15-16, 2012, and then notified via letter from the Air Force 
Service Acquisition Executive on March 15, 2012.
    DOD is implementing an event-based contracting strategy for LRIP 
Lots 6 and 7 that buys aircraft production quantities based upon 
development and test progress. This strategy provides a means to have 
control of production informed by demonstrated development performance 
against the 2012 plan and concurrency cost risk reduction.
    The Department will request Lockheed Martin provide a consolidated 
proposal for LRIP Lots 6 and 7 that affords flexibility with future 
procurement quantities. First, we will award 25 aircraft in Lot 6, out 
of 31 authorized and appropriated in fiscal year 2012. Second, we will 
provide a means to procure from zero to six of the remaining fiscal 
year 2012-funded Lot 6 aircraft concurrent with the Lot 7 contract 
award in 2013. Finally, we will link the total aircraft quantity 
ultimately procured in Lot 6 to Lockheed's development performance and 
concurrency cost risk reduction efforts.
    Currently, appropriated fiscal year 2012 funding is necessary to 
implement this contracting strategy. The variable quantity of up to six 
additional Lot 6 aircraft will be paid for with the fiscal year 2012 
funds originally authorized and appropriated by Congress for their 
purchase; however, these funds will not be obligated on contract until 
fiscal year 2013.
    The Department intends to award Lot 7 aircraft and the Lot 6 
variable quantity aircraft through fully definitized contract actions 
in fiscal year 2013. The initial Lot 6 contract award for 25 aircraft 
will require an undefinitized contract action (UCA) to ensure 
production flow is not disrupted. However, the Department does not 
intend to award a UCA for the 25 aircraft in Lot 6 until essential 
agreement is reached for Lot 5.
    We believe our plan for negotiations for LRIP 6 and 7 will allow us 
to control production quantity based on the performance of the 
development program. It is important that Lockheed Martin demonstrate 
performance and help us to establish the confidence that the F-35 is a 
stable and capable platform.

             ADDITIONAL BASE REALIGNMENT AND CLOSURE ROUNDS

    111. Senator Cornyn. General Schwartz, at today's hearing, you 
indicated that, in the long run, a manned aircraft may not be able to 
do all of the requirements that an unmanned aircraft is capable of 
doing. You went on to stress that you are not dealing with the long 
run, implying that you instead need to worry about cost savings now and 
in the immediate future. Yet, you also mentioned during the hearing the 
need for additional Air Force base closures, which inherently involves 
long-term considerations. According to a GAO report published March 8, 
2012, the 2005 BRAC round was estimated to cost $21 billion (and 
actually cost $35.1 billion), and it will result in only a $9.9 
billion, 20-year net savings (73 percent lower than what was originally 
estimated). With current budgetary constraints, do you believe we have 
another $20 billion+ to seriously consider another round of BRAC?
    General Schwartz. New rounds of BRAC may have a lower upfront 
investment because they would be focused on eliminating unnecessary 
infrastructure and installations, rather than transformation as in BRAC 
2005. The amounts you cite were for all of DOD. The Air Force effort 
produced a much more positive and timely result. The Air Force 
implemented all assigned BRAC 2005 recommendations on time and for less 
than initially estimated. Based on submitted budget justification 
material in the fiscal year 2013 President's budget, the Air Force net 
implementation costs through fiscal year 2011 were actually a savings 
of $756 million ($3.8 billion invested, offset by $4.5 billion in 
savings for the 2006 through 2011 period). In addition, $957 million in 
net annual recurring savings will continue in perpetuity. New rounds of 
BRAC are essential to meeting fiscal constraints and will provide an 
effective, fair process for the Department to identify and shed its 
excess infrastructure.

    112. Senator Cornyn. General Schwartz, has there been a business 
case analysis completed to support your opinion that another BRAC round 
is necessary? If so, under this assessment, how many years would it 
take to start seeing a positive savings from BRAC?
    General Schwartz. The Air Force has not conducted a business case 
analysis for another BRAC. However, we began BRAC 2005 with a known 
excess infrastructure capacity and ended the BRAC process by closing 
only seven small installations or facilities. As a result of force 
structure reductions since 2005 and projected in the 2013 budget, the 
Air Force has and will continue to have infrastructure excess to its 
needs. The best, most equitable way to determine the excess as well as 
potential costs and savings from shedding excess infrastructure in the 
United States is through the statutorily-defined BRAC process.

                  DATA AT REST ENCRYPTION REQUIREMENTS

    113. Senator Cornyn. Secretary Donley and General Schwartz, 
military computers containing critical government data are frequently 
at rest. As a result, the DOD Chief Information Officer (CIO) issued a 
memorandum on July 3, 2007, to address the encryption requirements for 
sensitive unclassified data at rest on mobile computing and removable 
storage devices. What is the status of the Air Force's implementation 
of the data at rest encryption requirements?
    Secretary Donley and General Schwartz. The Air Force has not met 
the DOD CIO data at rest (DaR) encryption mandate due to funding cuts 
and redirection of funds to the highest-priority cyber-related project 
in Air Force Space Command (AFSPC): collapsing multiple unclassified 
networks into a single Air Force non-secure internet protocol router 
network, known as the Air Force Network. The Air Force has developed a 
plan to deploy BitLocker, which is bundled with Windows 7 as a low cost 
solution on laptops, to meet some DaR requirements and improve overall 
security posture. BitLocker is Federal Information Processing System 
140-2 compliant and meets three of seven DaR requirements planned for 
Air Force implementation. AFSPC will implement BitLocker on all Air 
Force laptops beginning in fall 2012. The Electronic Systems Center in 
AFMC is researching and determining the cost of fielding a fully 
compliant DaR product. AFSPC is developing courses of action to 
reallocate funds to support fully compliant DaR fielding beginning in 
fiscal year 2013 or fiscal year 2014 with an estimated completion date 
in fiscal year 2015 or fiscal year 2016.

                        LONG-RANGE STRIKE BOMBER

    114. Senator Cornyn. Secretary Donley and General Schwartz, I was 
encouraged to see that the fiscal year 2013 Air Force budget request 
appears to protect the LRS-B program, with a marked increase in 
proposed spending over the FYDP. What is the Air Force's plan to 
protect funding for the LRS-B program in the face of possible 
sequestration in fiscal year 2013 and beyond?
    Secretary Donley and General Schwartz. With or without 
sequestration, the LRS-B will remain an Air Force priority; however, 
sequestration would drive major additional reductions beyond the first 
phase of the Budget Control Act reductions to the Air Force fiscal year 
2013 budget request. As Air Force leadership has testified, the 
proposed fiscal year 2013 budget is a balanced and complete package. 
Under sequestration, some programs would need to be reduced and 
possibly restructured and/or terminated. All investment accounts would 
be impacted including our high-priority modernization efforts, such as 
MQ-9, Joint Strike Fighter, and KC-46A.
    Additionally, sequestration would force an immediate percentage 
reduction in our operation and maintenance accounts which could damage 
readiness and make our ability to cover any emergent execution year 
requirements extremely difficult.

    115. Senator Cornyn. Secretary Donley and General Schwartz, what is 
the projected delivery date for the first LRS-B?
    Secretary Donley and General Schwartz. The projected delivery date 
for the first LRS-B is the mid-2020s, before the current aging bomber 
fleet begins to go out of service.

    116. Senator Cornyn. Secretary Donley and General Schwartz, how 
many total aircraft does the Air Force plan to purchase?
    Secretary Donley and General Schwartz. The Air Force plans to 
purchase 80-100 LRS-Bs to ensure flexibility and sufficient capacity 
for Joint Force commanders.

    117. Senator Cornyn. Secretary Donley and General Schwartz, at this 
time, does the Air Force plan still consist of both manned and unmanned 
LRS-B aircraft?
    Secretary Donley and General Schwartz. Yes. The LRS-B will be 
designed to accommodate both manned and unmanned operations.

    [Whereupon, at 12:40 p.m., the committee adjourned.]


DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR 
               2013 AND THE FUTURE YEARS DEFENSE PROGRAM

                              ----------                              


                        TUESDAY, MARCH 27, 2012

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

             U.S. STRATEGIC COMMAND AND U.S. CYBER COMMAND

    The committee met, pursuant to notice, at 9:33 a.m. in room 
SD-106, Dirksen Senate Office Building, Senator Carl Levin 
(chairman) presiding.
    Committee members present: Senators Levin, Lieberman, Reed, 
Nelson, Webb, Udall, Hagan, Manchin, Shaheen, Gillibrand, 
Blumenthal, McCain, Inhofe, Sessions, Chambliss, Ayotte, and 
Collins.
    Committee staff members present: Richard D. DeBobes, staff 
director; and Leah C. Brewer, nominations and hearings clerk.
    Majority staff members present: Joseph M. Bryan, 
professional staff member; Jonathan S. Epstein, counsel; 
Richard W. Fieldhouse, professional staff member; and Thomas K. 
McConnell, professional staff member.
    Minority staff members present: Ann E. Sauer, minority 
staff director; Daniel A. Lerner, professional staff member; 
and Michael J. Sistak, research assistant.
    Staff assistants present: Jennifer R. Knowles, Hannah I. 
Lloyd, and Bradley S. Watson.
    Committee members' assistants present: Carolyn Chuhta, 
assistant to Senator Reed; Ryan Ehly, assistant to Senator 
Nelson; Gordon Peterson, assistant to Senator Webb; Casey 
Howard, assistant to Senator Udall; Mara Boggs, assistant to 
Senator Manchin; Elana Broitman, assistant to Senator 
Gillibrand; Ethan Saxon, assistant to Senator Blumenthal; Clyde 
Taylor IV, assistant to Senator Chambliss; Charles Prosch, 
assistant to Senator Brown; Brad Bowman, assistant to Senator 
Ayotte; and Rob Epplin, assistant to Senator Collins.

       OPENING STATEMENT OF SENATOR CARL LEVIN, CHAIRMAN

    Chairman Levin. Good morning, everybody.
    Today's hearing continues a series of posture hearings that 
the Senate Armed Services Committee is conducting on our 
combatant commands within the context of the fiscal year 2013 
budget request and the President's new Strategic Guidance. 
Today we receive testimony from the U.S. Strategic Command 
(STRATCOM) and the U.S. Cyber Command (CYBERCOM), a sub-unified 
command of STRATCOM. Let me first welcome General Robert 
Kehler, the Commander of STRATCOM, and General Keith Alexander, 
the Commander of CYBERCOM, and thank them both for their 
service to our Nation. We also want to thank the fine men and 
women who serve in these commands for their dedication and 
service to our Nation and a special thanks to their families.
    STRATCOM manages nine missions across the Department of 
Defense (DOD). These missions range from satellite and space 
situational awareness, missile defense, and electronic warfare, 
to combating weapons of mass destruction. STRATCOM coordinates 
the activities of CYBERCOM across the DOD. Unlike combatant 
commands which are regionally focused, STRATCOM's missions are 
global.
    As noted in the President's Strategic Guidance, STRATCOM 
commands ``nuclear forces that can under any circumstances 
confront an adversary with the prospect of unacceptable 
damage.'' That capability needs to be preserved as we continue 
to reduce the size of these forces and modernize the 
infrastructure at the Department of Energy (DOE) that supports 
this mission.
    General Kehler, here are some of the issues that I hope 
that you will address this morning.
    First, are you satisfied with the direction that we are 
taking in our nuclear force posture and with DOE's role in 
maintaining our nuclear stockpile so that we can continue to 
reduce its size without testing while ensuring the stockpile 
remains safe and meets military requirements?
    Second, do you believe we are on a sustainable path to 
protect our space assets and to reconstitute them, if 
necessary, given the congested and contested nature of space?
    Third, DOD is allocated a block of the electromagnetic 
spectrum that connects our space, cyber, and electronic warfare 
assets to our forces. STRATCOM is the lead combatant command 
for synchronizing spectrum operations. How concerned are you 
about the prospect of losing spectrum and what are you doing to 
preserve the Department's access to it?
    Fourth, with the cancelation of the Operationally 
Responsive Space program, are you worried about our ability to 
field low-cost but rapidly deployable satellites that can fill 
capability gaps between large national intelligence satellite 
collection systems and the Department's airborne surveillance 
platforms?
    Fifth, what is your strategic vision for the combined use 
of space and cyber? These two domains are integrally linked but 
we have not seen a plan for integrating capabilities and 
operations.
    Let me now turn to CYBERCOM for a moment.
    There is much for us to examine in this increasingly 
important and complex, but still new mission area, not only as 
it affects DOD, but the government and the economy as a whole.
    General Alexander has stated that the relentless industrial 
espionage being waged against U.S. industry and government 
chiefly by China constitute ``the largest transfer of wealth in 
history.'' The committee needs to understand the dimensions of 
this technology theft and its impact on our national security 
and prosperity.
    The Armed Services Committee has focused for some time on 
the need to develop comprehensive policies and frameworks to 
govern planning and operations in cyberspace. What are the 
Rules of Engagement if we are attacked by another nation, and 
what is the doctrine for operations, and deterrence, and 
warfighting strategies. The administration has made progress in 
these areas, as reflected in recent strategy statements and in 
the development of comprehensive legislation to improve 
cybersecurity. But much more needs to be done.
    As a still-developing sub-unified combatant command, the 
committee needs to understand the current and planned 
relationships between CYBERCOM and STRATCOM and the other 
combatant commands. The Defense Department is considering the 
establishment of component CYBERCOMs at the combatant commands. 
We need to know what command arrangements would apply to these 
potential components, as well as the authorities and the 
missions that STRATCOM has delegated to CYBERCOM and those that 
it plans to retain.
    General Alexander has stated publicly that he believes he 
needs additional authorities to defend the networks and 
information systems of the rest of the Federal Government and 
those of critical infrastructure. The committee needs clarity 
on exactly what authorities General Alexander might be seeking 
and whether they go beyond what the administration has 
requested in its legislative proposal to Congress.
    General Alexander has also often stated that DOD does not, 
in fact, have a unified network but rather 15,000 separate 
networks or enclaves into which CYBERCOM has little visibility. 
The committee needs to understand what can and should be done 
to correct what would seem to be an urgent and critical 
problem.
    DOD has conducted a pilot program with a number of major 
companies in the defense industrial base (DIB) and multiple 
Internet service providers (ISP), like AT&T and Verizon. Under 
that pilot program, the National Security Administration (NSA) 
provides signatures of known cyber penetration tools and 
methods directly to the DIB companies or to the ISPs that 
provide the DIB companies their communications services. The 
companies then use these signatures to detect and block 
intrusion attempts.
    Carnegie Mellon conducted an independent assessment of the 
DIB pilot for DOD and concluded that NSA provided few 
signatures that were not already known to the companies 
themselves, and in many cases, the DIB companies by themselves 
detected advanced threats with their own non-signature-based 
detection methods that probably were not known to the NSA. So 
we need to hear from General Alexander on his view of those 
issues as well.
    We thank you both again for your service and for being here 
this morning.
    Now we call on Senator McCain.
    [The prepared statement of Chairman Levin follows:]

                Prepared Statement by Senator Carl Levin

    Good morning. Today's hearing continues a series of posture 
hearings that the Armed Services Committee is conducting on our 
combatant commands within the context of the fiscal year 2013 budget 
request and the President's new Strategic Guidance. Today, we receive 
testimony from the U.S. Strategic Command (STRATCOM) and the U.S. Cyber 
Command (CYBERCOM), a sub-unified command of STRATCOM. Let me welcome 
General Robert Kehler, the Commander of STRATCOM and General Keith 
Alexander, the Commander of CYBERCOM and thank them for their service 
to our Nation. I also want to thank the fine men and women who serve in 
these commands for their dedication and service to our Nation.
    STRATCOM manages nine missions across the Department of Defense 
(DOD). These missions range from satellite and space situational 
awareness, missile defense, and electronic warfare, to combating 
weapons of mass destruction. STRATCOM coordinates the activities of 
CYBERCOM across the DOD. Unlike other combatant commands which are 
regionally focused, STRATCOM's missions are global.
    As noted in the President's Strategic Guidance, STRATCOM commands 
``nuclear forces that can under any circumstances confront an adversary 
with the prospect of unacceptable damage''. This capability needs to be 
preserved as we continue to reduce the size of these forces and 
modernize the infrastructure at the Department of Energy (DOE) that 
supports this mission.
    General Kehler, here are some of the issues I hope you'll address 
this morning:
    First, are you satisfied with the direction that we are taking in 
our nuclear force posture and with DOE's role in maintaining our 
nuclear stockpile so we can continue to reduce its size without testing 
while ensuring the stockpile remains safe and meets military 
requirements?
    Second, do you believe we are on a sustainable path to protect our 
space assets and reconstitute them if necessary given the congested and 
contested nature of space?
    Third, DOD is allocated a block of the electromagnetic spectrum 
that connects our space, cyber and electronic warfare assets to our 
forces. STRATCOM is the lead combatant command for synchronizing 
spectrum operations. How concerned are you about the prospect of losing 
spectrum and what are you doing to preserve the DOD's access to it?
    Fourth, with the cancellation of the Operationally Responsive Space 
program are you worried about our ability to field low-cost but rapidly 
deployable satellites that can fill capability gaps between large 
national intelligence satellite collection systems and the DOD's 
airborne surveillance platforms?
    Fifth, what is your strategic vision for the combined use of space 
and cyber? These two domains are integrally linked but we have not seen 
a plan for integrating capabilities and operations.
    Let me turn to CYBERCOM for a moment.
    There is much for us to examine in this increasingly important and 
complex--but still new--mission area, not only as it affects DOD, but 
the government and the economy as a whole.
    General Alexander has stated that the relentless industrial 
espionage being waged against U.S. industry and government, chiefly by 
China, constitute ``the largest transfer of wealth in history.'' The 
committee needs to understand the dimensions of this technology theft 
and its impact on national security and prosperity.
    The Armed Services Committee has focused for some time on the need 
to develop comprehensive policies and frameworks to govern planning and 
operations in cyberspace. What are the Rules of Engagement if we are 
attacked by another nation, what is the doctrine for operations, and 
deterrence and warfighting strategies. The administration has made 
progress in these areas, as reflected in recent strategy statements and 
in the development of comprehensive legislation to improve 
cybersecurity. But much more needs to be done.
    As a still-developing subunified combatant command, the committee 
needs to understand the current and planned relationships between 
CYBERCOM and STRATCOM and the other combatant commands. DOD is 
considering the establishment of component CYBERCOMs at the combatant 
commands. We need to know what command arrangements would apply to 
those potential components, as well as the authorities and missions 
that STRATCOM has delegated to CYBERCOM and those it plans to retain.
    General Alexander has stated publicly that he believes he needs 
additional authorities to defend the networks and information systems 
of the rest of the Federal Government and those of critical 
infrastructure. The committee needs clarity on exactly what authorities 
General Alexander is seeking, and whether they go beyond what the 
administration has requested in its legislative proposal to Congress.
    General Alexander has also often stated that DOD does not in fact 
have a unified network but rather ``15,000'' separate networks or 
``enclaves'' into which CYBERCOM has little visibility. The committee 
needs to understand what can and should be done to correct what would 
seem to be an urgent and critical problem.
    DOD has conducted a pilot program with a number of major companies 
in the Defense Industrial Base (DIB) as it is called, and multiple 
Internet Service Providers (ISPs) like AT&T and Verizon. Under this 
pilot program, the National Security Agency (NSA) provides 
``signatures'' of known cyber penetration tools and methods directly to 
the DIB companies or to the ISPs that provide the DIB companies their 
communications services. The companies then use these signatures to 
detect and block intrusion attempts.
    Carnegie Mellon conducted an independent assessment of the DIB 
pilot for DOD and concluded that NSA provided few signatures that were 
not already known to the companies themselves, and in many cases the 
DIB companies by themselves detected advanced threats with their own 
non-signature-based detection methods that probably is not known to the 
NSA.
    I look forward to hearing General Alexander's views on these 
issues.

                STATEMENT OF SENATOR JOHN McCAIN

    Senator McCain. Thank you, Mr. Chairman.
    Let me thank our distinguished witnesses for joining us 
this morning and for their many years of service to our Nation.
    STRATCOM is in the midst of pivotal change as we proceed 
with the modernization of the nuclear weapons complex and the 
nuclear triad and further embed cyberdefense and cyberattack in 
the core mission competencies of 21st century warfare.
    On nuclear modernization, I am encouraged that even with 
the unprecedented level of defense spending uncertainty, the 
Department has maintained its commitment to modernizing the 
triad of nuclear delivery vehicles. Unfortunately, the same 
cannot be said for the National Nuclear Security Administration 
(NNSA) and their proposal to abandon or delay key elements of 
the nuclear weapons complex modernization plan. Ratification of 
the New Strategic Arms Reduction Treaty (START) treaty was 
conditioned on a commitment by the President to modernize the 
weapons complex. Modernization is universally recognized as 
essential to the future viability of the nuclear weapons 
complex and a prerequisite for future reductions. It has now 
been over a year since the treaty entered into force, and we do 
not see any sign of the administration keeping those 
commitments.
    Core to the STRATCOM mission is deterrence. However, as the 
frequency, sophistication, and intensity of cyber-related 
incidents continue to increase, it is apparent that this 
administration's cyber deterrence policies have failed to curb 
those malicious actions. The current deterrence framework, 
which is overly reliant on the development of defensive 
capabilities, has been unsuccessful in dissuading cyber-related 
aggression. Whether it is a nation state actively probing our 
national security networks, a terrorist organization seeking to 
obtain destructive cyber capabilities, or a criminal network's 
theft of intellectual property, we must do more to prevent, 
respond to, and deter cyberthreats. The inevitability of a 
large-scale cyberattack is an existential threat to our Nation, 
and a strategy overly reliant on defense does little to 
influence the psychology of attackers who operate in a world 
with few, if any, negative consequences for their actions.
    Last July, General Cartwright, the former Vice Chairman of 
the Joint Chiefs of Staff, criticized the administration's 
reactive Strategy for Operating in Cyberspace saying, ``If it's 
okay to attack me and I'm not going to do anything other than 
improve my defenses every time you attack me, it's very 
difficult to come up with a deterrent strategy.'' I look 
forward to hearing from our witnesses if they believe that a 
strategy overly focused on defense is sustainable and whether 
they agree more must be done to deter and dissuade those who 
look to hold U.S. interests at risk via cyberspace.
    The Senate will soon begin debate on cybersecurity 
legislation. The central themes in that debate will focus on 
how to improve information sharing across the spectrum and 
whether a new Government bureaucracy will improve our 
cybersecurity. I have proposed legislation, the Strengthening 
and Enhancing Cybersecurity by Using Research, Education, 
Information, and Technology (SECURE IT) Act, that first focuses 
on removing legal hurdles that hinder information sharing 
rather than adding regulations that would shift focus and 
previous resources away from the actual cyberthreat. If a 
timely response is essential, how would another layer of 
bureaucratic red tape be helpful?
    While the SECURE IT Act does not give new authorities to 
the National Security Agency (NSA) or CYBERCOM, few will deny 
that those institutions, not the Department of Homeland 
Security (DHS), are most capable of guarding against 
cyberthreats. Unfortunately, other legislative proposals favor 
prematurely adding more government bureaucracy rather than 
focusing on accomplishing the objective of protecting our cyber 
interests.
    General Alexander, during a Federal Bureau of Investigation 
(FBI)-sponsored symposium at Fordham University, you stated 
that if a significant cyberattack against this country were 
being planned, there may not be much that either CYBERCOM or 
NSA could legally do to discover and thwart such an attack in 
advance. You said: ``In order to stop a cyberattack, you have 
to see it in real time and you have to have those authorities. 
Those are the conditions we've put on the table. Now how and 
what Congress chooses, that'll be a policy decision.'' In a 
fight where the threat can materialize in milliseconds and 
quick action is essential, I look forward to better 
understanding what authorities you believe are needed to 
protect United States interests both at home and abroad.
    The DOD is requesting nearly $3.4 billion for cybersecurity 
in fiscal year 2013 and almost $17.5 billion over the Future 
Years Defense Program. The cyber budget is one of the only 
areas of growth in the DOD budget because of broad agreement 
that addressing the cyberthreat must be among our highest 
priorities.
    I thank the witnesses for appearing before the committee 
today and look forward to their testimony.
    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--and for their many years of service to our 
Nation.
    U.S. Strategic Command is in the midst of pivotal change as we 
proceed with the modernization of the nuclear weapons complex and the 
nuclear triad and further embed cyberdefense and cyberattack in the 
core mission competencies of 21st century warfare.
    On nuclear modernization, I am encouraged that even with the 
unprecedented level of defense spending uncertainty, the Department has 
maintained its commitment to modernizing the triad of nuclear delivery 
vehicles. Unfortunately, the same cannot be said for the National 
Nuclear Security Administration and their proposal to abandon or delay 
key elements of the nuclear weapons complex modernization plan. 
Ratification of the New START treaty was conditioned on a commitment by 
the President to modernize the weapons complex. Modernization is 
universally recognized as essential to the future viability of the 
nuclear weapons complex and a prerequisite for future reductions. It 
has now been just over a year since the treaty entered into force, and 
the President has already reneged on his commitment to modernization.
    Core to the Strategic Command mission is deterrence. However, as 
the frequency, sophistication, and intensity of cyber-related incidents 
continue to increase, it is apparent that this administration's cyber 
deterrence policies have failed to curb malicious actions. The current 
deterrence framework, which is overly reliant on the development of 
defensive capabilities, has been unsuccessful in dissuading cyber-
related aggression. Whether it's a nation state actively probing our 
national security networks, a terror organization seeking to obtain 
destructive cyber capabilities, or a criminal network's theft of 
intellectual property, we must do more to prevent, respond to, and 
deter cyber-threats. The inevitability of a large-scale cyberattack is 
an existential threat to our Nation, and a strategy overly reliant on 
defense does little to influence the psychology of attackers who 
operate in a world with few, if any, negative consequences for their 
actions.
    Last July, General Cartwright, the former Vice Chairman of the 
Joint Chiefs of Staff, criticized the administration's reactive 
Strategy for Operating in Cyberspace, saying `If it's okay to attack me 
and I'm not going to do anything other than improve my defenses every 
time you attack me, it's very difficult to come up with a deterrent 
strategy.' I look forward to hearing from our witnesses if they believe 
that a strategy overly focused on defense is sustainable, and whether 
they agree more must be done to deter and dissuade those who look to 
hold U.S. interests at risk via cyberspace.
    The Senate will soon begin debate on cybersecurity legislation. The 
central themes in that debate will focus on how to improve information 
sharing across the spectrum and whether a new government bureaucracy 
will improve our cybersecurity. I have proposed legislation, the SECURE 
IT Act, that first focuses on removing legal hurdles that hinder 
information sharing, rather than adding regulations that would shift 
focus--and precious resources--away from the actual cyberthreat. If a 
timely response is essential, how would another layer of bureaucratic 
red tape be helpful?
    While the SECURE IT Act does not give new authorities to the 
National Security Agency or U.S. Cyber Command, few will deny that 
those institutions, not the Department of Homeland Security, are most 
capable of guarding against cyberthreats. Unfortunately, other 
legislative proposals favor prematurely adding more government 
bureaucracy, rather than focusing on accomplishing the objective of 
protecting our cyber interests.
    General Alexander, during a Federal Bureau of Investigation-
sponsored symposium at Fordham University, you stated that if a 
significant cyberattack against this country were being planned, there 
may not be much that either Cyber Command or the National Security 
Agency could legally do to discover and thwart such an attack in 
advance. You said, ``In order to stop a cyberattack you have to see it 
in real time, and you have to have those authorities. Those are the 
conditions we've put on the table. Now how and what Congress chooses, 
that'll be a policy decision.'' In a fight where the threat can 
materialize in milliseconds and quick action is essential, I look 
forward to better understanding what authorities you believe are needed 
to protect United States interests both at home and abroad.
    The Department of Defense is requesting nearly $3.4 billion for 
cybersecurity in fiscal year 2013 and almost $17.5 billion over the 
Future Years Defense Program. The cyber budget is one of the only areas 
of growth in the DOD budget because of broad agreement that addressing 
the cyberthreat must be among our highest priorities. I thank the 
witnesses for appearing before the committee today and look forward to 
their testimony.

    Chairman Levin. Thank you very much, Senator McCain.
    General Kehler.

   STATEMENT OF GEN. C. ROBERT KEHLER, USAF, COMMANDER, U.S. 
                       STRATEGIC DEFENSE

    General Kehler. Thank you, Mr. Chairman. If it is okay with 
you, I would like to have my statement admitted to the record.
    Chairman Levin. It will be made part of the record.
    General Kehler. Sir, Senator McCain, and distinguished 
members of the committee, thanks for this opportunity to 
present my views on STRATCOM's missions and priorities.
    I am very pleased to be here today with General Keith 
Alexander, CYBERCOM's Commander, and of course, as both of you 
have pointed out, cyber is a critical component of our global 
capabilities.
    Without question, Mr. Chairman, we continue to face a very 
challenging global security environment marked by constant 
change, enormous complexity, and profound uncertainty. Indeed, 
change and surprise have characterized the year that has past 
since my last appearance before this committee. Over that time, 
the men and women of STRATCOM have participated in support of 
operations in Libya and Japan, have supported the withdrawal of 
U.S. combat forces from Iraq, and have observed the Arab 
Spring, the bold operation that killed Osama bin Laden, the 
death of Kim Jong Il, and the succession of Kim Jong-un, 
growing violence in Syria, continued tensions with Iran, the 
passage of the Budget Control Act, and the adoption of new 
defense Strategic Guidance.
    Through this extraordinary period of challenge and change, 
STRATCOM's focus has remained constant: to partner with the 
other combatant commands; to deter, detect, and prevent attacks 
on the United States, our allies and partners; and to be 
prepared to employ force, as needed, in support of our national 
security objectives. Our priorities are clear: deter attack, 
partner with the other commands to win today, respond to the 
new challenges in space, build cyberspace capability and 
capacity, and prepare for uncertainty. Transcending all of 
these priorities is the threat of nuclear materials or weapons 
in the hands of violent extremists.
    We do not have a crystal ball at STRATCOM, but we believe 
events of the last year can help us glimpse the type of future 
conflict that we must prepare for. Conflict will likely be 
increasingly hybrid in nature, encompassing all domains, air, 
sea, land, space, and cyberspace. It will likely cross 
traditional geographic boundaries, involve multiple 
participants, and be waged by actors wielding combinations of 
capabilities, strategies, and tactics. I think it is important 
to note the same space and cyberspace tools that connect us 
together to enable global commerce, navigation, and 
communication also present tremendous opportunities for 
disruption and perhaps destruction.
    Just last month, DOD released new Strategic Guidance to 
address these challenges. This new guidance describes the way 
ahead for the entire DOD, but I believe many portions are 
especially relevant to STRATCOM in our broad assigned 
responsibilities.
    For example, global presence, succeeding in current 
conflicts, deterring and defeating aggression, including those 
seeking to deny our power projection, countering weapons of 
mass destruction, effectively operating in cyberspace, space, 
and across all other domains, and maintaining a safe, secure, 
and effective nuclear deterrent, are all important areas in the 
new strategy where STRATCOM's global reach and strategic focus 
play a vital role.
    No question these are important responsibilities. There are 
real risks involved in the scenarios we find ourselves in 
today. It is my job to prepare for those events and to advocate 
for the sustainment and modernization efforts we need to meet 
the challenges. In that regard, the fiscal year 2013 budget 
request is pivotal for our future. We are working hard to 
improve our planning and better integrate our efforts to 
counter weapons of mass destruction. We need to proceed with 
planned modernization of our nuclear delivery and command and 
control systems. We need to proceed with life extension 
programs for our nuclear weapons and modernize the highly 
specialized industrial complex that cares for them. We need to 
improve the resilience of our space capabilities and enhance 
our situational awareness of this increasingly congested, 
competitive, and contested domain. We need to improve the 
protection and resilience of our cyber networks, enhance our 
situational awareness, increase our capability and capacity, 
and work across the interagency to increase the protection of 
our critical infrastructure. We need to enhance our 
intelligence, surveillance, and reconnaissance capabilities. We 
need to better manage and synchronize the crucial processing, 
exploitation, and dissemination capabilities that support them. 
We need to get better at electronic warfare. We need to 
practice how to operate in a degraded space and cyberspace 
environment. We need to improve our understanding of our 
adversaries. We need to review our plans and improve our 
decision processes and command relations, all subjects that the 
two of you touched on in your opening comments.
    In short, the new national security reality calls for a new 
strategic approach that promotes agile, decentralized action 
from a fully integrated and, I would say, fully interdependent 
and resilient joint force. These are tough challenges, but the 
men and women of STRATCOM view our challenges as opportunities, 
a chance to partner with the other commands to forge a better, 
smarter, and faster joint force.
    We remain committed to work with this committee, the 
Services, other agencies, and our international partners to 
provide the flexible, agile, and reliable strategic deterrence 
and mission assurance capabilities that our Nation and our 
friends need in this increasingly uncertain world.
    Mr. Chairman, it is an honor and a privilege to lead 
America's finest men and women. They are our greatest 
advantage. I am enormously proud of their bravery and 
sacrifice, and I pledge to stand with them and for them to 
ensure we retain the best force the world has ever seen. In 
that, I join with the Secretary of Defense and the Chairman of 
the Joint Chiefs of Staff and other senior leaders, my 
colleagues, the other combatant commanders in thanking you for 
the support you and this committee have provided them in the 
past, present, and on into the future.
    Before I close, Mr. Chairman, I would like to pause and 
remind the committee that STRATCOM is headquartered in the 
great State of Nebraska, and I wanted to take this opportunity 
to thank Senator Ben Nelson for his service. Senator Nelson 
will retire at the end of this Congress, and during his 
service, he has worked diligently to better the lives of our 
troops and to improve America's strategic forces. Those who 
live and work at Offutt Air Force Base are well aware of his 
deep commitment to them. So on behalf of your fellow Nebraskans 
at STRATCOM, Senator, we offer our thanks.
    With that, Mr. Chairman, thank you for this opportunity, 
and I look forward to your questions.
    [The prepared statement of General Kehler follows:]

           Prepared Statement by Gen. C. Robert Kehler, USAF

    Chairman Levin, Senator McCain, and distinguished members of the 
committee, thank you for the opportunity to testify today. I'm very 
pleased to be here alongside General Keith Alexander, Commander of U.S. 
Cyber Command (CYBERCOM)--an essential component of U.S. Strategic 
Command's (STRATCOM) global capabilities.
    Since I assumed command a little more than a year ago, we have been 
challenged by new fiscal constraints at home and complex national 
security events abroad. I am very proud of how our men and women in 
uniform and Defense civilians are meeting these financial and 
operational challenges with professionalism, dedication, and a keen 
mission focus. I know our team members very much appreciate your 
support, and I look forward to working with you as we maintain the 
world's finest military, avoid a hollow force, and make strategy-based 
capability decisions, all the while keeping faith with our All-
Volunteer Force.

                              INTRODUCTION

    Today, I am pleased to report to you that America's Strategic 
Command is strong, resilient, and ready. At STRATCOM, we continue to 
improve our capabilities and synchronize our multiple mission 
responsibilities--individually and with our partners in the other 
combatant commands (COCOM)--to deter strategic attacks, to enhance the 
combat capability of the joint force, and to assure access and use of 
the critical domains of space and cyberspace. I look forward to 
discussing the global strategic environment, the new Defense Strategic 
Guidance, and how STRATCOM's strategic deterrence and assurance efforts 
support the National Security Strategy.
      
