[Senate Hearing 112-590, Part 6]
[From the U.S. Government Publishing Office]




                                                 S. Hrg. 112-590, Pt. 6

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 6

                               PERSONNEL

                               ----------                              

                   MARCH 28; APRIL 25; JUNE 21, 2012


         Printed for the use of the Committee on Armed Services











                                                  S. Hrg. 112-590 Pt. 6

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 6

                               PERSONNEL

                               __________

                   MARCH 28; APRIL 25; JUNE 21, 2012





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         Printed for the use of the Committee on Armed Services

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                      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

                                 ______

                       Subcommittee on Personnel

                      JIM WEBB, Virginia, Chairman

JOSEPH I. LIEBERMAN, Connecticut     LINDSEY GRAHAM, South Carolina
DANIEL K. AKAKA, Hawaii              SAXBY CHAMBLISS, Georgia
CLAIRE McCASKILL, Missouri           SCOTT P. BROWN, Massachusetts
KAY R. HAGAN, North Carolina         KELLY AYOTTE, New Hampshire
MARK BEGICH, Alaska                  SUSAN M. COLLINS, Maine
RICHARD BLUMENTHAL, Connecticut      DAVID VITTER, Louisiana

                                  (ii)











                            C O N T E N T S

                              ----------                              

                    CHRONOLOGICAL LIST OF WITNESSES
        Active, Guard, Reserve, and Civilian Personnel Programs
                             march 28, 2012

                                                                   Page

Rooney, Hon. Jo Ann, Acting Under Secretary of Defense for 
  Personnel and Readiness........................................     4
Hale, Hon. Robert F., Under Secretary of Defense, Comptroller, 
  and Chief Financial Officer....................................    34
Woodson, Hon. Jonathan, Assistant Secretary of Defense for Health 
  Affairs and Director of TRICARE Management Activity............    39
McGinnis, David L., Acting Assistant Secretary of Defense for 
  Reserve Affairs................................................    50
Appendix A.......................................................   113
Appendix B.......................................................   141
Appendix C.......................................................   166
Appendix D.......................................................   200
Appendix E.......................................................   206
Appendix F.......................................................   214

 Continuation of Testimony on the Active, Guard, Reserve, and Civilian 
                           Personnel Programs
                             april 25, 2012

Lamont, Hon. Thomas R., Assistant Secretary of the Army for 
  Manpower and Reserve Affairs; Accompanied by LTG Thomas P. 
  Bostick, USA, Deputy Chief of Staff G-1, U.S. Army.............   229
Garcia, Hon. Juan M., III, Assistant Secretary of the Navy for 
  Manpower and Reserve Affairs; Accompanied by VADM Scott R. Van 
  Buskirk, USN, Chief of Naval Personnel, U.S. Navy; and Lt.Gen. 
  Robert E. Milstead, Jr., USMC, Assistant Commandant for 
  Manpower and Reserve Affairs, U.S. Marine Corps................   242
Ginsberg, Hon. Daniel B., Assistant Secretary of the Air Force 
  for Manpower and Reserve Affairs; Accompanied by Lt. Gen. 
  Darrell D. Jones, USAF, Deputy Chief of Staff for Manpower, 
  Personnel and Services, U.S. Air Force.........................   270
Appendix A.......................................................   305

    Department of Defense Programs and Policies to Support Military 
                      Families with Special Needs
                             june 21, 2012

Guice, Dr. Karen S., Principal Deputy Assistant Secretary of 
  Defense for Health Affairs and Principal Deputy Director, 
  TRICARE Management Activity....................................   320

                                 (iii)

Posante, Dr. Rebecca L., Deputy Director, Office of Community 
  Support for Military Families with Special Needs, Department of 
  Defense........................................................   328
Tait, Dr. Vera F., Associate Executive Director, Department of 
  Community and Specialty Pediatrics, American Academy of 
  Pediatrics.....................................................   329
Hilton, Jeremy L., Military Spouse, Veteran, and Family Advocate.   333
  Attachments A through I........................................   341
Dawson, Dr. Geraldine, Chief Science Officer, Autism Speaks, and 
  Professor of Psychiatry, University of North Carolina at Chapel 
  Hill...........................................................   471
O'Brien, John, Director of Healthcare and Insurance, U.S. Office 
  of Personnel Management........................................   475
Appendix A.......................................................   492
Appendix B.......................................................   500

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

                              ----------                              


                       WEDNESDAY, MARCH 28, 2012

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

        ACTIVE, GUARD, RESERVE, AND CIVILIAN PERSONNEL PROGRAMS

    The subcommittee met, pursuant to notice, at 2:03 p.m. in 
room SR-232A, Russell Senate Office Building, Senator Jim Webb 
(chairman of the subcommittee) presiding.
    Committee members present: Senators Webb, Begich, 
Blumenthal, Brown, Ayotte, and Graham.
    Majority staff members present: Jonathan D. Clark, counsel; 
Gabriella E. Fahrer, counsel; and Gerald J. Leeling, counsel.
    Minority staff members present: Diana G. Tabler, 
professional staff member; and Richard F. Walsh, minority 
counsel.
    Staff assistant present: Jennifer R. Knowles.
    Committee members' assistants present: Gordon Peterson, 
assistant to Senator Webb; Lindsay Kavanaugh, assistant to 
Senator Begich; Ethan Saxon, assistant to Senator Blumenthal; 
Charles Prosch, assistant to Senator Brown; Brad Bowman, 
assistant to Senator Ayotte; and Sergio Sarkany, assistant to 
Senator Graham.

        OPENING STATEMENT OF SENATOR JIM WEBB, CHAIRMAN

    Senator Webb. Good afternoon.
    The subcommittee meets today to receive testimony from the 
Department of Defense (DOD) on military and civilian personnel 
programs contained in the administration's Defense 
Authorization Request for Fiscal Year 2013 and the Future Years 
Defense Program (FYDP).
    I am pleased to have Senator Graham by my side again this 
year as the subcommittee's ranking member.
    With us today are senior DOD leaders with whom we will 
discuss not only DOD personnel policy issues but specific 
budget items in furtherance of our subcommittee's oversight 
responsibilities, which I take very seriously. Our witnesses 
are: the Honorable Jo Ann Rooney, Acting Under Secretary of 
Defense for Personnel and Readiness; the Honorable Robert F. 
Hale, Under Secretary of Defense, Comptroller, and Chief 
Financial Officer (CFO) for DOD; Mr. David L. McGinnis, Acting 
Assistant Secretary of Defense for Reserve Affairs; and the 
Honorable Jonathan Woodson, Assistant Secretary of Defense for 
Health Affairs and Director of TRICARE Management Activity.
    Virtually every leader in DOD who testifies before the 
Senate Armed Services Committee addresses the importance of 
their personnel. In just the past few weeks, for example, we 
heard: ``as we move forward, the Department is committed to our 
most important asset, our sailors, marines, civilians, and 
their families.'' ``The individual marine is our greatest 
asset.'' ``The hallmark of our success as an Air Force has 
always been and will always be our people.'' ``The strength of 
our Army is our soldiers.''
    We agree. Taking care of our military and civilian 
personnel and their families is the priority for this 
subcommittee. There are a number of military and civilian 
personnel policy issues on our radar this year. They include 
the administration's proposal to reduce military end strength 
by more than 120,000 personnel by the end of fiscal year 2017. 
Past experience tells us this cannot be accomplished through 
attrition alone. Many servicemembers who have served multiple 
combat tours will be asked to leave the military even though 
they want to remain in the ranks. This subcommittee will seek 
to provide the Services with the force management tools 
necessary to reduce end strength in a responsible manner while 
keeping faith with those who have sacrificed so much. We also 
want to ensure that the Services have robust transition 
programs to assist servicemembers and their families as they 
leave the Active Duty military.
    DOD has just released a proposed policy change that will 
open more than 14,000 positions to women at the conclusion of 
the congressionally required notification period in a few 
months. We are encouraged that the Services are continuing to 
explore the possibility of opening additional specialties and 
positions to women.
    This subcommittee will continue to monitor the 
implementation of the Secretary of Defense's decision to 
eliminate, reduce, or reallocate 140 general and flag officer 
positions and 150 Senior Executive Service positions.
    The subcommittee remains concerned about the number of 
servicemember suicides and will continue to monitor Service 
suicide prevention policies and programs.
    Sexual assault prevention and response remains a priority 
for this subcommittee. Last year we enacted a number of 
legislative provisions to assist victims of sexual assault. 
Secretary Panetta has announced that he will have additional 
proposals this year, some of which will require legislation. We 
stand ready to work with him on this important issue.
    Our National Guard and Reserves are an integral part of the 
military forces. As an operational reserve, the Reserve 
component is an economical force multiplier, providing 
flexibility and access to valuable capabilities resident in the 
National Guard and Reserves. This subcommittee will continue 
its effort to ensure that there is adequate legislative 
authority for optimal use of the operational reserve.
    The total force includes military personnel, DOD civilian 
employees, and contractor personnel. This subcommittee will 
continue to press the Services to include civilians and 
contract personnel when addressing total force requirements.
    The subcommittee remains committed to the care and 
treatment of our wounded warriors and their families. We 
believe that the Integrated Disability Evaluation System is an 
improvement over the legacy disability evaluation system, but 
it is still too bureaucratic and timeconsuming.
    The subcommittee faces a very clear challenge this year as 
we address the need to control the increasing costs of 
personnel programs. As the Chief of Staff of the Air Force 
stated during a recent hearing, ``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, `in his view,' the monumental defense 
issue of our time.''
    The total personnel-related base budget in DOD's fiscal 
year 2013 request, including the costs of providing health care 
to servicemembers, their families, and retirees, amounts to 
$168 billion, or about 32 percent of the overall DOD base 
budget. However, while we must achieve savings in our defense 
programs, we must do this in a way that does not unfairly 
impact military benefits for a force that is serving and has 
served so well during more than 10 years of combat operations.
    Our task is even more difficult this year because of the 
funding limitations imposed by the Budget Control Act (BCA) 
passed by Congress last year. To comply with this act, the 
administration has proposed several major actions to reduce 
military personnel costs, including end strength reductions of 
more than 120,000 military personnel, limiting pay raises 
beginning 2015, establishing a base realignment and closure 
(BRAC)-like commission to conduct a comprehensive review of 
military retirement, and increasing health care fees for 
military retirees. Each of these proposals warrants careful 
consideration.
    There is no greater responsibility for Congress and 
military leaders than to care and provide for our 
servicemembers and their families. Our military--Active, Guard, 
and Reserve--is still engaged in the longest sustained period 
of major conflict in our Nation's history. We look forward to 
learning more about the programs and priorities DOD has 
emphasized to make certain that despite today's fiscal 
challenges, our servicemembers, civilian personnel, retirees, 
and their families will continue to receive the support and 
benefits they have earned commensurate with their service.
    I look forward to all of your testimony today on all of 
these issues, and as always, I encourage you to express your 
views candidly and to tell us what, in your view, is working 
and to raise any concerns and issues you may want to bring to 
the subcommittee's attention. Please let us know how we can 
best assist our servicemembers and their families to ensure 
that our military remains steadfast and strong.
    Senator Graham.

              STATEMENT OF SENATOR LINDSEY GRAHAM

    Senator Graham. Thank you, Mr. Chairman. It has been a 
pleasure working with you.
    We have our work cut out for us. The BCA is going to 
require some $400-plus billion in defense spending reductions 
over the next decade. Sequestration--I hope in a bipartisan 
fashion--we can stop that. That would be devastating according 
to Secretary Panetta to do $600 billion on top of the $400-plus 
billion. To get there, you are going to have to put everything 
on the table like reducing the numbers of people we have in the 
military, looking at benefits anew. But as the chairman just 
mentioned, the number one priority of the Federal Government 
from my point of view is to defend the Nation, and you can only 
do that with people who are willing to serve, and taking care 
of those who have served is the best way to recruit people in 
the future.
    The chairman has a unique background in terms of his 
experience in the government and being a marine. So as we try 
to find out solutions to hard problems, we will work together 
the best we can. I look forward to hearing from each of you.
    Senator Webb. Thank you, Senator Graham. As always, it has 
been a pleasure working with you on this subcommittee and on 
other issues as well.
    We have received statements for the record from a number of 
different military and veterans organizations. Rather than list 
them all--I may be missing some here--all of those that will 
have been submitted by close of business today will be included 
at the end of this record, if there is no objection from anyone 
on this subcommittee.
    Senator Webb. We will now hear opening statements from our 
witnesses. Their complete prepared statements will be included 
in the record. I am going to make a point here because I really 
got into trouble on a recent hearing--we are going to have 7-
minute rounds for questions from the subcommittee once the 
testimony is over. Those of you here will recall that when we 
had a panel full of lawyers and a subcommittee full of lawyers, 
the conversations went on for about 2 hours. So we will do it 7 
minutes at a turn here. I think everybody on this end of the 
table is an attorney.
    Welcome, Dr. Rooney, why do you not begin?

  STATEMENT OF HON. JO ANN ROONEY, ACTING UNDER SECRETARY OF 
              DEFENSE FOR PERSONNEL AND READINESS

    Dr. Rooney. Thank you. Chairman Webb, Senator Graham, and 
distinguished members of the subcommittee, I appreciate the 
opportunity to appear before you to discuss the personnel and 
readiness programs in support of the President's budget request 
for fiscal year 2013.
    Thank you for your support of our Active and Reserve 
military members, their families, and our government civilians 
who have done everything we ask of them and more.
    As you have heard from Secretary Panetta, the fiscal year 
2013 budget request was the product of an intensive review of 
our defense strategy necessitated by the critical turning point 
of our country after a decade of war and substantial growth in 
our budgets.
    Today, I will describe how we can sustain the All-Volunteer 
Force for generations to come, a force that has a proven record 
of unprecedented success in operations around the world. 
Accomplishing this will require DOD to make hard choices 
regarding competing priorities for limited funding. This budget 
plan is predicated on the assumption that the Services are 
appropriately trained, resourced, and flexible enough to 
rapidly adapt to emerging threats. Resourcing the reset of the 
force while maintaining readiness will undoubtedly be one of 
the most challenging issues of our time.
    As the Acting Under Secretary of Defense for Personnel and 
Readiness, my priorities focus on total force readiness, 
improving the military health system, and total force support.
    After 10 years of intensive operations, our forces are 
among the most capable in our Nation's history. Our Active and 
Reserve servicemembers and defense civilians are well-prepared 
to execute current operations and respond to emergent needs. 
They are experienced and proficient in a wide range of real-
world operations, including those that were not traditionally 
within DOD's scope of responsibility. As we end today's wars 
and adjust to new and changing missions, we find ourselves 
naturally transitioning back toward a broader range of security 
missions.
    Although this transition is occurring in the midst of 
unavoidable fiscal pressure, we have committed to maintaining a 
ready, capable All-Volunteer Force.
    The performance of our military medical system at a time of 
war continues to set new standards. DOD strives to provide the 
best health care in the world to our servicemembers, but the 
current cost growth of the military health system is 
unsustainable. DOD is pursuing a balanced, four-pronged 
approach for improving the health of our population and the 
fiscal stability of the health care system to ensure we can 
continue to provide this benefit in the future. Our four 
approaches include: moving from a system of health care to one 
of health; continuing to improve our internal efficiencies; 
implementing provider payment reform; and rebalancing cost 
sharing.
    Another key component of overall health and readiness of 
the force is support to the families of our servicemembers. One 
of the four overarching principles of the defense strategy 
guidance is to preserve the quality of the All-Volunteer Force 
and not break faith with our men and women in uniform or their 
families. Despite difficult economic circumstances requiring 
budget reductions across all levels of the Federal Government, 
DOD remains committed to providing servicemembers and military 
families with support programs and resources, empowering them 
to address the unique challenges of military life.
    Ensuring the needs of military families and servicemembers 
are met contributes to the overall well-being of the total 
force. This includes access to mental health care, providing 
for the educational needs of servicemembers' children, support 
of morale, welfare, and recreation programs, and maintaining 
benefits at defense commissaries.
    Secretary Panetta has directed that family programs 
continue to be a priority for DOD and it remains my priority as 
well.
    Putting together this year's budget request in a balanced 
package was a difficult undertaking and took the combined 
effort of our senior military and civilian leadership. 
Throughout that process, I believe we have developed the right 
mix of programs and policies in place to shape the force we 
need. Yes, we will reduce the rate of growth of manpower costs, 
including reductions in the growth of compensation and health 
care costs. But as we take these steps, we will do so in a way 
that we continue to keep faith with those who serve.
    During the past decade, the men and women who comprise the 
All-Volunteer Force have demonstrated versatility, 
adaptability, and commitment, enduring constant stress and 
strain of fighting two overlapping conflicts. They have also 
endured prolonged and repeated deployments. 47,775 have been 
wounded, and 6,376 members of our Armed Forces have lost their 
lives. As DOD reduces the size of the force, we will do so in a 
way that respects and honors these sacrifices.
    I look forward to continuing to work with you, Chairman 
Webb, Senator Graham, and distinguished members of the 
subcommittee, to support the men and women in our Nation's 
Armed Forces.
    Accompanying me today is the Under Secretary of Defense 
Comptroller, Mr. Robert F. Hale, and two senior members of my 
staff, Dr. Jonathan Woodson, Assistant Secretary of Defense for 
Health Affairs and Director of TRICARE Management Activity, and 
Mr. David L. McGinnis, Acting Assistant Secretary of Defense 
for Reserve Affairs. All of us before you today look forward to 
your questions.
    [The prepared statement of Dr. Rooney follows:]
                Prepared Statement by Hon. Jo Ann Rooney
                              introduction
    Chairman Webb, Senator Graham, and distinguished members of the 
subcommittee, I appreciate the opportunity to appear before you to 
discuss Personnel and Readiness programs in support of the President's 
budget request for fiscal year 2013. Thank you for your support of our 
Active, Reserve component military members, their families, and our 
government civilians who have done everything we have asked of them and 
more.
    As you have heard from Secretary Panetta, the fiscal year 2013 
budget request was the product of an intensive review of our defense 
strategy necessitated by the fact that our country is at a critical 
turning point after a decade of war and substantial growth in our 
budgets. Today, I will describe how we can sustain the All-Volunteer 
Force for generations to come--a force that has a proven record of 
unprecedented success in operations around the world. Accomplishing 
this will require the Department to make hard choices regarding 
competing priorities for limited funding. This plan is predicated on 
the assumption that the Military Services are appropriately resourced, 
experienced, and flexible enough to rapidly adapt to emerging threats. 
Resourcing the reset of the force, while maintaining force readiness, 
will undoubtedly be one of the most challenging issues of our time.
    As the acting Under Secretary of Defense for Personnel and 
Readiness my priorities focus on: Total Force Readiness, Improving the 
Military Health System, and Total Force Support.
                               readiness
    After 10 years of intensive operations our forces are among the 
most capable in our Nation's history. Our Active and Reserve component 
members and defense civilians are well prepared to execute current 
operations and respond to emergent needs, and are experienced and 
proficient in a wide range of real world operations. We have, by 
necessity, mastered a host of specialized capabilities that depend 
heavily on language and culture, governance, rule of law, development, 
and other specialized skills; not all of which are within the 
Department's traditional scope of responsibility. However, fully 
preparing for these missions means that there have been fewer 
capabilities available for large-scale, major combat operations. As we 
end today's wars and adjust to new strategic guidance, we find 
ourselves naturally transitioning back toward a broader range of 
security missions.
    The first sign of this transition is the return of full-spectrum 
exercises that we have seen over the last year. Specifically, the 
Marine Corps exercised its first large-scale amphibious assault in 10 
years just a few weeks ago. Similarly, the Army is shifting to decisive 
action training exercises at the Combat Training Centers. We will see 
more of these exercises as forces return and reset from current 
operations. In addition, the Army has begun to regionally align 
maneuver and enabler forces to some combatant commands to conduct 
security cooperation and security force assistance activities. These 
forces will have appropriate language, culture, advisor training and 
skills to enable expanded engagement with critical partners in the 
region.
    Although this transition is occurring in the midst of unavoidable 
fiscal pressure, we have committed to maintaining a ready, capable All-
Volunteer Force. Program reductions were deliberately managed to 
preserve operational flexibility and to keep faith with servicemembers 
and their families who have made significant sacrifices. We realize 
that sometimes, either due to unforeseen circumstances or a changing 
world, even the most well-conceived plans must be revised. For this 
reason, my office is maintaining its role of closely monitoring the 
readiness of our forces for the dual purposes of identifying and 
remediating critical deficiencies or unmet requirements.
End Strength
    We know that multiple deployments to Iraq and Afghanistan, with 
limited time at home for recovery, have stressed our military members 
and their families. With the draw down in Iraq and Afghanistan, this 
stress is fundamentally reduced. We have withdrawn 50,000 troops from 
Iraq since 2010, and will have reduced Afghanistan troop levels by 
30,000 at the end of this year. Barring unforeseen events, the 
Secretary's goal of 2 or more years at home for every year deployed 
will likely be met this coming year. The All-Volunteer Active and 
Reserve Force is healthy, and our Services are achieving or exceeding 
their recruiting and retention goals.
    Today, our overall military end strength, which includes the base 
force and overseas contingency operations, is at 2,269,700 in fiscal 
year 2012. While the initial changes to force size are muted, a 1.4 
percent reduction equating to a 31,300 person reduction in fiscal year 
2012, ultimately the Department will be at 2,145,800 by fiscal year 
2017. This 5.5 percent reduction equates to 123,900 fewer troops and 
will be spread throughout the components of the force.

         Army Active, Reserve, and Army National Guard (NG) end 
        strength in fiscal year 2013 is projected to be 1,115,300--0.9 
        percent less than fiscal year 2012. In fiscal year 2017 the end 
        strength will be 1,048,200, a 6.8 percent reduction from fiscal 
        year 2012.
         Navy Active and Reserve end strength in fiscal year 
        2013 is projected to be 385,200--1.7 percent less than fiscal 
        year 2012. In fiscal year 2017, the end strength will be 
        376,600, a 3.9 percent reduction from fiscal year 2012.
         Marine Corps Active and Reserve end strength in fiscal 
        year 2013 is projected to be 236,900-2.0 percent less than 
        fiscal year 2012. In fiscal year 2017 the end strength will be 
        221,700, an 8.3 percent reduction from fiscal year 2012.
         Air Force Active, Reserve, and Air NG end strength in 
        fiscal year 2013 is projected to be 501,000--1.9 percent less 
        than fiscal year 2012. In fiscal year 2017, the end strength 
        will be 499,300, a 2.3 percent reduction from fiscal year 2012.

    A force drawdown of this size has not been experienced since well 
before September 11.
Total Force Management and Planning
    The Department relies on a Total Force of Active and Reserve 
military, government civilians, and contracted support to provide for 
the Nation's defense and execute its core missions. We will face force 
management challenges over the next several years which are far greater 
than those we have experienced since September 11, 2001 and, therefore, 
must balance the competing requirements for equipment reset, 
modernization and support for our servicemembers and their families in 
a climate of reduced budgets. Responsibly managing the required force 
reduction, while ensuring we keep faith with those who have sacrificed 
so much to secure our Nation's interests, and properly caring for our 
military families as many servicemembers transition to veteran status 
is a responsibility taken very seriously and one which my organization 
is helping to facilitate. Congress aided this effort immeasurably by 
recently enacting legislation that expanded voluntary separation 
programs which provide appropriate recognition for significant military 
service, such as the temporary early retirement authority (TERA) which 
gives the military departments the flexibility to offer retirement to 
servicemembers with more than 15 but less than 20 years of service. We 
will continue to work with Congress to reinstate additional expired 
authorities from previous drawdowns that would offer the Department the 
ability to focus separations and avoid the loss of critical expertise.
    The Department's Total Force of Active and Reserve military, 
government civilians and contracted services represents a carefully 
coordinated approach that balances operational needs, satisfies mission 
requirements, and recognizes fiscal constraints. Our future plans will 
seek to balance the capabilities and cost of all elements of the Total 
Force. They cannot be managed in isolation if we are to avoid a hollow 
force and unnecessary expense. Our plans recognize:

         Decreased operational commitments and revised overseas 
        posture;
         A Reserve Force that is an operational asset;
         A highly skilled civilian workforce capable of 
        performing mission essential and inherently governmental tasks;
         Contracted support that is cost effective and designed 
        to provide appropriate and complimentary support to our 
        operational needs;
         Civilian decreases that have been carefully targeted 
        to deliver efficiencies initiated by Secretary Gates; and
         Efficient management of our contracted support as part 
        of our Total Force mix and not as just an acquisition 
        management action.
    Active Duty Recruiting
    Recruiting for the All-Volunteer Force continues at unprecedented 
levels. The Department closed out fiscal year 2011 with all active 
Services meeting or exceeding recruiting objectives, both numerically 
and by recruit quality. As shown in Table 1, we continue that record 
pace into fiscal year 2012, with 44,414 new recruits against an 
objective of 44,323 through January of this year. Recruit quality 
remains considerably above Department benchmarks (or standards), with 
98 percent of new recruits having a high school diploma (90 percent 
benchmark) and 80 percent scoring above average in aptitude (60 percent 
benchmark) on the Armed Forces Qualification Test (AFQT). Of particular 
note is the fact that very few recruits accessed at or below the 30th 
percentile on the AFQT through January of this year.

                                      Table 1--Recruit Quality (Fiscal Year 2012 Through January) Active Components
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                           Quantity                                                     Quality
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                  Percent Scoring at/ Percent Scoring at/
                                                                                                 Percent High         above 50th          above 30th
  AC Enlisted Recruiting Fiscal       Accessions             Goal           Percent of Goal    School Graduate:      Percentile on       Percentile on
   Year 2012  (End of January)                                                                   Benchmark=90     AFQT; Benchmark=60   AFQT; Benchmark=4
                                                                                                    percent             percent             percent
--------------------------------------------------------------------------------------------------------------------------------------------------------
Army                              17,123              17,050              100  G                    95  G              64  G               <1  G
Navy                               9,289               9,289              100  G                    99  G              93  G                0  G
Marine Corps                       7,795               7,777              100  G                   100  G              76  G                0  G
Air Force                         10,207              10,207              100  G                   100  G              99  G                0  G
                                 -----------------------------------------------------------------------------------------------------------------------
  DOD Total                       44,414              44,323              100                       98                 80                  <1
--------------------------------------------------------------------------------------------------------------------------------------------------------
Quantity Key: 100 percent or above goal; 90-99 percent of goal; below 90 percent of goal.
Quality Key: 100 percent or above benchmark; 90-99 percent of benchmark; below 90 percent of benchmark.

    Generally, a slow economy makes recruiting less challenging, and 
operates to the advantage of those who are hiring, including the U.S. 
military; clearly, the current state of our economy has been one of the 
drivers of this recruiting success. As we see signs of economic 
improvement, we will remain vigilant and continue to monitor the impact 
of that improvement on our recruiting efforts. Despite the positive 
effect of the economy on recruiting, there remain other factors 
counterbalancing our ability to attract bright, young Americans into 
the Armed Forces--the lower likelihood of influencers of youth (e.g., 
parents and teachers) to recommend service, a large and growing 
proportion of youth who are ineligible to serve in the military, higher 
numbers of youth going to college directly from high school, and 
continuing concerns about the prolonged worldwide, irregular campaign 
with its concomitant high operations tempo. Therefore, we are in 
uncharted waters with significant factors directly affecting military 
recruiting in both positive and negative ways.
    Due to these direct effects on recruiting, and as the Nation faces 
a demographic shift, it is important that the Department align its 
recruiting assets to tap emerging markets. Leveraging the diverse 
perspectives, and cultural, language and regional competencies present 
in our force ensures we encourage innovation and optimize mission 
success with respect to evolving challenges we will face well into the 
21st century. We are carefully reviewing recruiting programs to align 
funding and policies with current realities as we recognize the 
necessity of current and future budget constraints. We will strive to 
ensure the resources dedicated to recruiting are reasonable and remain 
at levels that will not compromise success. The Services will decide 
where best to take those cuts and any realignments undertaken will be 
done carefully and their effects closely monitored.
    Recruit Quality: The Department generally reports recruit quality 
along two dimensions--aptitude and education. Both are important, but 
for different reasons.
    Aptitude is an indicator of trainability and job performance. All 
recruits take an enlistment test called the Armed Services Vocational 
Aptitude Battery (ASVAB). One component of the ASVAB, the Armed Forces 
Qualification Test (AFQT), measures math and verbal skills. Those who 
score at or above average on the AFQT are in Categories I-IIIA, while 
those who score between the 10th and 49th percentile are placed in 
Categories IIIB and IV. Applicants scoring below the 10th percentile 
are ineligible to enlist. We value higher-aptitude recruits because 
their training and job performance are superior to those who score in 
the lower categories.
    The Department's educational enlistment policy groups education 
credentials into three tiers--Tier 1, consists primarily of traditional 
high school diploma graduates; Tier 2 consists of alternate credential 
holders, to include home-school and virtual/correspondence schools; and 
Tier 3 is nongraduates. Education credential is used not to measure the 
quality of education or the intelligence of the applicant, but rather 
the applicant's likelihood of completing his or her enlistment term. 
Years of research and experience indicate about three-quarters of 
recruits with a high school diploma complete their first 3 years of 
service, whereas only about half of those without a high school 
credential will complete 3 years. The attrition rates of those holding 
an alternative credential (e.g., GED) fall between these extremes. The 
Department's benchmark is that 90 percent of new recruits are high 
school diploma graduates.
    As a result of the evolving methods of education delivery across 
the Nation, the National Defense Authorization Act (NDAA) for Fiscal 
Year 2012 required restructuring of the education credential tiers we 
use to determine enlistment priority. Specifically, the act expanded 
Tier 1, ``High School Diploma Graduate,'' to include graduates of 
alternative educational delivery methods. From past experience, we find 
these individuals, on average, have significantly higher attrition 
rates--the current first-term attrition rate for high school diploma 
holders is 28 percent; alternate credential holders average a 38 
percent rate. We remain concerned about the long-term impacts of this 
policy change as it costs the Services approximately $55,000 to replace 
(recruit, train, equip, pay) each individual who fails to complete his 
or her initial term of service. Nevertheless, the new policy will be in 
place by July of this year as directed, and we will monitor the 
attrition behavior of these recruits. Additionally, as encouraged in 
the legislation, we will continue to develop new methods of identifying 
those who are qualified for recruitment and enlistment. These methods 
may include use of a non-cognitive test, adaptive personality 
assessment, or other operational attrition screening tools to predict 
performance, behaviors, and attitudes of potential recruits which 
influence attrition and ability to adaptively perform the required 
missions.
    Active Component Retention:
    Similar to our recruitment numbers, the Army, Air Force, Navy, and 
Marine Corps all exhibit strong retention numbers for the first 4 
months of fiscal year 2012 continuing a trend from the previous year 
(Table 2). The resilience of the All-Volunteer Force through two wars 
continues to prove the tremendous dedication and patriotism of the men 
and women serving our great Nation. I am humbled by their willingness 
to place themselves in harm's way and do their Nation's bidding.
    That said, I also recognize we will face new challenges as the 
economy improves, conflicts subside, and uncertainty rises over the 
drawdown of the force. The Department must ensure meaningful missions, 
support for our military families, and complete transparency regarding 
our reduction efforts. Despite budget pressures we are committed to 
careful and deliberate reviews of servicemember and family programs 
with an eye on retention. We can ill afford to arrive at the end of the 
drawdown with a force that does not match the capabilities the Nation 
requires and without the resources necessary to make adjustments. 
Towards this end, I am encouraged by the plans offered by the Services 
as they make difficult force reduction decisions. For example, the 
Services are limiting reductions in accessions to ensure we meet future 
requirements, and they are offering voluntary separation programs to 
servicemembers prior to taking involuntary separation actions whenever 
possible. We also intend to extend to Congress our commitment of 
transparency in these efforts. Together I am convinced we can create an 
environment that avoids the pitfalls experienced throughout history by 
most post-conflict militaries. While this will undoubtedly prove 
extraordinarily challenging, I believe you will agree we owe it to our 
Nation and to the soldiers, sailors, airmen, and marines who will 
continue to stand watch for the generations to come.
      