    
    
      
                           STRATEGIC CONTEXT

    Without question, we face a very challenging global security 
environment. The coming years are likely to be characterized by 
constant change, enormous complexity, and profound uncertainty. Since 
my last appearance before the committee, we have witnessed our fair 
share of change. The Budget Control Act of 2011 realigned national 
fiscal priorities. U.S. forces withdrew from Iraq, and they partnered 
with our allies to support the Libyan people. The Arab Spring brought 
dramatic change to an unsettled region, and tensions grew inside Syria 
and between Iran and the world. In North Korea, Kim Jong Il's death 
made way for a new generation in power. And, violent extremists 
suffered several setbacks--most notably Osama bin Laden's death.
    Some of these events were positive; some were not. For some, the 
outcome remains uncertain. In a few cases we were surprised and, 
looking forward, surprise is one of the greatest dangers we will face. 
Indeed, violent extremism, popular revolutions, persistent conflict, 
financial stress, competition for natural resources, and the transition 
and redistribution of power among global actors will continue to bring 
uncertainty to our National security landscape.
Hybrid Conflict
    Conflict remains a fundamentally human enterprise conducted for 
political purposes. Yet, technology and ideology are pushing its means 
and methods in new and evolutionary directions at an ever-increasing 
pace. At STRATCOM, we believe we can glimpse the future of conflict if 
we look carefully today, so that we can prepare.
    First, conflict will encompass all domains--including air, sea, 
land, space, and cyberspace--all tied together through the 
electromagnetic spectrum. Second, it will cross traditional geographic 
boundaries--particularly with the emergence of new cyber weapons, the 
increased use of space, and the proliferation of familiar weapons like 
ballistic missiles. Third, it will involve multiple participants. A 
wider range of actors has access to advanced capabilities with lower 
entry costs, seeking to challenge us from the shadows. Finally, 
conflict will be hybrid--not neatly categorized as ``regular'' or 
``irregular'' warfare. More actors, leveraging combinations of 
capabilities, strategies, and tactics--potentially including weapons of 
mass destruction (WMD)--will seek to achieve their goals by denying or 
disrupting our Nation's ability to project power and maintain global 
awareness across all domains.
    These are sobering challenges. Hybrid, technologically advanced, 
and cross-domain threats can reach our doorstep in seconds, threatening 
vital capabilities and critical infrastructure. The same networks that 
enable global commerce, navigation, and communication also present 
tremendous potential for disruption. In particular, cyber tools 
combined with phenomenal increases in computing power may have 
surpassed the threat posed by more traditional means of espionage, 
presenting particularly problematic economic and national security 
challenges.
    The time honored military concepts surrounding speed and distance 
have also changed, increasing the speed at which initiative can shift, 
compressing our decision space, and stressing our strategies, plans, 
operations, and command relationships. Centuries ago, it could take 
months to influence an adversary by moving an army. However, navies, 
then airpower, and now space and cyberspace capabilities dramatically 
compressed the time and distance required to create effects. 
Adversaries today need not occupy any territory to create disruptive 
and potentially decisive strategic effects across domain and geographic 
boundaries. We should not expect adversaries to leave our homeland 
completely undisturbed while we operate globally.
New Strategic Approach
    In such a complex and profoundly uncertain world, sustaining the 
strategic stability that enables security at home, global commerce for 
our Nation, and freedom of action within the global commons requires 
great resilience and deep integration. The threats we face are not 
divisible by geography or domain. We must meet them with a similarly 
indivisible joint force--the strength of which lies not in its parts, 
but in their sum.
    Our challenges demand strategic thinking, unity of action, joint 
interdependence, commander focus, flexibility, decentralized execution, 
and innovation. They also require a robust, strategic imagination that 
allows us to anticipate the unexpected and to react to surprise in 
stride when--not if--it occurs. As a result, at STRATCOM we are 
emphasizing that every plan and operation must be well integrated with 
other combatant commands. We must work together, across other COCOMs 
and interagency partners, to shape the environment away from conflict, 
to assure our allies, to expand our leaders' decision space, and to 
protect our Nation's global access and freedom of action.
    As the U.S. transitions from a decade of conflict abroad and acts 
to sustain its leadership in the world, we are guided by a new 
strategic approach entitled Priorities for 21st Century Defense. We 
understand that we will face the future with a joint force that is 
smaller, but also more agile, flexible, ready, and technologically 
advanced. We will have a global presence, emphasizing the Asia-Pacific 
region and the Middle East, while preserving key commitments elsewhere 
and our ability to conduct primary missions to protect our core 
national interests.
    The new defense strategic guidance establishes priorities and 
delineates ten primary missions of the U.S. Armed Forces--most of which 
have particular relevance to STRATCOM. For counterterrorism and 
irregular warfare, STRATCOM provides space, ISR, precision strike, and 
cyber support. As we fulfill our responsibility to deter and defeat 
aggression, we are developing tailored, 21st century deterrence options 
to address a wider range of adversaries across the spectrum of 
conflict. STRATCOM's global capabilities also enhance the ability of 
the joint force to project power despite anti-access and area-denial 
challenges, perhaps our greatest military advantage. This supports 
deterrence at all levels. STRATCOM plays a key role in DOD efforts to 
counter weapons of mass destruction, synchronizing planning, advocating 
for capabilities, and delivering expertise to other commands. In 
closely linked, technologically advanced national security areas we 
ensure America's ability to operate effectively in cyberspace and space 
each and every day. Here we face real threats to our systems and 
networks--threats that are growing and require continued vigilance, 
improvement, and resilience. As we work to Maintain a Safe, Secure, and 
Effective Nuclear Deterrent, the strategy says ``we will field nuclear 
forces that can under any circumstances confront an adversary with the 
prospect of unacceptable damage both to deter potential adversaries and 
to assure U.S. allies and other security partners that they can count 
on America's security commitments.'' The professionals in STRATCOM 
perform the nuclear deterrence mission every day. Finally, and while 
principally the role of geographic COCOMs, we supports a wide range of 
efforts to Defend the Homeland and Provide Support to Civil 
Authorities, including our cybersecurity assistance to the Department 
of Homeland Security and missile defense programs.
      
    
    
      
    These are not the only primary missions mentioned in the new 
strategy. As a supporting command, STRATCOM also regularly contributes 
to COCOM efforts to provide a stabilizing presence; to conduct 
stability and counterinsurgency operations; and to conduct 
humanitarian, disaster relief, and other operations.
    In sum, the new strategy calls for a strategic approach that 
promotes agile, decentralized action from fully integrated--I would say 
fully interdependent--and resilient commands and joint forces. And, 
over the last decade, our joint force has made great strides 
integrating unique Service and interagency capabilities. Our joint 
forces have become more integrated, and our joint commands have become 
more interdependent--producing greater unity of effort. Since the 
threats we face are not necessarily divisible by geography or domain, 
integration that advances cross-domain synergy \1\ is imperative.
---------------------------------------------------------------------------
    \1\ Cross domain synergy: ``The complementary vice merely additive 
employment of capabilities in different domains such that each enhances 
the effectiveness and compensates for the vulnerabilities of the 
others--to establish superiority in some combination of domains that 
will provide the freedom of action required by the mission.'' Joint 
Operational Access Concept, Foreword.
---------------------------------------------------------------------------
    Achieving effective joint force synergy was a key principle in the 
strategy that shaped fiscal year 2013 budget requirements. Implementing 
the new strategy in a period of fiscal constraints is a substantial 
challenge, but I am confident that we can recalibrate our capabilities 
and make selective additional investments to succeed in these mission 
areas, based on priorities outlined in the strategy. This is the right 
approach.

                      U S. STRATEGIC COMMAND TODAY

    Over the last decade, STRATCOM's responsibilities have grown in 
size and scope, responding to evolving national security needs. Ten 
years ago this fall, DOD disestablished both U.S. Space Command \2\ and 
the first U.S. Strategic Command \3\--merging them and beginning the 
development of STRATCOM with its broad, functional responsibilities. 
Within just the past year, the Secretary of Defense added to our duties 
by reassigning the Joint Warfare Analysis Center (JWAC) \4\ to 
STRATCOM. We also returned several ``information operations'' 
responsibilities to the Joint Staff, such as planning, coordinating, 
and executing cross-areas of responsibility (AOR) and national-level 
operations, supporting other combatant commands' planning efforts, and 
advocating for military deception and operations security capabilities. 
This realignment of responsibilities allows us to better focus on the 
enduring joint electronic warfare and electromagnetic spectrum mission.
---------------------------------------------------------------------------
    \2\ A unified combatant command responsible for military space 
activities and (at the time) the relatively new computer network 
operations mission.
    \3\ A unified combatant command activated in 1992, solely focused 
on the nuclear deterrence and associated command and control missions.
    \4\ Formerly assigned to U.S. Joint Forces Command, JWAC is 
headquartered at Naval Support Facility Dahlgren, VA.
---------------------------------------------------------------------------
    The long series of changes begun in 2002 might appear random, but 
it was not. Moving missions of global significance and trans-regional 
impact to a single combatant command allows one organization to apply a 
global, strategic perspective to unique problem sets and to gain 
synergy from a range of strategic capabilities. STRATCOM is now able to 
provide our National leaders with a range of strategic, operational, 
and tactical options and capabilities that contribute to deterrence and 
enhance the effectiveness of the joint force.
    Today, STRATCOM exists to perform two fundamental missions: 1) to 
deter attack and assure our allies with a combination of capabilities 
that goes far beyond the nuclear force; and, 2) along with the other 
COCOMs, to employ force as directed to achieve national security 
objectives. The complementary (not merely additive) nature of 
STRATCOM's unique, strategic responsibilities allows us to wield 
formidable global capabilities every day, usually as a supporting 
command (and usually supporting multiple commands simultaneously), 
supporting global and regional deterrence and assurance activities.
      
    
    
      
    For example, STRATCOM provided several of America's unique B-2 
bombers to U.S. Africa Command to support last year's Operation Odyssey 
Dawn--quickly providing an essential capability not otherwise available 
in that command. After the tragic events in Japan, STRATCOM also 
delivered substantial modeling and communications support to U.S. 
Pacific Command's (PACOM) Operation Tomodachi recovery efforts. 
Finally, later this year and in recognition of emerging Asia-Pacific 
challenges, we will co-host a major exercise with PACOM to test and 
demonstrate joint capability and command interdependence, as we 
continue to explore and refine opportunities for greater collaboration.
    These and many other scenarios highlight how the interdependent 
combination of capabilities and synchronization of activities within 
STRATCOM and with the other COCOMs facilitates a more flexible and 
effective joint force effort. To that end, our staff is developing and 
implementing a more comprehensive and deliberate deterrence and 
assurance campaign to sustain our capabilities, synchronize our 
efforts, and position us to act as needed.

                        DETERRENCE AND ASSURANCE

    Deterrence and assurance have been part of the National lexicon for 
well over half a century, and although different today, they remain 
important and highly relevant concepts. The Cold War ended 20 years 
ago. Today, deterrence and assurance are not solely about Cold War 
deterrence objectives, they are about our Nation's unique security 
needs--in a world that still has nuclear weapons. Deterrence is 
fundamentally about influencing an actor's decisions. The deterrence 
decision calculus still revolves around familiar concepts like imposing 
costs and denying benefits; however, in today's world we also strive to 
highlight the consequences of restraint (benefits of the status quo).
    Deterrence is about communicating our capabilities and intentions, 
and it is about more than just one weapon system. It is about what the 
U.S. and our allies as a whole can bring to bear, tailored to specific 
actors and threats. Its practice encompasses both the nuclear and a 
strong conventional offensive force, missile defenses where 
appropriate, unfettered access and use of space and cyberspace, and, in 
all warfare areas, modern capabilities that are resilient and 
sustained. Our challenge is to apply deterrence and assurance concepts 
to today's complex global security environment. Deterring, detecting, 
and preventing attacks against the U.S. is the responsibility of every 
combatant commander, and although strategic deterrence is STRATCOM's 
particular responsibility, it is a global charge we carry out in close 
coordination with other COCOMs and elements of government.
    For decades, ``strategic deterrence'' focused solely on leveraging 
U.S. nuclear capabilities to deter our adversaries, but that day--the 
era of ``one-size-fits-all'' deterrence and assurance--has passed. 
Strategic deterrence today requires combinations of tailored options 
and capabilities, wielded across multiple commands as an integrated 
whole, based on a robust understanding of the adversary's decision 
calculus and our mission context. It requires faster output from our 
intelligence, strategy, and planning experts. This is not easy. We must 
shape deterrence approaches that communicate expectations, strength, 
and resilience well in advance of adversary decisions, taking every 
opportunity to better understand each actor's expectations and 
perceptions--particularly in space and cyberspace.

Combating Weapons of Mass Destruction (CWMD)
    The threat posed by WMD in the hands of violent extremists 
transcends all of STRATCOM's priorities and encompasses every 
geographic AOR. The 2010 National Security Strategy states that ``there 
is no greater threat to the American people than weapons of mass 
destruction, particularly the danger posed by the pursuit of nuclear 
weapons by violent extremists and their proliferation to additional 
states.'' \5\ Published shortly thereafter, the 2010 Nuclear Posture 
Review (NPR) noted that 21st century nuclear dangers are ``grave and 
growing threats.'' Nuclear weapons foster a sense of strategic 
stability between some actors, but WMD in general remain dangerously 
alluring capabilities to rogue and non-state actors.
---------------------------------------------------------------------------
    \5\ National Security Strategy of the United States, pp. 4.
---------------------------------------------------------------------------
      
    
    
      
    The NPR elevated the prevention of nuclear proliferation and 
nuclear terrorism to the top of the policy agenda as it outlined five 
objectives to guide the United States in reducing global nuclear 
dangers. STRATCOM plays a principal role in efforts to reduce nuclear 
dangers by deterring WMD usage, dissuading their acquisition, and 
supporting efforts to eliminate potential WMD threats. This is a great 
challenge, and we are working to ensure our sense of urgency and pace 
of preparation match the threat.
    We have unique CWMD responsibilities at STRATCOM. We synchronize 
global CWMD planning efforts across the COCOMs, work to improve 
interagency relationships, and synchronize advocacy for essential CWMD 
capabilities. Our semi-annual global CWMD synchronization conferences 
have highlighted the need to improve coordination and to expand 
foundational intelligence and information sharing to deter and address 
emerging threats. This includes accelerating the speed with which we 
develop and field capabilities like stand-off detection for nuclear 
materials, better nuclear forensics, and improved global situational 
awareness.
    One important CWMD development in the past year was the activation 
of STRATCOM's Standing Joint Force Headquarters for Elimination (SJFHQ-
E). SJFHQ-E stood up officially on 3 February 2012 \6\ and is commanded 
by the two-star officer who is also deputy director of the STRATCOM 
Center for Combating WMD (SCC WMD) \7\. When fully operational next 
year, SJFHQ-E will be a full-time, trained, deployable, joint command 
and control element able to quickly integrate into an operational HQ, 
conduct both deliberate and crisis planning, and maintain awareness of 
the WMD environment. This small standing headquarters will be augmented 
when needed and will operate in close coordination with the Defense 
Threat Reduction Agency and the U.S. Army's 20th Support Command.
---------------------------------------------------------------------------
    \6\ Our goal is for SJFHQ-E to reach full operational capability by 
the end of 2013.
    \7\ Located at Fort Belvoir, VA, SCC WMD is co-located with the 
Defense Threat Reduction Agency (DTRA). Mr. Ken Myers serves as the SCC 
WMD Director, as well as the DTRA Director.
---------------------------------------------------------------------------
Nuclear Deterrence
    Ensuring a safe, secure, and effective nuclear deterrent force 
remains a core responsibility of STRATCOM and is my number one 
priority. As stated in the NPR, nuclear weapons retain an important 
role in our country's defense. They represent a unique, relevant, and 
powerful deterrent capability even as their role changes. Nuclear 
deterrence remains a tremendously important component of strategic 
deterrence as we seek to influence adversary decision makers by 
communicating a credible capability.
    We have witnessed an impressive, 65-year period with neither 
nuclear use nor great-power war, during which we regularly adjusted our 
nuclear capabilities to match the global environment. Since the end of 
the Cold War, we significantly altered our own nuclear force structure 
and posture. We reduced the total number of ballistic missile 
submarines (SSBNs), converted four Ohio-class SSBNs to carry 
conventional cruise missiles, affirmed the B-1 bomber's non-nuclear 
role, removed all dual-capable heavy bombers from nuclear alert, 
eliminated the Peacekeeper Intercontinental Ballistic Missile (ICBM), 
substantially reduced the Minuteman ICBM force, withdrew numerous 
weapons abroad, and dramatically reduced our nuclear stockpile. In 
total, our stockpile is down over 75 percent from the day the Berlin 
Wall fell.
    These are significant changes. At each decision point along the 
way, the United States carefully accounted for potential impacts on 
deterrence capability and strategic stability. The end result is a 
substantially smaller force but one in which confidence remains to 
deter adversaries, assure allies, and maintain strategic stability in a 
crisis.
    STRATCOM operates the nuclear deterrent force and is responsible 
for nuclear weapon employment planning. I can assure you that today's 
weapons and Triad of delivery platforms are safe, secure, and 
effective. The Triad--SSBNs, ICBMs, and nuclear-capable heavy bombers, 
with their associated tankers--continues to serve us well by providing 
unique and important attributes (survivability, promptness, and 
flexibility) that create insurmountable problems for any would-be 
adversary. Moving forward, and to sustain our strong nuclear deterrent 
force, we fully support the continued modernization and sustainment of 
delivery systems, weapon life extension programs, stockpile 
surveillance activities, nuclear complex infrastructure 
recapitalization, naval reactor design activities, and upgrades for 
nuclear command, control, and communications (NC3) capabilities. We are 
also working across DOD to finalize and synchronize New Strategic Arms 
Reduction Treaty (New START) implementation decisions routine 
operations and maintenance to minimize impacts on the operational 
force. We are on track to fully implement the central limits of New 
START by February 5, 2018.
    As we consider possible future changes, I remain committed to the 
principle that a well-defined strategy must ultimately drive nuclear 
force structure and posture. STRATCOM is a full participant in the 
analysis of future deterrence requirements called for in the NPR, and 
we are providing military operational advice regarding implications of 
alternative approaches. Let me briefly review today's nuclear force.

Weapons
    Over the past few years, a national consensus emerged around the 
need to modernize our weapons, delivery platforms, and the programs and 
facilities that sustain them. Since assuming command, I visited each of 
the Nation's nuclear laboratories \8\ and key industrial facilities. 
Seeing the condition of our Nation's nuclear facilities and meeting the 
dedicated people who are the actual stewards of our nuclear weapons 
stockpile provided me a unique and irreplaceable appreciation for their 
needs.
---------------------------------------------------------------------------
    \8\ Los Alamos National Laboratory (NM), Sandia National Laboratory 
(NM), and Lawrence Livermore National Laboratory (CA).
---------------------------------------------------------------------------
    As our weapons continue to age and we face the continued erosion of 
the nuclear enterprise's physical and intellectual capital, we must 
protect important investments for stockpile certification, warhead life 
extension, and infrastructure recapitalization. These investments are 
central to the new Priorities for 21st Century Defense, and without 
them, maintaining the long-term credibility and viability of the 
Nation's nuclear deterrent will not be possible. Of all the elements of 
the nuclear enterprise, I am most concerned with the potential for 
declining or inadequate investment in the nuclear weapons enterprise 
that would result in our inability to sustain the deterrent force.

Ballistic Missile Submarines (SSBNs)
    The Navy's SSBNs and sea-launched Trident D-5 ballistic missiles 
constitute the Triad's most survivable leg. This stealthy and highly-
capable force requires modernization to replace aging and hull life-
limited Ohio-class ballistic missile submarines. Although the Ohio-
class replacement program will now be delayed by two years, the risk 
will be manageable. We must continue necessary preparatory activities 
and work to develop and field the Common Missile Compartment for both 
the Ohio-class replacement and the United Kingdom's Vanguard follow-on 
submarines. With your support, I am confident that today's approach 
described in the fiscal year 2013 budget request will continue the sea-
based leg's strong deterrent capability.

Intercontinental Ballistic Missiles (ICBMs)
    The Air Force's widely dispersed Minuteman III ICBMs comprise the 
Triad's most responsive platform leg, and the Air Force is successfully 
concluding efforts to sustain the Minuteman III force through 2020 and 
to enhance safety and security for the foreseeable future. STRATCOM is 
working with the Air Force to support life-extension programs to 
sustain the force through 2030. We are also participating in the Ground 
Based Strategic Deterrent Analysis of Alternatives to study the full 
range of concepts to eventually inform a decision to recapitalize the 
land-based Triad leg.

Heavy Bombers
    While the Nation relies on the long-range conventional strike 
capability of our heavy bombers, their nuclear capability continues to 
provide us with critical flexibility and visibility, as well as a rapid 
hedge response against technical challenges in other legs of the Triad. 
Planned sustainment and modernization activities will ensure a credible 
nuclear bomber capability through 2035. Looking forward, a new, 
penetrating bomber is required to credibly sustain our broad range of 
deterrence and strike options beyond the lifespan of today's platforms. 
The budget supports this effort, and STRATCOM is working with the Air 
Force to develop requirements for the next dual-capable (nuclear and 
conventional) long-range strike platform and associated Long Range 
Stand-off missile. The Air Force is also replacing the aging KC-135 
tanker fleet with the KC-46A, ensuring an enduring air refueling 
capability essential to long-range bomber operations and airborne 
nuclear command and control platform endurance.

Nuclear Command, Control, and Communications (NC3)
    In many ways, the NC3 component of the nuclear deterrent force is 
the most problematic. Ensuring continuously available and reliable 
communication from the President to the nuclear force is fundamental to 
our deterrence credibility. As with many systems and capabilities 
across our force structure, various NC3 components require 
modernization. Through smart investment and programming decisions, 
leveraging existing and emerging technologies, and in partnership 
across the department and interagency, we can achieve a robust and 
resilient 21st century NC3 architecture that both ensures this critical 
communication chain remains protected and is capable of addressing a 
broader range of threats and operational requirements. Within this 
context, I want to convey my appreciation for Congress' focus on NC3, 
and specifically fiscal year 2012 support for the new STRATCOM 
Headquarters Command and Control Complex at Offutt Air Force Base.
    As we pursue deterrence and assurance concepts in today's complex 
global security environment, we recognize that a broad range of 
capabilities must contribute to tailored options. We believe the full 
range of capabilities assigned to STRATCOM comprise our deterrence 
``tool kit.'' Each of these also contributes to daily operations and 
activities that enhance the combat capability of the joint force. Let 
me briefly describe the status of other capability areas:
Intelligence, Surveillance, and Reconnaissance (ISR)
    In a global environment characterized by complexity, asymmetric 
threats, and uncertainty, detecting and understanding adversary plans, 
intentions, and warning indicators has never been more important. As 
ISR technologies and platforms have improved in both the quality and 
quantity of data collected, we have seen a steadily increasing demand 
for ISR collection to meet routine and crisis requirements. Through our 
Joint Functional Component Command for ISR (JFCC ISR),\9\ STRATCOM's 
leadership in managing DOD's ISR capabilities and in assessing ISR 
performance has been pivotal to meeting today's intelligence 
challenges.
---------------------------------------------------------------------------
    \9\ Located at Joint Base Anacostia-Bolling (JBAB), DC. LTG Burgess 
is the Director of DIA and is dual-hatted as CDR JFCC ISR.
---------------------------------------------------------------------------
    As our global knowledge demands expand, orchestrating our ISR 
operations to gain greater effectiveness and efficiency is increasingly 
necessary and challenging. First, preventing strategic surprise 
requires unparalleled battlespace awareness. Second, the demand for ISR 
collection continues to outpace our ability to fully resource that 
demand. Therefore, we must refine our ISR global force management 
processes and hone our collection strategies to improve our agility and 
effectiveness, making our ISR capabilities even more responsive combat 
multipliers.
    Our ability to process and analyze data from increasingly capable 
ISR platforms is also a growing challenge. Not only are analysts 
dealing with more data, but also with an increased operations tempo 
that imposes ever greater demands on the timeliness of their analyses 
and reporting. Conservative estimates predict a one hundred percent 
increase in analysts is necessary to meet our combatant commanders' 
requirements. This level of growth would be unrealistic in almost any 
environment, let alone a fiscally constrained one, driving us to seek 
further efficiencies and concepts to get more from our existing 
analytic enterprise.
    A key to doing this will be to improve data management, increase 
computing power and capability to help the analysts, and manage ISR 
processing, exploitation, and dissemination (PED) more effectively. Our 
intent is to manage resources globally while maintaining regional and 
local focus. This will ensure we can move faster to our highest 
priorities during and between emerging crises and contingencies, 
guaranteeing knowledge dominance for our commanders. JFCC-ISR has been 
pursuing these goals, and their efforts paid dividends during the 
recent simultaneous intelligence demands imposed by Libyan operations, 
the Japanese reactor crisis, and the Afghanistan surge. While our 
vectors are in the right direction, we must continue to build our ISR 
concepts and processes to be even more agile and effective in the 
future.

Global Strike
    STRATCOM is responsible for planning, coordinating, and executing 
global strike activities (kinetic nuclear, kinetic conventional, and 
non-kinetic) and advocating for required capabilities. Global strike 
capabilities allow DOD to expand the range of integrated deterrent 
options available to the President and enable combatant commanders' 
access to capabilities not otherwise available in their particular AOR. 
STRATCOM's unique strategic capabilities enable us to rapidly support 
national and theater global strike missions in a number of ways.
    In addition, STRATCOM continues to support and advocate for a rapid 
conventional strike capability. This would enhance strategic deterrence 
with the ability to promptly deliver a non-nuclear effect against a 
limited subset of highest value targets at substantial ranges. The Air 
Force, Defense Advanced Research Projects Agency (DARPA), and the Army 
have made important progress developing non-ballistic, boost-glide 
technologies applicable to a Conventional Prompt Global Strike (CPGS) 
mission, as highlighted by the Army's successful flight test of the 
Advanced Hypersonic Weapon concept this past November. I ask for your 
continued support of research, development, test, and evaluation 
funding as we explore various conventional global strike system 
concepts and basing alternatives.

Integrated Missile Defense (IMD)
    Ballistic missiles remain a significant threat to the U.S. homeland 
and a growing threat to our allies and our forces deployed abroad. As a 
means of terror, or to deter U.S. or allied regional intervention, or 
as a trans-regional means to employ WMD, ballistic missiles continue to 
become more accurate, lethal, and capable--attractive attributes to any 
number of current or potential adversaries.
    In response, U.S. and allied capabilities to deter, detect, and 
defeat these weapons are also growing, and decades of research and 
development continue to pay dividends in terms of capability and 
credibility. And, as we consider a more integrated joint force, missile 
defense is an area that particularly highlights the importance of 
considering the full range of integrated strategic capabilities--since 
ballistic missile threats can rapidly transit areas of responsibility 
and may perhaps best be deterred or defeated via space, cyberspace, or 
global strike capabilities long before their launch requires action 
from regionally-based interceptors.
    Ballistic missile threats are likely to grow at least as rapidly as 
our defensive assets, and we have little margin for error in 
acquisition and force management decisions. STRATCOM plays important 
roles coordinating operational support and synchronizing missile 
defense planning, operating concepts, and capability advocacy. Our 
Joint Functional Component Command for Integrated Missile Defense (JFCC 
IMD) \10\ leads an annual global ballistic missile defense assessment 
to look across all areas of responsibility, consider individual 
combatant commanders' assessments of risk, find common threads, and 
make recommendations to reduce global risk. STRATCOM also coordinates 
the Air and Missile Defense Prioritized Capabilities List (PCL) across 
other COCOMs, improving the Services' and the Missile Defense Agency's 
(MDA) understanding of prioritized joint warfighter capability needs. 
This enhances efforts to provide persistent detection; expand data 
sharing among the U.S., allies, and partners; field effective defensive 
systems; and provide appropriately robust joint training. As the Joint 
Functional Manager for missile defense capabilities, JFCC IMD 
recommends the global allocation of low-density, high-demand assets, 
including force rotations, and force sufficiency--thus making the best 
use of limited resources.
---------------------------------------------------------------------------
    \10\ Located at Schriever Air Force Base, CO. LTG Formica serves as 
CDR JFCC IMD, as well as Commanding General U.S. Army-Strategic 
(ARSTRAT) and Army Space and Missile Defense Command (SMDC).
---------------------------------------------------------------------------
    Over the past year, these efforts substantially improved our 
overall missile defenses. We upgraded and integrated early warning 
radars in Greenland and England, improving battle-management software 
for data integration. We increased the number of Aegis BMD-equipped 
ships. And, we fielded and integrated additional elements of the 
European Phased Adaptive Approach (EPAA), an effort that improves 
missile defenses through the acquisition and integration of more 
advanced capabilities and the expansion of key partnerships.
    In specific cases, such as limited threats against the United 
States and/or regional contingencies, our growing missile defenses play 
important deterrence and assurance roles. The application of future 
Phased Adaptive Approaches to other regions is an integral part of 
theater defenses, and we must continue to strengthen regional 
partnerships to meet emerging ballistic missile threats. I am confident 
that planned and budgeted missile defense investments will continue to 
support deterrence and assurance goals by significantly improving the 
protection of our homeland, our forward-based forces, and our allies. 
STRATCOM is committed to future capability development efforts that 
leverage past successes, address the most pressing and most likely 
threats, and produce field-tested, reliable assets in a cost-effective 
manner.
Electromagnetic Spectrum (EMS) and Electronic Warfare
    The EMS is the connective tissue for literally every aspect of 
civil, commercial, and military activity. For example, signals flowing 
through the spectrum connect airborne ISR aircraft to the ground troops 
they support, to the fleet offshore, and to commanders anywhere in the 
world. We are all linked, in an increasing number of ways, to modern 
technological necessities whose very design assumes unfettered access 
across the spectrum. Yet, this access is something we assume with 
increasing risk, particularly for the closely linked national security 
areas of space and cyberspace.
    Today, there are three general concerns regarding the EMS. First, 
increased demand for interconnectivity and a growing base of EMS 
``users'' is creating pressure to make greater segments available for 
public use. Second, growing use is creating ``crowding'' in the EMS--a 
problem that can result in inadvertent interference of civil, 
commercial, and military activities alike. EMS use priorities must be 
carefully managed to ensure access for force training, readiness, and 
operations. Finally, our growing civil, commercial, and military 
reliance on the electromagnetic spectrum presents adversaries an 
opportunity. We must assume adversaries will seek disruptive or 
destructive EMS capabilities to obtain their own asymmetric edge. At a 
time when no single discipline or command can address any conflict 
alone, efforts to strengthen integration, ensure persistent spectrum 
access where and when we need it, and deter adversary disruption or 
exploitation are important deterrence and assurance objectives.
    To improve joint approaches to the electromagnetic spectrum, 
STRATCOM is focusing its enduring electronic warfare and 
electromagnetic spectrum responsibilities by establishing the Joint 
Electromagnetic Spectrum Control Center (JEMSCC). The JEMSCC will 
expand previous joint electromagnetic spectrum operations efforts, 
effectively organizing a single warfighter organization to advocate for 
and support joint electronic warfare capability strategy, doctrine, 
planning, requirements, resources, test, training, and operational 
support. The JEMSCC will place a particular focus on the coordination 
of electromagnetic spectrum-related elements to enhance joint 
warfighting capabilities across domains and our ability to fight 
through degraded environments.
Space
    The National Security Space Strategy highlights the importance of 
U.S. leadership for the global economy, scientific discovery, modern 
necessities, our national security, and global strategic stability. 
Though increasingly contested, congested, and competitive, space 
remains the ultimate high ground, and ensuring access to mission-
essential space capabilities through all phases of conflict is 
essential to maintaining and enhancing the strategic advantages space 
provides. Mindful of the need to maintain and enhance space's benefits 
for our national security enterprise, particularly in light of today's 
dynamic operating environment, the National Security Space Strategy 
identified a set of interrelated strategic approaches designed to 
sustain not just America's leadership in space but our ability to 
provide benefits for global navigation, commerce, communication, and 
research. As the combatant command responsible for military space 
operations, support, and capability advocacy, STRATCOM fully supports 
these approaches and is actively pursuing capability and cooperative 
improvements.
      
    
    
      
    The space domain physically borders every geographic area of 
responsibility and shares virtual boundaries with cyberspace. It is 
vital to monitoring strategic and military developments, responding to 
natural and man-made disasters, and understanding environmental trends. 
In short, space systems provide unfettered global access. However, we 
cannot assume that our space advantages will automatically continue. 
Today's constellations continue to age and require replacement, and 
although we still maintain a qualitative edge, technological diffusion 
and the sheer number of spacefaring nations could place our space 
advantages at risk. Our assets also face a range of challenges from 
both natural or unintentional manmade threats (space weather, 
accidental collisions, and inadvertent electromagnetic interference) 
and purposeful jamming, cyber intrusions, interference, anti-satellite 
weapons, and kinetic attack (on space- or terrestrial-based space 
assets).
    Sustaining U.S. advantages in the space domain requires that we act 
deliberately to enhance our own military advantage and to reduce 
strategic risk--both of which require broad collaboration across the 
U.S. Government and with our international partners. We must 
comprehensively assess the space capabilities we require to sustain our 
military advantage--focusing on cross-service and cross-organization 
capabilities to secure the greatest value. This includes working with 
the Services to refine and communicate clear, well-defined, and 
realistic requirements for each capability, mindful that the long-term 
strategy for assured access to space relies on a capable national 
industrial base. We must also take advantage of opportunities to work 
with other partners. For example, in January U.S officials announced a 
20-year agreement that will add Canada, Denmark, Luxembourg, the 
Netherlands, and New Zealand to our current partnership with Australia 
for global military satellite communications. Now shared with these 
additional partners, the Wideband Global Satellite Communications (WGS) 
program provides high-capacity communications for many more military 
users, and this agreement expands the program to secure a planned, 
ninth satellite.
    Reducing risks to space assets begins with situational awareness. 
Establishing and maintaining situational awareness in this vast, global 
domain is fundamental. It is also problematic. Each orbital regime 
presents its own unique challenges, and space is a harsh and 
technically challenging environment. Over the past several years, the 
Joint Space Operations Center (JSpOC) under the direction of our Joint 
Functional Component Command for Space (JFCC SPACE) \11\ has made great 
progress expanding the number of objects tracked, the number of 
satellite close-approaches analyzed, and the number of partners 
involved in the space situational awareness sharing process. We 
currently track more than 22,000 orbiting objects, and the JSpOC 
Mission System (JMS) and additional sensors contained in the fiscal 
year 2013 budget request will further improve our ability to detect 
smaller objects (increasing the number of objects tracked) and the 
frequency and fidelity of analyses (further contributing to the safety 
of space flight). Agreements that allow us to expand space surveillance 
and communication access points and data sharing hold great promise for 
improving shared space situational awareness and operational 
effectiveness. Additional sharing agreements, particularly those that 
lead to the eventual transition of the JSpOC into a truly international 
Combined Space Operations Center (CSpOC), have great potential to 
demonstrate space leadership and expand information available to all 
users. Finally, clearly communicating expectations and a shared 
understanding of space norms and responsibilities among space-faring 
nations will provide an important foundation for deterring undesirable 
aggression against space capabilities.
---------------------------------------------------------------------------
    \11\ Located at Vandenberg Air Force Base, CA. Lt. Gen. Helms 
serves as CDR JFCC Space as well as Commander, 14th Air Force.
---------------------------------------------------------------------------
Cyberspace
    Few might ever have imagined how cyberspace would evolve--globally 
connected and geographically unconstrained--to define modern life for 
billions of people. Not only have we woven cyberspace into nearly every 
facet of our personal lives, it has also become essential to the 
functioning of the global economy and military operations across all 
domains. In cyberspace we seek to conduct commerce, share information, 
learn, and entertain. But, through cyberspace others seek to vandalize, 
steal, disrupt, and, potentially, to destroy. In the military, we rely 
on many domains or capabilities with the reasonable expectation that we 
can secure them when required. However, in cyberspace, and across the 
broader electromagnetic spectrum, we find ourselves almost completely 
reliant on something we will likely never completely secure. Dealing 
with that reality is an extraordinary challenge.
      
    
    
      
    This reliance, like all of our technological advantages, is also 
clear to potential adversaries who are seeking to use cyberspace as a 
means to act against U.S. data, forces, or critical infrastructure--
particularly shared network infrastructure. Our challenge is to deploy 
resilient capabilities, sufficient capacity, and effective defenses 
that preserve access to our technological advantages by securing 
critical resources and preparing to operate and deliver effects--even 
when under threat of cyber intrusion.
    The Department of Defense Strategy for Operating in Cyberspace 
outlines five strategic initiatives to focus efforts to leverage 
cyberspace's tremendous opportunities while managing its dynamic nature 
and vulnerabilities. STRATCOM is responsible for operating and 
defending DOD information networks, planning against designated 
cyberspace threats, executing cyberspace operations as directed, 
advocating for cyberspace capabilities, and synchronizing activities 
with other combatant commands and agencies. In addition to our 
substantial work maturing the cyber mission, forces, capabilities, and 
relationships, we are continuing to improve operating concepts to 
better address cyberspace threats and support combatant commands. While 
much remains to be done, we have made substantial progress, and 
CYBERCOM continues to play an essential role operating and defending 
DOD's information networks.
    Moving forward, we must continue to improve situational awareness 
and clarify the global roles, responsibilities, expectations, and 
authorities that contribute to stable and effective deterrence and 
assurance. Effective defensive and offensive preparation begins with 
situational awareness. Threats in cyberspace are anything but static, 
and a useful defensive strategy or capability existing one moment may 
be ineffective mere seconds later, and improved relationships and 
technical capabilities allow us to better understand the dynamic cyber 
environment. Gaining this awareness and then acting quickly and 
effectively requires improving the complex interagency and 
international relationships. Cybersecurity requires the entire 
government's effort. No single agency or department can effectively 
address the threats we face in cyberspace; we must constantly evaluate 
relationships and operational constructs to address constantly evolving 
threats. The recent Defense Industrial Base (DIB) Pilot program is a 
great example of the benefits of partnership and the type of activity 
we look forward to furthering in the future.\12\
---------------------------------------------------------------------------
    \12\ The DIB pilot completed transitioning to the Department of 
Homeland Security this January and is now called the Joint 
Cybersecurity Pilot.
---------------------------------------------------------------------------
    Finally, in all of STRATCOM's unique functional mission areas, but 
particularly in cyberspace, I am concerned about sufficient technical 
capacity and personnel. We must ensure information technology 
capabilities are fielded with sufficient capacity and in a more 
resilient, defensible structure that still reaps as many benefits as 
possible from the open nature of the internet. Furthermore, we need the 
best trained and educated people to work our cyberspace challenges, and 
growing tomorrow's cyberspace professionals is fundamentally about 
education. Ensuring our future security in cyberspace--and really 
across STRATCOM's strategic responsibilities--begins with efforts to 
encourage and improve science, technology, engineering, and math 
education from an early age. It also includes the recognition that 
traditional military recruitment and retention programs may not be the 
best or fastest way to build a stable cyber cadre for the long term.

                               OUR PEOPLE

    At STRATCOM, we recognize that our people are our greatest and most 
enduring strength. Shaping the future joint force, professionally and 
personally, requires diligent attention. As a reflection of our 
strategy, we must support educational (including lifelong science, 
technology, engineering, and math ) and other personnel efforts that 
enable us to recruit, train, exercise, develop, and sustain the unique 
deterrence, space, and cyber workforce we need.
    Indeed, the All-Volunteer Force is our military's greatest 
strength, and we must keep the faith with our people and their 
families. Our servicemembers, civilians, and their families bear unique 
sacrifices for our Nation, and we especially appreciate their 
sacrifices over the past decade at war and at home. These sacrifices 
have come at great cost, and we must continue identifying stresses and 
providing our troops and their families necessary care. Suicides remain 
my greatest personnel concern, and I appreciate Service efforts this 
year to improve the personal resiliency of each member. One suicide is 
one too many. This is not only every commander's business, but it is 
the business of every soldier, sailor, airman, marine, and civilian.

                               CONCLUSION

    Mr. Chairman, it remains a great honor to lead the men and women of 
U.S. Strategic Command. This is an interesting time for our Nation; and 
this is more than an interesting time for STRATCOM. However, the 
challenge before us is not just to live in interesting times but to 
continue to excel in these interesting times. Ultimately, our goal is 
to anticipate and prevent strategic attacks, to continue to assure our 
allies, and to ensure we maintain access to space and cyberspace, which 
provide the U.S. decisive strategic and operational advantages to 
achieve our global security objectives. Our success will hinge on the 
quality of our people and the effectiveness of our response to a new 
national security reality that continues to test our agility, 
flexibility, and resolve. Dealing effectively with these challenges and 
identifying and pursuing opportunities that result will require all the 
imagination, innovation, and discipline we can muster. Dealing 
effectively with these challenges will also require us to synchronize, 
collaborate, and coordinate with the other combatant commands, 
agencies, and allies to an unprecedented degree.
    These are just the sort of interesting times and challenges 
STRATCOM was designed to address. We are equal to the task and 
determined to continuously improve and stay ahead of the challenge. I 
appreciate your continued support for STRATCOM and all of our 
servicemembers and civilians, and I look forward to continuing to work 
with you over the coming year.

    Chairman Levin. Thank you very much, General, and thank you 
for your reference to Senator Ben Nelson. We all feel very much 
the way you do, and we are grateful for your reference to him. 
Thank you.
    General Alexander?

STATEMENT OF GEN KEITH B. ALEXANDER, USA, COMMANDER, U.S. CYBER 
COMMAND, AND DIRECTOR, NATIONAL SECURITY AGENCY/CHIEF, CENTRAL 
                        SECURITY SERVICE

    General Alexander. Chairman Levin, Ranking Member McCain, 
and distinguished members of the committee, thank you for the 
opportunity to appear before you today. I am pleased to appear 
with General Bob Kehler, and I echo his comments all across the 
board, including those about Senator Nelson.
    I would start up front by echoing some of those comments. 
Namely, it is a privilege and honor to lead the soldiers, 
sailors, airmen, marines, and civilians of CYBERCOM and NSA. We 
have great people. Thanks for what you do to get those great 
people for us.
    I would also like to thank you and your colleagues for your 
support in helping this command move rapidly forward in our 
efforts to address emerging threats and concerns to our Nation.
    I also need to thank all our partners throughout DOD, DHS, 
and the FBI. We endeavor to build capability and capacity. 
Cyber is a team sport, and we could not have come this far and 
accomplished this much as we have without them.
    Many changes and substantial progress have been made since 
I last spoke to the committee almost 2 years ago. Cyberspace 
has increasingly become more critical to our national and 
economic security. Mr. Chairman, you brought up one of the 
quotes about the greatest transfer of wealth. I think that is 
absolutely correct. We are seeing increased exploitation into 
industry, other government agencies, and the theft of 
intellectual property is astounding. I will address parts of 
that shortly in my comments coming up.
    I also think that the threat has grown in terms of 
activists, nation states, and non-nation state actors. The 
Secretary of Defense and Chairman of the Joint Chiefs of Staff 
both emphasized cyber as an area of investment in a leaner 
defense budget. The task of assuring cyberspace access and 
security has drawn the attention of all our Nation's 
leadership. CYBERCOM is a component of a larger U.S. 
Government-wide effort to make cyberspace safer and a forum for 
vibrant citizen interaction to preserve our freedom to act in 
cyberspace and defend our vital interests and those of our 
allies.
    CYBERCOM is charged to direct the security, operations, and 
defense of the DOD information systems. But our work is 
affected by threats outside DOD's networks, threats the Nation 
cannot ignore. What we see both inside and outside DOD 
information systems underscores the imperative to act now to 
defend America in cyberspace.
    The American people expect broad and efficient access to 
cyberspace. The military and civilian sectors rely on 
accessibility. Increased interconnectedness of information 
systems, growing sophistication of cyber criminals and foreign 
intelligence actors has increased our risk.
    Last spring, in his international strategy for cyberspace, 
the President confirmed an inherent right to protect ourselves 
against attacks in this domain as in traditional domains. He 
said: ``When warranted, the United States will respond to 
hostile acts in cyberspace as we would to any other threat to 
our country. CYBERCOM exists to ensure the President can rely 
on the DOD information systems and has military options 
available to defend our Nation.''
    The President and the Secretary of Defense recently 
reviewed our Nation's strategic interests, issued guidance on 
defense priorities. In sustaining U.S. global leadership, 
priorities for 21st century defense, the Secretary focused on 
protecting access throughout the cyber domain. CYBERCOM's role 
is to pay attention to how nations and non-nation state actors 
are developing asymmetric capabilities to conduct cyber 
espionage and attacks. DOD recently added detail to that 
position. In accordance with the President's strategy, the 
Department further explained our deterrent posture to Congress 
in its cyberspace policy report last November.
    DOD components, especially CYBERCOM, work to dissuade 
others from attacking or planning to attack the United States 
in cyberspace. We work with a range of partners, U.S. 
Government allies, private industry to strengthen the defense 
of our citizens, the Nation, and allies in cyberspace. I want 
to assure you that all of our work is performed to safeguard 
the privacy and civil liberties of U.S. persons. These 
responsibilities are very much on our minds.
    In establishing the U.S. Combatant Command (COCOM) 
relationships, you asked about our relationships with the other 
commands, and I would like to briefly address that.
    First, we are establishing a cyber support element at each 
of the six geographically based COCOMs. U.S. Central Command's 
cyber support element is up and operational. U.S. Pacific 
Command's cyber support element is partially operational, and 
the others are on their way.
    The purpose is to provide technical expertise and 
capability and improve integration of cyber capabilities into 
the COCOM mission planning efforts. Our goal is to ensure each 
COCOM has a full sweep of cyber operations to choose from and 
an understanding of effects these options can produce in their 
area of responsibility.
    Mr. Chairman, you also asked about the standing Rules of 
Engagement. The Department is conducting a coordinated, 
thorough review with the Joint Staff of existing standing Rules 
of Engagement on cyberspace. These revised standing Rules of 
Engagement should give us authorities we need to maximize pre-
authorization of defense responses and empower activity at the 
lowest level. Issues being ironed out are what specific set of 
authorities we will receive, conditions in which we can conduct 
response actions, and we expect that those will be done in the 
next few months.
    DOD's role in defense against cyberattacks. Defending the 
Nation in cyberspace requires coordination with several key 
Government players, notably DHS, the FBI, the Intelligence 
Community. I would just like to put some of this on the table 
because it is my opinion that we need all three working 
together as a joint team. DHS has the lead for coordinating the 
overall national effort to enhance cybersecurity of U.S. 
critical infrastructure. They lead in resilience and preparing 
the defense. The FBI has the lead for detection, investigation, 
prevention, and mitigation response within the domestic arena 
under their authorities for law enforcement, domestic 
intelligence, counterintelligence, and counterterrorism. Of 
course, DOD, NSA, and CYBERCOM lead for detection, prevention, 
and defense in foreign space, defense of the Nation if the 
Nation comes under attack.
    I would like to go into, if I could, a little bit on what I 
see we need in cyberspace, the requirements to defend the 
Nation from attack because there has been a lot of discussion 
on this, and I think it is important to put this up front. I 
think this is the heart of some of the discussion that is going 
on with the legislation today.
    First, we need to see the attack. What do I mean by that? 
That was a quote that we made up at Fordham University. If we 
cannot see the attack, we cannot stop it. What we are not 
talking about is putting NSA or the military into our networks 
to see the attack. What we are talking about that all of you 
put on the table is we have to have the ability to work with 
industry, our partners, so that when they are attacked or they 
see an attack, they can share that with us immediately. The 
information sharing and the liability that goes along would 
allow industry, armed with signatures that we can provide, 
signatures that they have--I agree it takes all of us working 
together--to provide a better defense. What we need is for them 
to tell us that something is going on.
    There are a couple of analogies that I would like to use. 
These are not perfect analogies, just the best that I can come 
up with. Being in the Senate Armed Services Committee here, I 
use the missile analogy.
    So if a missile were coming into the country and we had no 
radars to see it, we could not stop that missile. If we have a 
cyberattack coming in and no one tells us that that cyberattack 
is going on, we cannot stop it.
    Today, we are in the forensics mode. What that means is an 
attack or an exploit normally occurs. We are told about it 
after the fact. I think we should be in the prevention mode in 
stopping that. A lot of that can be done by industry. I think 
that industry should have the ability to see these and share 
that with government in real time.
    When you think about it, it is almost like the Neighborhood 
Watch program. Somebody is breaking into a bank. Somebody needs 
to call the authorities to stop it. In cyberspace, what we are 
saying is armed with the signatures, the malicious software, 
those things that help us understand that an attack is going 
on, we believe that industry is the right one to tell the 
government that they see that and get us to respond to it.
    So I just want to clarify it because I do not believe we 
want NSA or CYBERCOM or the military inside our networks 
watching it. We think industry can do that, and we think that 
is the right first step. Actually that is in both of these 
bills.
    The second part. I used that one because I think there is 
another part to this that we have in force within DOD, and that 
is what standards do we build our networks to and how much of a 
defense do we put in there. How do we make our defense better? 
So we have put in a series of defensive capabilities, if you 
will, the standards that we operate and defend our networks. 
How do you align your networks? How do you know that they are 
configured right? How do you make them defensible so that they 
will last when somebody is trying to get in?
    We have a great Information Assurance Directorate, and one 
of the former directors told me that 80 percent of the exploits 
and attacks that come in could be stopped just by the hygiene 
itself.
    Mr. Chairman, you also brought up the issue of the Carnegie 
Mellon report, and I would like to just hit some of that 
because I do think that is an important report and it really 
applies to this discussion that we have going on now.
    As I have stated previously, that report and that 
assessment was early on in the DIB pilot. That does not mean 
that we cannot do better. In fact, let me turn that around and 
say for us to be successful in cyberspace, it is going to 
require Government and industry working together with the best 
of both. Industry partners see signatures that Government does 
not see, and government sees signatures or malicious software, 
exploitations, and attacks into the country that industry does 
not see. The information sharing and the ability to do that is 
key to stopping that.
    What I see from the DIB pilot was increased discussion 
between Government and industry. This was a good thing and it 
has grown and it continues to grow and we are getting better.
    So in legislation what I think is we need to make the first 
step. We need to start on that journey. We will not get it 
perfect, but we need that ability for industry to share with us 
the fact that these attacks and exploits are going on. But if 
we cannot stop them, we cannot help.
    There are five areas that I focused on with our folks, with 
the folks at CYBERCOM.
    First, we have to build and train cyber forces. These are 
things that General Kehler and I are arm-in-arm on. These are 
the key things that we have to do.
    Second, we have to have a defensible architecture. You 
mentioned the 15,000 enclaves, and the reality is our 
integrated architecture, the way that we have set them up, if 
went to the way Google, Yahoo, and others are doing it in the 
Defense Department, we would have a more defensible 
architecture. That is the way we are pushing, and the Services 
are helping us get there.
    I think we have to partner with DHS and FBI. The reason 
that I bring DHS into this is that I believe we want them 
working with the rest of government to help set up the rest of 
government networks and work with that. We do not want to take 
the people that I have and push them over here. I think we want 
the people that we have looking outside, and I think that goes 
to Senator McCain's comments. We are the offensive force. We 
are the ones that are going to protect the Nation. We need to 
see what is going on and be prepared to do that. We can give 
and work with DHS and provide capabilities and technical 
expertise, and that is growing.
    Finally, I would add in the FBI. They have some tremendous 
capabilities. They have the law enforcement arm.
    When you put all three of us together, I think our country 
knows that what we are doing is transparent and we are doing 
the right thing. In doing that, you have brought all three 
players to the table.
    I see command and control and partnership as key especially 
with our allies, and I would put the allies on the table 
because this is going to be huge for our future. The concept 
for operating in cyberspace we have mentioned earlier.
    So it is an honor and privilege to represent the soldiers, 
sailors, airmen, marines, and civilians of CYBERCOM here today. 
I thank you for the opportunity to discuss our many 
accomplishments and progress in building capabilities to 
perform our mission in the future.
    I would ask that my statement for the record be included on 
the record.
    That is all I have, Mr. Chairman.
    [The prepared statement of General Alexander follows:]

           Prepared Statement by GEN Keith B. Alexander, USA

    Thank you, Chairman Levin, and Ranking Member McCain, for inviting 
me to talk to you about Cyber Command. I am here representing Cyber 
Command, with an authorized staff of 937, and operational service cyber 
components totaling over 12,000 men and women, whose great work helps 
to keep our Nation more secure. Their ranks include uniformed members 
of all the military Services and the Coast Guard, as well as civilians 
and officials from several Federal agencies partnered with us in our 
missions. There is no finer group of Americans anywhere, and the work 
they do is vital to our security now and in the future. I am proud and 
humbled to be associated with them.
    The fiscal year 2013 President's budget for Cyber Command provides 
$182 million and 937 personnel to perform our global mission. As demand 
to develop and integrate capabilities into cyber planning and 
operations continues to grow, we continue to work with the Department 
to shape our resource requirements and workforce to provide the 
necessary level of effort against growing mission sets and threats. I 
last spoke to the committee in open session just about a year ago. 
Since then, Cyber Command has made substantial progress in building 
capabilities to perform its missions. I hasten to add, however, that 
our Nation's need for mission success has also grown, both in its scope 
and in its urgency. Secretary of Defense Panetta recently told Members 
that ``our adversaries are going to come at us using 21st century 
technology,'' including cyber threats. Chairman Dempsey amplified that 
statement, noting that we are ``very concerned about cyber.'' Both 
emphasized that cyber is one of the areas slated for investment in an 
overall Defense budget that will be leaner in the future. The United 
States relies on access to cyberspace for its national and economic 
security. The task of assuring cyberspace access continued to draw the 
attention of our Nation's most senior leaders over the last year, and 
their decisions have helped to clarify what we can and must do about 
developments that greatly concern us.
    Cyber Command is, of course, a component of a larger, U.S. 
Government-wide effort to make cyberspace safer for all, to keep it a 
forum for vibrant citizen interaction, and to preserve our freedom to 
act in cyberspace in defense of our vital interests and those of our 
allies. Although Cyber Command is specifically charged (among other 
missions) with directing the security, operation, and defense of the 
Department of Defense's (DOD) information systems, our work and our 
actions are affected by threats well outside DOD networks; threats the 
Nation cannot afford to ignore. What we see, both inside and outside 
DOD information systems, underscores the imperative to act now to 
defend America in cyberspace. In my time with you today, I want to talk 
about that larger, strategic context, to note some recent changes in 
the ways that we express our cyber posture in public, and to explain 
what these developments mean specifically for the progress of Cyber 
Command and the larger cyber enterprise.

                           STRATEGIC CONTEXT

    In framing my comments on our progress at Cyber Command, I have to 
begin by noting a worrisome fact: cyberspace is becoming more 
dangerous. The Intelligence Community's world-wide threat brief to 
Congress in January raised cyber threats to just behind terrorism and 
proliferation in its list of the biggest challenges facing our Nation. 
You know this if you are a national leader or a legislator, a military 
commander, a corporate executive or chief information officer, or just 
an ordinary citizen shopping or spending leisure time on-line. Out of 
necessity, more and more of the time and resources that every American 
spends on-line are being consumed by tasks to secure data, encrypt 
drives, create (and remember) passwords and keys, and repeatedly check 
for vulnerabilities, updates, and patches. Americans have digitized and 
networked more of their businesses, activities, and their personal 
lives, and with good reason they worry more about their privacy and the 
integrity of their data. So has our military. Those Americans who are 
among the growing number of victims of cybercrime or cyber espionage, 
moreover, are also spending their time trying to figure out what they 
have lost and how they were exploited.
    Dangers are not something new in cyberspace, of course. Observers 
theorized about hypothetical cyber attacks on data and information 
systems 20 years ago. When I spoke to you last year, however, I noted 
the sort of threats that were once discussed in theoretical terms were 
becoming realities and actually being deployed in the arsenals of 
various actors in cyberspace. I specifically use the broader term 
``actors'' instead of ``states.'' In 2010 we saw cyber capabilities in 
use that could damage or disrupt digitally controlled systems and 
networked devices, and in some cases we are not sure whether these 
capabilities are under the control of a foreign government. 
Furthermore, we believe it is only a matter of time before someone 
employs capabilities that could cause significant disruption to 
civilian or government networks and to our critical infrastructure here 
in the United States.
    We have long seen cyber capabilities directed by governments to 
disrupt the communications and activities of rival States, and today we 
are also seeing such capabilities employed by regimes against critics 
inside their own countries. Events during the Arab Spring last year 
offer a wealth of examples. Popular protests against authoritarian rule 
raised hopes across the Maghreb and beyond--hopes that were organized, 
informed, and expressed in no small part by expanded capacity for 
communications and the new social media applications that use it. The 
response of the former regimes in Egypt, Libya, and Tunisia--and some 
current regimes as well--was to try to filter, disrupt, or even shutter 
these channels for news and communications, whether to stifle ongoing 
protests by their own citizens or to keep their peoples from hearing 
that discontent in other lands had toppled autocratic regimes. Some 
regimes, moreover, even reach out via cyberspace to harass political 
opponents beyond their borders.
    Cyber crime is changing as well. In part this is due to heightened 
security and wariness among governments, businesses, internet service 
providers (ISPs), and average users. Law enforcement and ISPs, for 
example, have gotten better at identifying ``botnets,'' banks of 
computers slaved together for criminal purposes, and have become more 
skilled at neutralizing them. But now the more sophisticated cyber 
criminals are shifting away from botnets and such ``visible'' means of 
making money and toward stealthier, targeted thefts of sensitive data 
they can sell. Some cyber actors are paying particular attention to the 
companies that make network security products. We saw digital 
certificate issuers in the United States and Europe hit last year, and 
a penetration of the internal network that stored the RSA's 
authentication certification led to at least one U.S. defense 
contractor being victimized by actors wielding counterfeit credentials. 
Incidents like these affect DOD networks directly, targeting them with 
similar malware, often spread by clever ``phishing'' e-mails that hit 
an information security system at its weakest point--the user. Nation-
state actors in cyberspace are riding this tide of criminality. Some of 
these actors can and may turn their resources and power against U.S. 
and foreign businesses and enterprises, even those that manage critical 
infrastructure in this country and others. State-sponsored industrial 
espionage and theft of intellectual capital now occurs with stunning 
rapacity and brazenness, and some of that activity links back to 
foreign intelligence services. Companies and government agencies around 
the world are thus being looted of their intellectual property by 
national intelligence actors, and those victims understandably turn for 
help to their governments.
    The expanding popularity of social media and wireless consumer 
electronics is driving cyber crime as well. More and more malware is 
written for wireless devices, particularly smartphones, and soon, we 
anticipate, for tablets as well. These criminal gangs are trying to 
exploit social media users and wireless networked systems, but can also 
exploit our soldiers, sailors, airmen, and marines in their purely 
social activities. Real and potential adversaries can and do learn a 
great deal about our personnel, procedures, and deployments by 
monitoring the use that our people make of popular social media. As our 
military goes wireless these threats to our weapons systems, 
communications, databases, and personnel demand attention.
    Finally, I need to mention a recent development of concern to us at 
Cyber Command and across our government and allies. Last year we saw 
new prominence for cyber activist groups, like Anonymous and Lulz 
Security that were encouraging hackers to work in unison to harass 
selected organizations and individuals. The effects that they 
intentionally and indirectly cause are chaotic and perhaps exaggerated 
in the popular media, but the work of preventing those effects from 
disrupting DOD information systems does draw attention and resources. 
We are also concerned that cyber actors with extreme and violent 
agendas, such as al Qaeda affiliates or supporters, could draw upon the 
experiences and ideas of more sophisticated hactivists and potentially 
use this knowledge for more disruptive or destructive purposes, though 
it remains unclear what the likelihood of such an event is.

                       OUR NATIONAL CYBER POSTURE

    The American people have rightly come to expect broad and 
economical access to cyberspace. They have saved their personal 
information, business files, research projects, intellectual capital, 
and recreational pursuits in digital formats and stored in networked 
computing devices. Moreover, they have built social and professional 
webs of contacts in cyberspace--the all-important ``who you know''--and 
have thus come to rely on the accessibility of these networks. Our 
military and our government have done likewise. This increased inter-
connectedness of our information systems, combined with the growing 
sophistication of cyber criminals and foreign intelligence actors, has 
increased our risk. Our inter-connectedness is now a national security 
issue. Ensuring and securing our computing systems has focused the 
energies of America's leadership at both ends of Pennsylvania Avenue 
and in the Cabinet departments. Recent decisions have helped to clarify 
our posture for defending net users and the Nation in cyberspace, and 
have sent strong signals to anyone who might impair our interests in 
this domain.
    The President confirmed our inherent right to protect ourselves 
against attacks in this domain, as in the traditional domains, last 
spring in his International Strategy for Cyberspace, saying ``When 
warranted, the United States will respond to hostile acts in cyberspace 
as we would to any other threat to our country.'' We Reserve the right 
to use all necessary means--diplomatic, informational, military, and 
economic--as appropriate and consistent with applicable international 
law. In so doing, we will exhaust all options before military force 
whenever we can; will carefully weigh the costs of action against the 
costs of inaction; and will act in a way that reflects our values and 
strengthens our legitimacy, seeking broad international support 
whenever possible. As in the other domains, of course, the United 
States will seek to exhaust all options before employing military 
force, and will seek international support whenever possible. Cyber 
Command exists to ensure that the President can rely on the information 
systems of the Department of Defense and has military options available 
for his consideration when and if he needs to defend the Nation in 
cyberspace.
    President Obama and Secretary of Defense Panetta have recently 
reviewed our Nation's strategic interests and issued guidance on our 
defense priorities. In Sustaining U.S. Global Leadership: Priorities 
for 21st Century Defense, the Secretary focused on protecting access 
throughout the domain. For Cyber Command, this means we must pay 
attention to the ways in which nations and non-state actors are 
developing asymmetric capabilities to conduct cyber espionage--and 
potentially cyber attacks as well--against the United States as well as 
our allies and partners. In this context, our cyber capabilities 
represent key components of deterrence. Since modern forces cannot 
operate without reliable networks, we will invest in advanced 
capabilities to defend them even in contested environments.
    The Department of Defense recently added detail to that position. 
In accordance with the President's International Strategy, the 
Department further explained our deterrent posture to Congress in its 
``Cyberspace Policy Report'' last November. DOD's components, 
particularly Cyber Command, seek to maintain the President's freedom of 
action and work to dissuade others from attacking or planning to attack 
the United States in cyberspace. We will maintain the capability to 
conduct cyber operations to defend the United States, its allies, and 
its interests, consistent with the Law of Armed Conflict. Our 
indications and warning and forensic intelligence capabilities 
necessary to identify our enemies and attackers in cyberspace, 
moreover, are improving rapidly. As the Department's report to Congress 
noted, the co-location of Cyber Command with the National Security 
Agency provides our Command with ``unique strengths and capabilities'' 
for cyberspace operations planning and execution. I can assure you 
that, in appropriate circumstances and on order from the National 
Command Authority, we can back up the Department's assertion that any 
actor contemplating a crippling cyber attack against the United States 
would be taking a grave risk.
    Cyber Command works with a range of partner agencies in the U.S. 
Government and among our allies, along with parallel efforts in private 
industry, to strengthen the overall defense of our citizens, the 
Nation, and allies in cyberspace. The Departments of Defense and 
Homeland Security collaborate on various initiatives, including the 
Defense Industrial Base (DIB) Cyber Pilot, a test program to establish 
a construct for Commercial Service Providers to provide managed 
security services enhanced by government threat information to Defense 
Industrial Base companies; and the Enduring Security Framework, an 
executive and working-level forum with key partners in the commercial 
technology marketplace.
    Finally, I want to assure you that all of our work is performed 
with our responsibility to safeguard the privacy and civil liberties of 
U.S. persons very much in our minds. We take very seriously, in all of 
our operations, our duty to ensure that defending the Department of 
Defense's information systems and the Nation's freedom to access 
cyberspace does not infringe on Americans' civil liberties, those 
rights guaranteed by the Constitution that I and every member of my 
Command swore an oath to uphold.

                        BUILDING THE ENTERPRISE

    Cyberspace has a scope and complexity that requires inter-agency, 
inter-service, and international cooperation. Within the Department of 
Defense, cyberspace issues are handled by our command and a diverse set 
of other agencies and organizations, many of which have their own 
initiatives with government, allied, and industry partners. It is 
important to keep this context in mind as I review the efforts, 
accomplishments, and challenges of Cyber Command.
    When I spoke to you a year ago, our command had just become 
operational. Just a year later, we have a record of success. We are in 
action every day making the Department's networks more secure and its 
operations more effective. We are actively directing the operation of 
those networks and making commanders accountable for their security. 
Let me tell you about some of our recent successes:

         This time last year, sophisticated cyber intruders 
        compromised the security of the algorithm employed in tokens 
        distributed by the RSA Corporation. This was very serious news, 
        since a large number of enterprises, including some in the 
        Department of Defense, rely on two-factor authentication using 
        RSA tokens. Indeed, the systems of some non-DOD users were 
        breached not long after the compromise by intruders exploiting 
        the stolen certificates. Cyber Command had immediately 
        recognized the danger to DOD information systems, warned those 
        DOD networks at risk, and took swift mitigation efforts. We at 
        Cyber Command directed and oversaw the replacement of all RSA 
        tokens throughout DOD. Partly as a result of our actions, we 
        have not seen any intrusions of DOD networks related to the RSA 
        compromise.
         Just a few months ago, we saw an example of how Cyber 
        Command has improved DOD's cybersecurity. In late 2010, cyber 
        actors took advantage of a vulnerability in Adobe software that 
        allowed them to install malicious software on computers whose 
        users clicked on an apparently harmless link, a ruse called 
        spearphishing. In that case, as Cyber Command was just 
        beginning, several DOD networks/systems were breached and our 
        experts could only react to stop files from being stolen and 
        new breaches from being opened. A year later, by contrast, our 
        defensive posture and cyber command and control processes had 
        matured to the point where we were prepared not just to react 
        but to counter such tactics. When another Adobe vulnerability 
        was discovered in late 2011, Cyber Command quickly took action 
        to ensure that no one would be able to use it against us. Sure 
        enough, malicious cyber actors seized upon the vulnerability 
        and used it to mount a spearphishing campaign targeting DOD 
        networks. This time we were waiting and were able to block this 
        campaign from exploiting our systems and acquiring any DOD 
        files.
         The year 2011 might well be remembered as the Year of 
        the Hacker. Various on-line groups garnered headlines for their 
        efforts to publicize causes of concern to them by breaching the 
        security of government and private networks. The on-line 
        collective calling itself Anonymous, to mention just one of 
        these groups, announced several attempted attacks against 
        Department of Defense information systems. Cyber Command was 
        able to direct and integrate pro-active defensive cyber 
        operations to successfully counter these threats. Over the past 
        year, there have also been related, well-publicized examples of 
        major exploitations or attacks against Defense contractors and 
        other holders of intellectual property vital to our national 
        security. The Cyber Command-led defense of the Department's 
        information systems, however, prevented any of these threat 
        actors from having a similar effect against DOD networks. 
        Finally, the investigation of the WikiLeaks breach continued, 
        and its progress was closely followed by the hacker groups. In 
        response to the WikiLeaks breach, Cyber Command was able to 
        direct actions across the Department that quickly reduced risks 
        to DOD information. These measures supported operational 
        commanders exercising their accountability for cybersecurity in 
        their units.

    I'd be pleased to give you more details on these events in closed 
session, and to tell you about still others that remain too sensitive 
to mention here.
    I am proud of this record of success but aware that more needs to 
be done by Cyber Command as part of the larger cyber enterprise that 
includes the National Security Agency/Central Security Service (NSA/
CSS), the Service cyber components, and the Defense Information Systems 
Agency (DISA). I foresee five challenges over the coming year that 
Cyber Command will face and continue to address. Those areas are the 
following:

    (1)  Concept for Operating in Cyberspace: Every domain, by 
definition, has unique features that compel military operations in it 
to conform to its physical or relational demands. Doctrine, tactics, 
techniques, and procedures have been under development for millennia in 
the land and maritime domains, for a century in the air domain, and for 
decades in space. In the cyber domain, however, we are just beginning 
to craft new doctrine and tactics, techniques, and procedures. At the 
strategic level, we are building our organizational structures to 
ensure we can deliver integrated cyber effects to support national and 
combatant commander requirements; we are developing doctrine for a pro-
active, agile cyber force that can ``maneuver'' in cyberspace at the 
speed of the internet; and we are looking at the ways in which 
adversaries might seek to exploit our weaknesses. At the operational 
level, our objectives are to establish a single, integrated process to 
align combatant commanders' requirements with cyber capabilities; to 
develop functional emphases in the Service cyber components; and to 
draft a field manual or joint publication on cyber operations and 
demonstrate proof of concept for it. Finally, rapid deconfliction of 
operations is required, and that is garnering leadership attention as 
well. We are currently working closely with two of the geographic 
combatant commanders. Our goal is to ensure that a commander with a 
mission to execute has a full suite of cyber-assisted options from 
which to choose, and that he can understand what effects they will 
produce for him. Though we can only work such an intensive process with 
two of the combatant commanders at this time, we will be able to reach 
out eventually to all of the combatant commands.
    (2)  Cybersecurity Responsibilities: Defending the Nation in 
cyberspace requires a coordinated response among several key players 
from throughout the government. It takes a cross-government team to 
mature and implement an effective cyber strategy for the Nation. From 
my perspective, there are three key players that make up this team:

                 Department of Homeland Security--lead for 
                coordinating the overall national effort to enhance the 
                cybersecurity of U.S. critical infrastructure, and 
                ensuring protection of the civilian Federal Government 
                (.gov) networks and systems.
                 Federal Bureau of Investigation (FBI)--
                responsible for detection, investigation, prevention, 
                and response within the domestic arena under their 
                authorities for law enforcement, domestic intelligence, 
                counterintelligence, and counterterrorism. Importantly, 
                when malicious cyber activity is detected in domestic 
                space, the FBI takes the lead to prevent, investigate, 
                and mitigate it.
                 Department of Defense/Intelligence Community/
                NSA/Cyber Command--responsible for detection, 
                prevention, and defense in foreign space, foreign cyber 
                threat intelligence and attribution, security of 
                national security and military systems; and, in 
                extremis, defense of the homeland if the Nation comes 
                under cyber attack from a full scope actor.