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    Women in the Service
    The Department has recently completed a review of how we assign 
women in the Service. As requested by Congress, the Department, in 
coordination with the military departments, reviewed laws, policies, 
and regulations, including our co-location policy, to determine if any 
changes were needed to ensure female members have an equitable 
opportunity to compete and excel in the Armed Forces. We took a hard 
look at the current restrictions on women, and recommend changes within 
the report to Congress (available to the public online http://
www.defense.gov/news/WISR--Report--to--Congress.pdf). Pending 
expiration of the congressionally-required notification period, the 
Department will implement a change to policy that eliminates gender-
based assignment restrictions to units and positions that are 
doctrinally required to physically co-locate and remain with direct 
ground combat units that are closed to women. These recommendations 
will open over 14,000 positions to women, including 6 Army occupational 
specialties. The Department is not stopping with the policy changes set 
forth in the report. The Services will continue to evaluate these 
recommendations to inform future policy revisions in addition to 
developing gender-neutral standards for physically demanding 
occupations. Secretary Panetta directed the Secretaries of the Military 
Departments and Chiefs of Military Services to report their progress on 
the development of gender-neutral standards, assessment of newly opened 
positions and recommendations for any further positions that can be 
opened, 6 months after implementing these changes. We continue to 
reiterate our commitment to removing all barriers that would prevent 
servicemembers from rising to the highest level of responsibility that 
their talents and capabilities warrant.
    Implementation of the Repeal of ``Don't Ask, Don't Tell''
    Since September 20, 2011, the effective date of repeal, the 
Services report there have been no significant issues related to the 
implementation of the repeal of ``Don't Ask, Don't Tell.'' By all 
accounts, implementation is going smoothly across the force. We 
attribute this success to our comprehensive pre-repeal training 
programs, combined with the discipline of our servicemembers and 
continued close monitoring and enforcement of standards by our military 
leaders at all levels. Prior to repeal, the Department saw a 
preponderance of the force, 2.25 million servicemembers, trained 
regarding the necessary policy and regulation changes that went into 
effect on ``Repeal Day.''
    The Department and the Services remain engaged in ongoing 
implementation efforts. A formal monitoring process ensures continual 
assessment and reporting to the Secretary of Defense. Elements of this 
monitoring process include regular Service assessment reports and 
periodic surveys of servicemembers. Through this feedback mechanism, 
the most common question we hear from the field is about benefits--
specifically, whether or not benefits will be extended to same-sex 
partners. The Department is engaged in a comprehensive review of the 
possibility of extending eligibility for additional benefits, when 
legally permitted, to same-sex partners, and our goal is to complete 
this review by the end of the fiscal year. With leadership, 
professionalism, discipline, and respect, the Department and our 
servicemembers remain fully committed to the implementation effort, 
consistent with our standards of military readiness, effectiveness, 
unit cohesion, and recruiting and retention for the Armed Forces.
    General, Flag Officer, and Civilian Senior Executive/Equivalent 
        Efficiencies
    In 2011, the Secretary of Defense made the decision to eliminate, 
reduce, or reallocate 140 general or flag officer (GFO) positions and a 
minimum of 150 Civilian Senior Executive/Equivalent (CSE) positions. 
The Department designated 102 GFO positions for elimination (complete 
removal from structure or downgrade of a position to a grade of O-6 or 
below) and 211 CSE positions for elimination. By the end of the year, 
we had eliminated 29 GFO positions and reduced 20 positions to a lower 
grade of GFO. We are moving forward to implement the remaining 
efficiencies gradually over the next several years as conditions allow, 
not adversely affecting missions or forcing readiness. Three years ago, 
Congress' authorization of the Joint Pool created the foundation for 
increased flexibility for the Department in the management of 
positions. This latest efficiency effort will take those policies to 
the next level and will create flexibility for each of the Military 
Departments to ensure their readiness to respond to any emerging 
threat. CSE reductions are being implemented based on a 2-year 
strategy. To date, 93 Senior Executive Service, Senior Level or Senior 
Technical (SES/SL/ST) positions, and 57 Defense Intelligence Senior 
Executive and Defense Intelligence Senior Level (DISES/DISL) positions 
have been reduced. The remaining CSE efficiencies will be completed by 
March 2013.
    Growing Language and Culture Capabilities
    The President directed the Department to sustain U.S. global 
leadership as we transition from a long-term engagement in two wars 
toward a more global presence focused on the Asia-Pacific and the 
Middle East. Though Service end strengths will decrease, the demand for 
language skills, regional expertise, and cultural awareness will 
increase, as these capabilities are essential not only to our mission 
readiness but to achieving national security, building partner 
capacity, and strengthening alliances. Currently, 9 percent of military 
personnel have tested or self-professed foreign language skills at any 
level of proficiency and 5 percent have skills that meet the 
Department's need for limited working language proficiency or above.
    Increasing the language capabilities of the Department depends on 
recruiting policies, training, assignment policies, retention, overall 
career management, and the U.S. educational system. We have efforts 
underway to coordinate national and Departmental language capabilities, 
as well as initiatives for long-term sustainment. The goal is to ensure 
a spectrum of programs that include pre-accession, and in-service 
military and civilian training, while establishing new career paths for 
personnel with language and culture skills. These efforts include 
increasing the foreign language skills of the Department's military and 
civilian personnel, as well as outreach to our Nation's schools and 
universities to promote the teaching of critical languages. All these 
efforts are essential to achieving a force, a Nation, and a citizenry 
capable of facing the threats, opportunities, and challenges we will 
confront in the 21st century.
    Drug Demand Reduction
    The abuse of illicit and prescription drugs in the U.S. military 
has substantial implications on force readiness and safety. The goal of 
the Drug Demand Reduction (DDR) Program is to protect readiness and the 
well-being of our civilian and military personnel by detecting and 
deterring drug abuse. Toward that end, the Department and Services have 
recently expanded the existing panel of tested drugs to include 
frequently abused prescription medications, such as Vicodin and Valium. 
The Department's minimum random drug testing goal is 100 percent with a 
positive rate below 2 percent. Overall, drug positive rates for active 
duty military personnel across all Services have continued to decline 
and the current rate of positive specimens is below 1 percent, the 
lowest in the program's history. As with many programs, the DDR Program 
incurred a reduction in budget which will require additional 
efficiencies in collection, outreach, and educational programs. This 
will also require increased targeted random drug testing.
    Suicide Prevention
    Every person within the Department of Defense is a valuable team 
member and each loss to suicide is a preventable tragedy. For this 
reason, we are taking aggressive steps to address suicide by enacting 
policies, providing supportive services and assistance, implementing 
training initiatives and publishing education materials, and conducting 
data surveillance and research to support servicemembers and their 
families. For example, the Department increased behavioral health 
providers from 6,590 to 8,898 total providers, a 35 percent increase 
over the past 3 years, adding mental health providers in primary care 
settings and embedding them with front-line units. We have also 
partnered with the Department of Veterans Affairs (VA) to build a 
continuum of support for transitioning members. This partnership will 
not only provide more service options for our members, it will allow us 
to compile more complete data that could lead to better predictive and 
preventative measures.
    We are building and shaping resiliency and coping skills through 
realistic and interactive training to ensure every servicemember can 
recognize the warning signs of suicide and encompass the skills and 
knowledge necessary to purposely intervene. We are also committed to 
further research on understanding and preventing suicide as with the 
Army Study to Assess Risk and Resilience in servicemembers (ARMY 
STARRS), which is the largest study of mental health risk and 
resilience factors ever conducted among military personnel. Conceived 
by scientists at the National Institute of Health's National Institute 
of Mental Health (NIMH), ARMY STARRS was formalized through a 
memorandum of agreement that authorized NIMH to conduct an extensive 
investigation with Army funding. The ARMY STARRS program is led by an 
interdisciplinary team of Army, Academic, and NIH investigators.
    Though we have been able to arrest the increasing rate of suicides 
over the past 3 years, the Department continues to work hard to reduce 
these tragedies. We have established a Defense Suicide Prevention 
Office to serve as the focal point for developing and overseeing 
suicide prevention policy, training, and programs across the 
Department. This office will also collaborate with Military Departments 
to implement the recommendations of the Department of Defense Task 
Force on the Prevention of Suicide, and serve as our lead with the VA 
and nongovernment organizations to identify and institute a continuum 
of suicide prevention efforts for personnel leaving the Department.
    Sexual Assault Prevention and Response
    As Secretary Panetta has stated, this Department has a zero-
tolerance policy against sexual assault and this is a leadership issue 
first and foremost. We have received the final numbers from the 
Services and the Department had 3,192 reports of sexual assault in 
fiscal year 2011; because of underreporting, estimates are closer to 
19,000 (per a fiscal year 2010 Defense Manpower Data Center survey). 
This is in stark contrast to the first sample survey in 2006, when the 
estimate was 34,000. Since 2006, more victims are stepping forward to 
report assaults and the percentage of alleged sexual assault offenders 
facing court-martial proceedings has increased.
    In this past year alone, we have made significant strides. We 
recently published a revised Directive expanding our support to assault 
victims to include military spouses and adult military dependents, the 
Department's civilians stationed abroad and the Department's U.S. 
citizen contractors in combat areas. In addition, two new policies 
address expedited transfers and the retention of law enforcement 
records for 50 years. To ensure national standards for victim services, 
we are establishing a sexual assault advocate certification program 
and, we established the DOD Safe Helpline which provides anonymous and 
confidential, 24/7 hotline and texting support to victims anywhere in 
the world. We are collaborating with the VA and Department of Labor 
(DoL) to establish a continuum of care for victims of sexual assault 
transitioning from military to civilian life and will use the DOD Safe 
Helpline as a vehicle to help these transitioning servicemembers.
    To improve the tracking of reports, the Defense Sexual Assault 
Incident Database will be implemented by March 31 and be fully 
operational by August 31st. Because sexual assault cases are some of 
the toughest cases to investigate and to prosecute, the Department has 
committed funding through fiscal year 2017 to provide sexual assault 
specific training for judge advocates and criminal investigators and we 
are assessing the Sexual Assault Prevention and Response training for 
commanding officers and senior enlisted leaders. We will continue to 
hold the perpetrators appropriately accountable and all military 
servicemembers will live up to the high standards set.
    Compensation
    Senior leaders in the Department place a high value on the 
willingness of America's military personnel to serve their country. We 
understand our compensation system must be competitive, recognize the 
demands of military service, and always provide sufficient compensation 
to attract and retain qualified personnel. The 9th Quadrennial Review 
of Military Compensation shows that servicemembers need to be paid 
equal to or better than 70 percent of their civilian counterparts.
    Through the work of Congress, our servicemembers received generous 
military pay raises over the past decade and, as a result, military 
compensation has increased and significantly exceeds that 70th 
percentile. Additionally, over the past decade, the Department and 
Congress addressed a host of challenges ensuring military compensation 
remained competitive, and this has allowed the Department to continue 
to succeed in recruiting and retaining the high-quality, All-Volunteer 
Force required by the Nation, despite nearly a decade at war.
    As we reset following the end to combat operations in Iraq, the 
beginnings of force reductions in Afghanistan, and in light of the 
Nation's economic crisis and our expected manpower reductions, slowing 
the future growth of military compensation will be important. As 
mentioned earlier, we expect challenges in recruiting and retention to 
grow over the next few years as both the economy and labor market 
continue to improve. The current, competitive military compensation 
package makes the Department well suited to respond to those 
challenges, even during this time of war. As a result, we have 
requested full pay raises for fiscal year 2013 and fiscal year 2014, 
and more limited pay raises beginning in fiscal year 2015. For fiscal 
year 2013, this would provide an increase in military basic pay for all 
servicemembers of 1.7 percent, which is in line with earnings increases 
seen in the private sector as measured by the annual change in the 
Employment Cost Index.
    The Department also understands current fiscal pressures demand 
change, and that the costs of military compensation are significant. 
Some cost savings will be achieved through proposing more limited pay 
raises beginning in fiscal year 2015. However, in the continuing search 
for budget cuts and efficiencies, we are evaluating the military 
compensation system, focusing first on military retirement. As I stated 
before the subcommittee in October of last year, we have been 
conducting a vigorous, internal review, and are working diligently to 
identify and evaluate retirement alternatives. In addition to this 
ongoing review, the Department recommends Congress establish an 
independent commission to review military retirement, as requested by 
the administration. We fully support formation of such a commission, 
and if enacted, we will provide significant input. Most importantly, 
our review is performing critical and rigorous modeling and analysis of 
various alternatives. While many in the private sector, and elsewhere, 
have suggested alternatives to the current military retirement system, 
few have undergone rigorous modeling or analysis. We are committed to 
ensure any proposal we develop is sound and does not harm the 
Department's ability to recruit and retain the future force. Secretary 
Panetta has also made clear that current members will be grandfathered; 
for those who serve today, there will be no changes in retirement 
benefits. Following the review of military retirement, we plan to 
continue our comprehensive, broad-based review of military compensation 
in search of additional efficiencies and savings.
Reserve Component
    The fiscal year 2013 budget supports the increased utilization of 
the Reserve components (RC) as called for in the National Defense 
Strategy and will enable the RCs to continue to fulfill their vital 
national security role. The Department's Ready Reserve totaling about 
1.1 million members contributes 43 percent of total military end 
strength at a cost of 9 percent of the total base budget. The National 
Guard (NG) and Reserve provide trained, ready, and cost-effective 
forces that can be employed on a regular operational basis, while also 
ensuring strategic depth for large-scale contingencies or other 
unanticipated national crises.
    Prior to 2001, the RCs were primarily a strategic reserve with 
occasional operational missions as needed to augment active forces. 
Since 2001, RC units and individuals have been heavily employed across 
the full spectrum of military operations and have demonstrated their 
readiness and criticality. Our current NG and Reserve is, arguably, the 
most combat seasoned reserve force ever, and we plan to capitalize on 
this significant investment to provide needed military capacity during 
current austere economic times.
    The fiscal year 2013 budget anticipates the Department will 
continue to use the Guard and Reserve as a vital part of the 
operational force and--where it makes sense--as a force of first 
choice. Today's Citizen Warriors have made a conscious decision to 
serve, with full knowledge that their decisions mean periodic recalls 
to active duty under arduous and hazardous conditions. In approximate 
numbers, as of December 31, 2011, the Ready Reserve currently consists 
of:

         Selected Reserve: 844,400
         Individual Ready Reserve: 220,000
         Inactive NG: 3,700