    Cyber Command is working to ensure we have identified the roles and 
responsibilities correctly to accomplish our mission. Overall, our most 
pressing need across the government is to ensure we can see threats 
within our networks and thus address malware before it threatens us. 
Foundational to this is the information sharing that must go on between 
the Federal Government and the private sector, and within the private 
sector, while ensuring appropriate measures and oversight to protect 
privacy and preserve civil liberties. We welcome and support new 
statutory authorities for DHS that would ensure this information 
sharing takes place; an important reason why cyber legislation that 
promotes this sharing is so important to the Nation. Finally, we are 
working within the Department and administration on establishing the 
Rules of Engagement and criteria upon which Cyber Command will act. We 
are working with the Joint Staff to develop a decision framework that 
allows us to identify threats and ensure senior leaders can share 
information rapidly and take action, if necessary.

    (3)  Trained and Ready Force: At present we are critically short of 
the skills and the skilled people we as a Command and a nation require 
to manage our networks and protect U.S. interests in cyberspace. Our 
prosperity and our security now depend on a very skilled technical 
workforce, which is in high demand both in government and industry. We 
in DOD need to build a cyber workforce that can take action quickly 
across the full range of our mission sets as necessary. This will 
require us to adopt a single standard across the Department and the 
Services, so that we can truly operate as a single, joint force. In 
order to achieve our goals in this area by 2014, we must build a 
skilled force capable of full-spectrum cyber operations across a 
continuum of threats. We also need to build our workforce at Cyber 
Command and the Service Cyber Components so that, in extremis, we have 
the capability to defend the Nation in cyberspace. We are reviewing 
recruitment and incentive programs in order to build and retain the 
best of the best cyber defenders, and we are working to standardize, 
track, and manage the training needed for all cyber personnel.

    Let me mention one of the ways in which we are building the cyber 
force. Last fall we sponsored our first major tactical exercise, which 
we called Cyber Flag (after the Red Flag exercise that has trained 
generations of fighter pilots since the 1970s). This was a large, 
multi-day affair, in which operators from our Service cyber components 
engaged in realistic and intense simulated cyber combat against 
``live'' opposition. This unprecedented exercise attracted a great deal 
of interest from senior leaders in the Pentagon and other departments 
and agencies, and dozens of observers attended its sessions. 
Nevertheless, Cyber Flag was no mere drill, but a training exercise for 
those necessarily engaged in cyber operations now. The lessons that 
network operators learned first-hand in Cyber Flag are being applied 
daily in defense of our networks and in support of national policy 
goals.

    (4)  Defensible Architecture: Our current information systems 
architecture in the Department of Defense was not built with security 
uppermost in mind, let alone with the idea of operationalizing it to 
enable military missions. Instead, we have seven million networked 
devices in 15,000 DOD network enclaves. Our vision is to fashion that 
architecture into an operational platform, not just a channel for 
communications and a place for data storage. To do so, our DOD cyber 
enterprise, with the Department's Chief Information Officers, DISA, and 
Cyber Command helping to lead the way, will build a common cloud 
infrastructure across the Department and the Services that will not 
only be more secure but more efficient--and ultimately less costly in 
this time of diminishing resources--than what we have today.

    Cyber Command will directly benefit from this in its mission of 
directing the security, operation, and defense of DOD information 
systems. Our strategic objective is to reduce the attack surface of our 
critical networks that is available to adversaries, enabling us to 
``Defend and Jump'' as needed. Our operational objectives are to reduce 
the number of network enclaves to the minimum possible; to implement a 
common cloud-based infrastructure to improve security across all of 
DOD; to move to a more secure model for data and services with better 
tagging and metadata; to implement identity-based access controls to 
services, as well as attribute-based access controls to control who can 
use those data; and finally to grow the capability to rapidly 
reconfigure the single network in response to mission requirements or 
enemy actions.
    The NSA has begun making this vision a reality, with collateral 
benefits for Cyber Command in the process. The agency has sharply 
consolidated the number of desktop applications, closed half its help 
desks, trimmed the number of data centers required, and saved money 
through corporate management of software licenses. Similar actions 
taken Department-wide will not only improve the security of the DOD's 
networks but also reduce its information technology costs, freeing 
money for other purposes and allowing for a re-dedication of cyber 
personnel to more urgent needs.

    (5)  Global Visibility Enabling Action: We cannot wait for the 
implementation of that vision of a defensible architecture, however, to 
improve our situational awareness. Our commanders and our Services need 
to know what's happening inside and outside our networks, but at 
present we cannot even develop a definitive picture of the 15,000 DOD 
network enclaves and lack the capability to easily understand what is 
happening as it occurs. Furthermore, we must know in real time when and 
how the internet and the overall cyber environment inside and outside 
the United States are threatened in order to counter those threats. In 
this area, our strategic objectives are to enable unity of effort 
across DOD, the Federal Government, private partners and allied 
nations; to develop faster, more comprehensive, and timelier warning of 
threats against DOD networks and critical infrastructure; and to move 
beyond situational awareness to enabling integrated operational 
responses in cyberspace. Our operational objectives are to gain 
visibility of, and fuse information from, our own and public networks 
to enable action; to partner with the interagency, private 
infrastructure providers and global partners to share information; and 
to build capabilities to empower decisionmakers.

    Cyber Command Major Accomplishments (March 2011 to March 2012)

                          OPERATIONAL IMPACTS

    Common Operating Picture (COP) Exercise: Cyber Command Joint 
Operations Center, the NSA/CSS Threat Operations Center and the DOD 
Cyber Crime Center participated in a White House-led National Level 
Exercise to test the Federal Government's ability to develop a COP 
appropriate for White House-level consumers.
    Cyber Training Advisory Council (CYTAC) Creation: The CYTAC is an 
advisory and coordination committee established to improve the quality, 
efficiency, and sufficiency of training for computer network defense, 
attack, and exploitation that will work to coordinate and standardize 
cyber training across all military services, Cyber Command, and NSA.
    National Reconnaissance Office (NRO) War Game THOR'S HAMMER: Cyber 
Command personnel supported NRO's space and cyber wargame that 
increased the participant's understanding of critical space asset 
capabilities and their vulnerabilities to cyber attacks. Additionally, 
the wargame highlighted the interrelationship between space security 
and cyberspace security.
    DHS National Cyber Incident Response Program: Synchronized DHS 
National Cyber Incident Response Program (NCIRP) with the DOD's 
Cyberspace Conditions alert system to facilitate future actions.
    Global Cyber Synchronization Conference: Hosted the second Global 
Cyber Synchronization Conference on behalf of STRATCOM to integrate 
operational planning requirements across the combatant commands.

                          POLICY AND DOCTRINE

    The administration is working with Congress to finalize 
cybersecurity legislation. Within the administration, there is a strong 
and unified working relationship between DOD, DHS and NSA on 
cybersecurity matters; and NSA, NIST and DHS are closely partnered to 
address cybersecurity standards.
    Senate Cybersecurity Exercise: Members of the Senate participated 
in a cybersecurity exercise on 7 March 2012 as the result of an all-
Senate cybersecurity threat briefing given by the White House and 
Departmental Secretaries on 1 February 2012.

                         SUPPORT TO OPERATIONS

    Cyber Command Cyber Support Element (CSE) Placements: Working with 
the combatant commands to place a CSE at each COCOM tailored to their 
mission support requirements for cyberspace operations. Cyber Command 
has a full CSE deployed to U.S. Central Command, a partial CSE to 
PACOM, and expects to deploy a CSE to AFRICOM and SOCOM within 6 
months.
    Cyber Command Force Management Workshop: The Cyber Command Force 
Management Workshop held in November brought together service cyber 
components to discuss Cyber Command support for the Combatant 
Commanders.
    Trained and Ready Cyber Forces: Cyber Command, NSA and the 
military's cyber service components completed development of the Joint 
Cyberspace Training and Certification Standards (JCT&CS) document that 
will serve as the common foundation for training all cyber operators to 
unified standards across the DOD.

                           ENHANCING DEFENSES

    Global Thunder 12: The Cyber Command Joint Operations Center (JOC) 
supported STRATCOM's annual Field Training Exercise (FTX) designed to 
validate our Nuclear Command Control Communications (NC3) OPLAN tasks. 
The JOC supported this FTX with reporting, analysis, conducting de-
confliction, and responding to cyber related events.
    Cyber Command Support to Nimble Ghost: Cyber Command worked with 
the Joint Staff for this DOD exercise to provide a forum for senior DOD 
leaders to examine policies and procedures that enable the defense of 
DOD critical U.S. networks and explore the department's ability to 
respond to a major cyberspace attack.

                          BUILDING TEAM CYBER

    DHS Blueprint for a Secure Cyber Future: Offered substantive 
comments in response to a review of DHS' draft Blueprint for a Secure 
Cyber Future; the Cybersecurity Strategy for the Homeland Security 
Enterprise.
    Enhanced DHS and DOD Cybersecurity Operational Collaboration: 
Efforts remain underway by DHS and DOD to clarify responsibilities, 
assign specific actions, and establish timelines for implementing the 
DHS-DOD Joint Cybersecurity Vision in a cybersecurity work plan.
    Tri-Lateral Defense Cyber Contact Group: Cyber Command and NSA 
personnel attended the Tri-Lateral Defense Cyber Contact Group (DCCG) 
completing a planning-focused tabletop exercise with the United 
Kingdom, Australia, STRATCOM, and OSD(P); used to develop a listing of 
issues that impede our ability to conduct cyberspace operations 
trilaterally.

                               CONCLUSION

    We are working on all five of these focus areas simultaneously 
because they all demand our attention and because progress in each 
depends on progress in the others. Our capabilities across the board 
have to improve together, or good ideas in one area can be undermined 
by continuing weakness in another. We are moving with all deliberate 
speed, moreover, because the American people will rightfully want 
results, not excuses, as we defend our Nation.
    In conclusion, allow me to thank you again for inviting me here to 
talk about the achievements and the plans of Cyber Command. Cyberspace 
provides both incredible opportunities and significant challenges for 
the Department of Defense and the Nation. Cyber Command is part of a 
whole-of-government effort to capitalize on those opportunities, and to 
reduce and mitigate the uncertainties. With your continued support, I 
have no doubt that the hardworking and capable men and women of the 
Command will rise to those challenges and continue to make our Nation 
proud of their accomplishments. Now I look forward to continuing this 
dialogue with you, both here and in the months ahead.

    Chairman Levin. Thank you so much, General. Your statement 
will be made part of the record.
    We will start with a 7-minute first round.
    General Kehler, first, do you support the fiscal year 2013 
budget request?
    General Kehler. Yes, sir, I do.
    Chairman Levin. General Kehler, you made reference to an 
effective nuclear command and control network that needs 
improvement, I believe, in your opening statement. Are those 
efforts underway to modernize that command and control network? 
Can you describe those efforts a little bit?
    General Kehler. Yes, sir, I can. Of course, the nuclear 
command and control system is composed of many, many parts. 
There are parts of the nuclear command and control system that 
are not survivable. However, inherent in the nuclear command 
and control system is a thin line that ultimately would be 
survivable under any conditions so that we could always ensure 
that the President of the United States is connected to the 
nuclear forces.
    Investments are underway in those critical capabilities, 
the capabilities that are part of the space architecture layer, 
of course, advanced extremely high frequency satellites. The 
first one is on orbit. The second one will go to orbit in the 
next year or so. I do not have the exact date. That will be the 
satellite-based survivable part of our thin line network as we 
go forward.
    We have some issues with terminals and terminals lagging 
the deployment of the satellites. That means we are going to 
have to use older terminals. We will not get the full 
capability of the satellites at first. We are working that 
problem.
    We have some issues to make sure that our bomber 
connectivity is maintained. The Air Force program supports 
that, and so I am comfortable that we are going forward there 
to maintain the connectivity at the force end of this.
    We are also upgrading some of our other components to the 
network, ground-based parts of the network, et cetera.
    So I will always be a little uncomfortable about the 
network. I will tell you that I think there is more to be done. 
We are working that inside the Department for future budget 
requests. In fact, we are undertaking a fairly substantial 
review at this point in time about the nuclear command and 
control system and how it does or does not support other issues 
as well.
    Chairman Levin. Thank you, General.
    The 2010 Nuclear Posture Review called out for studying 
additional reductions in nuclear weapons. Do you think it is 
possible to further reduce our nuclear weapons beyond the New 
START levels?
    General Kehler. Mr. Chairman, I think there are 
opportunities to reduce further, but I think that there are 
factors that bear on that ultimate outcome. Rather than get 
into those, which I do not think would be appropriate, I would 
just simply say I do think there are opportunities here, but 
recognizing that there are some factors that bear on this.
    I would also mention it is never our view that we start 
with numbers. We start with an assessment of the situation we 
find ourselves in, the strategy, our objectives, et cetera, and 
ultimately then you get to numbers.
    Chairman Levin. Thank you.
    General Alexander, are you advocating for any additional 
legal authorities that are not included in the cybersecurity 
legislation that was proposed by the administration to Congress 
or that is included in the Lieberman-Collins bill?
    General Alexander. No, Mr. Chairman.
    Chairman Levin. I noted the industrial espionage campaign 
in my opening statement, and you made reference to it in your 
statement, particularly China's aggressive and relentless 
industrial espionage campaign through cyberspace.
    Can you give us some examples in open session of the 
technologies that have been stolen through penetration of major 
DOD contractors and perhaps the Department itself, and do you 
know whether or not in fact we have raised this issue, 
particularly Vice President Biden, with the Chinese?
    General Alexander. Senator, I am not aware on the last, 
what Vice President Biden has shared with the Chinese for that 
discussion.
    But we are seeing a great deal of DOD-related equipment 
stolen by the Chinese. I cannot go into the specifics here, but 
we do see that from DIB companies throughout.
    There are some very public ones, though, that give you a 
good idea of what is going on. The most recent one, I think, 
was the RSA exploits. RSA creates the two-factor authentication 
for things like PayPal. So when you get on and order something 
and pay for it over the network, the authentication is done by 
encryption systems that RSA creates. The exploiters took many 
of those certifications and underlying software which makes it 
almost impossible to ensure that what you are certifying or 
what someone else is certifying is in fact correct.
    Now, RSA acted quickly and is replacing all those 
certificates and has done that in priority order for the 
Defense Department and others.
    But when you think about it, the ability to do it against a 
company like RSA is such a high-order capability, RSA being one 
of the best, that if they can do it against RSA, that makes 
most of the other companies vulnerable.
    Chairman Levin. We took some action in the counterfeiting 
area in our defense authorization bill to try to stop that type 
of theft, particularly again by the Chinese when it came to the 
supply of parts for weapons systems. I think it will be 
important for you to talk to Vice President Biden or his office 
so that you can see what steps were taken to inform the Chinese 
of our position on this.
    We have now got to find ways--and I think you are the 
perfect person to be a spokesman for this--to stop their theft 
of other kinds of intellectual property through the use of 
cyber.
    I wonder if you could give us some examples or give us some 
options. I think Senator McCain also made reference to this. 
What are the options for us in terms of action for them or 
anyone else who is stealing our information or our intellectual 
property to pay a price for this?
    General Alexander. Well, I suppose using the rest of 
STRATCOM would be out, Mr. Chairman.
    I think the first thing that strikes my mind--and I want to 
be clear on this because the most important thing that we can 
do right now is make it more difficult for the Chinese to do 
what they are doing. The analogy that I put on the table is we 
have all our money in our banks, but our banks have the money 
out on tables in New York City at the park. We are losing the 
money, and we are wondering why. Nobody is protecting it or it 
is not well-protected. Our intellectual property is not well-
protected and we could do better protecting it. So step one is 
take those steps to do that.
    I do think what the Department is doing--you asked for 
authorities that would need legislation. I think those are in 
the legislation. What the Department is doing with the 
authorities we already have is maturing the standing Rules of 
Engagement that would allow us to stop some of these exploits 
as they are going on. I think we can do that with minimal risk, 
and I think those are some of the things that we can do. Stop 
them in progress.
    As an example, we saw an adversary trying to take about 3 
gigabytes, a lot of information, from one of our defense 
contractors. We saw that in foreign space. The issue was now we 
had to work in human space to reach out to them to say they are 
trying to steal something. You have to stop it. There has to be 
a better way to do that because that is almost like going at 
network speed now trying to send a regular mail letter to them 
that you are being attacked. So we have to bring this up into 
the network age to get these responses out.
    So I would advocate--and I think the way we are going is--
to, one, build our defense and, two, have options that would 
stop it.
    Beyond that, I think the President and the Secretary need 
options that would take it to the next step. These are not 
options that we would take, but these are options that we would 
propose to the administration. If they exceed certain limits, I 
think it is our responsibility jointly and with the COCOM's to 
say here are the options you can now take to stop these acts. 
Depending on the severity of the act, here is what we would 
propose to be done.
    So I think our job would be to defend and protect and to 
stop some of these attacks, analogous to the missiles coming 
in, and give the administration options of what they could do 
to take it to the next step if they choose. Those include cyber 
and other options that are available. I think the White House 
has put that forward in their cybersecurity thoughts.
    Chairman Levin. Thank you.
    Senator McCain.
    Senator McCain. I want to thank the witnesses.
    I would ask General Alexander, do you agree with what 
Secretary Panetta and the FBI have said, that cyberattacks may 
soon be the number one threats to the United States?
    General Alexander. Absolutely, Senator.
    Senator McCain. Would you agree that the major threats to 
our national security come from outside the United States 
specifically, obviously from unclassified information, from 
China?
    General Alexander. Absolutely.
    Senator McCain. Absolutely. So then what is the logic in 
providing the overall authority to the DHS? Anyone who has been 
through an airport, as I do regularly, as most of us do, have 
no confidence in the technological capabilities of the DHS. In 
fact, as an example nothing has changed as far as airport 
security is concerned since probably September 12, 2011. So the 
major threat comes from overseas. What would be the logic then 
in making the lead organization the DHS?
    General Alexander. Senator, I think the issue--if I could, 
I want to break this out into three areas to make sure my 
response is----
    Senator McCain. Make it brief please. I have additional 
questions.
    General Alexander. Yes, sir.
    I see three major things. We want DHS to take the lead on 
resilience in working with civilian agencies and critical 
infrastructure. We want DOD to take the lead on defending the 
Nation under cyberattack, FBI under law enforcement and 
intelligence. I think all three of us need to work together as 
a joint team to move this forward. If we do not work as a team, 
then the Nation suffers. So inside the United States, that is 
where I think DHS has the lead. They do not in terms of the 
foreign and the things coming in. That is where you would want 
us to have the lead.
    Senator McCain. How many people are under your command?
    General Alexander. In CYBERCOM, counting our Service 
components, a little under 13,000.
    Senator McCain. So we now have 13,000 and CYBERCOM was 
recently formed up. So now we need other agencies. Why should 
the responsibility not lie with CYBERCOM?
    General Alexander. Senator, I do think the responsibility 
for defending the Nation against attack lies within CYBERCOM. I 
think the lead for working with critical infrastructure and 
helping them defend and prepare their networks should lie with 
DHS.
    Senator McCain. That is a curious logic, General, in fact, 
most curious.
    So really all we formed up CYBERCOM for was to worry about 
external threats. Is that what you are saying? So the DHS 
should take the lead for anything that happens in the United 
States from outside, but you are still there with your 13,000 
people?
    General Alexander. Not quite that way, Senator. Probably I 
am not clear enough on this. In terms of DHS's roles and 
responsibility is working with critical infrastructure and 
other government agencies on developing the standards and the 
protocols of how they build their networks and to be the public 
interface. I think that is the role that we want them to do. 
Their people go out and reach out with critical infrastructure 
and make sure those government systems are adequately 
developed.
    If they are attacked, no matter where that comes from, now 
I think the President has options of what he can do. We are one 
of those sets of options, and if chosen, we are prepared to do 
that.
    More importantly, where those people really come in is in 
our offensive capabilities. You asked that earlier. So the 
offensive capabilities would be to support the other combatant 
commands and their plans and capabilities.
    Senator McCain. So your job is to support other commands 
with their offensive capability. You know something, General? 
One of the conclusions of the 9/11 Commission was there is too 
much stovepiping in our Intelligence Community. You are just 
describing stovepiping to me at its ultimate.
    General Alexander. Well, that is not the intent.
    If I could go one point further, the bulk of our forces are 
folks that operate and defend the DOD networks. That is where 
we are today. The bulk of them are operating and defending our 
networks. So if you think about what the Army, Navy, and Air 
Force do in operating and defending the networks, that is the 
first mission that CYBERCOM was given. We are developing the 
second parts of that.
    But I would point out, when you say stovepipe, Senator, I 
do not agree with that because this is an integrated network. 
It is one network trying to work everything together. So it is 
just the opposite of a stovepipe.
    Senator McCain. Well, it is interesting that Michael 
McConnell at George Washington University, former Director of 
National Intelligence, said current U.S. cyber defenses are 
weak and the bills on Capitol Hill are insufficient. So, 
obviously, the former Director of National Intelligence has a 
significant disagreement with your assessment.
    So according to a recent article in the Washington Post, 
the White House blocked draft legislation that would have given 
NSA or any government entity the authority to monitor private 
sector networks for computer viruses and to operate active 
defenses to block them. The NSA supported the authority but the 
White House did not. According to an administration official, 
blocking of the draft caused some consternation because NSA 
wanted to get that authority.
    There are some who propose that NSA should be able to 
detect but not read the cyberattack information. Do you agree 
or disagree with that?
    General Alexander. I disagree. I think the approach that we 
have put on the table is the appropriate one which is we give 
that to industry. They can look at that and when they see that, 
tell us. I think that is the first right step, Senator. I think 
if we go too far, it sends the wrong message, and I think we 
can take this journey and learn as we go on it.
    Senator McCain. General Cartwright, the former Vice 
Chairman of the Joint Chiefs of Staff, said DOD is spending 90 
percent of its time playing defense against cyberattacks and 10 
percent playing offense and that the Department should invert 
this defense/offense ratio to signify that a cyberattack on the 
United States will have negative consequences.
    Your answer, as I understand it, is, well, we will act in 
some way or fashion. Perhaps you can be a little more specific 
how we can gain the offense here.
    General Alexander. I actually agree with his statements, 
and I would like to characterize it in my words, if I could, 
Senator. More than 90 percent of our force was developed--all 
of our force in cyber, as we started, was on the defense and 
operate. We did not have offensive capability. So what we are 
looking at now is how do we grow that capability. So if you 
think about what we have within our fleets, air wings, and 
brigades is the operate and defend capabilities. The offensive 
capability primarily lies in the exploitation capabilities of 
NSA and others. We are developing those.
    I agree that we need to develop those more and faster, and 
we are working on that with the services and that is part of 
our growth plan.
    I think, in terms of this, Senator, I do not want to give 
you the impression that I do not believe we should defend the 
United States. I do. But I do think we can do that in a way 
that works with industry without having us in the middle of the 
network. They share the information with us, and I think that 
is the right first step to take.
    Senator McCain. Industry, according to industry, does not 
need additional regulations. They need the ability to share 
information which is our proposal rather than additional new 
government regulation implemented by probably the most 
inefficient bureaucracy that I have ever encountered in my 
number of years here as a Member of Congress. The DHS wasted 
$887 million on a virtual fence on the Arizona-Mexico border, 
that has made not a single technological advance as far as 
airport security is concerned to ease passengers' transit from 
one place to another, and has shown an incredible ability to 
illustrate inefficiency at its best.
    I thank you, Mr. Chairman.
    Chairman Levin. Thank you, Senator McCain.
    Senator Lieberman.
    Senator Lieberman. Thanks, Mr. Chairman, and thanks to both 
of you.
    Obviously, my friend from Arizona and I have a disagreement 
here. The first thing I want to do very briefly is come to the 
defense of the DHS. The fact is that we have not had a major 
terrorist attack on the United States since September 11, and 
you have to give the leadership, bipartisan over two 
administrations, and the thousands of people who work at DHS 
some credit for that.
    Second, in terms of the stovepiping, I think a better 
analogy here--and it is not a perfect one--is to compare the 
relationship between the Central Intelligence Agency (CIA) and 
the FBI to the relationship between CYBERCOM and NSA and DHS. 
CIA has authority outside of the United States of America. The 
FBI has authorities--I am speaking about terrorism, for 
instance, or threats to the Nation--within the country. The 
problem before September 11 is that they were stovepiped. They 
were not cooperating enough. In the same way, NSA, CYBERCOM, as 
you have said, has the responsibility to protect America--it is 
a jewel. It is a national treasure--from cyberattack, along 
with many other responsibilities that you have. DHS has a 
domestic responsibility, a preventive responsibility. In that 
sense, it is a little different and less expansive than FBI in 
the other case.
    The interesting thing that you have testified to and I 
think Senator McCain was not hearing is that you are building 
exactly the kind of cooperative relationship between NSA, 
CYBERCOM, DHS, and the FBI that did not exist before September 
11. The fact is Senator McCain and I introduced an amendment to 
the National Defense Authorization Act (NDAA) last December 
that codifies in law the working agreement between NSA and DHS.
    Incidentally, I will just say this for the record. I have 
talked to Admiral McConnell, a former Director of National 
Intelligence. I have heard him speak in a public setting. He 
thinks both bills are not strong enough, but if you ask him do 
you prefer the Cyber Security Act of 2012, which Senator 
Collins, Feinstein, Rockefeller, and I have put in, or the 
Strengthening and Enhancing Cybersecurity by Using Research, 
Education, Information, and Technology Act of 2012 (SECURE IT), 
which some of my colleagues have put in, he could not be 
clearer. SECURE IT does not do it because it does not provide 
for defensive preparation by the private sector.
    Look, I know the private sector is lobbying against this. I 
think there is a terrible trap here. This is not just a 
question of regulation of business. This is a protection of our 
homeland. You have told us in response to Senator McCain's 
question--General Dempsey, Secretary Panetta, Director 
Mueller--cyberattack is the main area of vulnerability we have 
today. Shame on us if we look at this as business regulation. 
This is homeland security. We have to get together before too 
long and make this happen.
    I want to come to the particular difference between the two 
bills. There are two critical things that have to be done here 
in my opinion. There are many important things. One is an 
information sharing authorization section. The other is 
protection of the most critical cyber infrastructure which is 
owned by the private sector, 90 percent of it, finance, 
transportation, electricity, water, all of which is vulnerable 
to attack by an enemy.
    Both bills have information sharing. Only the bill that 
Senator Collins and I have introduced has a provision for DHS 
to work with the private sector to require the most critical 
covered infrastructure, not every business, to take certain 
actions to defend their network, to defend our country.
    General Alexander, I believe I heard you say--I just want 
to have you confirm it--that you believe we need both of those 
authorities in government, that is, information sharing and a 
system for protecting and better defending privately-owned, 
covered critical infrastructure. Is that right?
    General Alexander. Senator, that is correct. As you have 
stated, the hard part is determining how you do that in such a 
way as not to burden industry. But I do think we have to set up 
some standards. We use what we call the gold standard. The gold 
standard was one that we thought provided our networks the best 
defensible posture. We give that out for free. We put it on the 
NSA.GOV Web site as here is a set of standards. I think as we 
work with industry, the issue is how do you make sure that they 
are as defensible as possible without being over-burdensome. So 
I do think that we have to set that up. It is like roads, like 
cars.
    Senator Lieberman. Exactly. This is not regulation 
actually. These are standards for what we are going to ask them 
to do to defend our country. They are then going to figure out 
how to do it.
    Incidentally, business is understandably worried about 
their bottom line. We have to be worried about the security of 
the American people.
    Incidentally, I take it from what you said earlier that the 
fear of a cyberattack against the United States--I mean a major 
cyberattack--is not theoretical but real in your mind, General 
Alexander.
    General Alexander. That is correct, Senator.
    Senator Lieberman. It literally could happen any day. I am 
not predicting that it will. But right now our privately-owned 
cyberspace infrastructure, as compared and distinguished from 
DOD's, is vulnerable to attack. Is that correct?
    General Alexander. That is correct, Senator. In fact, if I 
could add, it is my opinion that every day the probability of 
an attack increases as more tools and capabilities are out on 
the Internet.
    Senator Lieberman. Right. It is very important for people 
to hear that.
    I want to relate the requirement on the most critical 
covered infrastructure to take some defensive action to your 
description that I thought was excellent about what you mean 
when you say you want to see an cyberattack coming. You have 
made very clear that you do not want NSA into our private cyber 
systems, but you need to have the private cyber systems be able 
to tell you when an enemy attack is coming. Right?
    General Alexander. That is correct.
    Senator Lieberman. So you can act. To me, that is probably 
the most significant gain that we will have from DHS, informed 
by you, setting these standards for defense for the privately 
owned cyberspace. Look, I hear so many stories about critical 
infrastructure operating systems using defensive systems that 
are 15 years old without even basic detection capabilities. I 
think one of the most important things that is going to happen, 
as a result of the system we are talking about, is that the 
most critical infrastructure--not every business at home, but 
the most critical infrastructure--will have to develop within 
itself or hire some of the private companies that do this the 
defensive systems that will let them know, which a lot of them 
do not now, when they are being attacked so they can 
immediately get to you so you can spring into action to 
essentially counter-attack. Is that correct?
    General Alexander. That is correct. Under those conditions 
is what the administration and the Department is looking at on 
the Rules of Engagement. So when we actually do that, those 
will become the Rules of Engagement that we are working on.
    Senator Lieberman. Let me just ask finally is your 
relationship under the memorandum that we codified into law 
with DHS working well as far as you are concerned.
    General Alexander. It is. It is growing. Secretary 
Napolitano is wonderful to work with. She came out to NSA and 
CYBERCOM and had a chance to sit down with all of us. 
Absolutely her heart is in the right direction. She understands 
what we bring to the table. She leverages that not only in the 
cyber mission but across the board. I think we are making the 
correct strides.
    When you add FBI's tremendous technical capabilities in 
there, that is the team that I think the government wants and 
needs in place. The reality is we can put all of our manpower 
internal and it will not solve the problem. We have to work 
together as a team. I do believe that is the best way to 
approach it. To answer your response, DHS has been good to work 
with. They are growing their capabilities. It will take time. 
We provide a lot of assistance to that, and we think that is a 
good relationship.
    Senator Lieberman. That is exactly what they tell me: good 
relationship and they are benefitting enormously from your 
extraordinary expertise. Thanks, General.
    Thanks, Mr. Chairman.
    General Kehler. Senator Lieberman, could I add a comment?
    Chairman Levin. If you make it brief.
    General Kehler. It will be very brief.
    This is really about balanced responsibilities. When you 
look at balancing the responsibilities between the military, 
the Intelligence Community, law enforcement, and DHS, if we 
were not talking about cyber, we know how to do that. We 
understand what that balance looks like. We understand that 
when DHS needs military support, we have what we call defense 
support of civil authorities. We have ways that we can provide 
support to them.
    The question is what happens when you add cyberspace to 
this mixture, and that is the balance that we are trying to 
make sure that we are striking. I think that is an important 
point for us as we go forward. The bottom line here is all of 
us working together to improve the protection of our Nation and 
the national security.
    The second point that I would make quickly is there are 
basically three things we are going to have to do here. One is 
protect ourselves better related to cyberspace for the very 
reasons that you mentioned. The second is we have to become 
more resilient, recognizing that we are not going to be perfect 
at protection or defense. We have to be more resilient, 
particularly on the military side. Then lastly, we have to do 
better at an offensive capability and balance that in a better 
fashion as we go forward.
    Chairman Levin. Thank you, Senator Lieberman.
    Senator Inhofe.
    Senator Inhofe. Thank you, Mr. Chairman.
    The first question I am going to ask I already know the 
answer, but I am going to have to ask it just to get it in the 
record.
    In yesterday's Wall Street Journal, they talked about 
President Obama's meeting with Russian President Medvedev 
yesterday, Monday, when President Obama said--and I assume he 
said this without knowing that the mic was on, but this needs 
to be in the record. I would ask the record to reflect this 
accurately. On all these issues, but particularly missile 
defense, this--this can be solved, but it is important for him, 
incoming Russian President Vladimir Putin, to give me space. 
``This is my last election, and after my election, I'll have 
more flexibility.''
    [The information referred to follows:]
      
    
    
      
    Senator Inhofe. So the question is do either one of you 
want to comment? [No response.]
    I did not think so.
    The second thing that I would like to mention is to thank 
General Alexander for making the trip that you made to Tulsa 
University. Just real briefly, tell me what you found out 
during your visit.
    General Alexander. Thank you, Senator. First, there are two 
things.
    I am really impressed with the way the American people, 
especially in Tulsa, have come together to help fund that 
university and the young folks that go there. From my 
perspective, one of the key things--and I should have thought 
about this earlier--that Tulsa University is doing is in the 
information assurance area, coming up with better ways to 
defend networks. When you think about that, that is exactly 
what we are talking about on the resilience side. So when you 
look at what those young people do, they find problems in 
networks. They showed us some in the Supervisory Control and 
Data Acquisition (SCADA) system and others that if we now made 
some slight changes, I think those changes and upgrades in the 
security of those networks would make them more secure.
    So what I found was tremendous young people doing great 
things, some of whom we have hired, and we continue to hire 
from Tulsa and other universities throughout the country that 
are doing programs like that in the information assurance area. 
So thank you.
    Senator Inhofe. I thank you for going out. One of the 
things that we do have that you probably witnessed was the 
community support behind the program, behind the university. So 
anyway, it is a good program.
    General Kehler, back during the time that we were 
considering the bill a year ago, we were talking about the fact 
that President Obama was weighing options for sharp new cuts in 
our nuclear arsenal unilaterally. Then, of course, that was an 
agreement with Russia to bring it down to the 1,550. I guess it 
was a month ago, it was reported that President Obama is 
weighing the options of sharp new cuts to our nuclear arsenal 
unilaterally, potentially up to--and these are the figures they 
used--80 percent proposing three plans that could limit the 
number as low as 300.
    Now, it was in 2008--I always remember and I carry this 
with me--Secretary Gates stated as long as others have nuclear 
weapons, we must maintain some level of these weapons ourselves 
to deter potential adversaries and to reassure over 2 dozen--
that is about 30, as I understand it--allies and partners who 
rely on our nuclear umbrella for their security, making it 
unnecessary for them to develop their own.
    Now, I would like to ask what kind of implications this 
would come up with in terms of our allies, those 30 other 
countries that are depending upon our umbrella, if we were to 
voluntarily bring it down 80 percent.
    General Kehler. Sir, I would make a couple of points.
    The first thing I would say is, as I said earlier, we do 
not start with numbers. We have been starting with strategy 
objectives, national security objectives, et cetera.
    The study that you referred to is still ongoing. No 
conclusions have been reached yet, and so it is not appropriate 
for me to comment on the study. STRATCOM has been a full 
participant in the study, and I believe that, as I said 
earlier, there are opportunities here for additional 
reductions.
    Senator Inhofe. Unilateral reductions.
    General Kehler. Well, sir, all along here and going all the 
way back to the Nuclear Posture Review, I think the viewpoint 
has been that it is best to do this with Russia. The Russian 
and the U.S. arsenals still really drive this conversation, and 
so doing this with Russia is certainly the preferred way 
forward. I think that the need to continue to deter and assure 
allies remains.
    Senator Inhofe. Okay, the point I am getting to, though, is 
the key word is ``unilateral,'' and that is what concerns me.
    General Kehler. Yes, sir.
    Senator Inhofe. Let me, just real quickly, cover just a 
couple of other things here.
    This, General Kehler, was the triad--I think it was about 
2004 or 2005--showing the cliff.
    [The information referred to follows:]
      
    
    
      
    Senator Inhofe. You are somewhat familiar with that. Now, I 
am wondering if we could get this updated. First of all, during 
the consideration of the New START, the President said: I 
intend to modernize or replace the triad strategic nuclear 
delivery system, a heavy bomber, air launch cruise missiles, 
and Intercontinental Ballistic Missile (ICBM), and nuclear 
powered ballistic missile submarine and Submarine Launched 
Ballistic Missile, and maintain the United States' rocket motor 
industrial base. He goes on and elaborates on that.
    Now, this statement was made after this chart. Do you have 
an updated chart on this that would reflect what is happening 
today?
    General Kehler. Sir, may I take that for the record and get 
back to you?
    Senator Inhofe. Yes, you certainly may. That is very 
reasonable.
    General Kehler. I am happy to do that.
    [The information referred to follows:]

    See attached chart.
      
    
    
      
    Senator Inhofe. Then the last thing on that is something 
that no one ever talks about but I have always been concerned, 
and that is relating to the tactical nuclear weapons. Several 
of us on this side of the aisle and on the other side of the 
aisle made an effort to include tactical nuclear weapons at the 
time that we were looking at the New START program. As it is 
right now, it is about a 10 to 1 advantage of Russia over 
ourselves. Do you agree or disagree with me that that should be 
a part of the plan?
    General Kehler. I agree that it should be a part of the 
plan. Yes, sir.
    Senator Inhofe. All right. Thank you very much, Mr. 
Chairman.
    Chairman Levin. Thank you, Senator Inhofe.
    Senator Nelson.
    Senator Nelson. Thank you, Mr. Chairman.
    Thanks to both of you for your service and for your kind 
remarks this morning. I appreciate that very much.
    General Kehler and General Alexander, the comments today 
and all the discussion for some period of time has indicated 
the growing threat of cyber warfare threat to the United 
States' national security. As we engage in this discussion, 
there is an ongoing restructuring of STRATCOM's headquarters 
with a new headquarters at Offutt.
    General Kehler, can you give us some indication why an 
aging facility would not be an appropriate facility as we take 
on new responsibilities but particularly as it relates to the 
high-tech cyber situation?
    General Alexander, if you had some thoughts about that, it 
would be helpful too. Thank you.
    General Kehler. Sir, the activities that go on at STRATCOM 
are unique activities. We perform those activities, 
particularly the command and control that we have for our 
strategic forces, the planning that we do for our strategic 
forces, the intelligence support that is required behind our 
continuing need for strategic-level deterrence and being able 
to command and control forces under high stress. All of those 
really come together at STRATCOM headquarters.
    The demand that today's systems place on that headquarters 
building have far outpaced the ability of the building to keep 
up. Not only do we have vulnerabilities because of the cyber 
concerns that we have expressed earlier, but we have physical 
plant vulnerabilities there. You are well aware of some of the 
failures that we have had, catastrophic failures, in the 
building systems themselves that have threatened to take that 
one-of-a-kind location and really make it inoperable for 
months. We barely averted that kind of a catastrophe a year ago 
in December with a flood, of all things, in the basement, a 
burst water line.
    So as we looked at ways forward, given the unique nature of 
what we do, given the one-of-a-kind responsibilities that are 
performed there and given the continued importance of all of 
that in our deterrence posture, the conclusion that the 
engineers reached was that you could not modify the building, 
that basically what you needed to do was go and build a new 
command and control facility that houses all of the activities 
that we are going to need to perform.
    That remains my assessment today, that we need to get 
moving on this. I think that it is proceeding well. I believe 
that we are headed toward contract award. I know the Corps of 
Engineers has responsibility in this regard, and things seem to 
be moving forward, at least everything that I can be aware of. 
Much of this, of course, needs to be in the realm of the Corps 
and others.
    So from my perspective, Senator, the bottom line is the 
recognition that we do something unique there, that it is not 
about a brick and mortar building. It is about what goes on 
there in the computer systems and the need for support systems, 
information technology, and the supporting networks that put 
all of that together so that we are prepared to continue to 
perform this deterrence mission as far into the future as we 
can see.
    Senator Nelson. Thank you.
    When it comes to the Chemistry and Metallurgy Research 
Replacement (CMRR) facility, the NNSA has deferred for 5 years 
the construction of the CMRR facility. Is this, the CMRR 
facility, a concern for you in not only meeting our 
responsibilities and obligations and commitments on the New 
START treaty but just in general keeping our arsenal current?
    General Kehler. Senator, it is a concern for me. I think of 
all of the items in the 2013 budget, those items that would be 
associated with STRATCOM's portfolio of mission 
responsibilities, fare generally pretty well. There were some 
delays and programmatic adjustments and other things that were 
made. I think we can manage risk across all of that.
    When I look specifically at the weapons complex, the 
ability of the complex to provide us the weapons that we need 
that have the appropriate life extensions provided, that give 
us the flexibility to manage the hedge and allows us to look at 
potential reductions, as we go to the future, in the stockpile, 
I think the thing that concerns me the most is our continued 
investment in the weapons complex. So the issue with CMRR does 
concern me. I understand the 2013 budget does provide for us to 
get moving in a number of areas.
    The Secretary of Energy and the Secretary of Defense sent a 
letter to Congress that reminded them that we are not ready yet 
to lay out what happens in 2014 and beyond. Until we are ready 
to lay all of that out, I remain concerned.
    Senator Nelson. It could be appropriate to at least start 
the process as in the case of the STRATCOM headquarters which 
is going to be a phased-in funding over several years. At least 
a start could be made on CMRR in a similar fashion. Otherwise, 
it looks like we have just put together baling wire and maybe a 
duct tape structure to get us through 2013 budget-wise.
    General Kehler. Senator, this is ultimately a due-out from 
the Departments of Energy and Defense, and we owe you the 
alternatives. I do not have with me today, because we do not 
have yet, a set of viable alternatives that we can come and 
present. I do agree, though, with the main thrust here and that 
is I see no alternative, as we look to the future, aside from 
modernizing the complex.
    Regardless of what happens, we have a fairly extensive 
backlog of weapons awaiting dismantlement that require the same 
kind of a modern complex to dismantle. So I think from both 
sides of this equation, we need a modern weapons industrial 
complex. It is highly unique and it is very specialized. We 
need that kind of a complex so that we have a safe, secure, and 
effective deterrent.
    Senator Nelson. It is hard to draw an analogy other than to 
say that trying to put together something on a stop-gap basis 
might get us through 2013 but does not position us for what we 
might do years beyond and particularly with an aging stockpile.
    General Kehler. Senator, we owe you some answers, and the 
study to produce those is underway.
    Senator Nelson. Thank you.
    General Alexander, as you relate to the responsibilities 
with cyber, I think you made it very clear that there is a role 
for the DOD. There is a role for Homeland Security. There is a 
role for our law enforcement agencies, and continuing to find 
ways to work together is a reduction of stovepiping that has 
been so predominant in the past.
    Are you comfortable that the agencies that are all trying 
to work together understand the important need not to stovepipe 
and to break down even with some comparable authorities that 
will go to different agencies, but to continue to work together 
on this important threat to our country and to our business, 
which is also a threat to our country?
    General Alexander. Senator, I do.
    Senator Nelson. Thank you. Thank you, gentlemen.
    Thank you, Mr. Chairman.
    Chairman Levin. Thank you very much, Senator Nelson.
    Senator Brown.
    Senator Brown. Thank you, Mr. Chairman.
    General Kehler, would you consider the air operations 
groups currently supporting the Global Strike Command a 
valuable resource?
    General Kehler. Senator, yes, we sure do.
    Senator Brown. Are they irreplaceable? Are they such an 
integral part of what you are doing that if you did not have 
them, we would be in trouble?
    General Kehler. The entire force that Global Strike Command 
brings to STRATCOM--in fact, that is one of Air Force 
components, one of our major components as a matter of fact. 
They bring us the entire dual-capable bomber force, the B-52s 
and the B-2s. They also bring us the entire ICBM force. They 
bring us an air operations center that allows us to manage all 
of our air activities in STRATCOM. So what Global Strike 
brings--and all of its subordinates are all very valuable to 
us.
    Senator Brown. That actually provides real-world, time-
sensitive planning support as well. Correct?
    General Kehler. Yes, sir.
    Senator Brown. When you are answering those questions like 
that, that is why I am a little concerned with the Otis Air 
National Guard Base. I was there a couple of months ago, and 
they have a great mission and their air operations group 
supports STRATCOM's Global Strike Command by providing exactly 
what you have indicated, the irreplaceable, real-time, 
sensitive support. Yet, I have heard that the Air Force wants 
to break up this very valuable, irreplaceable unit to save 
money. I was wondering if, number one, you were aware of or 
were given the opportunity to comment on that proposal 
affecting that group and Otis in particular.
    General Kehler. Senator, if I could take that for the 
record, I would appreciate that. I do not know enough about the 
details.
    Senator Brown. Okay, that would be helpful because I agree 
with you.
    [The information referred to follows:]

    The combatant command develops requirements from Operational Plans. 
The Services provide forces or resources to fulfill those requirements. 
In this case, the National Guard Bureau serves as a force provider for 
this particular capability and has provided the following statement in 
regards to the 102nd AOG: The Air National Guard (ANG) had to make 
difficult decisions as a result of PB13 Force Structure announcements. 
Specifically, the ANG did not receive additional manpower for the MC-12 
and the new Remotely Piloted Aircraft missions. The four component 
Numbered Air Force units were slated for divestment to provide needed 
manpower for higher priority missions.

    Senator Brown. I agree with everything you just said in 
your opening response to my questions, that it is 
irreplaceable. It is valuable, and I know what these folks do 
there, and especially being on the eastern seaboard of the 
United States and covering all of the eastern United States in 
some respects, I mean the Air Guard, in particular, and Army 
Guard, as well and Reserves--they give you great value for the 
dollar. I am deeply concerned that we are cutting off our nose 
to spite our face. It is kind of like the Air Force is saying, 
okay, I am going to keep all my toys here, and by the way, the 
Guard and Reserves--we are going to take away what you have. I 
have not been yet convinced that these cuts represent either an 
acceptable level of risk or an efficient use of the money. So I 
would ask--and I will get you the very specifics questions for 
the record. I appreciate that.
    I know we are talking about cybersecurity. I know there are 
many proposals. We have one in government regulations and the 
administration. The military is working on a whole host of 
things. How are the Rules of Engagement actually working or 
being implemented or coming along with regard to the CYBERCOM 
operation?
    General Alexander?
    General Alexander. Right now we are updating, if you will, 
the Rules of Engagement that the chairman has put out dated in 
2005. Given where we are today, what the Joint Staff has taken 
on is to update those. Right now all our measures are internal 
to our networks, what DOD is authorized to do. What we are 
looking at within DOD and then within the interagency what are 
the next steps that we should have and how do we take those 
steps. I think over the next month or 2, the Joint Staff will 
complete those standing Rules of Engagement and then move those 
to the interagency and share those.
    Senator Brown. What role do you see or what segments of the 
private sector should fall into DOD's responsibility, if any?
    General Alexander. This is where the discussion comes in. 
First----
    Senator Brown. Let me just extend on that. If attacked, 
what entities would be considered an extension of U.S. 
Government facilities?
    General Alexander. I think those are decisions that you in 
the bills and the administration would make on when we actually 
implement response options or response options to defend 
against an attack. That is the first step.
    So let me start with technically what we are doing. I think 
the first part of that, Senator, is to have the information 
sharing, to know that an attack is going on. We discussed that 
a little bit previously. That is the ability for industry to 
tell us that something is happening and that either FBI, if it 
is domestic, DHS, or if it is foreign, that FBI and CYBERCOM 
and NSA would respond to.
    The issue and I think what we are going to walk our way 
through candidly is we have to start someplace. I think putting 
out where we are on the information sharing and having industry 
take the lead with DHS on providing us the insights of what is 
going on is the first right step. I think that is the best step 
that we can take.
    More importantly, I think we need to take that step. What 
we cannot do is wait. I think your question and where you are 
going on this is absolutely right. We have to take measures 
now, and I think those are absolutely important because my 
concern and the statements that go to that is that if somebody 
is attacked, the way we find out about it today is after the 
fact. You cannot stop it then. Now you are in the forensics 
mode. So I think what everybody agrees is so we have to get to 
a point where industry can tell us when something is going on 
so that we can help prevent it.
    Then the options come up to what industry has included in 
that, and those are parts of the bills that I know that you are 
all considering.
    Senator Brown. That's great, but I tell you what. We do not 
have all the answers. I can tell you that firsthand. What I am 
concerned about is that we create a bill that has so much red 
tape and so much overlap and duplication that you cannot get 
out of your own way. So I would ask for your recommendations 
and guidance as well to be part of the process and let us know 
what your thoughts are and where you feel the weaknesses or 
strengths lie so we can expand or detract from that.
    I am deeply concerned, and I think you are right. I know 
you are right in the fact that we are always reacting instead 
of being proactive, and when that attack happens, we find out 
about it after, after our technology and intellectual property 
and military secrets and plans are stolen. That deeply concerns 
me.
    I was wondering as the technology continues to advance, 
potential cyberattacks are capable, as I think have referenced, 
and executed at increasing speeds. Do you have enough leg room 
from the authorization standpoint to act at the earliest 
possible opportunity to defeat a cyberattack before it is 
launched? Do you have enough flexibility do you think?
    General Alexander. Those are some of the issues that are 
being considered in the Rules of Engagement. So I will not know 
until we are complete with that. We are pushing for what we 
think we need, and I think what the Chairman and the Joint 
Staff and then OSD will do is say, okay, what makes sense.
    Being extremely candid on this, it really comes down to 
what are those actions that make the sense that we could do 
defensively, analogous to the missile shoot-down. I think there 
are some there that we are getting agreement on, yup, it makes 
sense to stop that attack from going. But if you were to go 
after a computer in foreign space or some other thing, that 
might be a response option that would now take, I think, the 
President and the Secretary to step in and start making 
decisions versus us taking that on. I think that is probably 
where we will end up. That makes a lot of sense from my 
perspective.
    Senator Brown. Thank you very much, both of you. This is an 
issue that deeply concerns me and many other members of the 
committee. I will be submitting some questions for the record 
or maybe we can speak offline. I do not want you to have to 
reinvent the wheel, just some certain areas that I think I need 
a little bit more understanding of. Thank you very much.
    Chairman Levin. Thank you, Senator Brown.
    Senator Hagan.
    Senator Hagan. Thank you, Mr. Chairman.
    I thank both of you for your testimony today and certainly 
for your service to our country.
    General Alexander, the administration believes that it is 
crucial for critical infrastructure companies to carefully 
diagnose their cyber vulnerabilities and the risk posed to the 
American people should these vulnerabilities be exploited and 
to take steps to eliminate these vulnerabilities. The 
administration has proposed legislation to ensure that industry 
stands up to these responsibilities as a matter of national 
security. The administration is also seeking to extend the 
signature-based defense that the NSA and that CYBERCOM have 
developed for DOD's critical infrastructure.
    Since the administration is seeking to implement both 
approaches, the implication is that neither one alone is seen 
as sufficient to meet the threat. Others, however, take the 
position that information sharing, in conjunction with NSA's 
defensive solution, would be enough, that it is not necessary 
to require critical infrastructure companies to build up their 
own defenses.
    Do you believe that NSA's signature-based defense deployed 
recently in the DIB pilot program can defend our Nation's 
critical infrastructure against nation state cyberthreats, or 
do you believe that the critical infrastructure companies also 
need to close their vulnerabilities?
    General Alexander. Senator, first, I think it is the 
latter. We need both. But I would like to take it one step 
further because I do not think what we are talking about is 
having NSA deploy capabilities out there. Rather, what we are 
talking about is NSA providing technical capability to others 
to run, so we do not want, to run stuff within industry. So I 
want to make that clear. It is not us putting stuff out there 
for us to operate. What we are really saying is industry has a 
bunch of signatures that can detect foreign actors that are 
coming against them. Government has some of those. NSA, DHS, 
and FBI, all of us need to work together to provide the best 
set of signatures to protect that critical infrastructure. 
Industry can actually operate that and tell us when that 
occurs.
    I also think that you need to set a set of standards for 
how those systems are operated to give you the best and I will 
call that--and General Kehler mentioned it and it is in there--
resilience. We need the resilience in those networks to ensure 
that they can operate and be defensible while we are trying to 
defend the country outside.
    Does that make sense?
    Senator Hagan. Yes.
    Just last Friday--and I read about it yesterday--Microsoft 
was accompanied by U.S. marshals and they raided office 
buildings in Pennsylvania and in Illinois to disrupt a group of 
computers, a botnet, that was harvesting bank accounts, 
passwords, and other personal information from millions of 
computers. Microsoft's actions show what is possible and some 
say is certainly necessary now to stop cyber crimes.
    What are your thoughts on these actions taken recently, and 
should they serve as a model for other private industries? Is 
there a take-away for DOD on this recent raid?
    General Alexander. Senator, I think it shows how we can 
work together, industry and Government, to do what is right 
here, and by bringing both of those together, we are better off 
for it. I think what we have to do is we have to come up with 
that solution in this area too, and I know both bills are 
looking at that. I think that information sharing is critical.
    Senator Hagan. Thank you.
    General Alexander, it is often argued that terrorist groups 
and rogue nations, such as North Korea, for example, do not yet 
possess the sophisticated and extensive cyber capabilities to 
effectively cripple our Nation's critical infrastructure. For 
example, General Cartwright, the former Vice Chairman of the 
Joint Chiefs, has publicly expressed doubt that this class of 
actors could carry out such attacks today. However, we are 
aware of what is described as a thriving international black 
market where it is possible to buy or to rent cyberattack tools 
and large-scale supporting infrastructure such as thousands or 
even millions of compromised computers that are deemed to be 
effective against almost any type of network or information 
system.
    This black market has developed to support the vast cyber 
criminal activities that have been estimated by some to now 
yield more revenue than the global illegal narcotics trade. 
This criminal money then, obviously, fuels research and 
development of modern and up-to-date cyberattack tools.
    Could this black market in cyberattack tools and 
infrastructure now or in the future enable terrorists or rogue 
nations to acquire ready-made capabilities to inflict 
significant damage on the U.S. economy and our critical 
infrastructure? Are you worried about that?
    General Alexander. Senator, that is my greatest worry. I 
would go beyond that group. I think the proliferation of cyber 
weapons, if you will, grows, that we cannot discount the 
actions that one smart person can do. From my perspective, when 
we see what our folks are capable of doing, we need to look 
back and say there are other smart people out there that can do 
things to this country. We need to look at this and say how are 
we going to defend. From my opinion, as you described 
accurately and I agree with it, it could be non-nation state 
actors all the way up to nation state actors like North Korea. 
I would not discount any of them. We have to be prepared for 
all of them. Only one of them could do tremendous damage to 
this country.
    Senator Hagan. Last July, General Cartwright, also speaking 
as the Vice Chairman, noted the challenges of recapitalizing 
all three legs of the triad with constrained resources. General 
Kehler, you have raised a similar point, that we are not going 
to be able to go forward with weapons systems that cost what 
weapons systems currently are costing today. In the search for 
a solution to these challenges, options seem to take the form 
of delaying the current programs or reducing the size of the 
planned programs.
    What are your thoughts on the pluses and minuses of each of 
these options?
    General Kehler. Senator, first of all, I continue to 
support the need for a balanced triad of strategic deterrent 
forces. I think the triad has served us well. I think it 
continues to serve us well. I think that as we look to the 
future, there are attributes that are spread across the triad 
that continue to make sense for our national security.
    Having said that, I am concerned about the costs. So I 
think there are a couple of things that we need to keep in 
mind. We need to phase these programs appropriately. We need to 
make sure that we have matched the investment with the needs. 
We need to control costs. I think there are a number of 
programmatic steps to take as we go forward.
    When I look at the Ohio-class replacement program, I know 
that we are making decisions here today that will be with us 
for decades to come. The Ohio-class replacement program, as far 
as we can see into the future, we believe that we see the 
strategic need for a submarine-based part of our deterrent. So 
moving forward with that, even though we have had to delay the 
program some, is going to be important. That is also important 
with our allies, the British.
    I think it important that we have a dual-capable long-range 
bomber. It needs to be nuclear capable but it will not just be 
used for nuclear purposes. If we do our deterrence job right, 
it will never be used for that purpose. It may very likely be 
used to employ conventional weapons which is what B-52s and B-
2s and B-1s have done. That program is underway. I think 
controlling costs is going to be a big issue in both of those 
programs.
    The next question then becomes the future ICBM, and we have 
begun an analysis of alternatives to look at what shape, form 
that might take. Then as we go to the future, I think we will 
get to a number of decision points on all of these systems that 
will allow the future environment to shape what the ultimate 
force outcome becomes.
    Senator Hagan. My time is up. Both of you, thank you.
    Chairman Levin. Thank you, Senator Hagan.
    Senator Ayotte.
    Senator Ayotte. Thank you, Mr. Chairman.
    Thank you, General Alexander, and thank you, General 
Kehler, for being here today and for your service.
    General Kehler, the Senate support for the New START treaty 
was tied to modernization of the United States' nuclear complex 
and strategic delivery system. Specifically during the Senate 
confirmation, the President committed to modernization in what 
became known as the 1251 plan that was incorporated in the 2010 
NDAA. Is that not right?
    General Kehler. Senator, yes.
    Senator Ayotte. If you look at that commitment in the 1251 
plan, there was an initial plan submitted in May 2010 and then 
a month before the ratification of the Senate treaty, there was 
$4.1 billion added over 5 years to the plan. Is that not right?
    General Kehler. Yes. Are you talking about the DOD?
    Senator Ayotte. Yes. But that was specifically reflected a 
month before the ratification of the START treaty put into the 
1251 plan as incorporated in the 2010 NDAA.
    General Kehler. Senator, I think that is right. That is a 
little before my time, but I think that is right.
    Senator Ayotte. The reason that was done is because 
modernization was such an important issue to getting that 
treaty through the U.S. Senate because modernization is very, 
very important for our nuclear program. Is that not correct?
    General Kehler. Yes, it is.
    Senator Ayotte. The 2013 budget request underfunds the 
commitment made that was expressly made in conjunction with the 
ratification of the START treaty by over $4 billion over the 
next 5 years. Is that not the case?
    General Kehler. It is lower than the level of the 1251 
report. Yes, it is.
    Senator Ayotte. It is $4 billion lower, roughly.
    General Kehler. I think that is right, yes.
    Senator Ayotte. The President, a month before ratification 
to get the Senate to sign on to the reductions in the START 
treaty, added $4 billion because we were so worried. I was not 
here at the time, but I know many of my colleagues were very 
worried about modernization of the program if we were going to 
make the reductions required by the START treaty.
    If the President is not following through, why did we not 
include the $4 billion in the commitment on modernization? In 
particular, just to break that down, Senator Nelson had asked 
you about the Chemical and Metallurgy Research Replacement 
Facility. That is an 83 percent cut in that facility. In fact, 
we are not following through at all in our commitment to that 
facility. Are we?
    General Kehler. The commitment has been delayed, if I 
understand the budget correctly. The building has been slipped 
to the right 5 to 7 years I believe was the number.
    Senator Ayotte. Would that not be a broken promise from 
what was required by the 2010 NDAA and what was specifically 
contained within the 1251 plan?
    General Kehler. It is certainly different than the 1251 
plan, yes, clearly.
    Senator Ayotte. If my colleagues signed on to the START 
treaty concerned about modernization, with a commitment from 
the administration of a certain level of resources, 
particularly this facility that we have talked about, the CMRR 
facility. It is critical, is it not, to modernization?
    General Kehler. Yes, it is.
    Senator Ayotte. So no doubt that we need it to modernize.
    General Kehler. In the long run, there is no doubt we need 
it.
    Senator Ayotte. So when you were being questioned by 
Senator Nelson, you said you owe us answers to this. Is that 
true?
    General Kehler. Yes.
    Senator Ayotte. I guess I would reframe it. I think what we 
need is a commitment from the administration to follow through 
on what they promised in conjunction with the ratification of 
the START treaty. What are the concerns that you have if we do 
not modernize?
    General Kehler. I have a lot of concerns if we do not 
modernize. There are four pieces to this from my vantage point 
anyway.
    Piece number one is the delivery systems, and I just 
mentioned that there are modernization plans in place for the 
delivery systems or there is a study underway to take a look at 
the ICBM leg and what we might need as we go to the future.
    There is command and control and the commitment to both of 
those.
    The real issue for me is the weapons end of this and the 
weapons complex that supports those. In an era that we are in 
today, without nuclear explosive package testing where we do 
not do any yield testing, that puts a strain on the industrial 
base in a way that I believe has not been strained in the past. 
It strains the science and engineering skills that we have to 
make sure that as we do life extensions, that we have the 
appropriate science bases and understanding to be able to do 
those extensions without nuclear testing.
    We have issues with aging. Most of the problems with the 
weapons that we have today is that they are reaching the end of 
their lifetimes in various stages. So being able to have life 
extension for those weapons is also very important.
    At the end of the day, if you have a more modern complex, 
we think that we probably can have a smaller stockpile because 
the way we would hedge against failure would be different as we 
go to the future.
    Senator Ayotte. But if we just reduce our stockpile and we 
do not modernize, are we not taking on additional risk?
    General Kehler. I think there are scenarios there where 
that can be additional risk, yes.
    Senator Ayotte. I certainly would like to know why, as 
reflected in the DOD fiscal year 2013 budget, the 
administration has not followed through on its commitment to 
modernization because I think that was critical, as I 
understand it, to many individuals around here. They were 
concerned about that in the debate over the START treaty. So it 
was a very important issue, and that is why it was specifically 
incorporated and tied to the START treaty in the 2010 NDAA. I 
would hope you would take that for the record and get back to 
us on that.
    [The information referred to follows:]

    The fiscal year 2013 budget request reflects the administration's 
commitment to the Nuclear Enterprise and is sufficient to certify the 
stockpile, conduct required maintenance, and support fiscal year 2013 
activities for ongoing and planned life extensions. The Budget Control 
Act required responsible choices, to include a construction sequencing 
adjustment between the Uranium Processing Facility and the Chemistry 
and Metallurgy Research Replacement-Nuclear Facility. The Department of 
Defense and Department of Energy are committed to maintaining a safe, 
effective, and secure nuclear deterrent and are working to develop an 
executable, long-term plan.