    Reserve Component Utilization
    The Reserve component has become an integral part of the Nation's 
military force participating in nearly every mission worldwide for the 
past two decades. As this practice continues, the Department has 
emphasized prudent and judicious management and use of the RC to help 
mitigate stress on the Total Force. Total Reserve component usage in 
support of Contingency Operations since September 11, 2001 is 835,689 
(809,913 Selected Reserve and 25,776 Individual Ready Reserve). Of 
those, 80 percent have deployed in the U.S. Central Command area of 
responsibility. On December 31, 2011, there were 86,213 Reserve 
component members activated in support of Operation Noble Eagle (ONE) 
and Operation Enduring Freedom; of those, 35,361 were deployed in the 
Central Command theater.
    Realigning Capabilities
    The Reserve component is well suited for use as a source of 
strategic depth as well as in a wide variety of operational roles, 
including providing: (1) rotating operational units deployed in 
response to Combatant Commander needs and Service requirements; (2) 
units and teams deployed in support of Theater Security Cooperation and 
Building Partner Capacity activities around the globe; (3) individual 
augmentees who can be deployed in response to Combatant Commander, 
Defense agency, or Service needs; (4) units, teams, and individuals to 
support core Unified Command Plan missions such as Homeland Defense and 
Defense Support of Civil Authorities, as well as to support Governors 
in state security; and (5) units, teams, and individuals assigned to 
support Department or Service institutional needs. Reserve component 
forces are well-suited for missions and tasks in support of Theater 
Security Cooperation and Building Partner Capacity activities and 
specialty missions requiring unique skills, particularly when the RC 
units have an enduring relationship with a supported command.
    Individual and Medical Readiness
    One of the key aspects of maintaining a viable, operational RC is 
to ensure that our military members and our civilian employees maintain 
the highest level of individual readiness. We must focus on maintaining 
the appropriate physical fitness levels for a force that has a higher 
average age than the Active component. Similarly, ensuring that our RC 
members are medically and dentally ready to serve is of the utmost 
importance.
    Employing the RC as operational force requires modifications to 
training schedules and funding requirements. Before we operationalized 
the RC, normal minimum training profiles consisted of training 2 days 
per month plus 14-15 days of active duty for training annually. During 
that training time, RC personnel were required to meet the same 
standards as their Active counterparts. While that training profile 
remains in-place for some types of units, for those with planned 
deployments, training days prior to mobilization increases. This 
training profile, with more training pre-deployment and less post-
deployment, minimizes mobilized time away from families and civilian 
jobs. Increasing individual readiness by modifying training profiles 
with resources and policies is a major focus area that will allow the 
Guard and Reserve to capitalize on the gains made during the last 
decade and enable sustained use of the RC as an operational force.
    We continue to monitor Individual Medical Readiness of the NG and 
Reserve to ensure availability of ready RC members for deployment, as 
it is a priority for the Department. By the fourth quarter of fiscal 
year 2011, the RC had increased its Fully and Partially Medically Ready 
(FMR/PMR) rate 5 percent over first quarter fiscal year 2011 rates, and 
reduced the Indeterminate population by 6 percent. Most notably, the 
Marine Corps Reserves improved their FMR status by 16 percent and 
reduced the PMR rate by 14 percent--over half of the fiscal year 2011 
first quarter rates. The Coast Guard Reserve also made great 
improvements increasing their FMR rate by 9 percent, and reducing their 
Indeterminate and Not Medically Ready population by 4 and 6 percent 
respectively. While we continue to face challenges with Dental 
Readiness, all Services are over the 75 percent goal except Army 
Reserve and Army NG which are at 71 and 73 percent respectively. We are 
working diligently to improve access to medical and dental services for 
RC members. For example, the Army Reserve now budgets additional 
medical and dental services into their Readiness Accounts for RC 
members if needed.
    Yellow Ribbon Reintegration Program (YRRP)
    The YRRP is a Congressionally-mandated program whereby the Services 
provide RC servicemembers and their families with critical support, 
information, services, and referrals throughout the entire deployment 
cycle focused primarily on local community resources to maximize 
successful servicemember reintegration back into their civilian lives. 
During the past 3 years, the YRRP has evolved into a successful, 
forward-leaning program providing essential readiness and resiliency 
training and resources to over 800,000 servicemembers and designees. In 
fiscal year 2011, Congress appropriated $16 million to the YRRP for 
enhanced outreach and reintegration employment activities which allowed 
the Department to support various State-led initiatives. YRRP's fiscal 
year 2012 funding is entirely dedicated to supporting its legislatively 
mandated core activities. To support the use of the operational reserve 
in the future, we will ensure funding for Service YRRPs is moved to 
their base line budgets.
Transition to Veterans Affairs
    Today's Veterans face a number of challenges in making the 
transition to civilian life, and among these is embarking on a 
productive post-military career. For every success story of a Veteran 
who has turned skills developed in the military into success in the 
civilian workplace, there are, as President Obama has said, stories of 
Veterans who come home and ``struggle to find a job worthy of their 
experience and worthy of their talent.'' We see these struggles most 
clearly in high unemployment rates for Veterans. Making this situation 
more urgent is that, as we draw down from the wars in Iraq and 
Afghanistan and we make difficult decisions about our future force 
structure in light of the fiscal challenges the Nation faces, the 
number of servicemembers--particularly young servicemembers--departing 
the military over the next several years will increase.
    Making a firm commitment to employ America's Veterans, in August 
2011, the President called for the creation of a Task Force led by the 
DOD and VA with and other agencies including the DoL, Department of 
Education (DoE), Department of Commerce, Small Business Administration, 
and the Office of Personnel Management, to develop proposals to 
maximize the career readiness of all servicemembers. In coordination 
with our VA, DoL, and DoE partners, DOD's role involves implementing 
and sustaining a comprehensive plan to ensure that all transitioning 
servicemembers have the support they need and deserve when they leave 
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; or successful start-up of an 
independent business entity or nonprofit organization. The effort is 
fully aligned with the VOW to Hire Heroes Act of 2011 and is consistent 
with DOD's commitment for 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.
Civilian Personnel
    The Department continues to hold, with limited exceptions, the 
civilian workforce to authorized fiscal year 2010 levels. This 
continues the direction from last year's efficiency initiative and was 
implemented in conjunction with organizational assessments and mission/
function prioritization. This direction reflects the Department's 
commitment to challenge workload demand; more appropriately size our 
workforce to meet our most pressing and critical priorities; and 
focuses on reducing administrative functions associated with 
headquarters staff while realigning resources to warfighting 
capability, recapitalization, and unit readiness. As Secretary Panetta 
has testified, our spending choices must be based on sound strategy and 
policy. and reductions in the civilian workforce reflect changes in the 
Department's strategy, overseas presence, and force structure.
    Despite the overall decreases to the Department's civilian 
workforce, there have been areas where mission workload, requirements, 
and fiscal considerations warranted growth and exceptions. Growth and 
increases to the civilian workforce have continued in critical areas 
such as acquisition, cyber, and intelligence. Targeted exceptions to 
fiscal year 2010 levels have also been approved for shipyard and 
security guard workforces in the Navy; the test and evaluation 
workforce in the Army and Air Force; joint basing requirements for the 
Navy and Air Force; and in-sourcing of contracted services at some 
combatant commands and defense agencies.
    Reductions in the Department's civilian workforce are being 
executed very deliberately to minimize adverse impacts to our dedicated 
civilian service workforce and to avoid unintended consequences, such 
as:

         ``borrowing'' or ``repurposing'' military personnel 
        for non-military tasks, which would risk hollowing the force;
         potentially paying more for contracted services or 
        inappropriately realigning work to the private sector; and
         jeopardizing our ability to sustain and develop 
        mission critical skills and competencies.

    To support these goals, I reconstituted the Defense Human Resources 
Board (DHRB) on December 8, 2011. The DHRB is my primary advisory body 
for Total Force management across the Department. Specifically, the 
DHRB serves to promote and facilitate improved Department-wide Total 
Force management, both current and future, through the improved 
alignment of statutes, policy, business practices, information 
technology, and resources.
    It is imperative we improve the management of our Total Force of 
Active and Reserve military, government civilians, and contracted 
services. To do so, leaders and managers throughout the Department must 
be provided the information, tools, and flexibility necessary to make 
sound and well-reasoned decisions. To that end, there are a number of 
specific areas that we have focused attention on.
    In October 2011, the Office of Federal Procurement Policy (OFPP) 
issued its policy letter regarding inherently governmental (IG) and 
other work Reserved for government performance. The Department was an 
active participant in developing that policy letter, and my staff is 
currently working to ensure its implementation and application across 
the Department. The identification of IG functions, work that is 
closely associated with IG, and workload critical to the Department's 
ability to execute its mission are fundamental processes in our Total 
Force management strategy.
    Ensuring the Department's workforce is sufficiently sized and 
comprised of the appropriate mix of personnel is critical to maintain 
readiness and capabilities in our constrained fiscal environment. The 
Department's ``sourcing'' of necessary functions and work between 
military, civilian, and contracted services must be consistent with 
workload requirements, funding availability, readiness and management 
needs, and applicable laws. In particular, workforces must be 
structured to not use military personnel outside of their primary 
specialty to perform functions or tasks that would limit their 
availability to mobilize and perform the operational mission, support 
and maintain necessary states of readiness, or impede their training 
and career progression requirements. As planned military end strength 
reductions happen, the Department will continue to focus on the proper 
mix of personnel.
    Inventory of Contracts for Services (ICS)
    Contracted services remain the largest element of the Total Force. 
The Department remains committed to meeting its statutory obligations 
under title 10 to annually review its contracted services. After 6 
months of working with the more than 40 components that comprise the 
Department, we delivered, on November 22, 2011, a consolidated plan to 
the congressional defense committees that identified both short- and 
long-term actions that will improve the ICS, make it a more reliable 
and complete data set, and improve visibility and accountability in the 
area of contracted services. Consistent with changes to the statute, 
this plan, and subsequent guidance issued on December 29, 2011, 
specifically addresses how the Department will:

         measure contracted support level of effort using 
        direct labor hours and associated cost data collected from 
        contractors;
         assess the type of work being performed by the private 
        sector and for whom based on standardized taxonomies and 
        portfolio groups;
         strengthen the relationship between the ICS and annual 
        budget justification materials; and
         ensure the ICS supports strategic workforce planning 
        and an appropriately balanced, effective, and efficient 
        workforce.

    The actions being taken will improve the long-term utility of the 
ICS, beginning with the next submission this summer, and will enable us 
to more accurately and holistically assess contracted workload. Coupled 
with an improved IG&CA Inventory, the ICS will help us achieve the 
right balance in our workforce, aligning inherently governmental 
activities to military and civilian workforces, and commercial 
activities to the most cost effective service provider.
    In-sourcing
    The Department greatly values the support provided by private 
sector firms and recognizes the private sector is a vital source of 
expertise, innovation, and support to the Department's Total Force. 
However, in-sourcing continues to be a necessary workforce shaping tool 
to reduce excessive or inappropriate reliance on contract support; 
appropriately align inherently governmental activities; and protect the 
public's interest while providing the best value for taxpayers. 
Therefore, we are continuing to in-source contracted services that are 
closely associated with inherently governmental work; that provide 
unauthorized personal services; or that may otherwise be exempted from 
private sector performance (to mitigate risk, ensure continuity of 
operations, build internal capability, and to meet and maintain 
readiness requirements). While some contracted services may be 
identified for in-sourcing, some services may no longer be required, or 
be of lower priority, and therefore reduced in scope or eliminated. 
Contracted services that meet the necessary criteria (i.e. consistent 
with statutes, policies, and regulations) will be in-sourced by:

         absorbing work into existing government positions by 
        refining duties or requirements;
         establishing new positions to perform contracted 
        services by eliminating or shifting equivalent existing 
        manpower resources (personnel) from lower priority activities; 
        and
         as appropriate or necessary, requesting an exception 
        to the civilian levels currently reflected in the budget.

    Our in-sourcing efforts are focused on rebalancing the workforce, 
rebuilding critical internal capabilities (including the acquisition 
workforce), and reducing operational risks.
    OMB Circular A-76
    Consistent with statutory changes that restrict the ``direct'' 
conversion of work currently performed (or designated for performance) 
by any number of civilian personnel to private sector (contract) 
performance, I issued guidance to the Department on December 1, 2011. 
In it, I urged vigilance to prevent the inappropriate conversion of 
work to contract performance, as we adapt to declining budgets and 
operating in a constrained fiscal environment. We are also preparing 
guidance that reiterates the current statutory moratoriums on public-
private competitions.
    As noted earlier, contract support is critical to the Department's 
operations. Last summer, we submitted a report on our public-private 
competition policy and procedures under OMB Circular A-76, making 
recommendations to improve the end-to-end competition process. The 
public-private competition process can be a useful tool for our 
commanders and managers to validate an organization's manpower and 
other requirements; drive a more consistent delivery of mission support 
and services to our servicemembers and families; improve business 
process; and deliver readiness while minimizing fiscal opportunity 
costs to meet the compelling needs of the Department. Congress, in the 
NDAA for Fiscal Year 2012, accepted many of our recommendations and 
made changes to the governing statute for public-private competitions. 
We are committed to making improvements to ensure the process is more 
equitable, less time consuming, and minimizes disruptions to incumbent 
workforces. Together with improvements to the ICS that will enable us 
to more accurately gauge the extent of private sector reliance, we look 
forward to providing an improved A-76 process to our decision makers in 
the future. In summary, we must shape an efficient, effective, and 
viable Total Force aligned to strategy and is supported by robust 
analysis. The fiscal year 2013 budget and our associated plans reflect 
our best judgment today.
    Strategic Human Capital Management and Competency Management
    The Department is making progress toward developing a more 
systematic approach and enterprise tools for strategic human capital 
planning that covers over 750,000 civilian employees in over 600 
occupations. In fiscal year 2012, we developed initiatives to meet 
statutory civilian strategic workforce planning requirements by fiscal 
year 2015. First, the Department expanded its functional community 
construct to cover all major occupations in the civilian workforce. 
Previously, only mission critical occupations, which made up less than 
40 percent of the workforce, were covered in the DOD Strategic 
Workforce Plan. Second, the Department updated criteria for designating 
mission critical occupations following a more structured process 
defined by the Federal-wide Strategic Human Capital Management High 
Risk Initiative. Third, an Enterprise Competency Management Framework 
has been designed that includes phased development of Department-wide 
occupational competency models and deployment of a tool for competency 
assessments. An Army system is now being updated for Department-wide 
use to replace multiple competency tools with a single enterprise 
system. That system, the Defense Competency Assessment Tool is 
scheduled for deployment in fiscal year 2013; and through it, we will 
be able to assess workforce competencies and develop strategies to 
reduce critical skill gaps that may impact mission accomplishment by 
fiscal year 2015.
    The Department continues to focus on life-cycle management of the 
civilian workforce by integrating strategic workforce planning, 
competency management, hiring process improvements, and workforce 
development initiatives to ensure that plans support the recruitment, 
retention, and development of a ready civilian workforce that is 
responsive to swiftly changing mission demands and complex challenges. 
These are multi-year initiatives to improve the Department's ability to 
rapidly grow, contract, and shift the workforce in response to emerging 
mission requirements.
    Hiring Reform
    The Department has made great strides in reforming the hiring 
process by reducing hiring timelines, streamlining the process, and 
focusing on efficient practices. Prior to implementing the May 2010 
Presidential Memorandum for Improving the Federal Recruitment and 
Hiring Process, measurement of all hiring practices was inconsistent 
and lacked input from individual components and servicing agencies. In 
2010, we adopted standard measurement practices that enabled our 
leadership to analyze and measure hiring timelines across multiple 
dimensions, and to drive mission-critical changes.
    In 2011, we continued to make positive and meaningful progress 
toward reforming civilian hiring practices. We reduced the number of 
days it takes to hire an employee by developing a common business 
process, deployed tools to automate key steps in the hiring process, 
and provided manager and human resources specialist training and job 
aids. In addition, our arsenal of hiring-related metrics and 
measurements has grown, thereby enabling transparency and targeted 
improvements to the hiring process. In fiscal year 2011, the Department 
reduced its external hiring timeline by 31 percent, from the fiscal 
year 2010 baseline of 116 days to 91 days. As a result of progress made 
in the early part of fiscal year 2011, the Department's external hiring 
timeline target was adjusted downward to 95 days from the original 101 
day target. Our goal for external hiring in fiscal year 2012 is 80 
days, with quarterly goals established to monitor progress. The overall 
reduction in hiring timeline for external hires contributed to an 
overall time to fill for all hiring actions, both internal and 
external, of 75 days for fiscal year 2011 and 63 days for fiscal year 
2012 year-to-date. Another area of improvement is the automation of our 
hiring process. We procured an automated staffing tool (USA Staffing) 
in fiscal year 2010 and successfully deployed it to over 70 percent of 
the Department in fiscal year 2011, and are aggressively working toward 
completing deployment this year.
    The Department continues to partner with the Office of Personnel 
Management (OPM) on the re-engineering of USAJOBS, the job posting 
portal used by the Federal Government. The USAJOBS 3.0 project is a 
high visibility project and DOD is the largest consumer of USAJOBS' 
services. The deployment of USA Staffing and improvements to USAJOBS 
are critical initiatives; however, without participation and engagement 
from our Hiring Managers and Human Resource (HR) Professionals, the 
benefit of these initiatives cannot be fully realized. As a result, a 
primary objective is to foster and encourage strong partnerships 
between these key stakeholders. To assist, the Hiring Reform Website 
(http://www.cpms.osd.mil/HiringReform/) provides a Hiring Managers 
Toolkit containing 24 guides, and a Webinar series is now available 
that provides content based on the four phases of the hiring process.
    The initiatives outlined represent the Department's continued 
approach to hiring reform implementation, an approach aligned with the 
Department's overall mission, and with its Strategic Workforce Planning 
objectives. A key success criterion is the involvement of senior 
leadership. We continue to solicit and use our cadre of senior leaders 
to guide our efforts, communicate and campaign for process 
improvements, and provide direction throughout each hiring reform 
effort. We will continue to monitor these efforts closely.
    Termination of the National Security Personnel System (NSPS)/New 
        DOD-wide Performance Management System, Redesigned Hiring, and 
        Workforce Incentives
    The NDAA for Fiscal Year 2010 repealed the statutory authority for 
NSPS, mandating all employees transition from NSPS no not later than 
January 1, 2012. The Department successfully completed the termination 
of NSPS and the transition of all employees and positions from NSPS to 
the appropriate successor statutory pay and personnel system in 
December 2011. No employees or positions remained under NSPS on the 
statutory deadline of January 1, 2012.
    In September 2010, we launched our ``New Beginnings'' effort to 
involve labor representatives in design of a new performance management 
system and hiring processes. New Beginnings was an evolving effort and 
included labor and management planning sessions, conferences, and 
design team working meetings for more than 18 months, which culminated 
in over 100 pre-decisional proposals developed by labor and management 
employees for leadership consideration. The pre-decisional process 
culminated in a comprehensive report from the design teams that 
captures their research, conclusions, and proposals, and Department 
leadership has considered the report's recommendations. We will 
continue to involve employees through their labor representatives as we 
move forward on particular recommendations and decisions about the new 
authorities and practices.
    Civilian Leadership Development
    The Defense Civilian Emerging Leaders Program (DCELP), as 
authorized by the NDAA for Fiscal Year 2010, fills a critical need by 
focusing on a corporate scale on developing civilian leaders at the 
entry and mid-level. We recognize the need for an improved model to 
attract, retain, and develop civilian leaders to support pipeline 
readiness and enhance bench strength. We conducted a gap analysis 
between existing programs and requirements, and designed a framework to 
create a new program to recruit and develop new civilian leaders, using 
proven models such as the Presidential Management Fellows program. 
Recognizing the financial environment and to ensure we have a sound 
programmatic framework, we implemented a DCELP pilot in September 2011 
with 103 participants at the General Schedule (GS) 7 through 11 level 
from the Acquisition, Financial Management, and Human Resources career 
fields. A second cohort, which expands our intake to 180 participants, 
will begin before the end of 2012.
    This new DCELP is additive to the Department's current leadership 
programs, which include the Executive Leadership Development Program 
(ELDP) and the Department of Defense Senior Leader Development Program 
(DSLDP). DSLDP was established in 2008 to meet emergent leadership 
needs and provides a competency-based approach to the deliberate 
development of senior civilian leaders (GS 14 or 15 and equivalent 
grades) with the enterprise-wide perspective needed to lead 
organizations and programs and achieve results in the joint, 
interagency, and multi-national environments. We are pleased to report 
that DSLDP is soon graduating its second cohort and just commenced its 
fourth cohort. DSLDP is a critical feeder pipeline for executive 
talent. Established in 1985, ELDP provides mid-level civilians (GS-12 
through GS-14 and equivalent grades) with an extensive exposure to the 
roles and mission of the Department and our Interagency partners and, 
an increased understanding of, and appreciation for, today's 
warfighters through intensive hands-on field experiences. Both programs 
are aligned with the 21st century competency framework and designed to 
ensure application of critical leader competencies and have garnered 
success for their target senior grade populations. These highly 
competitive Department-wide programs will serve as building blocks for 
the new leader development framework.
    In addition to the programs just mentioned, another critical 
building block in this arena is training managers and supervisors. 
Pursuant to the NDAA for Fiscal Year 2010, the Department has 
established a holistic training curriculum and baseline learning 
objectives for each training topic. We have piloted and launched our 
first course, focusing on new supervisors. Our attention has turned to 
developing the curriculum for refresher training, which the NDAA 
requires occur at least every 3 years. The refresher pilot will take 
place in May 2012. Following that, we will develop and then launch for 
Departmental use training for managers--those who supervise other 
supervisors. All courses will be launched this year. Also, we are 
partnering with OPM and vendors to design assessment and developmental 
tools that will help predict interest and success for aspiring and 
current supervisors. Those assessment tools are planned for use by May 
2012.
    Senior Mentors/Highly Qualified Experts
    In April 2010, in response to media and congressional concern, the 
Secretary issued policy guidance regarding how the Department may 
acquire certain advisory services from retired senior officials--the 
so-called senior mentor (SM) policy. The guidance prohibits contracting 
for mentoring services and directs that senior mentors must be employed 
as Federal officials under the specific Highly qualified Expert (HQE) 
appointing authority, which subjects them to certain Federal ethics 
rules and salary limits. The NDAA for Fiscal Year 2011 formalized the 
requirement that senior mentors be hired as HQEs, and comply with all 
applicable Federal laws and regulations on personnel and ethics 
matters.
    In November 2010, the Deputy Secretary of Defense issued a 
memorandum directing all HQE-SMs position descriptions be revised 
within 30 days, requiring all HQE-SMs complete the public disclosure 
forms. In addition, all HQE-SMs were to submit completed public 
disclosure forms within 30 days of the position description being 
updated, but no later than January 12, 2011. Accordingly, all HQE-SM 
either separated or completed the public financial disclosure form as 
of January 12, 2011. Currently, the Department has 34 HQE-SMs on board, 
and approximately 164 HQEs total while Congress has authorized 2,500, 
and the number of HQEs has declined by 8 percent since December of last 
year. As a result of ongoing efficiency initiatives, the total number 
of HQEs will change as functions are discontinued.
    To further ensure SM services are acquired in strict compliance 
with Department policies, the Defense Federal Acquisition Regulation 
Supplement (DFARS) incorporated the prohibition on contracting for SM 
services in DFARS 237.102-72 issued on November 24, 2010. After a 
Department-wide audit, the Department of Defense's Inspector General 
reported on October 31, 2011, that the Department complied with these 
new policies for hiring senior mentors as HQEs.
    As a result of these changes, the Department has successfully 
balanced the critical need for SM services with the public's need for 
confidence in the integrity of the program. We are committed to 
ensuring consistency and transparency in the use of SM across the 
Department. Further, as we greatly value the contributions of our SM to 
the training and professional development of our current and future 
Joint and Service commanders, we believe this policy provides the 
rigorous oversight required for the proper employment of these experts.
    Civilian Expeditionary Workforce
    The Department is working to better employ the talents of our 
civilian workforce to meet expeditionary mission challenges, including 
those not directly related to war fighting. Global security challenges 
require adequate civilian capacity to conduct complex operations, 
including those missions that require close military-civilian planning 
and cooperation in theater. Since 2001, approximately 50,000 Department 
civilians have been involved in contingency operations around the 
globe. Currently, approximately 4,800 civilian employees are serving in 
the CENTCOM theater.
    The Department institutionalized the Civilian Expeditionary 
Workforce (CEW) to provide deployable civilian experts to support 
military operations, contingencies, emergency operations, humanitarian 
missions, disaster relief, and stabilization and reconstruction 
operations. The CEW is designed to enhance the Department's ability to 
work alongside and help build the capacity of partner defense 
ministries and provide surge support where needed. Since June 2010, CEW 
deployments have increased by 56 percent, from 171 deployed civilians 
to 388 as of the end of February 2012. Civilians deployed under the CEW 
receive general and theatre-specific, urban training, and are eligible 
for the same health care benefits in-theatre as deployed military 
personnel, including medical evacuation and access to hospital 
services.
    With the support of Congress, we have obtained important incentives 
and benefits to help compensate for the inherent risks of deployment. 
The Department continues to identify pertinent issues and propose fully 
integrated solutions to ensure force health protection, surveillance, 
deployment benefits, and medical care for civilians who have been 
injured, wounded, or have contracted diseases while deployed in support 
of contingency operations. We have worked in partnership with OPM, the 
Department of State, and the DoL to ensure all similarly-situated 
Federal civilians receive consistent and equitable benefits 
commensurate with the risks of deployment. In this endeavor, working 
with our partner agencies, we developed proposed legislation to provide 
a standard benefits package for all Federal employees.
    More work is underway to transform the CEW program mission. 
Consistent with the Department's strategic direction, the goal is to 
implement an enduring solution which will enable the CEW to achieve a 
rapid response capability in support of all Combatant Commands. The 
transformation will include consolidation of four key functions across 
the Department, including:

         Policy formulation that enables standard, DOD-level 
        instructions for the deployment of civilians that will allow 
        sufficient flexibility to meet future demand and ensure 
        personnel are identified for potential deployment in any event;
         HR Servicing that provides end-to-end lifecycle 
        support, from recruitment to separation;
         Management support for arranging travel; performing 
        audience targeted training; conducting final medical screening 
        and vaccinations; providing passport services and travel 
        voucher training; issuing travel orders, uniforms, and 
        equipment; tracking time and attendance during deployment; and 
        providing redeployment services; and
         Payroll support allowing for a centralized payroll 
        function to ensure standardized policies and administration.

    These efforts will help transform the capability of the CEW to 
efficiently support future contingency staffing needs to unify and 
improve the efficiencies in support of operations.
    Workforce Shaping
    The Department has long experience managing a civilian workforce in 
transition. Beginning with the first installation closures in the mid-
1960s, our predecessors formulated a strategy for maintaining a 
relatively stable workforce despite the instability that is inherent in 
major downsizing and restructuring. The centerpiece of that strategy 
was, and continues to be, the Priority Placement Program (PPP). Through 
this vital program, we have retained the skills of more than 258,000 
transitioning civilian employees by matching them with Department job 
vacancies. During the last 25 years, which have been largely defined by 
five Base Realignment and Closure rounds and a workforce reduction of 
30 percent \1\, our overall objective has been to reshape the 
Department as efficiently and humanely as possible. By maintaining 
constant focus on this goal, we have been able to develop a broad-based 
career transition assistance program to complement the PPP.
---------------------------------------------------------------------------
    \1\ This represents an overall reduction from 1,070,000 in 1987 to 
751,000 in 2012.
---------------------------------------------------------------------------
    In view of the efficiency initiatives implemented by former 
Secretary Gates, ongoing efforts by Secretary Panetta to further 
streamline, and the specter of even deeper spending cuts, it is very 
unlikely that involuntary separations can be avoided in fiscal years 
2012 and 2013. Although the scope of involuntary separations is 
uncertain at this time, we will fully exploit all available tools and 
resources to minimize the human impact of force restructuring while 
maintaining mission readiness. Under our current plan, the civilian 
workforce will decrease in size from about 764,300 full-time 
equivalents (FTEs) to 756, 800 in fiscal year 2013. This represents a 
reduction of about 1 percent, and is approximately 2 percent lower than 
our fiscal year 2011 actual execution of 771, 300. Absent additional 
constraints, the workforce will gradually decrease to 738,000 FTEs by 
fiscal year 2017.
    Federal agencies are required to use standard reduction-in-force 
(RIF) procedures when reorganization, lack of work, shortage of funds, 
or insufficient personnel ceilings necessitate separating or demoting 
civilian employees. When RIF becomes necessary, employees compete for 
retention based on several factors established by law and regulation. 
These factors include tenure, veterans' preference, length of service, 
and performance ratings. Together, these factors determine each 
employee's RIF retention standing.
    During periods of force reductions, the Department's policy is to 
use voluntary separation programs to the maximum extent possible prior 
to imposing any involuntary actions. The most familiar and publicized 
of these are Voluntary Separation Incentive Pay (VSIP) and the 
Voluntary Early Retirement Authority (VERA). The Secretary has 
independent authority to allow up to 25,000 VSIP buyouts annually. This 
figure, which does not include incentives paid in conjunction with Base 
Realignment and Closure (BRAC), has thus far been sufficient to meet 
our needs. Although there is no limit on the number of VERAs, the use 
of this authority can be constrained by the VSIP limit, since employees 
who elect VERA frequently also take VSIP.
    The Department also partners with the DoL to provide downsizing and 
restructuring installations outplacement assistance under the Workforce 
Investment System (WIS). The WIS is administered through the various 
State One-Stop Career Centers, and includes assistance such as 
retraining, career counseling, testing, and job placement assistance. 
While working constantly to refine and enhance existing force shaping 
tools, the Department will continue to seek regulatory and legislative 
changes to further assist affected civilian employees in transitioning 
to other positions, careers, or to private life.
                             health affairs
    The Military Health System provides extraordinary care on the 
battlefield to our servicemembers--both preventing illness and injury 
to those in harm's way, and rapidly treating those who are wounded. The 
performance of our military medical system in a time of war continues 
to set new standards for battlefield survival rates, the reintegration 
of many who are wounded back into their units and for returning those 
who need additional care back to the United States.
    In addition to these successes, the military health system provides 
access to care for over 9.6 million beneficiaries, no matter where they 
live. We provide this access through our direct health care system and 
through our managed care support contracts. This health care benefit is 
justifiably one of the finest in the county and is an appropriate 
benefit for those who serve our county. However, the costs of providing 
this care continue to increase more rapidly than overall inflation. For 
a number of years, and through several administrations, there have been 
continuous, incremental steps taken to reduce the rate of growth in the 
costs of healthcare.
    The Department is pursuing a balanced, four-pronged approach by 
which all stakeholders share responsibility for improving the health of 
our population and the financial stability of the system of care. Our 
four approaches--moving from a system of healthcare to one of health; 
continuing to improve our internal efficiencies; implementing provider 
payment reform; and rebalancing cost-sharing--are further described 
below. In some instances, they reflect efforts already underway, or new 
initiatives that the Department is implementing within existing 
legislative and regulatory authorities.
Moving from Healthcare to Health
    The Department of Defense's military medical leaders are leading a 
strategic effort to move our system to one that promotes and sustains 
the optimal health of those we serve, while providing world class 
healthcare when and where it is needed. Central to this effort are the 
Department's investments in initiatives that keep our people well; that 
promote healthy lifestyles; and that reduce inappropriate emergency 
room visits and unnecessary hospitalizations.
    Over the last 2 years, the Department introduced the Patient-
Centered Medical Home and over 2.2 million are currently enrolled. We 
are beginning to see the benefits of this new model of care with 
decreases in emergency room visits; increased compliance with provider 
directions and drug prescriptions; and increased patient satisfaction 
for those enrolled. We've also placed behavioral health staff within 
these medical homes, improving access with reduced stigma, for our 
patients needing the support of mental health providers. A valued 
component of the medical home is the introduction of secure patient-
provider email communications, allowing our patients to directly 
communicate with their medical providers without the need for a 
physical visit to the clinic. In 2013, we will continue to expand this 
model to all of our primary care clinics in the military health system, 
and increase the tools available to patients to help manage their own 
care.
    Aligned with that initiative is the introduction of a 24/7 nurse 
advice line for all stateside beneficiaries based on our effective use 
of this approach for our military beneficiaries in Europe. This will 
provide beneficiaries with around-the-clock access to toll-free nurse 
advice services. When the caller requires follow-up care, this service 
will provide direct appointing services for beneficiaries enrolled to 
TRICARE Prime in our military treatment facilities. We will implement 
this added service this year.
    In moving from healthcare to health, we have also engaged the 
broader DOD community--line leaders, commissaries, dining facilities, 
schools and child development centers. By changing menus, promoting 
better food choices and healthy lifestyles we will encourage healthy 
lifestyle changes. The First Lady, Michelle Obama, recently visited one 
of our leading installations, Little Rock Air Force Base, to highlight 
the progress we have made.
    Finally, we have taken a number of steps to support preventive 
services. Our TRICARE beneficiaries--whether enrolled to TRICARE Prime 
or in TRICARE Standard--have no copayments for recommended preventive 
services, such as influenza immunizations.
    The ``Healthcare to Health'' element of our strategy will not 
produce immediate cost savings. Nonetheless, based on early results 
from our efforts, as well as experience in the private sector, we are 
confident that these, and other ongoing enhancements to the TRICARE 
program, will produce improvements to health that also ``bend the cost 
curve.'' In the longer term, it is the strategy most likely to produce 
the greatest amount of savings to our system.
Internal Efficiencies
    Over the last 24 months, we have reduced internal costs by 
decreasing headquarters administrative overhead, reviewing more cost-
effective governance models, jointly purchasing medical supplies and 
equipment, and directing patients to lower cost venues for medications.
    Last year, the Secretary of Defense directed specific efficiency 
targets across the Department. As a result, over the last 11 months we 
have reduced or eliminated contractor support in the Office of the 
Assistant Secretary of Defense (Health Affairs) and the TRICARE 
Management Activity (TMA). Overall savings from internal efficiencies 
are projected to provide $259 million in savings for fiscal year 2013.
    In June 2011, the Deputy Secretary of Defense established a Task 
Force on Military Health System (MHS) Governance, with the purpose of 
evaluating options for the long-term governance of the MHS as a whole; 
governance in those areas where more than one Service operates medical 
treatment facilities--referred to as multi-Service markets, and 
governance for the National Capital Region (NCR). In late September, 
the Task Force provided their recommendations, after which senior 
Department leaders including Chairman of the Joint Chiefs of Staff 
began review of the Task Force recommendations.
    Implementation of any organizational efficiencies resulting from 
this Task Force has been placed on hold at the direction of Congress, 
subject to a review by the Comptroller General and Congress. We will 
provide congressional committees with the information requested 
regarding the Task Force work, and will develop more detailed cost and 
savings estimates for any eventual governance model. The Deputy 
Secretary of Defense approved and released a ``way ahead,'' on March 2, 
and while we are still awaiting the Government Accountability Office 
(GAO) report, we are prepared to answer any additional questions you 
may have.
    The Department has accelerated tri-service processes to standardize 
and jointly acquire medical supplies and equipment. We project savings 
that grow from $31 million in fiscal year 2012 to more than $69 million 
in fiscal year 2017. We have also engaged with our beneficiaries who 
have chronic medical conditions and high utilization of prescription 
drugs. Through a targeted outreach campaign, we have redirected a 
significant number of our patients from retail network pharmacies (our 
most expensive outlet) to home delivery--an option that is more 
economical for the government and the beneficiary, and has been shown 
to increase drug compliance.
Provider Payment Reform
    We are committed to identifying greater efficiencies and cost 
savings in all areas of our operations. In addition to internal 
efficiencies we can achieve through reorganization and consolidation, 
we are also seeing significant savings through a number of initiatives 
we have introduced in the last several years. These include the 
implementation of the outpatient prospective payment system; further 
use of Federal ceiling prices for acquisition of pharmaceutical 
products; a redirection of patients to our TRICARE mail order 
pharmacy--where prescription drugs are less expensive to both the 
government and patients, and is shown to increase patient adherence to 
their medication regimen; and the policy changes we made for 
reimbursement to select hospitals and health plans in the TRICARE 
network.
    The Department has undertaken a broad-based, multi-year effort to 
ensure all aspects of our provider payments for care purchased from the 
civilian sector are aligned with best practices in Medicare and in 
private sector health plans. The most notable efforts have included 
implementation of changes to the outpatient prospective payment system 
(OPPS) and reform of payment to Sole Community Hospitals.
    OPPS is modeled after the payment process that Medicare uses for 
similar health care services--setting a fixed fee per procedure, 
inclusive of provider and institutional charges for care. To allow 
medical facilities to transition to this new method of payment, TRICARE 
phased in the reimbursement levels over 4 years, with the full 
implementation of this policy set to occur in 2013. In fiscal year 
2012, we project $840 million in savings, and $5.5 billion over the 
fiscal years 2012-2017.
    Our provider payment reform for Sole Community Hospitals was 
approved by Congress in the NDAA for Fiscal Year 2012. This reform is 
also phased-in over time, producing a projected $31 million in savings 
in fiscal year 2012, but growing to more than $108 million in savings 
by 2017.
    In the area of purchasing prescription drugs, in 2009 we instituted 
a process for obtaining discounts on drugs distributed through retail 
network pharmacies. Known as Federal Ceiling Prices (FCP), 
prescriptions purchased under FCP are at least 24 percent less than 
non-Federal Average Manufacturer prices. In 2012, the FCP program will 
save the Department over $1.6 billion, and will grow to almost $2 
billion in savings by 2017.
Beneficiary Cost-Shares
    In addition to the focus on internal and external efficiencies, our 
proposed budget introduces changes to the health care out-of-pocket 
costs for our beneficiaries.
    I want to make three critical points related to these proposals. 
First, even accounting for these proposed fee changes, the TRICARE 
benefit will remain one of the finest health benefits available in the 
country, with among the lowest beneficiary out-of-pocket costs 
available to anyone--and certainly lower than costs by other Federal 
Government employees. We believe that is appropriate and properly 
recognizes the special sacrifices of our men and women in uniform, past 
and present.
    Second, these proposals were developed within the Department, and 
represent the input and consensus of our uniformed leadership. They 
have endorsed these proposals, and believe that we have appropriately 
balanced the need for a superb benefit that assists with both 
recruitment and retention of an All-Volunteer Force with our need to 
sustain a cost-effective approach for the long-term.
    Third, we recognize that some beneficiary groups should be 
insulated from increases in out-of-pocket costs. We propose to exempt 
those servicemembers, and their families, who were medically retired 
from military service, as well as the families of servicemembers who 
died on active duty. We also propose to establish cost-sharing tiers, 
with lower increases for retirees based on their retirement rank. More 
junior enlisted retirees, for example, will experience the lowest 
dollar increases in out-of-pocket costs. Finally, we have also avoided 
any changes in cost-sharing for active duty families with the exception 
of prescription drug copayments obtained outside of our medical 
treatment facilities (MTFs). Prescription drugs distributed within MTFs 
will continue to be free of charge for all beneficiaries.
    For over 15 years, patient out-of-pocket costs were either frozen 
or decreased. This was true for all beneficiary categories--active duty 
families; retirees under age 65 and their families; and retirees and 
their families who are Medicare-eligible. Last year, we introduced very 
modest changes in one segment of our population--increasing TRICARE 
Prime enrollment fees for retiree families by $5/month. We further 
recommended that these enrollment fees be indexed so that future 
increases continue to be modest and beneficiaries can plan for them. We 
greatly appreciate Congress' support for these proposals in the fiscal 
year 2012 budget, and have implemented those fee changes in the current 
year.
    For fiscal year 2013, we propose additional changes to fees across 
a broader set of programs. Although last year's changes were a 
necessary step, the Federal budget crisis and the need to balance cost 
reduction efforts throughout the Department necessitate these actions 
begin in 2013, with most changes phased in over time. The following 
sections provide a high-level overview of the proposed changes in 
beneficiary out-of-pocket costs, and Table 3 summarizes the proposed 
phased-in fees through 2017, followed by the estimated indexing of the 
proposed fees through 2022.
      