    General Kehler. We will certainly do that. I fully 
understand the concern, recognizing that nothing was immune 
when we went through the budget reduction to include the 
nuclear force. I believe that we balanced the investments in 
much of the portfolio. It does not look like the 1251 report, 
but I think we balanced much of it. What concerns me the most, 
I think, is the industrial complex.
    Senator Ayotte. Thank you very much.
    I also wanted to follow up with a question about Russia. As 
I understand it historically, General Kehler, why did the 
Russians not want us to improve our missile defense system in 
Europe and expand it? They have been very concerned about that. 
Why is that?
    General Kehler. I could give you my understanding of where 
I think they are. They are very concerned. At least in the 
informal contacts that I have had with some Russian officials, 
they continue to say that they are concerned that our 
deployment of a missile defense system will tip the strategic 
balance in our favor, that it will render their offensive 
capabilities irrelevant. Our contention is that is not at all 
true, and therein has been the conversation back and forth.
    Senator Ayotte. My time is up.
    So when the President said that essentially he had to be 
given space to the Russians the other day, what he was really 
talking about is their concerns about us expanding or enhancing 
our missile defense system in Europe. Even on the continental 
United States, it could be interpreted that way because the 
Russians do not want us to do that.
    So I am really concerned about that statement that Senator 
Inhofe asked you about in the context of what it means in terms 
of what we would be conceding to the Russians going forward in 
protecting the United States of America and our allies.
    So thank you very much for appearing today. I appreciate 
it.
    Chairman Levin. Thank you, Senator Ayotte.
    Senator Blumenthal?
    Senator Blumenthal. Thank you, Mr. Chairman.
    Thank you both for your extraordinary service to our Nation 
in each of your commands and responsibilities and to the men 
and women who serve under you.
    General Kehler, if I could begin just briefly following up 
on a remark that you just made about the Ohio-class submarine 
which you have said is going to be of strategic vital 
importance as far as we can see into the future. I probably am 
paraphrasing you, not quoting you directly. But I agree 
completely, and I wonder if you could speak to the significance 
of the Ohio-class submarine replacement in terms of what its 
value is. How does it add value to our strategic force and why 
is it so important to continue building it without further 
delay?
    General Kehler. Senator, each of the elements of our 
nuclear deterrent force brings something unique to the mixture, 
and the strength of the overall deterrent has always been in 
the sum of its parts. So as we look at this today and as we go 
to the future, the inherent survivability of the submarine-
based deterrent has been of great value to us. It continues to 
be of great value as we go forward at many levels. Strategic 
stability is really built on survivability. The understanding 
that neither side possesses an overwhelming advantage to strike 
first, that even in the event of that kind of a highly 
unlikely--I mean, the world is different today and we 
understand that. But stability, particularly in an unforeseen 
crisis as we look to the future, something that would arise 
that would put us in crisis with any of the nuclear contenders, 
having a survivable element of our strategic deterrent is 
extraordinarily valuable. We believe that that remains valuable 
as we look to the future.
    Now, you can get survivability a lot of ways. An airborne 
aircraft is a pretty survivable platform, and if it stands off 
or it can penetrate or it has stealth--I mean, there are lots 
of attributes there that get to survivability.
    But we have looked at our submarine force as providing the 
bulk of our survivable deterrent, in particular the day-to-day 
survivable deterrent. Submarines that are at sea are inherently 
survivable.
    The issue will be with Ohio-class replacement is making 
sure it stays that way and making sure that we can deploy a 
platform that has those attributes that is perhaps lower in 
cost to operate when it is fielded, and we can guarantee, as we 
look to the future, that it can stay a step ahead of any 
developing technologies that might threaten it.
    Senator Blumenthal. So you would say that the commitment of 
our military, our Defense Department, and our strategic 
planners is undiluted when it comes to the Ohio-class 
replacement.
    General Kehler. Within the modernization efforts that we 
are undertaking in our strategic deterrent, this one and the 
long-range strike bomber are both at the top of my list.
    By the way, we do not talk much about the need, but the 
need for a replacement tanker is equally important to STRATCOM, 
and that is, of course, underway with the Air Force today as 
well.
    Senator Blumenthal. Thank you.
    General Alexander, I was struck by your extraordinarily 
insightful and helpful testimony about the wide ranging breadth 
of potential cyberthreats relating to industrial espionage and 
intellectual property theft, as well as the potential 
infiltration of social media. It reminded me of a separate and 
perhaps unrelated aspect of problematic conduct involving 
social media that I have highlighted recently which is the 
demands that employers have made for passwords, log-in 
information from prospective job applicants or from employees 
which enables them to invade the private communications, e-
mails, g-chats, private accounts of their employees and 
potentially people with whom their employees communicate, 
including potentially service men and women or loved ones or 
family or service men and women who are applying for jobs.
    I wonder if you could comment on the potential security 
threats apart from the invasions of privacy that may occur from 
the demand for information from employees about their security 
accounts and also what the needs are in terms of background 
checks on the part of your agency.
    General Alexander. I think, Senator, that is a great 
question. I think, first of all, asking for potential employees 
for their passwords and other things is odd from my 
perspective, to say the minimum.
    I think the issue that I see in here is a couple things. 
One, how do you secure those so that somebody else does not 
gain access to all of them. One of the Senators--I think 
Senator Hagan--had a great comment about the theft of bank 
records and what was going on about what she is seeing what 
Microsoft and the authorities are doing to make that easier. I 
am concerned about that. I am not sure about the foreign 
threats to this as I am to what that means to the future.
    We have some tremendous capabilities in cyberspace, we as a 
Nation, the iPads, the iPhones. I think our people should feel 
free to use those and know that they are going to be protected 
in using them. Both their civil liberties and privacy and as a 
country. I think we can do both, and I think we should push for 
both.
    This is a new area, and you can see. I mean, you are 
hitting right on some of the key parts when you look at how the 
companies are wrestling with this too. How do you provide 
maximum benefit without intruding. I think that is going to be 
an issue that we are going to wrestle with for several years.
    Senator Blumenthal. When it strikes you as odd, I assume 
that ``odd''--and it is a very well chosen word--may be a 
euphemism for strange or unnecessary or invasive, unacceptable.
    General Alexander. Senator, I am not completely up to speed 
on all of it. I did read it. So I do not know all the facts 
that go with it. My initial reaction was this does not seem 
right. That is what I mean by ``odd.'' But I do not have all 
the facts.
    Senator Blumenthal. Thank you, General, and thank you for 
your great work on this issue. I hope you will give thought as 
well--and I may ask you a question in writing about it--
regarding the potential uses of the National Guard cyber units 
and how they can better assist you and the cost-effectiveness 
of building those programs through our National Guard.
    General Alexander. We are working with the National Guard, 
and there are a number of those. I will start right with the 
Maryland National Guard, the Delaware National Guard, go out to 
Washington. There are some great ones. I am sure Connecticut 
too. I did not want to miss that. But I do think this is an 
opportunity where the National Guard has some technical 
expertise as civilians working in this area, especially when 
you look in the high-tech areas. So this is something that we 
can leverage and we are working on that.
    Senator Blumenthal. Thank you very much.
    Thank you, Mr. Chairman.
    Chairman Levin. Thank you, Senator Blumenthal.
    Senator Collins.
    Senator Collins. Thank you, Mr. Chairman.
    General Alexander, I very much appreciate the attempts you 
have made today to clarify the roles of DOD versus DHS versus 
the FBI when it comes to dealing with cybersecurity. As the 
discussion today has indicated, I believe there is a lot of 
confusion over who does what and who should do what. As you 
correctly said, this has to be a team approach, and DOD, DHS, 
and the FBI have different but complementary roles.
    So what I would like to do since, based on some of the 
questioning I heard today, I think there is still a little bit 
of confusion, is just take you through a series of questions in 
the hopes of clarifying who does what.
    First, let me say do you agree that our critical 
infrastructure today is not as secure as it should be.
    General Alexander. Senator, I do.
    Senator Collins. Second and related to that, several 
studies and experts have told us on the Homeland Security 
Committee that critical infrastructure operators are not 
taking, in some cases, even the most basic measures such as 
regularly installing patches or software updates or changing 
passwords from default settings. Those are pretty basic and 
known vulnerabilities. Would you agree with that assessment?
    General Alexander. I think those are basic vulnerabilities. 
I would add to that we see that in a number of cases in other 
areas as well.
    Senator Collins. In addition to just critical 
infrastructure. The reason I am focused on critical 
infrastructure is, obviously, if there is an attack on critical 
infrastructure, the consequences are so much greater than if 
there is an attack on one particular business even though that 
too can have significant economic consequences and cause many 
problems.
    So my third question is to try to better define the roles. 
Would you agree that DHS has the lead role in interacting with 
the owners and operators of critical infrastructure to get them 
to strengthen their protections, harden their defenses up front 
as opposed to when an attack occurs?
    General Alexander. I do agree with that, Senator.
    Senator Collins. The distinction that I am trying to make 
is once there is an attack that has significant consequences, 
DOD would become the lead agency just as you would if we were 
attacked by missiles. Is that an accurate assessment?
    General Alexander. That is correct.
    Senator Collins. There is where I think the confusion lies. 
It is the role of DHS under the current practice of this 
administration and under the legislation that Senator Lieberman 
and I have authored to try to strengthen the defenses of our 
critical infrastructure. In our legislation and in a 
collaborative effort with industry, which is absolutely 
critical that it be collaborative, the Department with industry 
would develop risk-based performance standards. Is that your 
understanding?
    General Alexander. That is my understanding, Senator.
    Senator Collins. The reason for that is to ensure that the 
owners of critical infrastructure implement these risk-based 
performance standards. But I would point out to my colleagues 
this is not some new bureaucracy as we have heard today. It 
would be a collaborative effort, and the owners and operators 
of the critical infrastructure would decide how to meet those 
standards. It would not be dictated by the Department. Is that 
your understanding?
    General Alexander. That is my understanding.
    Senator, if I could, I think that is the key point because 
I think the concern that I hear, that we all hear, is just that 
key point. How do you do this in such a way that helps industry 
without--I will use the term ``over-regulating.'' This is 
outside of my area of expertise, but how do you get them the 
standards and help them build a more resilient network, a more 
defensible network, if you will? That is the key to this, and I 
do think that is the key issue that you are wrestling with. I 
think that is where we can provide technical expertise to DHS 
and others. I think that is where we have to partner with 
industry and just as you said. I agree with the way that you 
have stated that, and I think that is extremely important, that 
bringing the industry folks together to help decide is what I 
get because they want to be a player in this because this is, 
from their perspective, important as well.
    Senator Collins. In fact, we need the expertise of 
industry, of NSA, of DHS, of everybody working together, the 
results of the investigations from the FBI because this is a 
huge problem, and it has consequences for our national security 
and our economic prosperity. It is so critical that we work 
together to solve this problem. I know that is what you are 
committing to doing and that is what you are doing.
    That is the one final point that I want to make today. NSA 
is already working with DHS, for example, at what is called the 
National Cybersecurity and Communications Integration Center, 
which is the 24-hour/7-day-a-week entity that has been set up. 
There is an exchange of personnel between DHS and NSA. Is there 
not?
    General Alexander. There is.
    Senator Collins. Under the bill that Senator Lieberman and 
I have introduced, to try to get that essential visibility that 
you have emphasized is so important, we would require mandatory 
reporting in the event of an attack because this cannot be 
discretionary if in fact there is a significant attack on 
critical infrastructure. Critical infrastructure is defined as 
infrastructure, an attack upon which, would cause mass 
casualties, a severe economic impact, or a serious degradation 
of our national security.
    So do you support requiring that mandatory reporting in 
such cases?
    General Alexander. I do, Senator, and I think I would add, 
as we discussed earlier, that in order for us to help prevent 
it, it has to be in real-time. I think that is absolutely vital 
to the defense.
    Senator Collins. The reporting and information sharing 
under our bill is bi-directional, as has become the latest 
phrase to be used in this. In other words, it is in both 
directions. Even NSA, the capabilities of which are 
unparalleled, can learn from the private sector. I think you 
learned that in the DIB study where there were some signatures 
that the private sector had that NSA may not have had. Is that 
accurate?
    General Alexander. That is accurate and logical when you 
think about it. Adversaries will do different things for 
different sectors of the Government, will use different tools 
for different sectors of the Government. That is one of the 
great things that we learned on it and how we have to go 
forward on the DIB pilot.
    Senator Collins. Thank you very much.
    Thank you, Mr. Chairman.
    Chairman Levin. Thank you, Senator Collins.
    Senator Udall.
    Senator Udall. Thank you, Mr. Chairman.
    Good morning, gentlemen. Thank you for being here.
    General Alexander, let me turn to you first. I have been 
concerned, as we all have, for some years about the potential 
of cyberattacks on our electricity grid here in the United 
States and the potential effects that such attacks would have 
on the critical missions, especially during an emergency or 
during periods of prolonged power outages.
    Given the uptick of tensions in the Persian Gulf and the 
presence of our military in the region, I am interested to know 
about our potential vulnerabilities of our own military to 
cyberattacks in the Gulf on that electrical infrastructure that 
our military depends on. I am thinking about this from the 
perspective of the U.S. military's reliance on fuel in the 
region, fuel that cannot be produced without the electricity 
that runs oil extraction wells and refineries and that powers 
pumps for offloading fuel for storage and use.
    Do we have an assessment of how dependent the U.S. military 
in the Gulf is on electricity infrastructure? Do we have a 
backup plan if there were to be a prolonged grid outage? Do we 
understand the constitution and the vulnerability of the 
electricity grid in the Persian Gulf well enough to measure the 
effect on the oil production and transportation system 
especially but not limited to the oil refineries there?
    Thank you for letting me direct that trio of questions at 
you.
    General Alexander. Senator, I thought you were going to ask 
me if I got the new iPad. I thought that is how we were going 
to start this out. So I did. I got the new iPad. It is 
wonderful.
    Senator Udall. Well, we are envious.
    General Alexander. That is a really good and complex 
question. So let me expand it, if I could, not to make it 
harder.
    The underlying grids that are in the Gulf States and other 
parts of the region--the military will normally have backup 
power for military operations, generator power and other 
things, to operate all our critical capabilities. So for the 
most part, both for our computer networks and for our 
operations, we have backup power for our critical 
infrastructure.
    That is not the same for the flow of oil and electricity 
per se throughout the region. I think the concern that we have, 
the concern that I think everyone shares here is what you were 
driving at. Note that this is one network, one global network, 
with a lot of little pieces but all interconnected. So you can 
be anywhere on the network. My concern is not only in the Gulf 
but here in the United States. So as we go forward, in a 
crisis, no matter where it erupts, is that increasingly the 
probability that cyber will be part of that crisis grows and we 
have to be prepared for it. It will cover all the things that 
you mentioned because those are the easier things to attack and 
have some significant advantage for the adversary.
    Senator Udall. So you are saying we have more work to do 
here to understand the potential threat and to prepare for it.
    General Alexander. We do. Senator, I think we are looking 
at it both from how do we defend the DOD networks. Great 
progress there. With Senator Collins, we just talked about 
defending the critical infrastructure and support to our 
allies. I think all of those have to be laid out and discussed, 
and it is growing.
    Senator Udall. Also what I was saying and I think you 
agreed with was the flow of oil on which the world's economy 
depends could also be affected by something in this realm of 
cyberattacks, and we also need to be prepared for that.
    General Alexander. It could be. I would not put that 
highest on the list. I think the electricity and the other--but 
you can see how that would--it all depends on flow and things 
opening up and SCADA systems, if you will.
    Senator Udall. So SCADA systems in that part of the world 
are vulnerable and we are also dependent on them at the far 
reach of the United States or Europe or the Asian oil markets 
as well.
    Thank you for that. Obviously, more attention needs to be 
paid to that.
    Let me move to a question dealing with computer network 
exploitation (CNE) versus computer network attack (CNA). How do 
you exactly draw the line between those two, and how does the 
Government change legal authorities funding personnel and 
infrastructure when moving from CNE to CNA?
    General Alexander. CNE is largely done under title 50. I 
say largely, not solely, but largely done under title 50. So 
that would go to the Intelligence Community and fall under the 
Executive Order 12333. While title 10 is normally where we 
would conduct CNA, you could also do it under covert action. In 
times of crisis and war, our forward operating elements would 
operate CNA and exploit under title 10, and it would be done in 
conjunction with title 50 so the deconfliction would have to 
do.
    The good part about training our forces together and 
operating together is to ensure that we can deconflict those 
kinds of things. It flows back to the defense. The same thing 
on the defense. That is why I think the good part about putting 
the defense to operate with the exploit and attack puts it as 
one team, not two different teams, which is what we largely had 
up until 2008.
    Senator Udall. So you sound as if we are well prepared to 
deal with those differences.
    General Alexander. No. I think we are well prepared to 
state how, Senator, we would deal with those. I think there is 
a lot that we have to do, and that begins with grow the force 
and train them. That is the most important thing that I think 
we can do right now.
    I think the partnership with industry is critical on 
learning and protecting the critical infrastructure. I think 
those are the right steps to make.
    I think all of these are in motion. I would just like it to 
go faster.
    Senator Udall. Have we conducted--I say ``we''--the U.S. 
Government, your command and so on--some exercises to get at 
this CNA/CNE hand-off, if you will, and relationship that you 
just outlined?
    General Alexander. We did have a great exercise out in Las 
Vegas, Nellis. Yes, outside Las Vegas. We actually never got to 
Las Vegas. Let the record state that.
    Senator Udall. Your iPad would have been handy in Las 
Vegas, by the way.
    General Alexander. What we did learn is just some of the 
things you say. While I cannot go into all of that here, it was 
a tremendous exercise. I will give the Air Force credit for 
helping to set it up there. They did a wonderful job. We 
brought in all of our capabilities and our components, and some 
tremendous lessons learned. I think at a classified level, we 
could go into those. When you see that, you would say, okay, so 
you are headed in the right direction. I think, Senator, we 
are.
    Senator Udall. I assume I will see you in a classified 
setting at some point in the near future where we can discuss 
it further.
    General Alexander. I think this afternoon, Senator.
    Senator Udall. My time is about to expire. But long-term--
and you may want to take part of this for the record--how do 
you see the relationship between the NSA and CYBERCOM evolving 
and changing?
    General Alexander. I think, Senator, they are inextricably 
linked. I would put it as a platform. You do not want--any more 
than we want DHS to recreate an NSA, we do not want CYBERCOM to 
recreate an NSA. So we need these two components of DOD to work 
closely together. NSA has the technical talent. It has the 
access, got the capability. CYBERCOM will have the forces to 
deploy and the capability to leverage that platform and work 
with the intelligence side of NSA to further support the 
combatant commands. So I think that that relationship is 
growing, is headed in the right direction. I think that is one 
of the things that we have talked about and we both strongly 
agree is something that we have to maintain.
    Senator Udall. Thank you for that.
    General Kehler, I know my time has run out, but if you want 
to reply further for the record, I would certainly appreciate 
it; thank you for your service as well.
    [The information referred to follows:]

    I concur with General Alexander's comments.

    Senator Udall. Thank you, Mr. Chairman.
    Chairman Levin. Thank you, Senator Udall.
    Senator Chambliss.
    Senator Chambliss. Thanks, Mr. Chairman.
    Gentlemen, thank you for your service.
    General Alexander, I thank you particularly for your recent 
trip down to Fort Gordon where you gave a pat on the back and a 
morale boost to some of the smartest, hardest working, most 
committed Americans who are doing a great job of helping to 
protect our great country. I thank you for doing that at NSA/
Fort Gordon.
    General Alexander, CYBERCOM you said had 13,000 employees. 
Let me make sure I get this right in my mind. Actually you have 
13,000 personnel under your direction. CYBERCOM itself has 
what? Maybe 1,000 or so personnel?
    General Alexander. A little under 1,000 authorized, about 
900 and some, and that is not only the CYBERCOM staff but also 
operates and directs the defense of the DOD networks. But that 
is correct. So what I counted in that other 12,000 is our 
cyber, Army CYBERCOM, Air Force CYBERCOM----
    Senator Chambliss. Various Services.
    General Alexander. That is right.
    Senator Chambliss. Okay. I wanted to make sure I understood 
that.
    NSA today does a pretty good job of intercepting and 
protecting the dot gov, the dot mil networks. In fact, I have 
heard you say that the DOD information systems are probed as 
many as 250,000 times an hour, over 6 million times a day from 
criminals, terrorist organizations, including 100 foreign 
intelligence organizations. Even with that huge magnitude of 
hacks into the system, General, NSA has done a remarkable job 
of protecting that system. Are you satisfied with where you are 
in that regard today?
    General Alexander. Actually I am going to answer this twice 
and contradict myself. We are making progress and I think we 
are doing a good job on it, but we are not where we need to be, 
Senator. There are two reasons I say that. I do think we have 
the best defense right there, but it could be better, and I 
think for the future for military command and control it must 
be better. So I think the IT modernization that the Defense 
Department is looking at is a key part to even make it better.
    Senator Chambliss. The legislation that we are talking 
about, whether it is the administration's proposal or 
Lieberman-Collins bill, one and the same, or the alternative 
legislation--neither one of those really address that issue. 
This is work that you are doing protecting dot gov and dot mil. 
Right?
    General Alexander. That is correct in part. If I could say, 
the slight difference is the information sharing of those 
things that we do to protect our networks that go beyond what 
you would normally do for a civilian network are the things 
that we think should be included in the information sharing 
parts that both of those have.
    Senator Chambliss. I am going to get to information sharing 
in just a minute.
    Now, going one step further there, NSA also monitors the 
DIB. There have been numerous attempts, and it may be within 
those numbers that I have heard you use before. Hacks into the 
DIB have happened, and NSA does a good job of protecting those 
scenarios. Where that has happened, you have been notified and 
you are able to respond to it. Am I correct?
    General Alexander. Not quite. There is an innuendo that I 
think is extremely important. The ISPs operate that. We provide 
them signatures, as do the other industry players, and the ISPs 
actually do the work. The reason that that is important is that 
I believe that is how we can scale in protecting other critical 
infrastructure and the mechanisms that Homeland Security and 
others are working with. So what we bring to the table and what 
the FBI and others would bring is specific things that we see 
going on in the network that may be sensitive or classified. So 
we bring that, but they actually operate it. The part that we 
are able to work with the DIB is to understand that they will 
protect and safeguard classified information. That is a key 
element of this approach.
    Senator Chambliss. My point being that your relationship 
with the ISPs today allows the DIB to have that protection.
    General Alexander. That is correct. Now it has been taken 
over by DHS. So they actually lead. They are the lead interface 
for the new DIB pilot and have been doing that for 6 weeks. We 
are at the table and provide technical support, but they are 
actually the lead on that as well.
    Senator Chambliss. I am looking at another what I would 
assume you would consider critical infrastructure, our electric 
grid. If the electric grid is hacked into today, there is a 
mechanism in place that was developed by industry where if they 
see something unusual, then they notify the North American 
Electric Reliability Corporation (NERC) and NERC immediately 
goes to U.S. Computer Emergency Readiness Team (USCERT) and 
notifies USCERT about it, which is under DHS. They are able to 
provide protection to the grid under voluntary standards that 
the industry put forth. Am I correct?
    General Alexander. Yes, but I think, Senator, that is 
slightly different, if I could, because in those notifications, 
you have gone out of real time to now a part where actually we 
are in the forensics mode. So what they are telling is 
something has occurred, and by the time it gets to USCERT, what 
USCERT could do is not prevent it but only help them understand 
it.
    So I think the information sharing part of what you and 
others have proposed would take that to a more real-time 
capability or at least allow that where they could say I see X 
happening and they, industry, could tell the government that 
that event is occurring so that you could take it from the 
forensics side to the prevention side, which is I believe 
hugely important for the protection of the country.
    Senator Chambliss. Now coming back to what you just alluded 
to and you stated earlier and that is on information sharing. 
This is really the key, as I understand it, from the standpoint 
of being able to provide blanket protection to virtually every 
segment of the economy or every industry that wants the 
protection out there or that needs the protection. If they have 
the capability of sharing proprietary information with both the 
government, as well as with other like industries, then is that 
not the crux of what it is going to take to be able to protect 
all of the industrial base from a cyberattack in the short run, 
as well as in the long run?
    General Alexander. Not actually. From my perspective, 
Senator, the issue in this part really lies in two great 
capabilities. The one that we provide, I agree, they want that. 
They want to know what are the foreign, state, and other 
sensitive things that could attack them. Industry also brings 
together the McAfees, the Symantecs, the Lockheed Martins, and 
all those that work in this area, also bring a wealth of 
knowledge in how to configure and operate their networks to a 
certain standard. It is our assumption in going into this that 
those networks like the DOD networks would be operated to a 
standard. If they are not operated to a standard, then what 
happens is you have other ways of getting into the network that 
we probably are not looking at. We assume that the doors will 
be locked. If the doors are not locked, then somebody would get 
in or if the window was open. What we would be doing is looking 
for other types of nation state threats and assume that what I 
will call the stuff that the antivirus community generally sees 
and is working on today is taken care of.
    What that means, I think, as you put all that on the table, 
is, one, we all have to work together and share information. I 
agree with that part. I do think we have to have some set of 
standards. I think that is where working with the industry, 
just as you said--so how do you get to that standard and how do 
you have the industry players work with the government and say, 
so what is the right way to approach it?
    As you may know, we had a meeting a few years ago with a 
number of the electric companies who asked just that question. 
So how do we do this and who is going to tell us how we work 
it? I think that is the approach that we have to take, help 
them get there in such a way that it is not burdensome but 
helpful.
    Senator Chambliss. I think that part of both pieces of 
legislation is about the same. With respect to getting 
voluntary participation versus mandatory is a little bit 
different. But the fact of getting the industry to set the 
standards is the key, and getting the industry to share the 
information is the other piece of that both pieces of 
legislation have that is a critical part of it.
    Mr. Chairman, my time is up. I did want to say to General 
Kehler I did not vote for the START treaty. One reason I did 
not is because I was apprehensive about the administration not 
being able to do what they said they would do on modernization. 
I thank you for your specific comment on that about the fact 
that you are concerned about it. That is a critical aspect of 
this, and we look forward to working with you as we go forward. 
It has to be done. Thank you.
    Thanks, Mr. Chairman.
    General Kehler. Senator, thank you.
    Chairman Levin. Thank you, Senator Chambliss.
    Senator Sessions.
    Senator Sessions. Thank you, Senator Chambliss, for that 
comment.
    General Kehler, it was great to be with you yesterday and 
talk about some of the issues you just mentioned because the 
understanding that Senator Kyl had, Senator Chambliss, about 
the START and what kind of funding would be laid out for the 
next decade to modernize our nuclear weapons has not been 
funded and Senator Kyl was deeply disappointed about that.
    Mr. Chairman, I am troubled today about this little 
overheard conversation between the President and Mr. Medvedev 
where President Obama says of all these things, but 
particularly missile defense, this can be solved, but it is 
important for him to give me space. Mr. Medvedev said I 
understand. I understand your message about space, space for 
you. This is my last election. After my election, I will have 
more flexibility. I understand. I will transmit this 
information to Vladimir.
    This is not a little matter. I will tell you why it is not 
a little matter. We had a long debate over the missile defense. 
The left has never favored missile defense. President Bush was 
preparing to place a system in Poland. Out of the blue, it was 
canceled. The Pols were deeply shocked and disappointed. So 
were the Czechs. We were promised do not worry about it. We 
will have another system when, in effect, I felt that they were 
trying to change the course of things, and Standard Missile-3 
(SM-3) Block IIB, and we were going to have that, something 
that was not even on the drawing board then. But we were about 
to implant in Poland a system that we had proven, the Ground-
based Midcourse Defense system that we had already placed in 
the United States.
    So I guess what it says to me, the President makes us 
assurances that we are going to implant a new system. It will 
be an SM-3 system. It will protect America. Sure, we canceled 
that one, but we are going to build this new one. But the 
Russians object to the new one. They have objected steadfastly 
for no good reason that I can see other than maybe domestic 
Russian politics or use leverage against the United States.
    So now it looks like the President is saying we are going 
to take care of those concerns too. We are not going to build 
the new system. We are not going to place it there. After the 
election, I will take care of it, Vladimir. But that is not 
what he told the American people, what he told Congress. He 
told Congress we were going to build this system.
    So I am worried about it. I know the significance of this 
little conversation, and it concerns me.
    I am also concerned that the policy of the Defense 
Department of the United States, when it comes to the nuclear 
weapons you control, General Kehler, is that we are moving to a 
world without nuclear weapons, the complete elimination of 
them. The Defense Department's Nuclear Posture Review has 30 
references to a world without nuclear weapons in it. This was 
directly driven by the policy of the President. He is the 
Commander in Chief. That is what he wanted. That is what DOD 
put in there.
    So that is one reason Congress insisted that we budget 
sufficient money to modernize the aging nuclear weapons that we 
have. We insisted on that and it came up as a part of the New 
START debate. The President sent a letter to us and promised 
it. But it is not occurring. The money is not there.
    So we are at a time of great danger, as I see it. The 
defense budget is under great stress. We are looking to save 
money wherever we can save money, and it appears to me that the 
administration does not have the kind of rigorous intellectual 
support for missile defense or nuclear weapons necessary to 
ensure we keep these programs on track.
    So with regard to that system, let me ask you a few 
questions, and if you have answered these, let me know because 
I am ranking member on another committee that I had to attend 
this morning.
    Tell me about the nuclear weapons that we have for the 
submarines, aircraft, and so forth. You explained to me several 
of them were being delayed under the budget plans that you 
have. Would you just tell us what the budget has caused you to 
delay?
    General Kehler. Senator, first let me make the point that 
the stockpile and the deployed force that we have today I am 
confident is safe, secure, and effective. Those are the three 
watchwords that we tend to use when we are talking about this, 
and so today I believe that that deterrent force could meet its 
objectives and that it is safe, secure, and effective.
    However, we have weapons that are beginning to reach their 
end of life. It is not classified information that the W-76 
submarine weapon life extension program is underway as we sit 
here today. I am very encouraged by that, and the program seems 
to be moving forward successfully.
    What the budget reductions did was it slowed the delivery 
of those weapons. I believe while all of these budget 
reductions I think in a perfect world we would say we really 
wish we did not have to deal with budget reductions, but the 
fact of the matter is that they are there and the nuclear force 
was not immune. So I believe that we can manage that delay in 
the W-76 because it is toward the end of the program that we 
can manage this. I think that that is manageable.
    The aircraft-delivered weapons are also reaching a critical 
point in terms of their age. The B-61 in particular needs to go 
through life extension. The fiscal year 2013 budget begins that 
life extension effort, although it will give us the first unit, 
what we call the first production unit, most likely in 2019 
instead of 2017, which is what the 1251 report had suggested. I 
believe that is manageable risk as well.
    Senator Sessions. I would just add a political risk that 
when you push things out--and you are assuming Congress will 
act rationally and predictably in the future, but I would just 
say the more things are pushed out and they are not done when 
you planned to do them, the greater the danger is that somehow 
it will not happen.
    But go ahead.
    General Kehler. Yes, sir. In terms of operational risk, I 
believe we can manage operational risk on both of those.
    We are beginning a study to look at the ICBM and remaining 
submarine warheads to see whether or not we can get commonality 
out of those as we look to a future life extension program. We 
believe that there are some possibilities there. We would like 
to go study that and see.
    So in terms of the weapons for the fiscal year 2012 budget 
that we are executing now that you all appropriated last year--
for the fiscal year 2013 budget that is laying on the table, I 
believe that we can go forward with manageable operational 
risk.
    The issue is what happens beyond 2013, and that is where 
the Secretaries of Energy and Defense have said that we do not 
have the complete plan in place for what happens beyond 2013. 
That concerns me. When I look to the infrastructure, the 
industrial complex--and as I mentioned earlier to another 
question, it is a very unique, highly specialized industrial 
complex--the plan to upgrade the uranium processing facility 
remains in place. The plan to upgrade what we call CMRR, or the 
chemical and metallurgical building that allows us to process 
plutonium, is not in place. That has been slipped fairly far to 
the right, 5 to 7 years depending on which of the documents you 
look at. I am concerned about that. I am concerned about our 
ability to provide for the deployed stockpile, and that is my 
number one concern here. So I have some concerns.
    We owe you answers. The two Departments are working 
together to look at what alternatives might exist. We are 
participating in that review, and as the customer, if you will, 
for all of this at the deterrence end of this street, I will be 
concerned until someone presents a plan that we can look at and 
be comfortable with and understand that it is being supported.
    So I am not saying there is not a way forward. I am hopeful 
that there is. We just do not have it yet, and until we do, as 
the customer I am concerned and I will remain concerned until 
we go a little farther down the road.
    Senator Sessions. Thank you. You are the customer. You are 
the person for whom these weapons are delivered. You need to 
share with us--and I believe you have honestly--both the good 
and the bad news. I think it is up to Congress to make sure 
that out of all the money we spend on national defense, we make 
sure that we have sufficient funds to maintain a credible 
nuclear stockpile.
    So thank you, Mr. Chairman.
    Chairman Levin. Thank you, Senator Sessions.
    Senator Shaheen.
    Senator Shaheen. Thank you, Mr. Chairman.
    Thank you, gentlemen, for being here this morning and for 
your service, and hopefully I will not keep you too much past 
lunch.
    I wanted to start, General Kehler, if I could, with talking 
about New START treaty implementation. The treaty was an 
extremely difficult and contentious debate here in the Senate, 
and your predecessor, General Chilton, as well as seven of the 
last eight commanders of STRATCOM, voiced their support for the 
treaty, which I think was very helpful in getting it done.
    But can you tell us a little bit about how the 
implementation of the treaty is progressing?
    General Kehler. Senator, I can. There are a number of 
segments in implementation of the New START treaty that have to 
move forward together.
    The first segment is that we need to eliminate those 
launchers that count against the overall treaty limits that 
have not been in use for a very, very long time. We call them 
``phantoms'' simply because they count on the books, but they 
have been deactivated a very long time ago. Some number of 
bombers, B-52s are in the bone yard and need to be dismantled. 
There are 100 ICBM silos that have been empty now for a number 
of years that we do not have any plans to go back to that need 
to be eliminated as well, not converted from nuclear to non-
nuclear, but completely eliminated. Those processes are 
underway. The wheels are turning. They are about to finish the 
environmental impact studies that go along with eliminating 
those silos. So I am comfortable that those pieces are moving 
forward correctly.
    The second thing is we have to get ourselves down to the 
central limits of the treaty, and that is 1,550 deployed 
warheads, 700 deployed launchers, and up to 800 deployed and 
nondeployed launchers. That requires us to select a force 
structure mixture and we have gone through the joint chiefs 
with proposals. We believe that we are settling on a final 
proposal that the chairman and I can take to the Secretary of 
Defense.
    In the meantime, we have begun reconfiguration activities. 
We are de-MIRVing (multiple independent reentry vehicle) all of 
the ICBMs. That work has begun and it is going to continue. We 
are reconfiguring the numbers of warheads on the submarines so 
that we can get our warheads down to certain limits. So all of 
these steps are underway, Senator.
    I will tell you that we know that there is a clock running 
here. We have to be at those central limits not later than 
February 5, 2018, and the goal we have set for ourselves is a 
year in advance of that so that we have time. The ICBM fields, 
for example, reconfiguring those--we know we will have to make 
some adjustments in the ICBM force. We know we will have to 
make some adjustments in the SSBN forces, the submarine force. 
There is a long lead time on being able to do that. The ICBM 
fields are sensitive to weather, of course, and so we have to 
leave ourselves some slack. I am okay with that, but we are 
getting to the point now where we need to make some final force 
structure decisions, and I believe we are poised to make those.
    Senator Shaheen. So based on that, you are comfortable on 
the central limits that we will meet the deadlines?
    General Kehler. Yes, I am comfortable we are going to do 
that.
    Senator Shaheen. The Russians are also meeting their 
requirements under the treaty, as far as we know?
    General Kehler. They are.
    Senator Shaheen. Good. Thank you.
    I want to switch now to the refueling tankers because, 
General Kehler, as I know you have commented, one of the 
important support elements of the long-range bomber is 
obviously a refueling capability. We have seen that at Pease 
Air Force Base (AFB) where we have the 157th Air Refueling 
Wing, and I have had a chance to ride along on some of those 
planes. So I appreciate the skill and the importance of having 
that component.
    So can you talk very briefly about how critical it is for 
the Air Force to modernize that refueling capability and how 
important it is that we have the new KC-46A tanker for those 
long-range bomber operations?
    General Kehler. Senator, the one word that we typically use 
to describe STRATCOM is ``global.'' That word has been used for 
STRATCOM since it was Strategic Air Command, and so I think we 
appreciate the value of what makes us a global command.
    In large part, what makes us a global command is our 
ability to project power. In large part, our ability to project 
power is based upon our tankers. It is not the only thing that 
allows us to project power. By the way, I think that the big 
advantage that the entire United States military has is our 
ability to project power, which is why anti-access area denial 
counter-strategies against us are so concerning.
    In that mixture, when I look at my friends in Air Mobility 
Command and our colleagues in U.S. Transportation Command, I 
think there is probably no more valuable military assets that 
we have than our long-range aircraft that can give us strategic 
mobility and the tankers that make it so. So when I look at 
important things for us in the future, a modern tanker fleet is 
irreplaceable and is crucial for our success. I think that the 
United States' ability to project power relies on that as well. 
By the way, it relies pretty extensively on space and 
cyberspace as well for us to be able to project power.
    So all these pieces go together, and anymore, it is almost 
impossible to say that one platform only exists in the air. 
They are connected by cyber. They are relayed by space. They 
are really truly global in nature and being able to move a lot 
of fuel to power projection forces is critically important.
    Senator Shaheen. I know it goes without saying that in 
addition to the equipment that is required for all of that, the 
skills of the human talent that is required to do that is also 
critical.
    General Kehler. The most critical part.
    Senator Shaheen. Given that, one of the things that I have 
worked on in my civilian life before I came to the Senate was 
the importance of education, and obviously, one of the things 
that we are struggling both in the private sector now and the 
public sector--and I think it is particularly true in the 
defense arena--is making sure that we have the trained 
engineers, scientists, mathematicians, technicians that it is 
going to take for all of these jobs in the future.
    So could I ask maybe if both of you might comment on what 
your commitment is to making sure that we have the Science, 
Technology, Engineering, and Mathematics (STEM)-trained people 
that we are going to need for the future and whether there are 
any particular efforts that you see that the military is 
involved in to help make that happen?
    General Kehler. Senator, again, having people who are STEM 
people who have that set of skills is irreplaceable for us. 
Anything we can do to support the development of our young 
people in that regard we need to go do. I would say it this 
way. In all of our combatant commands, you can look and you can 
see who the warriors are. Typically they are someone with a set 
of warfighting that you would recognize on television. They 
carry a rifle. They fly an airplane, et cetera. In STRATCOM--
and General Alexander can speak to CYBERCOM--but across 
STRATCOM, whether it is space or any of the other things that 
we do, the engineers and the scientists very often are people 
with that kind of background. Those are our warriors. So it is 
even more magnified, I believe, in STRATCOM the value of people 
with that kind of background than it may be in other places.
    General Alexander. Senator, I would just add NSA has a 
program with over 100-plus universities for information 
assurance and cyber-related stuff. We do that in conjunction 
with DHS, and now we bring CYBERCOM into that. So that offers 
us a wealth. Tulsa University was one of those that we work 
with, and there are many others.
    But I think the issue with science, technology, 
engineering, and math, the STEM program, is critical for our 
country. We, the military, cannot do this. It is going to take 
you in Congress to help generate that. We need more scientists, 
and we need to start that in fourth grade. It is the things 
that we have absolutely got to push. I have 14 grandchildren. 
All of them should be engineers and scientists and 
mathematicians. Maybe one could be a lawyer.
    Chairman Levin. Thank you for leaving us a little room 
here.
    General Alexander. Yes, sir.
    Senator Shaheen. I would go for a doctor myself.
    Thank you. I think as you point out, this is an area where 
the military and the civilian sector really need to work more 
closely than we have in the past. I think as we talk about what 
we need to do in our education system, I think it is important 
to point out that this is a national security issue as well. So 
thank you all very much.
    Chairman Levin. Thank you, Senator Shaheen.
    I happen to agree with Senator Shaheen about her efforts in 
the STEM skills. I happen to also agree, despite that I am a 
lawyer and married to a lawyer, with your comment about 
engineers. We need a heck of a lot more of them. I will not be 
negative about whether we need more lawyers. I will just be 
positive about needing more engineers.
    Both of you, we are very grateful for your comments.
    The only thing I think I would add probably, General 
Alexander, is that you make repeated reference to what we need 
to do in the area of cyber in terms of working with industry. I 
obviously agree with that in terms of needing performance 
standards. They are going to work to try to come up with 
performance standards. I think it is important, however, to 
emphasize that even though they will be adopted, that they are 
going to have to be followed. The industry can decide how to 
meet those standards but there will be standards. I do not 
think you should shy away from that. I think we are talking 
about national security here, and this is not a question of 
pro-business/anti-business. This is the security of the United 
States we are talking about. We want to work with business, but 
we cannot just allow business here to dictate what the security 
of this country is by saying that they oppose standards. 
Instead, we would hope that they would work with us on those 
standards and understand that there is plenty of flexibility in 
deciding how to meet those standards, but not whether to meet 
those standards.
    Are you with me so far?
    General Alexander. I am, Senator. Mr. Chairman, I agree.
    Chairman Levin. Also another piece is the information 
sharing piece. As you point out, you want them to get to the 
point where they can tell us about an attack. The bills make it 
easy for them to tell us because, I guess, we are addressing 
some of the issues about proprietary information, for instance, 
so that they will be protected on that.
    But I think, as your answers to Senator Collins made clear, 
that whether or not they share--and we are talking here about 
the major infrastructure in this country--whether or not they 
share information with us is not a question of whether they 
agree to it or not. At some point, with major infrastructure 
there is going to be a requirement that they share information 
relative to attacks with us. We will protect them in terms of 
proprietary information, but they have to help protect the 
country by understanding that there should be, and I believe 
hopefully will be, requirements that they share information of 
attacks on that major infrastructure with us.
    I would just urge that you not be reluctant about talking 
about their obligation, not only that they will get to the 
point where they will share, but that there is a responsibility 
that needs to be placed upon them, and again talking here about 
major infrastructure, responsibility that will be placed upon 
them to share that information of major attacks with us.
    Would you agree with that?
    General Alexander. Chairman, I do.
    Chairman Levin. Okay.
    We thank you both. It has been a very, very helpful 
hearing.
    We will stand adjourned.
    [Questions for the record with answers supplied follow:]

               Questions Submitted by Senator Carl Levin

                              SPACE DEBRIS

    1. Senator Levin. General Kehler, are you concerned about our 
ability to track and maneuver Department of Defense (DOD) satellites 
with the increasing amount of debris in space?
    General Kehler. Yes. The increasing amount of debris in space and 
its potential impact to daily operations is an issue U.S. Strategic 
Command (STRATCOM) is continuously addressing. While we are currently 
effective in ensuring we can operate in the domain, we need to 
continually upgrade our equipment, space situational awareness systems 
and relationships with allies and partners to ensure we are effectively 
sharing necessary information to meet this growing challenge to 
preserve the advantages that space provides.

    2. Senator Levin. General Kehler, are you concerned about other 
nations denying us access to space?
    General Kehler. Yes. Our forces derive significant advantages from 
our space capabilities. Potential adversaries understand this and are 
actively seeking capabilities to deny our full use of space. We are 
working diligently to ensure our access to and use of space cannot be 
denied.

    3. Senator Levin. General Kehler, does DOD have a plan to defend 
satellites in space if they come under threat?
    General Kehler. Yes. Military planners, in conjunction with the 
Intelligence Community continue to work aggressively to find solutions 
to counter any hostile actions in space. We have various plans in place 
to improve our protection posture.

    4. Senator Levin. General Kehler, we are negotiating with the 
European Union (EU) a code of conduct on space operations to avoid 
collisions with other satellites and share space data. Do you support 
such a concept?
    General Kehler. Yes. Ensuring the stability, safety, and security 
of our space systems is of vital interest to the United States and the 
global community. The time is right for the development of a structure 
for space activities that encourages all spacefaring nations to act 
responsibly in a space environment that is increasingly congested and 
contested. Through voluntary and pragmatic transparency and confidence-
building measures, an International Code of Conduct for Outer Space 
Activities could contribute to enhancing the long-term sustainability, 
stability, safety, and security of the space environment, as well as 
help reduce the risk of mishaps, misperceptions, mistrust, and 
misconduct. While such an approach will not eliminate the possibility 
of intentional threats, it will help reduce unintentional threats due 
to unsafe behavior.

                                SPECTRUM

    5. Senator Levin. General Kehler, in February it was legislatively 
proposed that DOD move operations from a block of spectrum you now use. 
The cost to DOD, I understand, would have been about $14 billion. Can 
you please explain the importance to DOD of its operating spectrum and 
how any movement from it should be paid for and coordinated?
    General Kehler. Answer: The operating spectrum utilized by DOD is 
critical to national security and any transition into, or out of, any 
bandwidth must be assessed for impact to operations, relocation, 
implementation and administration costs, timelines, and coordinated 
among all effected organizations. The National Telecommunications and 
Information Administration's Assessment of the Viability of 
Accommodating Wireless Broadband in the 1755-1850 MHz Band Report, 
dated March 2012 concluded it is possible to repurpose the entire 95 
MHz block of spectrum, but cites challenges with the estimated 
relocation cost/timeline of $18 billion over 10 years. This does not 
include costs to incumbent systems in comparable bands or 
implementation and administration costs for DOD, which it estimates at 
an additional $272 million for vacating the identified spectrum.
    The identified block of spectrum is used to conduct uplink 
operations for 140+ active satellite systems representing 45+ 
operational constellations or programs currently being developed 
including Global Positioning Satellite, Wideband Global Satellite 
Communication, Advanced Extremely High Frequency, Mobile User Objective 
System, Space Based Infrared System, and Intelligence, Surveillance, 
and Reconnaissance programs.
    The report highlights that some systems will remain in the band 
indefinitely. To ensure maximum flexibility, DOD seeks to maintain the 
1755-1850 MHz band for satellite tracking, telemetry, and commanding 
(TT&C) operations including, but not limited to, vehicle anomalies and 
emergencies. Further, testing and training for electronic warfare and 
some software defined radios will require continued operation within 
the band. Collectively, these programs provide space effects to 
combatant commands, deployed forces, national leadership, and the 
general populace.

    6. Senator Levin. General Kehler, you are the combatant command who 
advocates for preserving our electromagnetic spectrum. What actions can 
you as the combatant commander for spectrum operations take to help 
preserve DOD's access to it?
    General Kehler. STRATCOM provides warfighter operational impact 
assessments to all proposed frequency auctions and advocates for the 
spectrum needs of the combatant commands. Our justification of 
exclusive use protects the DOD from immediate loss of spectrum. Our 
assessments also identify, where possible, the timeframe for which 
frequency coexistence would be possible or, when to vacate a frequency 
band once older systems are replaced.

                     OPERATIONALLY RESPONSIVE SPACE

    7. Senator Levin. General Kehler, does STRATCOM support the initial 
requirement that led to the development of the Operationally Responsive 
Space (ORS) program?
    General Kehler. Yes, I fully support the requirement for 
Operationally Responsive Space. ORS was initiated to meet an immediate, 
urgent need using a highly responsive process for delivering 
capabilities. The ORS process was designed to deliver solution concepts 
within about 60 days, and (when directed) field space capabilities 
within about 24 months.

    8. Senator Levin. General Kehler, does the ORS program still meet a 
valid STRATCOM requirement?
    General Kehler. STRATCOM maintains a requirement to rapidly 
improve, augment, or reconstitute on-orbit capability.

    9. Senator Levin. General Kehler, I understand that the satellite 
ORS-1 is directly tasked by U.S. Central Command (CENTCOM) in contrast 
to the normal tasking process for large overhead systems--do you find 
that is a new paradigm that is beneficial to DOD?
    General Kehler. ORS-1 was just recently declared operational, and 
we are currently in the process of evaluating the overall utility of 
the mission, including its tasking process. The original requirements 
for ORS-1 were to support CENTCOM, so this system is operating exactly 
as it was designed. CENTCOM values their ability to fully manage 
collection operations for the ORS-1 satellite, and appreciates the 
ability to task ORS-1 for high-value image collection where the 
priority of that collection is certain. We are still evaluating the 
overall return-on-investment for space capabilities designed to support 
and be tasked by a single regional commander.

                      COMBINED SPECTRUM OPERATIONS

    10. Senator Levin. General Kehler, you have under your command 
three operations that can be used together: space, cyber, and 
electronic warfare. Are you developing an operations plan to 
synchronize all three elements?
    General Kehler. Yes. STRATCOM continually reviews the adequacy of 
operational plans to ensure our ability to leverage capabilities across 
all domains to best meet national policy and strategy objectives. As 
necessary, we make changes or develop new plans to synchronize all 
available elements to ensure national security.

    11. Senator Levin. General Kehler, what do you judge as the largest 
policy issue in such a combined operation?
    General Kehler. In my judgment, the largest policy issue in such a 
combined operation would be the lack of policy precedent regarding 
military action in cyberspace.

    12. Senator Levin. General Kehler, where do you judge the Services 
are in their cyber efforts and would they be capable today of 
synchronizing cyber, space, and electronic warfare?
    General Kehler. One of our greatest challenges in cyberspace is to 
build and sustain a cyber-workforce which can bring the capacity and 
capabilities required to conduct operations quickly across the full 
range of our missions and threats. STRATCOM, CYBERCOM, and the Service 
Cyber components are working hard to identify critical capability gaps 
within our cyber-workforce related specifically to emerging threats and 
our ability to integrate cyber, space, and electronic warfare efforts. 
These domains require technically demanding expertise in a highly 
competitive environment to continue to build capability and capacity. 
Efforts to synchronize cyber, space and electronic warfare are ongoing 
to achieve the requirements and meet mission demands.

                   GLOBAL MISSILE DEFENSE INTEGRATION

    13. Senator Levin. General Kehler, one of your functional commands 
is the Joint Functional Component Command for Integrated Missile 
Defense (JFCC-IMD). As your prepared statement indicates, STRATCOM 
leads an annual global ballistic missile defense assessment and 
considers the missile defense priorities of all the combatant commands. 
You also state that over the past year, our efforts ``substantially 
improved our overall missile defenses.'' Based on this assessment, do 
you believe the current and planned missile defense capabilities, such 
as the Ground-based Midcourse Defense (GMD) system and the European 
Phased Adaptive Approach (EPAA) to missile defense, are providing 
capabilities needed to protect our Homeland, our forward-based forces, 
and our allies?
    General Kehler. Based on STRATCOM annual assessments, I am 
confident national and regional missile defense systems adequately 
protect our homeland, deployed forces, allies, and friends against the 
intended threat. However, as adversaries' ballistic missile 
capabilities improve in range, accuracy, countermeasures, numbers, and 
ability to conduct structured attacks, it becomes increasingly 
important to continue improving GMD system capabilities and 
reliability, and to deploy the remaining phases of the EPAA on 
schedule.

                    PRECISION TRACKING SPACE SYSTEM

    14. Senator Levin. General Kehler, STRATCOM has expertise and 
responsibilities for a variety of intersecting issues, including 
missile defense and space-based sensors that provide missile warning. 
Your prepared statement mentions our ``efforts to provide persistent 
detection'' of missiles. I gather STRATCOM has done an analysis of the 
Precision Tracking Space System being developed by the Missile Defense 
Agency (MDA). Do you believe that system would provide a useful and 
persistent capability to detect and track ballistic missiles?
    General Kehler. We conducted a remote sensor assessment during the 
fiscal year 2013 Program Review. The assessment compared PTSS 
operational capabilities and attributes with airborne infrared sensor 
and ground-based sensor capabilities and limitations. The results 
showed PTSS can significantly contribute to both homeland and regional 
missile defense by providing continuous threat tracking to facilitate 
large raid handling, engage-on-remote capability, and shoot-assess-
shoot tactics against post-boost targets. Placing persistent sensors in 
space offers the opportunity to engage threats launched from land or 
sea, free of geographic, strategic warning time, or host nation basing 
complexity constraints.

                         KILL VEHICLE TEST PLAN

    15. Senator Levin. General Kehler, the MDA has designed a fix to 
the problem that caused a flight test failure of the GMD system, using 
the newest model of kill vehicle. MDA plans a flight test in December 
to demonstrate that the fix works--using the hardware planned for 
operational deployment--before we build, refurbish, or assemble more of 
the kill vehicles that failed. On March 13, the Commander of U.S. 
Northern Command (NORTHCOM), General Jacoby, told this committee he 
supports that plan to test and demonstrate the system. Do you support 
the MDA plan to test and demonstrate that the fix to the GMD kill 
vehicle works before producing or deploying more of them?
    General Kehler. I support MDA plans to conduct a non-intercept GBI 
flight test and performance demonstration with an upgraded kill vehicle 
prior to resuming deployment of the system.

                MISSILE DEFENSE COOPERATION WITH RUSSIA

    16. Senator Levin. General Kehler, in February, an international 
group of experts, called the Euro-Atlantic Security Initiative, issued 
a report advocating missile defense cooperation between Russia and the 
United States, with our North Atlantic Treaty Organization (NATO) 
allies. The group proposed that the partners should share satellite and 
radar early warning data, thus improving their ability to detect, 
track, and defeat ballistic missiles from the Middle East. This is 
consistent with U.S. and NATO proposals for cooperation with Russia on 
missile defense. Do you agree that sharing such early warning data, 
which would involve sharing classified information subject to national 
disclosure policy, could improve our ability to defeat ballistic 
missiles launched from Iran, and that such cooperation could benefit 
our security?
    General Kehler. Sharing satellite and early earning data with 
Russia as part of the principal of information sharing, is beneficial 
in increasing transparency and building confidence in Russia that the 
European Missile Defense system is not directed at them. In order to 
improve our ability to defeat ballistic missiles launched from Iran, 
only Russian radars which are both technically interoperable with our 
IMD systems and in the right geographic position could aid in the 
defeat of these missiles. Our ability to defeat Ballistic Missile (BM) 
launches from Iran may be improved through integration of U.S. and 
Russian BM warning systems and the sharing of classified information. 
However, section 1244 of the fiscal year National Defense Authorization 
Act requires congressional notification by the President 60 days prior 
to any instance in which the U.S. Government plans to provide such 
information to the Russian Federation.

    17. Senator Levin. General Kehler, do you agree that such 
cooperation with Russia could send a powerful signal to Iran that the 
United States and Russia are united in opposing Iran's acquisition of 
long-range missiles and nuclear weapons?
    General Kehler. The inclusion of Russia as part of the 
international communities' opposition to the proliferation and use of 
ballistic-missile technologies would be a welcome addition and 
demonstrate a united stance against the pursuit of weapons of mass 
destruction.
                                 ______
                                 
           Questions Submitted by Senator Joseph I. Lieberman

                    NUCLEAR PIT PRODUCTION SHORTFALL

    18. Senator Lieberman. General Kehler, I share many of the concerns 
my colleagues have already expressed concerning the shortfalls in 
funding and capacity for the modernization of our nuclear weapons. Does 
STRATCOM still have a validated requirement for the production of 50 to 
80 plutonium pits per year starting in 2021?
    General Kehler. Yes, DOD's current plutonium pit production 
requirement is 50 to 80 pits per year to respond to technical failure 
of a warhead and remove reliance on the nondeployed stockpile for 
hedging. The President's Budget submission for 2013 delays this 
capability until at least 2028.

    19. Senator Lieberman. General Kehler, the fiscal year 2013 
National Nuclear Security Administration (NNSA) budget request proposes 
to delay the construction of the Chemistry and Metallurgy Research 
Replacement-Nuclear Facility (CMRR-NF) for 5 years. The director of Los 
Alamos National Laboratory has stated that without the CMRR-NF he 
cannot meet the requirement of 50 to 80 pits per year. What steps are 
you taking to try to mitigate the expected shortfall in pit production 
capability?
    General Kehler. We are working in an interagency forum to identify 
options to mitigate this delay, including increasing interim pit 
production capability at existing facilities. The Nation needs to have 
a plutonium capability to support our deterrent, dismantle retired 
weapons, and support non-proliferation initiatives.

    20. Senator Lieberman. General Kehler, do you believe that there is 
any risk that this stated 5-year delay to the CMRR-NF will become 
lengthier or turn into a permanent cancellation?
    General Kehler. The nation requires an executable plutonium 
production strategy to support the deployed force and reduce reliance 
on the nondeployed stockpile. DOD and the Department of Energy (DOE) 
are currently working on a revised nuclear weapons and infrastructure 
modernization plan to address such risk.

    21. Senator Lieberman. General Kehler, in that event, how would you 
address the pit production shortfall to ensure the continued 
reliability and credibility of our nuclear deterrent?
    General Kehler. Today's stockpile is safe, secure, and effective 
and can be certified without CMRR-NF. Both Departments are examining 
options to provide an interim pit production capability within the 
existing facilities. Until CMRR-NF or an equivalent capability is 
available, life extension options may be limited and we will continue 
to rely on the nondeployed stockpile to manage risk.

    22. Senator Lieberman. General Kehler, do you believe there is a 
risk to the long-term reliability and credibility of the U.S. nuclear 
arsenal if we continue to defer modernization?
    General Kehler. While I am extremely confident in today's deterrent 
force, deferring modernization does increase risk across the nuclear 
enterprise. Maintaining the credibility and long-term reliability of 
the nuclear force will require continued investments in sustainment, 
modernization, life extension, and replacement programs. While the 
fiscal environment may impose difficult choices, we are prioritizing 
our investments to maintain a safe, secure, and effective nuclear 
deterrent force.

    23. Senator Lieberman. General Kehler, can you highlight some of 
the specific manifestations of that risk for us?
    General Kehler. As the force continues to age, the risk of 
technical failure increases, certifying the stockpile will likely 
become more difficult, and sustainment costs will rise. One specific 
risk of delayed NNSA infrastructure modernization is our inability to 
respond to an unexpected technical failure in a timely way.
                                 ______
                                 
            Questions Submitted by Senator Claire McCaskill

                       RECRUITMENT AND RETENTION

    24. Senator McCaskill. General Alexander, you stated in your 
testimony that U.S. Cyber Command (CYBERCOM) is critically short of the 
skills and the skilled people necessary to manage our networks and 
protect U.S. interests in cyberspace. Our prosperity and our security 
now depend on a very skilled technical workforce, which is in high 
demand both in government and industry. You stated that you are 
reviewing recruitment and incentive programs in order to build and 
retain the best-of-the-best cyber defenders. Can you please provide 
specific details on what CYBERCOM is doing to compete with the private 
sector when it comes to hiring and retaining the top talent in cyber 
operations?
    General Alexander. Initial assessment and recruiting to identify 
the best candidates possible to support the cyberspace mission is 
critical. The Joint Cyberspace Training and Certification Standards 
(JCT&CS) provides the Services an overarching framework for training 
the current and future cyberspace workforce spanning a career. JCT&CS 
also provides key insights into the preliminary knowledge, skills, and 
abilities needed to ensure success. Service recruiting efforts are 
advised by these standards and special screening techniques and 
evaluations will be developed to identify suitable candidates. In 
addition, it appears that talented personnel are drawn to the newness 
of this command and our challenging mission. We anticipate the 
competition for cyber talent to become more intense. We are working 
with DOD to ensure appropriate recruiting/retention policies and 
incentives are developed so we can recruit top quality talent. To 
address the anticipated challenges in the short-term, we are 
collaborating with STRATCOM and the Office of the Secretary of Defense 
to permanently extend the temporary hiring authorities granted to us 
(e.g. Schedule A--which is set to expire December 2012). In the long-
term, we are advocating for: special salary rates, tuition 
reimbursement, access to specialized training and robust professional 
development opportunities as incentives for potential employees and to 
retain them once they are hired. Underlying all of these initiatives, 
we support the development of separate cyber operations/planner career 
fields for our civilian and military personnel. Delays in recruiting 
and retaining cyber talent could adversely affect the command's future 
operational capability.

    25. Senator McCaskill. General Alexander, does CYBERCOM have the 
necessary authority to adjust policies to attract and retain the level 
of talent that is necessary to operate our networks and protect U.S. 
interests in cyberspace?
    General Alexander. Currently, CYBERCOM does not have all of the 
necessary authorities to adjust policies aimed at attracting and 
retaining skilled military and civilian cyber professionals. The 
responsibility to recruit and retain military members lies with each of 
the Services. While CYBERCOM can influence the skill-levels and 
training required to accomplish the cyber mission, the Services are 
responsible for the recruitment, retention, organization, training and 
equipping functions for their personnel. The ability to adjust civilian 
personnel policies requires approval from agencies and offices outside 
of CYBERCOM. The extension or permanent institution of direct hiring 
authorities for CYBERCOM will require coordination and approval from 
offices within DOD and Office of Personnel Management (OPM). Likewise, 
the creation of a more flexible personnel system, which would help 
CYBERCOM keep pace with market demand for high-demand skill sets, will 
require coordination and approval from our Executive Agency (the 
Department of the Air Force), OPM, and perhaps Congress. For example, I 
require the ability to dynamically adjust duty responsibilities and pay 
commensurate with changing skills, mission requirements, and 
organizational structure. Unfortunately, the tools at my immediate 
disposal are not flexible enough to guarantee CYBERCOM has the type of 
force necessary to operate our networks and protect U.S. interests in 
cyberspace.

                              COORDINATION

    26. Senator McCaskill. General Alexander, CYBERCOM is tasked with 
centralizing and coordinating the cyber activities of DOD. However, 
each of the Services, along with each of the combatant commands, have 
cyber capabilities and responsibilities that do not fall within the 
chain of command of CYBERCOM. What is CYBERCOM's relationship to each 
of the Services?
    General Alexander. Currently, CYBERCOM does not have all of the 
necessary authorities to adjust policies aimed at attracting and 
retaining skilled military and civilian cyber professionals. The 
responsibility to recruit and retain military members lies with each of 
the Services. While CYBERCOM can influence the skill-levels and 
training required to accomplish the cyber mission, the Services are 
responsible for the recruitment, retention, organization, training and 
equipping functions for their personnel. The ability to adjust civilian 
personnel policies requires approval from agencies and offices outside 
of CYBERCOM. The extension or permanent institution of direct hiring 
authorities for CYBERCOM will require coordination and approval from 
offices within DOD and OPM. Likewise, the creation of a more flexible 
personnel system, which would help CYBERCOM keep pace with market 
demand for high-demand skill sets, will require coordination and 
approval from our Executive Agency (the Department of the Air Force), 
OPM, and perhaps Congress. For example, I require the ability to 
dynamically adjust duty responsibilities and pay commensurate with 
changing skills, mission requirements, and organizational structure. 
Unfortunately, the tools at my immediate disposal are not flexible 
enough to guarantee CYBERCOM has the type of force necessary to operate 
our networks and protect U.S. interests in cyberspace.

    27. Senator McCaskill. General Alexander, how does CYBERCOM 
coordinate the various cyber activities and responsibilities of the 
Services?
    General Alexander. CYBERCOM maintains a mutually supportive 
relationship with each of the Services through the established CYBERCOM 
Service components that I mentioned in my response to Question #26. All 
CYBERCOM Service components are under Operational Control (OPCON) of 
CYBERCOM. The Transitional Cyberspace Operations Command and Control 
Concept of Operations, signed by the Office of the Secretary of Defense 
on 1 May 2012, provides guidance for responsibilities. The Services are 
responsible for protecting and sustaining their core business functions 
of recruiting, organizing, training, and equipping their forces. They 
are also responsible for executing information assurance, network 
operations, certification and accreditation, and computer network 
defense functions assigned to them in accordance with DOD regulations, 
orders, or directives. We will continue to work closely with the 
Services to develop mutually acceptable ways to satisfy both Service 
and Joint warfighting requirements. Effective command and control is 
critical to achieve unity of effort across cyberspace. Partnership, 
collaboration, and cooperation amongst the Services, combatant 
commands, and other agencies are the keys to successful cyberspace 
operations.

    28. Senator McCaskill. General Alexander, does CYBERCOM have the 
authority to override decisions regarding cyber activities carried out 
by each of the Services?
    General Alexander. Yes, CYBERCOM has the authority to override any 
decisions regarding cyber activities carried out by each of the 
Services. The DOD Global Information Grid (GIG) is a series of 
interconnected networks, and actions on one portion of the GIG could 
cause cascading negative effects on other portions of the GIG. CYBERCOM 
enacts this authority through the publishing of Operations Orders and 
Directives to each of the Services. CYBERCOM will work closely with the 
Services on all aspects of cyberspace operations that may affect 
Service equities or missions. The Services have the responsibility to 
execute information assurance tasks, operate Service specific networks, 
conduct certification and accreditation, and computer network defense 
functions assigned to them in accordance with DOD regulations, orders, 
or directives. Under the Unified Command Plan, CYBERCOM is tasked with 
synchronizing planning for cyberspace operations, and will do so in 
coordination with other combatant commands, the Services, and as 
directed, appropriate U.S. Government agencies.

    29. Senator McCaskill. General Alexander, what is CYBERCOM's 
relationship to each of the combatant commands?
    General Alexander. We have an ongoing and maturing operational 
relationship with each of the combatant commands. CYBERCOM has deployed 
Cyberspace Support Elements (CSEs) to PACOM and CENTCOM and will 
eventually place CSEs at the other combatant commands as resources 
permit, and as directed by the Office of the Secretary of Defense 
approved Transitional Cyberspace Operations Command and Control Concept 
of Operations (dated 1 May 2012). The CSEs link our global and regional 
planning with the theater and operational planning conducted by each 
combatant command, provide significant and timely insight and 
assistance in defining combatant command cyber operational 
requirements, facilitate critical reach-back to Fort Meade, and become 
the combatant command's advocate among competing priorities for access 
and intelligence to support cyberspace operations. I have tasked each 
CYBERCOM Service component to ``lead the joint effort to provide cyber 
support'' for a specific combatant command. For example, U.S. Army 
CYBERCOM is tasked to provide support to CENTCOM and U.S. Air Force 
CYBERCOM is tasked to support EUCOM. In efforts of a global or trans-
regional nature, CYBERCOM generally is designated as the supported 
command with the appropriate combatant commands designated as 
supporting command. Where operations are projected within a specific 
area of operations, it is more common for the geographic combatant 
commander to have the lead as supported command, with CYBERCOM 
designated as the supporting command. While each operational situation 
is different, I have confidence in our ability to synchronize our 
activities with the combatant commands.

    30. Senator McCaskill. General Alexander, how does CYBERCOM 
coordinate the various cyber activities and responsibilities of the 
combatant commands?
    General Alexander. The Office of the Secretary of Defense newly 
published Transitional Cyberspace Operations Command and Control 
Concept of Operations, dated 1 May 2012, directs CYBERCOM to coordinate 
various cyber activities and responsibilities of the combatant commands 
through CYBERCOM Cyber Support Elements (CSE). Each combatant command 
will have a fully functioning CSE which remains under OPCON of 
CYBERCOM, but is in direct support of its assigned combatant command 
through the Joint Cyber Center (JCC). The JCC functions as the nexus 
for the combatant command cyberspace enterprise. CYBERCOM has deployed 
CSEs to PACOM and CENTCOM and will eventually place CSEs at the other 
combatant commands as resources permit. The CSE's mission is to 
facilitate geographic/functional cyber operations for the combatant 
commander and enable CYBERCOM to support global cyberspace operations. 
When resourced, CYBERCOM CSEs will perform forward liaison function and 
will assist the supported combatant command and CYBERCOM by performing 
the following tasks:

    (1)  Provide functional and technical expertise to the combatant 
command/JCC staff on the subjects of cyberspace planning, operations, 
exercises, development of cyber joint intelligence assessment products, 
intelligence collection and analysis, targeting, and assessment of 
operational readiness.
    (2)  Reach back to Headquarters, CYBERCOM and CYBERCOM Service 
components to enable coordination, deconfliction, and synchronization 
of supporting CYBERCOM effects as requested by the combatant command.
    (3)  Inform the combatant commander of orders issues by CYBERCOM, 
and inform CYBERCOM of combatant command network events.
    (4)  Ensure combatant command's requirements for global and 
regional threat warnings are clearly communicated to CYBERCOM.
    (5)  Relay to CYBERCOM the impacts to combatant command and its 
subordinate component's mission critical operations that result from 
capability and capacity gaps in assigned or attached cyberspace units, 
as identified by the combatant command.
    (6)  Report CYBERCOM readiness information relevant to the 
combatant command JCC, and monitor status reporting of combatant 
command assigned or attached cyberspace units and capabilities for 
CYBERCOM.

    31. Senator McCaskill. General Alexander, does CYBERCOM have the 
authority to override decisions regarding cyber activities carried out 
by each of the combatant commands?
    General Alexander. Yes, CYBERCOM has the authority to override 
decisions regarding cyber activities carried out on the DOD GIG by the 
combatant commands. The GIG is a series of interconnected networks, and 
actions on one portion of the GIG could cause cascading negative 
effects on other portions of the GIG. CYBERCOM enacts this authority 
through the publishing of Operations Orders and Directives to each of 
the combatant commands. CYBERCOM will work closely with the combatant 
commands on all aspects of cyber operations that may affect combatant 
command equities or missions.

                             NUCLEAR TRIAD

    32. Senator McCaskill. General Kehler, you have stated that our 
Nation needs to maintain the current nuclear triad of Submarine 
Ballistic Missile, Intercontinental Ballistic Missiles (ICBM), and 
nuclear-capable heavy bombers. A viable nuclear force requires 
sufficient force structure, expertise, and industrial-based support for 
weapons. What is being done to ensure that the industrial base for 
nuclear weapons is being maintained?
    General Kehler. The fiscal year 2013 budget request continues to 
fund numerous delivery platform, weapon, and facility sustainment and 
modernization programs that exercise critical scientific, engineering, 
and production skills across the industrial base. Specifically, NNSA's 
weapons infrastructure continues to be transformed with facility 
improvements in uranium processing and handling, non-nuclear component 
production, high explosive manufacturing, and radiological research. 
The most effective steps we can take to ensure the industrial base for 
nuclear weapons is being maintained is by continuing to support the 
life extension, surveillance, and sustainment programs needed to ensure 
a safe, secure, and effective deterrent force.

    33. Senator McCaskill. General Kehler, how can we ensure that the 
nuclear force is not hollowed out?
    General Kehler. To avoid a hollow force, DOD and DOE must ensure 
adequate sustainment, modernization, and recapitalization of the Triad; 
ongoing surveillance and maintenance of the stockpile; and sustained 
investments in supporting infrastructure and the highly specialized and 
experienced human capital needed take us to the future.

    34. Senator McCaskill. General Kehler, can you talk about what role 
the B-2 bomber plays in contributing to the nuclear triad and its 
enduring value to U.S. national security as the U.S. nuclear strategy 
continues to evolve for 21st century missions?
    General Kehler. The B-2 is an integral part of the nuclear triad 
and our Nation's sole penetrating dual-capable bomber. It provides the 
President a flexible capability to project conventional and nuclear 
power worldwide regardless of adversary anti-access/area denial 
strategies.

                               NEW START

    35. Senator McCaskill. General Kehler, in April 2010, the United 
States and Russia signed the New Strategic Arms Reduction Treaty (New 
START). The Treaty places certain limits on U.S. and Russian strategic 
offensive nuclear forces, including limits on delivery vehicles and 
numbers of warheads. As commander of STRATCOM, what is your assessment 
of the New START's effects on U.S. national security interests?
    General Kehler. New START enhances U.S. national security interests 
because it constrains future Russian strategic nuclear force levels and 
provides us transparency into Russian strategic forces via outside 
access in order to verify compliance. The treaty permits us to sustain 
and modernize our nuclear force and to mix and posture that force as 
needed to meet national security objectives.

    36. Senator McCaskill. General Kehler, how will U.S. national 
security be strengthened as the United States and Russia complete 
implementation of the New START?
    General Kehler. U.S. national security will be strengthened as the 
United States and Russia complete the implementation of New START 
because it will provide transparency and limit the potential future 
growth of strategic arsenals.
                                 ______
                                 
               Questions Submitted by Senator Mark Udall

                    CYBER ATTACK IN THE PERSIAN GULF

    37. Senator Udall. General Alexander, what do we understand about 
the Iranian capability to conduct a cyber attack on the electricity 
grid or Supervisory Control and Data Acquisition (SCADA) systems in the 
Persian Gulf?
    General Alexander. [Deleted.]

    38. Senator Udall. General Alexander, are we monitoring that 
capability and their interest in it closely enough to get ahead of a 
problem?
    General Alexander. [Deleted.]

    39. Senator Udall. General Alexander, who gets those reports, how 
often are they generated, and who else should see these reports?
    General Alexander. [Deleted.]

    40. Senator Udall. General Alexander, who besides the Iranians is 
being monitored for this capability and are we monitoring all potential 
cyber attackers on this very precious region?
    General Alexander. [Deleted.]

          vulnerability of electrical grid in the middle east
    41. Senator Udall. General Alexander, do we understand the 
constitution and the vulnerability of the electricity grid in the 
Persian Gulf well enough to measure the potential impact on the oil 
production and transportation system, especially but not limited to the 
oil refineries there?
    General Alexander. [Deleted.]

    42. Senator Udall. General Alexander, do the Gulf Cooperation 
Council (GCC) countries (Saudi Arabia, Qatar, Bahrain, United Arab 
Emirates, Kuwait, and Oman) or a subset of those have a single grid?
    General Alexander. [Deleted.]

    43. Senator Udall. General Alexander, are those country grids 
interconnected as they are here in the United States between Canada and 
Mexico, or is each country's grid separate both physically and by SCADA 
system management, so a cyber attack might take out one country's power 
and refining but not the next?
    General Alexander. [Deleted.]

    44. Senator Udall. General Alexander, does anyone keep spare large 
electric transformers in a safe and invulnerable location for grid 
reconstitution?
    General Alexander. [Deleted.]

    U.S. MILITARY DEPENDENCE ON COMMERCIAL POWER GRID IN MIDDLE EAST

    45. Senator Udall. General Alexander, is the U.S. military in 
Bahrain, Dubai, and other locations in the Gulf dependent on the 
electricity generated in the host country, and what's our back-up plan 
if the electricity suffers a prolonged grid outage?
    General Alexander. The U.S. military typically uses various 
electricity sources, depending on the location and mission, with pre-
planned back-up sources. Additionally, we understand both the Joint 
Staff and the Office of the Secretary of Defense initiated Operational 
Energy Divisions to address combat capabilities, their respective fuel 
and energy trade-offs, as well as reliance on commercial 
infrastructure. This initiative was a result of the 2008 Defense 
Science Board Task Force on DOD Energy Strategy. Other elements of DOD 
may be able to provide amplification on this issue.

    46. Senator Udall. General Alexander, how much storage capability 
do we have there for emergency diesel electric generators and will our 
back-up electric power capability cover all our mission critical 
functions or only a subset, and if so, which subsets?
    General Alexander. The U.S. military typically maintains various 
amounts of storage capability, depending on the location and mission, 
with pre-planned back-up capability. Additionally, we understand both 
the Joint Staff and the Office of the Secretary of Defense initiated 
Operational Energy Divisions to address combat capabilities, their 
respective fuel and energy trade-offs, as well as reliance on 
commercial infrastructure. This initiative was a result of the 2008 
Defense Science Board Task Force on DOD Energy Strategy. Other elements 
of DOD may be able to provide amplification on this issue.

    47. Senator Udall. General Alexander, have the GCC countries' 
militaries thought about this problem and are they prepared for it?
    General Alexander. After coordination with other elements of the 
Department, we understand in April 2012 Oman hosted a Cyber Defense 
conference for the GCC in Muscat (agenda available at 
www.cyberdefencesummit.com/summit/agenda). As GCC countries continue to 
develop their IT infrastructure and heavy reliance on information and 
communications technology, governments must ensure they protect their 
critical assets. The repercussions of a cyber-attack against important 
institutions and sectors including energy and utilities can have an 
immense impact on the country's economic prosperity and undermine its 
sovereignty. In many countries given the typical mandate for militaries 
to protect civilian infrastructure from physical attack, cybersecurity 
responsibilities are divided between military and civilian leadership, 
both of which were represented at the Oman conference.
    The Middle East and particularly the Gulf remains a significant 
concern for international cyber warfare. As a specific example, for 
numerous reasons--including the probability that the fate of the global 
economy relies on Saudi Arabia, which heavily deploys computer networks 
to maintain productivity in one of the world's most strategic energy 
producing regions-strong commitment to Saudi cybersecurity is 
paramount.

    48. Senator Udall. General Alexander, have the electric companies 
or their equivalents in the Gulf become aware of the potential for 
cyber attacks as a part of war, and what are they doing to prepare and 
respond to the vulnerabilities and the threats?
    General Alexander. The concerns over cyber attacks are well known 
and publicized across the spectrum of conflict, from peacetime to war 
and across various sectors. Electric power producers can deploy a 
number of products from a variety of venders to help protect 
information systems from cyber attack. After coordination with other 
elements of the Department, we understand in April 2012, Oman hosted a 
Cyber Defense conference for the GCC in Muscat (agenda available at 
www.cyberdefencesummit.com/summit/agenda). As GCC countries continue to 
develop their IT infrastructure and heavy reliance on information and 
communications technology, governments must ensure they protect their 
critical assets. The repercussions of a cyber-attack against important 
institutions and sectors including energy and utilities can have an 
immense impact on the country's economic prosperity and undermine its 
sovereignty. In many countries given the typical mandate for militaries 
to protect civilian infrastructure from physical attack, cybersecurity 
responsibilities are divided between military and civilian leadership, 
both of which were represented at the Oman conference.
    The Middle East and particularly the Gulf remains a significant 
concern for international cyber warfare. As a specific example, for 
numerous reasons--including the probability that the fate of the global 
economy relies on Saudi Arabia, which heavily deploys computer networks 
to maintain productivity in one of the world's most strategic energy 
producing regions-strong commitment to Saudi cybersecurity is 
paramount.
    Additionally, other elements of DOD may be able to provide 
amplification on this issue.