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Fee increases for TRICARE programs. The following proposed changes 
represent increases from existing patient out-of-pocket costs:

         TRICARE Prime Enrollment Fees. We propose to raise the 
        enrollment fees in 2013 for retired servicemembers and their 
        families between $80-$300 per year, based on the retirement pay 
        of the servicemember, and continue to provide similar increases 
        through 2017.
         TRICARE Deductibles. We propose to increase 
        deductibles for the TRICARE Standard program for retired 
        servicemembers and their families beginning in fiscal year 
        2013. TRICARE deductibles have not been changed since before 
        the TRICARE program was introduced, having last been adjusted 
        over 20 years ago.
         TRICARE Pharmacy Copays. We propose to increase 
        pharmacy copayments for generic, brand name, and non-formulary 
        prescriptions in both the retail and mail order settings, 
        although we will continue to offer significant incentives for 
        beneficiaries to elect mail order over retail pharmacy 
        networks. This change is proposed for all non-active duty 
        beneficiaries, to include active duty family members. 
        Prescription drugs obtained in military hospitals and clinics 
        will continue to be provided without copay for any 
        beneficiaries.

    New fees for TRICARE programs. Our proposed budget also calls for 
the introduction of new fees not previously part of the TRICARE 
program.

         TRICARE Standard/Extra Enrollment Fee. We propose to 
        introduce an annual enrollment fee in TRICARE Standard/Extra 
        for retired servicemembers and their families. This enrollment 
        action will require beneficiaries to elect their preferred 
        primary benefit coverage--TRICARE Prime, TRICARE Standard, or 
        other health insurance offered through an employer. The 
        proposed fee for 2013 will be $40/year for an individual 
        retired beneficiary, or $140 per retired family.
         TRICARE For Life (TFL) Enrollment Fee. When TFL was 
        introduced in 2002, there was no enrollment fee in the program, 
        only a requirement that beneficiaries be enrolled in Medicare 
        Part B to enjoy their TFL benefit. Medicare Part B was always a 
        step that we recommended our retirees elect, and prior to 2002, 
        over 95 percent of eligible military retirees were enrolled in 
        Medicare Part B. The TFL benefit has reduced beneficiary out-
        of-pocket costs by thousands of dollars per year in copayments 
        or Medicare supplemental health insurance plan payments. The 
        proposed TFL enrollment fees, similar to the TRICARE Prime 
        enrollment fees, are tiered, based on an individual's 
        retirement pay--and range from $35 to $115 per beneficiary per 
        year.
         Exclusion of Enrollment Fees from the Catastrophic 
        Cap. We propose that enrollment fees, which had previously 
        accumulated toward a retiree's catastrophic cap limit, will not 
        be counted toward the cap beginning in 2013.
         Indexing all fees beginning in 2014. In addition to 
        the indexing of the TRICARE Prime enrollment fee, which is 
        already indexed, we propose to index other beneficiary out-of-
        pocket costs identified in this set of proposals, to include 
        the TRICARE Standard deductible, TRICARE Standard enrollment 
        fee, TFL enrollment fees, pharmacy copayments, and catastrophic 
        caps.

    These proposed changes continue to be modest by historic standards 
of cost-sharing in the TRICARE program. In 1994, when TRICARE was 
originally created, a working age retiree's family of three contributed 
approximately 27 percent towards the total cost of their care; today 
that percentage has dropped to 10 percent. Even with these proposed 
changes, the percentage would still remain below the percentage 
originally set by Congress, averaging approximately 14 percent of range 
of overall health care costs in 2017--and stabilizing at that level for 
the out-years.
    These adjustments are an important step to setting the TRICARE 
benefit on a more sustainable path that maintains the quality of the 
medical benefit for future generations. Moreover, the overwhelming 
majority of these adjustments will be phased in over a 4- to 10-year 
period and will be appropriately indexed to ensure future 
sustainability and guarantee transparency. These proposals--one element 
of a four-pronged effort at cost control--will help shift us toward 
more effective and cost-efficient processes that will allow us to 
provide better care while meeting our obligations to help reduce our 
budgets.
Wounded Warriors
    The 2007 revelations regarding Walter Reed were a stark wakeup call 
for us all. In the nearly 5 years since, the Department has worked in 
tandem with VA to improve policies, procedures, and legislation that 
impacts the care of our wounded warriors. As a result of efforts in 
both Departments and in Congress, we have reached important milestones 
in improving care for our wounded warriors. These milestones include a 
new disability evaluation system and improved case management that are 
the result of a programmatic cohesion with the VA that is better than 
ever before. More so than at any time in our Nation's history, 
separating servicemembers are greeted by more comprehensive mental and 
physical care; by greater opportunity for education, and by a deeper 
societal commitment to ensuring their welfare.
    Disability Evaluation System/Integrated Disability Evaluation 
        System
    The genesis of the Disability Evaluation System (DES) was the 
Career Compensation Act of 1949. The DES remained relatively unchanged 
until November of 2007 when, as a result of public concern and 
congressional interest, the joint DOD and VA Senior Oversight Committee 
(SOC) chartered a DES Pilot designed to create a ``servicemember-
centric'' seamless and transparent DES, administered jointly by the DOD 
and VA.
    The Pilot launched at the three major military treatment facilities 
(Walter Reed, Bethesda, Naval Medical Center, and Malcolm Grow) in the 
NCR on November 21, 2007 and successfully created a seamless process 
that delivers DOD benefits to wounded, ill and injured servicemembers 
and VA benefits to servicemembers as soon as possible following release 
from duty. We found the DES Pilot to be a faster, fairer, more 
efficient system; and, as a result, in July 2010, the SOC co-chairs 
(Deputy Secretary of Defense and Deputy Secretary of Veterans Affairs) 
directed worldwide implementation to start in October 2010 and to 
complete in September 2011. On December 31, 2010, the first Integrated 
Disability Evaluation System (IDES) site became operational, which 
marked the end of the pilot, and the name was formally changed to the 
IDES.
    The IDES, similar to the pilot, streamlines the DES process so that 
the member receives a single set of physical disability examinations 
conducted according to VA examination protocols, proposed disability 
ratings prepared by VA that both DOD and VA can use, and processing by 
both Departments to ensure the earliest possible delivery of disability 
benefits. Both Departments use the VA protocols for disability 
examination and the proposed VA disability rating to make their 
respective determinations. DOD determines fitness for duty and 
compensates for unfitting conditions incurred in the line of duty 
(title 10), while VA compensates for all disabilities incurred or 
aggravated in line of duty during active military, naval, or air 
service for which a disability rating of 10 percent or higher is 
awarded, and also determines eligibility for other VA benefits and 
services (title 38). The IDES permits both Departments to provide 
disability benefits at the earliest point allowed under both titles. 
servicemembers who separate or retire (non-disability) may still apply 
to the VA for service-connected disability compensation.
    In summary, the IDES features a servicemember-centric design, a 
simplified process, more consistent evaluations and compensation, a 
single medical exam and disability rating, seamless transition to 
Veteran status, case management advocacy, and establishment of a 
servicemember relationship with the VA prior to separation. It also 
provides increased transparency through better information flow to 
servicemembers and their families and a reduced gap between separation/
retirement from Service to receipt of VA benefits. As of January, IDES 
enrollment is 23,602 servicemembers (66 percent Army, 14 percent 
Marines, 10 percent Navy, 10 percent Air Force). Since November 2007, 
cumulative enrollment has been 40,911, with 12,640 completing the queue 
and receiving benefits. Including return to duty cases in the process, 
Active component member IDES completion time averages 380 days as of 
January 2012, RC members average 441 days, and the Guard averages 371 
days. These averages are above our targeted goals but still are 
significantly lower than the 1940-era legacy system it replaced which 
averaged an estimated 540 days by combining DOD and VA systems.
    This past year, the Department partnered closely with the VA to 
implement the IDES at all 139 sites worldwide; however, we recognize 
the need to do better in the areas of timeliness to complete the 
process. This year our focus will be on such timeliness improvements. 
We have made significant policy adjustment to remove efficiency 
impediments, made procedural improvements, enhanced oversight and 
assistance to the Military Departments, and added resources that should 
improve Military Department performance in this area. We will enhance 
our emphasis on leadership, execution, and resourcing the IDES to 
handle increased volume while decreasing the time spent in the process.
    In addition, the Departments are looking closely at the stages of 
the system that are outside of timeliness tolerances and are developing 
other options to bring these stages within goal. We are committed to 
working closely with Congress to explore new initiatives to further 
advance the efficiency and effectiveness of the disability evaluation 
process.
    Recovery Coordination Program
    The Recovery Coordination Program (RCP) was established by the NDAA 
for Fiscal Year 2008 , and was further defined by the Department of 
Defense Instruction (DODI) 1300.24, entitled ``Recovery Coordination 
Program.'' Together these provide a comprehensive policy on the care 
and management of recovering servicemembers, including the assignment 
of a Recovery Care Coordinator (RCC) to help wounded, ill, and injured 
servicemembers and families through the phases of recovery, 
rehabilitation and reintegration. The policy also provides for 
standardized training, and a caseload ratio of not more than 40 
recovering servicemembers per RCC.
    Currently, there are 171 RCCs in 84 locations worldwide, placed 
within the Army, Navy, Marines, Air Force, U.S. Special Operations 
Command, and Army Reserves. More than 3,800 servicemembers and families 
have the assistance of an RCC, whose responsibilities include ensuring 
the servicemember's non-medical needs are met, and assisting in the 
development and implementation of the Comprehensive Recovery Plan 
(CRP). Each RCC receives more than 40 hours of Department-sponsored 
standardized training, including information on roles and 
responsibilities and concepts for developing the CRP. Additionally, we 
are now beginning to train Army ``Advocates'' in order to bring their 
program into compliance with the legislative mandate that every 
recovering servicemember be provided a DOD-trained RCC. RCC training is 
continually enhanced based on feedback from participants. After the 
October 2011 training, 90 percent of students rated the instruction and 
course materials as ``excellent.''
    Over the past 5 years, we have added $26.953 million, resulting in 
increased numbers of RCCs available to provide care coordination to our 
recovering servicemembers. Looking ahead, each Military Service will 
continue to identify and resource their requirements for additional 
RCCs. In addition to standardized training for RCCs, the CRP has 
expanded to include several other portfolios, many of them identified 
as key priorities for the non-medical care management of recovering 
servicemembers during a Wounded Warrior Care Coordination Summit held 
in March 2011.
    The Wounded Warrior Education and Employment Initiative (E2I) 
operates on a regional basis and engages recovering servicemembers 
early in the recovery process to identify skills they have, career 
opportunities that match those skills, and any additional skills they 
might need to be successful. The process is overseen by Regional 
Managers currently located in five regions across the United States. 
The E2I process also relies on collaboration with the VA, which is 
governed by a Memorandum of Understanding to provide VA's vocational 
rehabilitation services earlier in the recovery process than ever 
before.
    The Operation Warfighter program (OWF) also supports this White 
House priority by placing wounded, ill, and injured servicemembers in 
Federal internship opportunities that positively impact their 
rehabilitation and augment career readiness by building resumes, 
exploring employment interests, obtaining formal on-the-job training, 
and gaining valuable Federal Government work experience. There are 
currently more than 500 OWF interns working in approximately 75 Federal 
agencies and subcomponents around the country, with a total of more 
than 2,500 placements in 105 agencies and subcomponents since the 
inception of the program. The program is also supported by five 
Regional Coordinators placed across the country. Going forward, the 
Regional Coordinators will continue to focus on local and regional 
outreach to strengthen relationships with Federal agencies to improve 
and enhance internship and employment opportunities for wounded, ill 
and injured servicemembers.
    The Warrior Athletic Reconditioning Program (WARP) engages wounded, 
ill and injured servicemembers early in individualized physical 
activities outside of traditional therapy settings, inspiring recovery 
and encouraging new opportunities for growth and achievement. This new 
initiative will be implemented throughout the Department. WARP partners 
include the Service chiefs from each branch of the Military, as well as 
the United States Olympic Committee. WARP goals include increasing 
awareness and participation in adaptive sports at the Service-level, as 
well as preparing athletes for participation in competitive events such 
as the Warrior Games.
    These measures when taken together, substantially and materially 
affect the life experience of our men and women in uniform and the 
families who support them. Our work to improve the care of wounded 
warriors, especially as they transition from DOD to VA, is the core of 
our efforts to provide those who have sacrificed so much with the care 
and benefits they deserve. Despite the significant achievements, we 
should not underestimate what remains to be done as we care for a new 
generation of veterans who have served under very difficult 
circumstances for sustained periods. We will continue to work with our 
colleagues at VA and throughout the government to provide our 
servicemembers with the highest quality care and treatment. Taking care 
of our wounded, ill and injured servicemembers is one of the highest 
priorities for the Department, the Service Secretaries, and the Service 
Chiefs.
                          total force support
Military Family Policy
    One of the four overarching principles of the Defense strategy is 
to preserve the quality of the All-Volunteer Force and not break faith 
with our men and women in uniform or their families. Despite difficult 
economic circumstances necessitating budget reductions across all 
levels of government, the Department remains committed to providing 
military families with support programs and resources that empower them 
to address the unique challenges of military life. To this end, the 
Secretary of Defense has directed that Family Programs and Mental 
Health Care be maintained as a priority for the Department.
    The Department conducted a Front End Assessment of family programs 
and non-medical mental health care. The purpose of the review was to 
ensure that mission critical needs would be met for family programs or 
mental health care during the next 5 years. To ensure efficiency of 
programs, without redundancy, programs were reviewed with the intent of 
identifying, comparing and contrasting methods of program delivery.
    These efficiencies did not cut programs for servicemembers or their 
families but resulted in a more cost-effective approach to program 
delivery. The review identified the following efficiencies.

         Maximized use of military family life consultants 
        (MFLC) and Military OneSource counselors;
         Limited number of full-time rotational personal MFLC 
        financial counselors due to identified overlaps with Services' 
        programs, while allowing the capability for surge support 
        through the MFLC program; and,
         Right-sized MyCAA program based on new eligibility 
        criteria, which reduced the number of eligible spouses.

    Some key programs and initiatives are:

         Spouse Education and Career Opportunities: The DOD 
        Spouse Education and Career Opportunities (SECO) program is a 
        holistic, spouse-centric initiative designed to meet the needs 
        of all military spouses as they explore portable career 
        interests and strive to overcome common barriers to their 
        education and career goals. One of the components of SECO is 
        the My Career Advancement Account (MyCAA) that provides 
        eligible military spouses with tuition assistance as they 
        pursue requirements for a portable career. The Department has 
        also expanded upon the Army's Spouse Employment Partnership 
        program model. A significant number of ``Fortune 500 Plus'' 
        employers now participate in the Military Spouse Employment 
        Partnership (MSEP), with over 150,000 jobs posted on the 
        www.MSEPJobs.com web portal and 15,000 spouses hired by MSEP 
        employers. We are expanding the portal to include a new 
        function which automatically matches posted spouse resumes to 
        posted employer job openings. We are also instituting an 
        electronic MSEP partner application and streamlining the 
        vetting and approval process. These enhancements will allow 
        companies to become partner employers more quickly. Webinars 
        and online training resources are helping new schools and 
        employers to improve their understanding and support for 
        military spouse employees who seek employment continuity and 
        upward career growth as they relocate to new duty stations.
         Voluntary Education Opportunities: During fiscal year 
        2011, our Voluntary Education program helped fund 866,788 
        enrollments by over 300,000 servicemembers, which resulted in 
        44,692 diplomas and 528 certifications/licensures. 
        servicemembers are ``blending'' their course work, taking both 
        traditional and online courses, with approximately 73 percent 
        of servicemembers taking some courses online. Due to this, we 
        now require all post-secondary institutions participating in 
        the DOD Tuition Assistance program to follow certain standards 
        of conduct; we are tracking compliance and monitoring to ensure 
        there is continuous quality improvement.
         Family Readiness Programs: With budget and personnel 
        reductions we can expect an increase in stress-related demand 
        for support from our military families and we are prepared to 
        meet that demand using the wide range of family support 
        programs and partnerships. This includes developing virtual 
        applications for the delivery of what has traditionally been 
        in-person support, and providing surge capability. The 
        Department is working closely with the Services to reduce 
        redundancy and increase efficiency. For instance, we are in the 
        process of developing a new community capacity-building toolkit 
        and online professional development modules to streamline the 
        training and development of our family support staff, and 
        improve capacity. The last Military Family Readiness Council 
        meeting was held in December 2011. We are identifying new 
        members and working in coordination with the military Services 
        to select spouses and/or parents to represent their Services. 
        The next MFRC is projected to be during the third quarter of 
        fiscal year 2012.
         Non-Medical Counseling: Demand for non-medical 
        counseling continues to increase, and access to non-medical 
        counseling is a Department focus area. We continue to enhance 
        confidential non-medical counseling via two delivery systems, 
        the Military Family Life Consultants (MFLC) and the Military 
        One Source (MOS) Program. Non-Medical Counseling augments the 
        military support programs currently in place, and is designed 
        to help servicemembers and families cope with normal reactions 
        to the stressful situations created by deployments, family 
        separations, war, and reintegration.. MOS non-medical 
        counseling is offered by licensed clinicians who have private 
        practices in the local community. The MFLC program began as a 
        pilot in 2004, and today, more than 1,100 MFLCs provide 
        confidential non-medical counseling support on 229 
        installations throughout the world. In fiscal year 2011, the 
        program provided face-to-face counseling sessions to 
        approximately 6.6 million people. At a commander's request, 
        additional MFLCs may also be mobilized and deployed to provide 
        ``surge'' counseling support. Non-medical counseling is 
        provided by licensed clinicians who are deployed to 
        installations and are assigned to work at the family centers, 
        child development centers, youth centers, schools, and are 
        embedded into brigades.
         Military OneSource (MOS): MOS provides call center and 
        web-based information, referral, counseling, and educational 
        materials. Services are available worldwide, 24 hours a day, at 
        no cost to the user. In fiscal year 2011, MOS responded to 
        almost a million telephone calls, received 3.6 million online 
        visits and assisted servicemembers and families with over 
        200,000 Federal and State tax filings. Other MOS services 
        include relocation assistance, document translation, child care 
        and education resources, special needs consultation, elder care 
        consultation, on-line library resources, and health and 
        wellness coaching. Accessed via MOS, the Wounded Warrior 
        Resource Center (WWRC) provides immediate assistance to 
        wounded, ill, and injured servicemembers, their families, and 
        caregivers. In 2011, WWRC resolved 3,056 cases for wounded 
        warriors, an increase from 2010.
         Family Advocacy Programs (FAP): The FAP addresses 
        physical, sexual, and emotional abuse and neglect involving 
        Active component military personnel and family members either 
        as victims or abusers. We evaluate the effectiveness of FAP 
        through rates of child abuse and neglect and spouse/intimate 
        partner abuseand outcome measures for prevention and treatment. 
        Through 10 years of high stresses on our families due to 
        wartime deployments, our rates of such family maltreatment have 
        remained relatively stable; however, we continue to monitor 
        this carefully. For 2 consecutive years, 85 percent of those 
        who participated in our New Parent Support Program for at least 
        6 months had no substantiated child abuse or neglect the 
        following year, and 90 percent of substantiated spouse abusers 
        who completed FAP treatment had no substantiated spouse abuse 
        the following year.
         Child Care: The Department continues to expand child 
        care capacity that supports RC families while the servicemember 
        is deployed, geographically-dispersed active duty military 
        families, and servicemembers living in areas in the continental 
        United States where on-installation military child care is 
        unavailable. Ongoing efforts are focused on ensuring the 
        availability of child care options that meet quality standards, 
        including health and safety standards and standards for 
        developmentally-appropriate practices.
         Youth Programs: Faced with their own unique 
        challenges, military youth aged 6-18 can turn to a number of 
        quality programs serving more than 600,000 military youth 
        around the world designed to prepare young people to meet the 
        challenges of military life, adolescence, and adulthood. We 
        have developed relationships with other Federal agencies and 
        nationally-recognized organizations such as the Boys and Girls 
        Clubs of America and the USDA's 4-H Youth Development Program. 
        Through these relationships, we offer more than 300 camp 
        opportunities each year for military youth, and are a vital 
        component of our support to geographically-dispersed youth of 
        the NG and RCs.
    Special Needs
    The Department and the Military Services continue to provide 
support to military families with special needs. During the last 2 
years, 120 additional family support personnel have been hired and 
deployed to installations worldwide; we now have a total of over 400 
providers who provide information, referral and education to families 
with special needs. The Exceptional Family Member Program (EFMP) family 
support component also provides non-clinical case management to those 
families who need additional assistance with accessing services on the 
installation and in their local communities. The Office of Community 
Support for Military Families with Special Needs developed a mobile 
website, accessible from smart phones; that website provides military 
families with information on the EFMP and contact information for 
enrollment and family support providers. The mobile website also 
provides podcasts and links to other materials available to military 
families with special needs.
    The Department engages with military families with special needs by 
participating in the Congressional Military Family Caucus sessions and 
reviewing input from families during focus groups and online. We also 
established an EFMP family panel composed of ten families who represent 
all military Services, active duty, and RCs, and ranks. Family members 
with special needs are of all ages (children through adults) and with a 
wide variety of disabilities. Their issues range from access to medical 
care, availability of comparable services in the public schools, and 
lengthy waiting lists for Federal and State programs.
    To address the needs of this population, the Office of Special 
Needs has partnered with the DOD children and youth programs to provide 
training through Kids Included Together on the inclusion of children 
with special needs into children and youth programs. They have also 
partnered with the TRICARE Management Activity to communicate better 
with families about their benefits and accessing care, and to support 
them with portability of care during moves.
    DOD-State Initiatives
    The Department continues to work with State governments to educate 
policymakers on the life-challenges faced by servicemembers and their 
families, and to ensure that State-level policies do not disadvantage 
military families due to their transient life style. States have 
addressed several key quality of life issues, to include the impact of 
frequent school transitions experienced by military children, the loss 
of income by spouses as a result of military moves, and enforcement of 
the Congressionally-mandated DOD predatory lending regulation. The 
State responses have affirmed their commitment to the well-being of the 
Nation's fighting force. For example, 39 States have approved the 
Interstate Compact on Educational Opportunity for Military Children, 39 
States (plus DC) now provide eligibility for unemployment compensation 
to military spouses, and 34 States (plus DC) enforce the DOD predatory 
lending regulation. The Department is continuing this effort in the 
2012 State legislative sessions with strong emphasis on support of 
military families through the issues listed above. We are also 
promoting expedited occupational licensure processes to allow military 
spouses to resume their work faster in a new State, and provisions for 
separating servicemembers to receive credit for their military 
education, training and experience toward a State occupational license 
or an academic degree. The Department is continuing to partner with the 
Uniform Law Commission to inform State legislators of the Uniform 
Military and Overseas Voters Act which simplifies the absentee voting 
process by making it more uniform, convenient and efficient. This year 
we are advocating for States to consider establishing Veterans 
Treatment Courts for servicemembers and Veterans in the criminal 
justice system who are suffering substance abuse and mental health 
issues.
    MWR Support to Troops in Combat:
    Support is critical to allow servicemembers to communicate with 
family and friends, stay physically and mentally fit, and reduce 
stress. The Department now funds over 514 free MWR Internet Cafes in 
Iraq and Afghanistan and 135 portable satellite units (known as 
Cheetahs) to support remote locations. The DOD MWR Online Library 
offers free downloads of audio and e-books, and access to up-to-date 
recreation, education and career transition support databases.
    The ability of injured servicemembers to engage in recreation and 
sports is a very important component of rehabilitation and 
reintegration. Under a contract with Penn State University, MWR 
specialists are trained to work with medical personnel, wounded warrior 
units, and community and non-profit organizations to ensure inclusive 
and adaptive sports and recreation are included in recreation programs. 
The DOD Paralympics Program continues to provide rehabilitation support 
and mentoring to injured servicemembers and veterans who have sustained 
various types of injuries.
    We remain fully committed to supporting the All-Volunteer Force and 
their families, particularly in light of the unprecedented demands that 
have been placed on them in recent years.
    The Department continues to pursue innovations, initiatives, and 
efficiencies that improve the quality of life of its military members 
and their families. With your continued support, our military force 
will remain ready, willing and able to serve this Nation with 
distinction.
Military Voting
    The Department is well positioned for the 2012 election, building 
on its considerable success in the 2010 election efforts. Through 
direct-to-the-voter outreach programs, easy and quick online voting 
assistance tools, and aggressive communications and marketing programs, 
we experienced a 21 percent increase in military voter participation 
rates between 2006 and 2010. The Department is refining and expanding 
those programs for the 2012 election, as well as providing direct 
support to State and local election jurisdiction which deploy online 
ballot delivery systems, reducing ballot delivery time from 20 to 30 
days to 20 to 30 milliseconds.
Department of Defense Education Activity
    Ensuring excellence in the education of military children is a top 
priority for Secretary Panetta and the entire Department. A quality 
education is both a stabilizing influence in the lives of our children 
and their families and an overall recruitment, retention and morale 
element in the readiness of our Force. There are 1.2 million school-
aged children with a parent serving in the military. Nearly 86,000 of 
these children attend one of the schools operated by the Department of 
Defense Education Activity (DODEA). Not unlike other parents, military 
families frequently say that the quality of their children's education 
is one of the most important criteria when selecting a place to live. 
The demands of extended conflict and frequent relocations add to the 
challenges faced by military families. While they are often described 
as a resilient group, the cumulative effects of multiple moves and 
significant parental absences can erode this resilience and, as the 
research suggests, diminish academic performance in school.
    The DODEA schools offer a 21st century, student-centered learning 
environment that is tailored to meet the needs of military families. To 
this end, DODEA is leaning forward and providing military-connected 
children an educational experience that challenges each student to 
maximize his or her potential and prepares them to be successful, 
productive and contributing citizens in today's global economy. DODEA 
also is mobilizing its knowledge, expertise, and resources to support 
military-connected children in the U.S. public schools.
    The Department has made a number of sweeping commitments to 
improving the educational experience for military children. Some of 
these far-reaching commitments are highlighted below:

         DODEA has joined 46 States in the adoption of the 
        Common Core State Standards. Today, the differences between 
        State educational standards, including variances in graduation 
        requirements, can and have negatively impacted achievement for 
        military children. The Common Core State Standards will help 
        mitigate this academic disruption and provide greater 
        continuity in the educational experiences of our highly mobile 
        children.
         DODEA has launched a vibrant Virtual Learning program 
        which includes the use of tele-presence equipment in 
        classrooms, to expand course offerings for students. No longer 
        will small enrollments and limited course offerings at one 
        DODEA school significantly drive the educational experience of 
        students. Student interests and needs now have considerable 
        influence. Through virtual learning, students have access to 
        courses such as Advanced Placement, foreign language, and STEM-
        related courses that simply would not be possible in some 
        locations.
         DODEA is adopting a 21st century teaching and learning 
        framework, where technology is leveraged to improve the 
        educational experience of children. Ten middle and high schools 
        will be using a digital instruction platform on a pilot basis. 
        As we leverage technology in our learning environments, we will 
        need to make a significant investment in the professional 
        development of our teachers and leaders.
         DODEA is modernizing and replacing school facilities 
        to ensure that military children have school facilities that 
        are safe, secure, in good repair and provide an optimal 
        learning environment that supports current and future 
        educational requirements. In fiscal year 2013, DODEA requested 
        $657 million for 11 school Military Construction projects.
         DODEA has ramped up its outreach to U.S. public 
        schools to improve the educational experience for students in 
        non-DODEA schools. Since 2008, DODEA has provided 146 grants 
        totaling $167 million to school districts, in over 900 schools. 
        All grants focus on enhancing student learning opportunities, 
        social-emotional support, and educator professional 
        development.