  MOVING CRUDE OIL THROUGH THE PERSIAN GULF DURING A PROLONGED POWER 
                                 OUTAGE

    49. Senator Udall. General Alexander, I understand that 77 percent 
of the crude oil leaving the Straits of Hormuz travels in one form or 
another to the Pacific. China gets 50 percent of its crude from inside 
the Straits, and Japan gets 65 percent of its crude from inside the 
Straits. Australia, India, Singapore, and the U.S. military in the 
Pacific and the Indian Ocean are also dependent on that oil for both 
military tactical fuels and for electricity in many cases. What will a 
region-wide cyber attack on the electricity grid that results in a 
prolonged power outage in the Persian Gulf do to the ability to move 
crude oil in and out of there at the current rate, especially the oil 
and fuel that supports the U.S. military in the Indian Ocean, such as 
at Diego Garcia, and all the way into the Pacific Ocean?
    General Alexander. The concerns over cyber attacks are well known 
and publicized across the spectrum of conflict, from peacetime to war 
and across various sectors. After coordination with other elements of 
the Department, we understand in April 2012, Oman hosted a Cyber 
Defense conference for the GCC in Muscat (agenda available at 
www.cyberdefencesummit.com/summit/agenda). As GCC countries continue to 
develop their IT infrastructure and heavy reliance on information and 
communications technology, governments must ensure they protect their 
critical assets. The repercussions of a cyberattack against important 
institutions and sectors including energy and utilities can have an 
immense impact on the country's economic prosperity and undermine its 
sovereignty. In many countries given the typical mandate for militaries 
to protect civilian infrastructure from physical attack, cybersecurity 
responsibilities are divided between military and civilian leadership, 
both of which were represented at the Oman conference.
    Additionally, we understand both the Joint Staff and the Office of 
the Secretary of Defense initiated Operational Energy Divisions to 
address combat capabilities, their respective fuel and energy trade-
offs, as well as reliance on commercial infrastructure. This initiative 
was a result of the 2008 Defense Science Board Task Force on DOD Energy 
Strategy.
                                 ______
                                 
          Questions Submitted by Senator Kirsten E. Gillibrand

                               ROME LABS

    50. Senator Gillibrand. General Alexander, I am very pleased to see 
that cyber is one of the areas where DOD is focusing. So, I was very 
disappointed to see that the budget documents reflect almost a 20 
percent cut in funding for the Information Directorate research at the 
Air Force Research Lab in Rome, New York. The Rome Lab leverages 
successful collaborations with universities and companies in what is a 
very technology-rich environment in central New York. This cut really 
does not make sense to me. While I know you do not oversee the Rome 
Lab, you work with and rely on some of their research. In fact, the 
National Security Agency (NSA) consistently provides Rome Lab with 
additional funding. Can you tell me about your experience in 
collaborating with the Air Force Research Lab in Rome, NY, and what 
future projects you expect to undertake?
    General Alexander. We have a strong collaborative effort with Air 
Force Research Lab (AFRL) in Rome, NY through U.S. Air Force Cyber/24th 
Air Force. We have directly invested Research Development Test and 
Evaluation funds in the past towards eight research efforts at AFRL 
under a CYBERCOM-run program called ``Call for Proposal'' and we 
currently fund one research effort. AFRL is seeking to embed up to two 
individuals into CYBERCOM to work on advanced concepts and 
experimentation and technology discovery in support of CYBERCOM's 
Science and Technology and R&D roadmaps. CYBERCOM has a seat on the OSD 
Cyber S&T Priority Steering Council EXCOM governance board which 
provides the roadmap across the Future Years Defense Program for all 
labs including AFRL. As the CYBERCOM Service Components continue to 
organize, train, and equip their respective forces, we will work more 
with 24th Air Force in supporting their needs. We expect AFRL to 
undertake more efforts that are in alignment with 24th Air Force 
priorities (ex. anti-access and area denial support).

    51. Senator Gillibrand. General Kehler, the Air Force cyber science 
and technology funding is going down in fiscal year 2013 and fiscal 
year 2014--why is that?
    General Kehler. The Department's new strategic guidance highlights 
the increasing importance of cyber operations which is why it is one of 
the few areas where investments were increased in the administration's 
budget request for fiscal year 2013. We continue to work with the Air 
Force to ensure our priorities are appropriately addressed, to include 
the important work being done at Rome Labs and other cyber research 
facilities.

    52. Senator Gillibrand. General Kehler, doesn't decreasing cyber 
research undermine our ability to stay ahead in this quickly evolving 
field?
    General Kehler. Cyber research is indeed critical for the United 
States to maintain its leadership in the cyber domain. While individual 
programs may have experienced funding decreases, cyber is one of the 
few areas in which DOD increased its overall investments including 
offensive and defensive capabilities.

    53. Senator Gillibrand. General Kehler, where is cyber research 
being increased if it is decreased in the Services?
    General Kehler. As stated in Defense Budget Priorities and Choices, 
cyber is one of the few areas in which DOD increased its overall 
investments including offensive and defensive capabilities. The Defense 
Advanced Research Projects Agency program funding for cyber science and 
technology funding has been substantially increased. Additionally, 
STRATCOM has cosponsored several joint capability technology 
demonstrations for cyber research and several cyber limited objective 
experiments.


                   NATIONAL GUARD AND CYBER MISSIONS

    54. Senator Gillibrand. General Alexander, Secretary Donley has 
spoken about the Guard's unique position and assets in contributing to 
the Nation's cybersecurity, since Guard members can work on both Title 
32 and Title 10 missions, and leverage the training that their 
information technology professionals received in their civilian jobs. 
Do you plan to make use of the Guard more robustly for the cyber 
mission?
    General Alexander. CYBERCOM has a Guard and Reserve Directorate 
(GRD) who is in the initial phases of establishing habitual 
relationships with the National Guard Joint Force Headquarters (JFHQs) 
in each of the 54 States and Territories with a planned outcome over 
the coming years of establishing productive operational relationships. 
The GRD is also working through the National Guard Bureau (NGB) to 
scope current National Guard forces and capabilities. Additionally, the 
GRD is working with the NGB National Guard Coordination Center (NGCC) 
to establish a process for leveraging CYBERCOM capabilities to a State 
or Territory JFHQ request for cyber mitigation.
    The habitual relationships under development tacitly recognizes 
that the first military forces likely to respond to a cyber attack are 
National Guard elements operating under Title 32 to fulfill the 
immediate tasking by state authorities, frequently in response to 
municipal needs. CYBERCOM's developing relationships with the State and 
Territory JFHQs will reduce the timeline between cyber event and 
CYBERCOM's provision of operational information or dynamic actions to 
support the JFHQ response, even while they function under Title 32 
authorities.
    CYBERCOM will also increasingly rely upon members of the Reserve 
and National Guard during steady-state operations. The civilian IT 
sector provides cutting edge cyber expertise and capabilities. The GRD 
is working with the Office of the Secretary of Defense and the NGB to 
develop new or modify existing manpower databases in order to quantify, 
track, and leverage the cyber expertise among reservists and national 
guardsmen.
    Additionally, we are planning a Cyber Guard exercise this summer. 
This will demonstrate not only the capabilities of the National Guard, 
but also explore the command and control interfaces with the National 
Guard leadership, Department of Homeland Security, U.S. Northern 
Command and CYBERCOM. Finally, the GRD is working with NGB on looking 
at developing future National Guard units within the states with 
available manpower to fulfill identified shortfalls.

    55. Senator Gillibrand. General Alexander, I understand that 
sometimes the time that it takes to get people security clearance 
hinders your ability to work with the Guard. Is that still true?
    General Alexander. The security clearance process at CYBERCOM is 
well established. The standard for entry is to possess a Top Secret 
clearance with eligibility for Sensitive Compartmented Information and 
to have successfully passed a counter-intelligence polygraph. There are 
no additional clearance requirements levied on those National Guard 
units currently working CYBERCOM-related missions. Future units 
engaging with CYBERCOM will require the same security requirements as 
those of the command. We are currently working with U.S. Air Force 
Space Command and U.S. Army CYBERCOM to establish procedures for 
existing National Guard units with cyber expertise to meet CYBERCOM 
security procedures. As the National Guard looks to remission some 
units towards a cyber capability, the CYBERCOM Guard Reserve 
Directorate will work with National Guard Bureau to ensure that the 
correct cyber-focused Air Force and Army occupational specialty 
structures and requisite security requirements are in place.

    56. Senator Gillibrand. General Alexander, are there ways we in 
Congress can assist you, and if so, what does that mean concretely?
    General Alexander. I appreciate the collective legislative branch 
support for cybersecurity legislation that, at a minimum ensures the 
following; removes existing barriers and disincentives that inhibit the 
owners of critical infrastructure from sharing cyber threat indicators 
with the Government; ensures that infrastructure is sufficiently 
hardened and resilient.
    Regarding the National Guard and cyber missions, the States and 
Territories should be able to track those National Guard units whose 
personnel require Top Secret Sensitive Compartmented Information (SCI) 
access. We will ensure that there is sponsorship of an SCI billet 
(position) and then it will be up to the State Security Managers to 
track and provide oversight of an individual's timely compliance in 
submitting the appropriate documentation.

    57. Senator Gillibrand. General Alexander, I understand that the 
Washington National Guard's 262nd Network Warfare Squadron, for 
example, has a cyber mission. Will additional bases around the country 
receive the cyber mission?
    General Alexander. The Washington Air National Guard's 262nd 
Network Warfare Squadron (NWS) is one of several National Guard units 
with a cyber mission. Other Air National Guard (ANG) and Army National 
Guard (ARNG) units working cyber missions include:

         Delaware ANG 166th NWS, New Castle, DE;
         Kansas ANG 177th Information Warfare Squadron, 
        Wichita, KS;
         Maryland ANG 175th NWS, MD;
         Rhode Island ANG 102nd Information Warfare Squadron, 
        North Kingston, RI;
         Utah ANG 101st Information Operations Flight, Salt 
        Lake City, UT;
         Vermont ANG 229th Information Operations Squadron, 
        Northfield, VT;
         Virginia ARNG Data Processing Unit, Fairfax, VA; and
         Washington ARNG 56th Theater Information Operations 
        Group, Camp Murray, WA

    In addition to these units, there are initiatives at the State-
level to develop cyberspace capabilities among other existing 
information operations and communications units.
                                 ______
                                 
             Questions Submitted by Senator Saxby Chambliss

                          VIRTUALIZED NETWORKS

    58. Senator Chambliss. General Alexander, a promising and cost-
effective new cybersecurity technology is that of virtualized networks 
which use virtual machines inserted between the operating system and 
the network interface to provide a capability analogous to spread-
spectrum frequency-hopping radios for Internet protocol-based networks 
and devices. This capability allows for a multitude of cybersecurity 
options, including: creation of stealthy networks, permitting multiple 
peers to relay traffic, isolating attacks and rerouting them for 
analysis and response, and allowing rapid changes to a device's network 
identity. In addition, multiple robust offensive options are also 
available. Can you comment on any work CYBERCOM is doing regarding 
assessing virtualized network technologies to reduce hardware 
requirements and costs?
    General Alexander. Network virtualization offers tremendous 
opportunities to reduce cost and streamline our network footprint. 
Through DOD information technology effectiveness, we assess a large 
reduction in hardware requirements and associated costs. However, the 
opportunity to further harden our networks through virtualized 
technology is just as important. We will improve our ability to command 
and control DOD networks, standardize security configurations, and 
minimize the impact of sophisticated attacks. Finally these virtualized 
networks, can save on power, space, and cooling costs, as they 
constitute smaller devices that can consolidate more than one standard 
desktop system.
    In November 2011, I briefed the Joint Chiefs of Staff on the 
difficulty of protecting and defending the heterogeneous make-up of the 
Department's sprawling, 15,000-network Global Information Grid. I 
argued that a new Joint data-centric approach is necessary, with one 
common architecture, governance and operations instead of 4 Service and 
10 combatant command approaches. Resulting from this briefing, the DOD 
CIO's office, the Joint Staff, CYBERCOM and the Services have been 
busily engaged in defining this vision of the Joint Information 
Environment (JIE). While CYBERCOM's imperative for establishing the JIE 
is to establish a more defensible architecture, the use of virtualized 
network or cloud technologies and services in order to accomplish that 
goal will inherently reduce costs through standardization and joint use 
of hardware, software, and network components.

    59. Senator Chambliss. General Alexander, would virtualized 
networking significantly and economically enhance our cyber warfare 
capabilities by simultaneously providing defensive and offensive 
capabilities?
    General Alexander. Network virtualization offers tremendous 
opportunities to reduce cost and streamline our network footprint. 
Through DOD information technology effectiveness, we assess a large 
reduction in hardware requirements and associated costs. However, the 
opportunity to further harden our networks through virtualized 
technology is just as important. We will improve our ability to command 
and control DOD networks, standardize security configurations, and 
minimize the impact of sophisticated attacks. Finally these virtualized 
networks, can save on power, space, and cooling costs, as they 
constitute smaller devices that can consolidate more than one standard 
desktop system.
    In November 2011, I briefed the Joint Chiefs of Staff on the 
difficulty of protecting and defending the heterogeneous make-up of the 
Department's sprawling, 15,000-network Global Information Grid. I 
argued that a new Joint data-centric approach is necessary, with one 
common architecture, governance and operations instead of four Service 
and ten combatant command approaches. Resulting from this briefing, the 
DOD CIO's office, the Joint Staff, CYBERCOM and the Services have been 
busily engaged in defining this vision of the JIE. While CYBERCOM's 
imperative for establishing the JIE is to establish a more defensible 
architecture, the use of virtualized network or ``cloud'' technologies 
and services in order to accomplish that goal will inherently reduce 
costs through standardization and joint use of hardware, software, and 
network components. Offensive capabilities are not enhanced or affected 
by using virtualized networking as the basis for the JIE. The 
capabilities used for offense are separate and distinct from the 
capabilities used for defense.

    60. Senator Chambliss. General Alexander, what is CYBERCOM doing 
with respect to virtualized networking to establish stealth and 
maneuver in the cyber arena?
    General Alexander. Virtualized networking is a key component in the 
development of infrastructures that will enable CYBERCOM Service 
Components the ability to execute their mission in contested 
environments. We are collaborating with mission partners across the DOD 
to leverage this technology as a means to quickly establish logical 
presence around the world ensuring freedom of maneuver in cyberspace.

    61. Senator Chambliss. General Alexander, do you believe there is a 
disproportionate focus in the cybersecurity arena on storage and 
processing of data versus on protecting networks, and if so, is this 
appropriate?
    General Alexander. The focus in the cybersecurity arena on storage 
and processing of data versus protecting networks is not 
disproportionate. When you move into virtualized environments, storage 
and processing of data become critical to ensuring the integrity of 
virtualized environments.
                                 ______
                                 
              Question Submitted by Senator Scott P. Brown

                                SECURID

    62. Senator Brown. General Alexander, in your written statement, 
you refer to details about a cyber attack on RSA (the Security Division 
of EMC), which is a company headquartered in my home State of 
Massachusetts. You stated: ``Indeed, the systems of some non-DOD users 
were breached not long after the compromise by intruders exploiting the 
stolen certificates.'' I understand that the systems of only one non-
DOD user were attacked not long after the compromise by intruders 
attempting to exploit information stolen from RSA, and that the attack 
was unsuccessful. It is also my understanding that certificates were 
not stolen from RSA, nor was the RSA algorithm compromised, but that 
other information related to RSA's SecurID tokens was stolen. Please 
clarify your written statement submitted for the record on March 27, 
2012.
    General Alexander. During the cyber attack against RSA, the 
Security Division of EMC, the adversaries extracted information related 
to RSA's SecurID two-factor authentication products. SecurID products 
apply additional layers of security to systems requiring users to 
authenticate their identities. Alone, the information extracted during 
the attack does not put RSA SecurID customers at risk. However, in 
combination with other user data or incorrect network configurations, 
networks are more susceptible to attacks.
    In the weeks following the cyber attack on RSA, we found evidence 
of multiple non-DOD users' systems being attacked. The attackers 
demonstrated similar or equivalent tactics, techniques, and procedures 
as those used against RSA. In one case, a non-DOD user reported to the 
NSA that they had been attacked, and that they believed that 
information extracted from RSA was used to facilitate the attack. 
Although NSA investigated this intrusion, we were unable to 
independently verify that information extracted from RSA was used as 
part of the network intrusion.
    The RSA name is shared by the RSA company and a popular encryption 
algorithm invented by the founders of the RSA company. The cyber attack 
against the RSA company should not be construed as an attack or 
compromise of the RSA public key algorithm. In addition, SecurID tokens 
employ cryptographic algorithms that we believe to be sound. The 
security of the RSA algorithm and other encryption algorithms used by 
RSA products have not been affected or degraded in any way by this 
cyber attack.
                                 ______
                                 
               Questions Submitted by Senator John Cornyn

                      GOAL OF A NUCLEAR-FREE WORLD

    63. Senator Cornyn. General Kehler, in December 2010, I opposed 
ratification of the President's New START treaty, in part because of 
serious doubt about the President's long-term nuclear weapons policies. 
The reality is that nuclear weapons are proliferating in the world, not 
going away. The Russians maintain a sizeable nuclear arsenal. But, more 
alarmingly, Iran continues to make progress in its pursuit of nuclear 
weapons, North Korea's nuclear weapons program remains a serious threat 
to regional security and stability, and the full extent of the Chinese 
nuclear arsenal is not known. Nuclear weapons exist, and this is not a 
genie that we can put back in the bottle by unilaterally disarming and 
dismantling our nuclear weapons. Yet, all the while, the administration 
is reportedly contemplating deep reductions in U.S. nuclear forces. How 
realistic is the President's goal of a world without nuclear weapons?
    General Kehler. The administration has said that the goal of a 
world without nuclear weapons is a long term pursuit and the conditions 
that would ultimately permit the United States and other nations to 
give up all their nuclear weapons without risking greater international 
instability and insecurity do not exist today. Any future reductions in 
U.S. nuclear forces must strengthen deterrence of potential regional 
adversaries, strategic stability vis-a-vis Russia and China, and 
assurance of our allies and partners. In addition, it is important that 
Russia join us in any effort to move to lower levels.

    64. Senator Cornyn. General Kehler, if President Obama were to 
succeed in eliminating the entire U.S. nuclear arsenal, what effect do 
you think that would that have on the global threat picture for the 
United States?
    General Kehler. I agree with the Nuclear Posture Review (NPR) 
statement that the conditions which would ultimately permit the United 
States and others to give up their nuclear weapons without risking 
greater international instability and insecurity are very demanding and 
do not exist today. I believe that as long as nuclear weapons exist, 
the United States must sustain safe, secure, and effective nuclear 
forces to deter potential adversaries and reassure allies and partners.

                    DEEPER NUCLEAR FORCE REDUCTIONS

    65. Senator Cornyn. General Kehler, the administration is 
conducting a review of U.S. nuclear deterrence requirements, ostensibly 
to support another round of nuclear arms reductions with Russia. It 
appears, however, that the President has already determined that 
additional reductions are necessary. This past weekend, he told an 
audience in South Korea that he can ``already say with confidence that 
we have more nuclear weapons than we need.'' Yet, during consideration 
of the New START treaty, the then-commander of STRATCOM, General Kevin 
Chilton, told the Senate: ``I think the arsenal that we have is exactly 
what is needed today to provide the deterrent.'' In light of this 
authoritative statement from a subject matter expert on nuclear forces, 
how can the President subsequently conclude that we have more nuclear 
weapons than we need?
    General Kehler. I remain committed to the principle that a well-
defined strategy should drive our nuclear force requirements. STRATCOM 
is a full participant in the ongoing analysis of future deterrence 
requirements called for in the NPR, and we are providing military 
advice regarding strategies and their implications for force 
requirements.

    66. Senator Cornyn. General Kehler, we have been told that the 
deterrence relationship between the United States and Russia is stable. 
We've been told that neither side has an incentive to strike first in a 
crisis; and there is no arms race. So, in light of this stability 
achieved by our current approach, why must we reduce below New START 
levels of 1,550 warheads on 700 strategic delivery systems?
    General Kehler. Any future nuclear reductions below New START 
levels must be strategy based, continue to strengthen deterrence of 
potential regional adversaries, sustain strategic stability vis-a-vis 
Russia and China, and continue to assure our allies and partners. 
Additionally, implementation of the Stockpile Stewardship Program and 
the nuclear infrastructure investments recommended in the NPR will 
allow the United States to shift away from retaining large numbers of 
nondeployed warheads as a hedge against technical or geopolitical 
surprise, allowing reductions in the nuclear stockpile. Finally, 
Russia's nuclear force will remain a significant factor in determining 
how much and how fast we are prepared to reduce U.S. forces.

    67. Senator Cornyn. General Kehler, what justification can you 
offer for risking U.S. national security by altering U.S. nuclear 
strategy in pursuit of deeper reductions?
    General Kehler. A key premise of the 2010 NPR was that any 
successful strategy for deeper reductions must be balanced, with 
movement in one area enabling and reinforcing progress in other areas. 
For example, increased infrastructure investment and a sound Stockpile 
Stewardship Program will facilitate reductions in both deployed and 
nondeployed nuclear weapons. The elements of such a strategy must also 
be integrated, both nationally--across Federal agencies and between the 
executive and legislative branches--and internationally among a wide 
range of partner governments. An effective strategy must also be 
sustained over time, with support from a long succession of U.S. 
administrations and Congresses.

    68. Senator Cornyn. General Kehler, do you believe U.S. allies 
still feel assured under our nuclear umbrella, and if not, do you 
foresee them building up their own nuclear capabilities?
    General Kehler. Assuring our allies continues to be a fundamental 
component of STRATCOM's mission. We continuously work with our allies 
and partners on extended deterrence issues to ensure they understand 
the breadth of capability that the United States can employ and are 
positioned to make contributions to our combined deterrence capability.

    69. Senator Cornyn. General Kehler, would a shift in U.S. nuclear 
doctrine away from counterforce and flexibility toward minimum 
deterrence weaken the credibility of U.S. nuclear use on behalf of 
allies?
    General Kehler. The current nuclear employment strategy reflects 
existing guidance and objectives for the nuclear deterrent force. The 
number of deployed nuclear weapons under New START supports our current 
strategy to include extended deterrence to allies. The credibility of 
the U.S. nuclear deterrent requires we maintain a ready, trained, and 
effective force with a demonstrated willingness to implement our 
deterrent capabilities at any force level on behalf of our allies, 
partners, and the Nation.

    70. Senator Cornyn. General Kehler, do you believe that at lower 
numbers, the implications of cheating become more important?
    General Kehler. Cheating at any force level is cause for concern--
in part because it indicates intent. However, it is not always true 
that cheating provides a significant military advantage. The 
implications of cheating at lower force levels are functions of the 
force structures, capabilities, and intent of the two sides. We would 
analyze the nature of any cheating very carefully and provide a 
military assessment of the potential implications along with 
recommendations to address it.

    71. Senator Cornyn. General Kehler, would lower strategic nuclear 
force levels exacerbate the existing disparity in tactical nuclear 
weapons between Russia and the United States, and if so, wouldn't this 
affect allied calculations during future crises?
    General Kehler. I agree with the importance the NPR places on 
Russia joining us in any effort to move to lower nuclear force levels 
and its recommendation that non-strategic nuclear weapons, together 
with the nondeployed nuclear weapons of both sides, should be included 
in any future reduction discussions or agreements between the United 
States and Russia.

                         CHINA'S NUCLEAR FORCES

    72. Senator Cornyn. General Kehler, according to DOD data, since 
2001, China has perhaps tripled the size of its ICBM force. Add to this 
China's ambitions for a submarine-based nuclear force as well as 
increasing numbers of short- and medium-range ballistic missiles. Dr. 
James Miller, who is currently the acting Under Secretary of Defense 
for Policy, testified to Congress in March 2011: ``The lack of 
transparency surrounding China's nuclear programs--their pace and 
scope, as well as the strategy and doctrine that guide them--raises 
questions about China's future strategic intentions.'' His concerns 
seemed to be confirmed in December 2011, when research by Georgetown 
University revealed that China could have as many as 3,000 nuclear 
missiles and thousands of miles of underground tunnels to hide this 
arsenal. How large is this force likely to be in another 10 years?
    General Kehler. I take very seriously China's nuclear capabilities, 
intentions, forces, strategy and doctrine. I also agree that increased 
transparency in nuclear programs reduces ambiguity and the associated 
risk of misinterpreting intentions. I defer to the Intelligence 
Community assessments of China's future strategic forces and note DIA 
Director Lieutenant General Burgess' 12 February 2012 Senate testimony 
in which he indicated China currently has fewer than 50 ICBMs capable 
of reaching the United States and will probably double that number by 
2025. I do agree that China has extensive underground tunnels.

    73. Senator Cornyn. General Kehler, what is your assessment of the 
incentive that further reductions in U.S. nuclear weapons would provide 
to China and other nuclear powers to build up to U.S. and Russian 
levels?
    General Kehler. It is difficult to assess the actions others may 
take in response to situations which have yet to occur. If Chinese 
leadership should perceive a political or military advantage, an 
incentive to increase capacity could result. However, they may choose 
to maintain their current structure. U.S. nuclear forces are intended 
to deter any potential nuclear-armed adversary.

    74. Senator Cornyn. General Kehler, how many nuclear weapons does 
the United States need to maintain to convince China not to seek 
strategic equivalence?
    General Kehler. It is not possible to accurately determine the 
precise level or conditions at which the PRC leadership might elect to 
attempt to match the U.S. nuclear inventory.

                     NUCLEAR MODERNIZATION FUNDING

    75. Senator Cornyn. General Kehler, in testifying before this 
committee, you expressed concerns about the funding shortfall for NNSA 
Weapons Activities. Using the 1251 modernization plan as a baseline, 
the fiscal year 2013 request falls $372 million short, and funding 
between fiscal year 2012 and fiscal year 2017 could fall $4 billion 
short of the 1251 commitment. You noted the slips to the B-61 and W-76 
Life Extension Programs, and indicated that while it would increase 
risk, you thought it was manageable. You also expressed concerns about 
deferring the start of construction of the CMRR-NF and, perhaps most 
important, you were uncertain about the administration's alternative 
course of action for producing the necessary number of nuclear pits to 
maintain a responsive infrastructure. It seems strange that DOD would 
agree to the fiscal year 2013 funding request and alternative to CMRR-
NF without knowing whether it is technically feasible, cost-effective, 
or whether the funding will be provided in the out-years to accomplish 
these tasks. In light of these comments, what is the state of thinking 
in DOD regarding the way forward?
    General Kehler. The President's fiscal year 2013 budget request for 
NNSA Weapons Activities funds required life extension and stockpile 
stewardship programs with manageable risk. What concerns me is that we 
do not yet have an executable program defined for fiscal year 2014 
budget and beyond. To that end, STRATCOM is participating in a DOD/DOE 
interagency team to balance our weapon needs, NNSA's infrastructure and 
stockpile stewardship requirements, and projected fiscal constraints to 
ensure we maintain a safe, secure, and effective nuclear deterrent well 
into the future.

    76. Senator Cornyn. General Kehler, how could the Nuclear Weapons 
Council (NWC) approve the fiscal year 2013 budget request with so much 
uncertainty?
    General Kehler. The fiscal year 2013 budget request is sufficient 
to certify the stockpile, conduct required maintenance, and support 
fiscal year 2013 activities for ongoing and planned life extensions. 
Given the confluence of a late fiscal year 2012 appropriation and 
constrained out-year budget targets, the NWC recognized the necessity 
to move forward in fiscal year 2013 while commissioning an interagency 
working group to develop an executable plan.

    77. Senator Cornyn. General Kehler, this committee supported the 
full funding request for NNSA Weapons Activities last year. The 
committee cannot wait until DOD completes its assessment this summer. 
Will you commit to helping this committee identify efficiencies within 
the national laboratories or NNSA that could free up funding for the 
important weapons life extension programs and, perhaps, even to fund 
the construction of CMRR-NF on its original schedule?
    General Kehler. The committee has my full support to ensure the 
Nation's nuclear deterrent remains safe, secure, and reliable.

                            MISSILE DEFENSE

    78. Senator Cornyn. General Kehler, I am also particularly 
concerned regarding President Obama's recent unfortunate admission to 
Russian President Dmitry Medvedev that he is waiting until after the 
election, when he can exercise more flexibility to deal with issues 
relating to missile defense. Although not having to worry about the 
judgment of the American people on this issue may be convenient, 
allowing the President to make more concessions to the Russians, to do 
so would be antithetical to our safety and security, as well as 
dishonest and contrary to the assurances President Obama has given. In 
order to secure Senate support for the New START treaty, President 
Obama pledged to continue development and deployment of all stages of 
the PAA to missile defense in Europe. What is the precise status of the 
plan to deploy the remaining three phases of the PAA?
    General Kehler. The plan for the remaining three phases of the EPAA 
is on track. EPAA Phase II will provide a capability against short and 
medium-range threats by 2015 with the installation of an Aegis Ashore 
battery in Romania and introduction of the more capable SM-3 IB 
interceptor. EPAA Phase III will enhance capability against 
intermediate-range threats by 2018 with the installation of an Aegis 
Ashore battery in Poland and SM-3 IIA interceptor at sea and ashore 
with improved on-board discrimination and reliability. EPAA Phase IV 
will provide intercept capability against intermediate-range threats 
and an additional layer for homeland defense against non-advanced 
intercontinental-range ballistic missiles with the SM-3 IIB, an 
advanced discrimination and higher velocity interceptor.

    79. Senator Cornyn. General Kehler, President Obama's discussions 
with Russian President Dmitry Medvedev at the Nuclear Security Summit 
in Seoul do not appear to have produced any fruit, with Medvedev 
stressing that the United States and Russia remain in their respective, 
opposing positions on missile defense. Ellen Tauscher, former Under 
Secretary of State for Arms Control and International Security Affairs, 
stated at the 10th Annual Missile Defense Conference this week that the 
administration is committed to ``getting Russia inside the missile 
defense tent now,'' so that the United States can demonstrate to Russia 
that missile defense systems ``will not threaten Russia's strategic 
forces.'' She believes this conversation, and associated exchanges of 
information that have been discussed, are ``essential because Russia 
has not been convinced by our technical arguments that the NATO system 
isn't a threat even despite . . . detailed technical responses to 
Russia's inaccurate assumptions about our missile defense 
capabilities.'' It seems that Secretary Tauscher is operating based on 
a flawed assumption that Russia will eventually agree to our missile 
defense plan, despite already receiving repeated assurances and 
technical responses from the United States. What is your assessment of 
the likelihood that further dialogue will placate Russia's fears 
regarding the deployment of missile defense systems in Europe?
    General Kehler. I will defer to the Department of State to assess 
the likelihood that further dialogue will succeed in placating Russia's 
missile defense fears. The United States will proceed with missile 
defense in concert with our friends and allies. I support the policy 
and I believe that we can only be better served by working to assuage 
Russian concerns that our limited capability is not arrayed against 
their strategic nuclear forces.

    80. Senator Cornyn. General Kehler, do you believe that offering 
them concessions, such as viewing Aegis SM-3 missile defense flight 
tests, will improve the likelihood that Russia will be willing to 
cooperate in the future?
    General Kehler. It is important to maintain an open and transparent 
approach to addressing Russian concerns, which might facilitate or 
enable future missile defense cooperation. We continue to offer 
cooperative opportunities, such as inviting Russia to observe our 
recent Nimble Titan 12 capstone event, in order to further the dialogue 
on missile defense.

    81. Senator Cornyn. General Kehler, in your opinion, what would be 
the ramifications if the United States were to continue fielding the 
PAA without Russia's blessing?
    General Kehler. As long as the United States retains the support of 
our NATO allies in continuing to field these systems as part of our 
contribution to the NATO territorial missile defense capability, it may 
have no direct impact. We continue to assure the Russians that they are 
not our adversary and that we are not building this system in response 
to their strategic nuclear forces. Russia, however, has indicated that 
continued deployment could result in a military response or withdrawal 
from the New START treaty.

              FUNDING FOR THE STRATEGIC NUCLEAR DETERRENT

    82. Senator Cornyn. General Kehler, last year, Dr. James Miller 
testified to Congress that the 10-year cost of sustaining and 
modernizing U.S. strategic nuclear forces will be approximately $125 
billion over 10 years, which does not include NNSA funding for the 
nuclear weapons complex and the warheads. Assuming that amount remains 
roughly constant, that is about $12.5 billion per year for the nuclear 
deterrent, which equates to approximately 3 percent of the defense 
budget. During the Cold War, we devoted up to 25 percent of the defense 
budget on nuclear deterrence. We should bear this in mind. It's 
important for Congress to understand just how much our nuclear 
deterrent costs. What is the total that DOD plans to spend over the 
next 10 years to sustain and modernize U.S. strategic forces?
    General Kehler. The pending National Defense Authorization Act 
(NDAA) for Fiscal Year 2012 Section 1043 Report will include a 
breakdown of DOD's nuclear enterprise funding. As stated in the 
Secretaries' memorandum to the committees, the DOE portion will be 
delivered later this year.

    83. Senator Cornyn. General Kehler, please provide as soon as 
possible a breakdown of that funding by weapon system or whatever 
category makes the most sense.
    General Kehler. The pending NDAA for Fiscal Year 2012 Section 1043 
Report will include a breakdown of DOD's nuclear enterprise funding. As 
stated in the Secretaries' memorandum to the committees, the DOE 
portion will be delivered later this year.

   CONNECTION BETWEEN NUCLEAR MODERNIZATION AND REDUCTION IN NUCLEAR 
                                WEAPONS

    84. Senator Cornyn. General Kehler, the 2010 NPR stated: 
``Implementation of the Stockpile Stewardship program and the nuclear 
infrastructure investments recommended in the NPR will allow the United 
States to shift away from retaining large numbers of nondeployed 
warheads as a hedge against technical or geopolitical surprise, 
allowing major reductions in the nuclear stockpile. These investments 
are essential to facilitating reductions while sustaining deterrence 
under New START and beyond.'' In other words, the modernization program 
was intended to give us, among other things, a modern manufacturing 
capability necessary to extend the life of our nuclear weapons and to 
be able to respond to unforeseen events that may require the 
manufacture of nuclear weapons components, such as the nuclear pits. 
The logic was that once we had this capability, we would eliminate some 
of the nuclear warheads that are in the nondeployed or hedge category. 
For example, the United States has approximately 5,000 nuclear warheads 
of all types; of this, approximately 2,000 are in the operational 
category, the rest are nondeployed. If the CMRR-NF is delayed from 2021 
to 2028, at the earliest, does it not follow that we should similarly 
delay the elimination of our nondeployed or hedge weapons?
    General Kehler. There is a relationship between our nuclear 
infrastructure's capacity and responsiveness to the Nation's ability to 
respond to technical or geopolitical surprise. Today we rely on 
nondeployed weapons to manage this risk; the capability that CMRR-NF 
provides is only one of the factors that determine the size of the 
nondeployed stockpile. I continue to support the retention of 
nondeployed weapons as a hedge against risk, and believe we must 
modernize our nuclear infrastructure to sustain our deterrent force for 
the long term.

    [Whereupon, at 12:20 p.m., the committee adjourned.]

                                 