    As we move forward with Force structure changes, DODEA will 
continue to work with the Military Services to right-size schools in 
the affected communities, will keep students in the forefront, and will 
stay focused on delivering an excellent education and supporting our 
families. DODEA will ensure a ``warm-hand off'' to the U.S. public 
schools who may be receiving an influx of military-connected students. 
Further, we will leverage our civilian workforce shaping tools to 
provide continuity of employment for all those who wish to continue 
with their Federal careers.
    The Department is charged with the responsibility and privilege of 
educating the children of our Nation's military. We know full-well the 
toll that war, conflict and frequent movements have exacted from our 
servicemembers and their families. The Department is committed to 
ensuring that the education of the children of servicemembers will not 
be among the many sacrifices our families must make to defend our great 
Nation.
Defense Commissaries
    The commissary continues to be one of the most popular benefits 
with military members and families and is an efficient provider of non-
pay compensation to our military personnel. Operated by the Defense 
Commissary Agency (DeCA), this integral element of the total 
compensation package significantly contributes to the financial 
readiness of our military families. An average family of four that 
consistently shops at the commissary will save nearly $4,500 per year 
by taking advantage of the 32 percent savings on their overall 
purchases. The commissary further enhances financial readiness as a 
major employer of military spouses and family members. Last fiscal 
year, 39 percent of DeCA employees in the United States were military 
spouses or other family members; and the total rises to 63 percent when 
including military retirees, other veterans, and members of the Guard 
and Reserve. While enhancing military families' quality of life, the 
commissary also provides an excellent return on investment. Last fiscal 
year, the commissary provided direct savings to commissary customers of 
$2.8 billion for a taxpayer cost of $1.4 billion, a 2-for-1 return. 
DeCA implemented efficiency reductions in fiscal year 2012 and there 
are no plans for additional budget reductions at this time.
                               conclusion
    Putting together this year's budget request in a balanced package 
was a difficult undertaking, but I believe we have the right mix of 
programs and policies in place to shape the force we need in support of 
the strategic guidance. We will reduce the rate of growth of manpower 
costs, to include reductions in the growth of compensation and health 
care costs. But as we take those steps, we will continue to keep faith 
with those who serve.
    During the past decade, the men and women who comprise the All-
Volunteer Force have shown versatility, adaptability, and commitment, 
enduring the constant stress and strain of fighting two overlapping 
conflicts. They have also endured prolonged and repeated deployments. 
Some--more than 46,000 men and women--have been wounded, and still 
others--more than 6,200 members of the Armed Forces--have lost their 
lives. As the Department reduces the size of the force, we will do so 
in a way that respects and honors these sacrifices.

    Senator Webb. Thank you very much, Dr. Rooney.
    Secretary Hale, welcome.

 STATEMENT OF HON. ROBERT F. HALE, UNDER SECRETARY OF DEFENSE, 
            COMPTROLLER, AND CHIEF FINANCIAL OFFICER

    Mr. Hale. Thank you, Mr. Chairman, Senator Graham, members 
of the subcommittee. Let me underscore Dr. Rooney's thanks to 
all of you for the support of our men and women in uniform and 
the civilians who support them.
    I am going to focus on some budget aspects of the personnel 
budget with just a few overall numbers.
    We have asked Congress for $525.4 billion of discretionary 
budget authority in fiscal year 2013. If you adjust that for 
inflation, it is a 2.5 percent real decline, the third 
consecutive year of real decline in the defense budget. As you 
look beyond fiscal year 2013, the budget is basically flat in 
real terms or slightly up.
    To get to this request while also remaining consistent with 
title I, the non-sequestered title of the BCA, we reduced 
overall defense spending by $259 billion in the next 5 years, 
our budget period 2013 to 2017, compared to the last year's 
plan. We took three steps to reduce our plan funding.
    First, more disciplined use of defense dollars by 
eliminating lower priority programs and through efficiencies, 
including some cutbacks in contractor workforce.
    Second, we propose force structure changes to carry out a 
new defense strategy, particularly important to this 
subcommittee. For example, our military will be smaller and 
leaner, especially our ground forces which will no longer be 
sized to carry out large, prolonged operations such as the one 
we undertook in Iraq. On the investment side, we made a number 
of decisions to fund high priority programs, cyber, special 
operations, for example, but also restructured and reduced 
investments for many weapons systems.
    Third, and I know of particular importance to this 
subcommittee, the budget continues to fully support America's 
All-Volunteer Force even in the face of the BCA. We fully 
funded personnel, took a number of steps, funded family support 
programs fully.
    But we also carefully reviewed and slowed the growth in 
military pay and benefits.
    Let me expand on just two aspects of this budget in my oral 
statement.
    The new 5-year budget plan calls for a reduction in end 
strength, Active end strength of about 100,000 and 20,000 in 
the Reserve components, mostly in our ground forces. To achieve 
these substantial end strengths, the Army will eliminate at 
least eight brigade combat teams; the Marine Corps, six 
battalions, four tactical air squadrons. There will be 
significantly smaller cuts in the Navy and the Air Force. 
Altogether these force structure reductions will save us about 
$9 billion in fiscal year 2013 compared to last year's plan, 
$53 billion over the FYDP, so we are about 20 percent with 
those on the way toward being consistent with the BCA.
    We made substantial changes in investment--the cuts in this 
budget were disproportionately on the investment side--and 
pushed for more disciplined use of resources through 
streamlining and efficiencies. But it did not get us to where 
we needed to be.
    In the end--and it was in the end--we made a decision to 
address military pay and benefits issues to avoid what we 
viewed as overly large cuts in force structure and investment. 
Our assessment took note of important trends in military pay 
and benefits. Pay and benefits, defined as military personnel 
and health care and some others, are up over 87 percent since 
2001, 30 percent more than inflation, while the Active Duty end 
strength grew by only 3 percent during that period.
    While we strongly believe that changes are needed in 
military pay and benefits, we also believe they must take into 
account some vital principles. The military compensation system 
has to recognize the unique stress of military life. We cannot 
simply copy the civilian system. It must enable us to recruit 
and retain needed personnel. We judged that it should be 
disproportionately small in terms of the amount of the savings. 
So our total savings were about 10 percent of the target we 
were working toward under the BCA, military pay and benefits 
more than a third of our budget. No one's pay can be cut. 
Growth can be slowed, but no pay cuts, no freezes.
    Now, statements by other witnesses have described the 
proposals to reduce the size of our out-year pay raises, 
increase fees and deductibles for retirees, and raise pharmacy 
copays in ways that increase incentive to buy by mail order and 
to use generic drugs. I am not going to go over those again.
    But I would like to do a couple of things, and I would like 
to correct first a misimpression we created. I am sorry Senator 
Ayotte is not here because I did not do a very good job. I did 
not have a chance really when I testified before the Senate 
Budget Committee, and she asked a question about what we were 
doing for fees of our civilian personnel--health care fees.
    While the President's budget does not propose changes in 
the mechanism for fees charged to Federal civilian employees 
and retirees, those fees are tied to private sector insurance 
costs. Those fees have increased substantially over recent 
years, more than doubling for some large cuts over the last 
decade, and they are almost certain to continue to grow. 
Moreover, even when our proposed increases in military fees are 
fully in place, the military fees will remain substantially 
less than the ones charged to Federal civilian employees and 
retirees. So this budget does require increases for Federal 
civilian personnel and substantial ones.
    Perhaps the most important point regarding our military 
compensation proposals is this, the proposals have the full 
support of our military leaders and that includes all the 
members of the Joint Chiefs, the senior enlisted, and advisors, 
and they have indicated that support in a formal letter sent to 
Congress earlier this year.
    Several of our proposed compensation changes require 
legislative authority. None can be put into effect without your 
support. We fully recognize that. But if that support is not 
forthcoming--and you asked me to be candid, Mr. Chairman, so I 
will be--what keeps the CFO up at night--further cuts in forces 
and investment will be required of us to remain consistent with 
the targets of the BCA. Even if somehow we fit in changes in 
2013, I have to worry about 2014 through 2018, and those cuts 
get bigger in that period.
    If, for example, Congress turned down all of our 
compensation proposals and we offset that hole in our budget 
with additional force cuts, we would have to cut roughly 
another 60,000 troops by 2017. We might look at other ways and 
we probably would. But just to give you an idea of the 
magnitude, these additional cuts would surely jeopardize the 
new defense strategy that we have just recently put in place.
    As this point suggests, our budget is a balanced, 
interconnected whole. I very much ask that you consider it as 
such.
    Mr. Chairman, thank you again for your support of our 
troops and to all the subcommittee members for support of our 
troops and for the opportunity to testify today. When the 
witnesses are done, I welcome your questions.
    [The prepared statement of Dr. Hale follows:]
               Prepared Statement by Hon. Robert F. Hale
    Mr. Chairman, Senator Graham, members of the subcommittee, thank 
you for the opportunity to join you this afternoon. I will not repeat 
the thorough statements presented by the Department's other witnesses. 
I would like to discuss selected personnel and readiness issues in the 
context of the Department's budget request for fiscal year 2013.
    The fiscal year 2013 budget for the Department of Defense (DOD) 
responds to two broad factors. First, to be consistent with Title I of 
the Budget Control Act of 2011, it reduces defense funding for fiscal 
year 2013 to fiscal year 2017 by $259 billion compared with last year's 
plans. We started by culling $45 billion from our spending plans in 
fiscal year 2013, resulting in a request for $525.4 billion in 
discretionary budget authority. Adjusted for inflation, that is a 
reduction of 2.5 percent compared to the enacted budget for fiscal year 
2012--the third consecutive year of real decline in the Defense budget.
    Second, our proposed budget for fiscal year 2013 reflects the new 
defense strategy that we announced in January. That strategy has been 
documented in a white paper issued in January. The budget implements 
this new strategy in four key ways:

         We seek to make more disciplined use of defense 
        dollars. Key changes include streamlining in the Office of the 
        Secretary of Defense and defense agencies, rephasing of 
        military construction projects in view of force structure 
        changes, further IT consolidations, efforts to improve our 
        purchasing activities, and continued efforts to improve 
        financial management and achieve audit readiness.
         Our budget proposes force structure and investment 
        changes that are consistent with the new strategy. Our military 
        will be smaller and leaner, but also ready and agile. We 
        continue to invest in high priority areas such as Special 
        Operations Forces, cyber, and unmanned aerial vehicles. 
        However, reflecting strategy and good management along with 
        budgetary limits, we propose to restructure and reduce 
        investments in programs including the Joint Strike Fighter, 
        shipbuilding programs, the Army Ground Combat Vehicle program, 
        and the SSBN-X submarine program. We terminate six weapon 
        programs in this budget proposal.
         We continue full support for America's All-Volunteer 
        Force, which is the very foundation of our military strength. 
        But we carefully review and slow the growth in military pay and 
        benefits.
         Finally, we provide full support for our warfighters 
        in combat through our request for funding for Overseas 
        Contingency Operations.

    Our budget proposal for fiscal year 2013 needs to be considered as 
a whole. It proposes changes that are balanced in order to be 
consistent with both our new strategy and good management. We hope that 
Congress will be cautious in making changes lest the revised version 
fail to fully support our new strategy or the current budgetary limits.
    Finally, while this budget is consistent with Title I of the Budget 
Control Act, it does not accommodate the sequestration that could occur 
under Title III of that Act. Sequestration could have devastating 
effects on defense activities. It would force us to revisit our 
strategy and could lead to involuntary separations of personnel, 
reductions in readiness, and the disruption of numerous investment 
programs. We still have time to avert sequestration, and the 
President's fiscal year 2013 budget represents a path to doing so. We 
urge Congress to enact a large, balanced program of deficit reductions 
and then enact legislation to halt the sequestration.
    In addition to this brief overview of our fiscal year 2013 request, 
I want to mention three specific considerations as they relate to 
personnel and readiness.
              budgetary importance of force structure cuts
    The first of these involves force structure changes. Consistent 
with our strategy and budgetary limits, we assume there will be force 
structure cuts, primarily in ground forces. Our strategy envisions a 
force that is smaller and leaner and that no longer maintains forces 
sized for large, prolonged stability operations.
    Specifically, the new 5-year budget plan calls for an end strength 
reduction of about 72,000 Army soldiers and about 20,000 marines by 
fiscal year 2017. This will result in an Army of 490,000 soldiers and a 
Marine Corps of 182,100 marines. To accommodate these reductions, the 
Army will eliminate a minimum of eight brigade combat teams, and the 
marines will disestablish six battalions and four tactical aircraft 
squadrons.
    There will be smaller cuts in the Navy and Air Force. The Navy will 
be retiring 11 older vessels, and the Air Force will cut 7 TACAIR 
squadrons. By fiscal year 2017, the Navy's Active-Duty end strength 
will be reduced by 6,200 to a force of 319,500 sailors, and the Air 
Force will lose 4,200 airmen, to bring their total to 328,600.
    We will also be reducing end strength in the Reserve components by 
21,500 by fiscal year 2017. This will result in a total Reserve Force 
of 825,600, with Navy Reserve, Air Force National Guard, and Army 
National Guard components experiencing the greatest force reductions. 
There will be no reduction to the Marine Corps Reserve.
    Altogether, compared to last year's plans, force structure 
reductions will save about $53 billion over the FYDP and $9 billion in 
fiscal year 2013 alone. Most of these savings reflect reduced operating 
costs but there are some investments savings as well.
    These force structure changes mean that we need to consolidate our 
infrastructure. The President will ask Congress to authorize the Base 
Realignment and Closure (BRAC) process for 2013 and 2015. We recognize 
the political difficulty associated with the BRAC process, but it is 
the only effective way to achieve needed infrastructure savings.
            budgetary importance of pay and benefit changes
    The second item I want to mention is the budgetary importance of 
pay and benefit changes. Since 2001, the cost of military pay and 
benefits has grown by over 87 percent (30 percent more than inflation), 
while Active Duty end strength has grown by about 3 percent. We felt we 
had to review pay and benefits to avoid overly large reductions in 
forces and investments.
    As my colleagues have noted, the military and civilian leadership 
considered changes in pay and benefits based on several guiding 
principles. To begin with, the military compensation system must take 
into account the unique stress of military life. It should not simply 
be a copy of civilian systems. The system must also enable us to 
recruit and retain needed personnel. We must keep faith with our 
military personnel. That means changes to the system of pay and 
benefits that do not cut anyone's pay. We propose to slow the rate of 
growth, not to institute pay freezes or pay cuts.
    Changes affecting pay and compensation were designed to be 
disproportionately small when compared to the changes in forces and 
investments. While pay and benefits account for about one-third of the 
Defense budget, savings from the initiatives we are proposing will 
amount to about $29 billion over the FYDP, which is slightly more than 
10 percent of our savings target.
    As our acting Under Secretary for Personnel and Readiness 
indicated, we plan military pay raises in fiscal years 2013 and 2014 
consistent with the Employment Cost Index. In later years increases 
will be lower, but by then servicemembers and their families will have 
had time to plan. Over the 5 years of the FYDP, this approach will 
realize total savings of about $16.5 billion.
    We have also proposed changes in the cost-sharing formula for 
health care. This will mostly affect retirees and, especially, retirees 
who are under the age of 65 and are still in their working years. We 
have exempted those who are medically retired and survivors of those 
killed on Active Duty. Our proposed changes save about $12.9 billion 
over the next 5 years. Dr. Rooney's statement expands on these changes, 
and I will not repeat them here.
    However, I do want to emphasize one very important point that Dr. 
Rooney has made. Changes in cost sharing represent only one of the key 
steps that we are taking to improve health care and to hold down cost 
growth. We are also working to improve overall health care--moving from 
health care to health. We are reducing internal costs by cutting 
administrative overhead at headquarters and buying more effectively. We 
have significantly reduced payments to our civilian providers in order 
to slow the growth in health care costs.
    I also want to note that, while our budget does not change the 
formula for enrollment fees for Federal civilian employees or civilian 
retirees, those fees have and are increasing. Fees for civilian 
employees and retirees are tied to private-sector plans and increase 
with increases in health care costs. It is important to note that fees 
paid by civilian employees and retirees will remain substantially 
higher than those paid by military retirees even after all of the 
changes proposed for military retirees have taken effect.
    Our health care proposals, and all of our proposals for military 
compensation, have the full support of our military leaders--including 
both officer and enlisted leaders. These leaders have supported these 
changes in a letter to each of our oversight committees.
    Several of our proposed changes in pay and benefits will require 
legislative authority. For instance, we need authority to exempt 
survivors of members who die while on Active Duty or military 
disability retirees and their families; to establish an annual TRICARE 
Standard enrollment fee for most retirees and their families; and to 
introduce an annual enrollment fee for TRICARE For Life beneficiaries. 
While these particular proposals require legislation, we need your 
support for all of these important changes.
    If Congress does not provide us with needed support, we will face a 
major problem that would jeopardize our defense strategy. Without 
needed authority, we will face further cuts in forces and investment to 
be consistent with the Budget Control Act. Because our budget proposal 
already makes substantial reductions in the investment accounts, 
further cuts might fall mostly on forces. If, for example, Congress did 
not support any of our proposed changes to pay raises and health care, 
and we elected not to make further cuts in investment, we would be 
required to increase the size of our force reductions by roughly half. 
That could mean cutting roughly another 60,000 Active Duty and Reserve 
Forces by fiscal year 2017. Additional force cuts of this magnitude 
would jeopardize our ability to pursue the new defense strategy.
                               readiness
     The third and final concern that I would raise today is the matter 
of readiness. Our strategy calls for a force that is leaner and 
smaller, but also agile and ready.
    Readiness is a complex topic. There is no single part of the budget 
that we could characterize as the ``readiness'' budget. That said, 
Operation and Maintenance (O&M) is the title most often associated with 
readiness. I would point out that O&M is the only title that would 
increase in the President's budget. Total O&M increases by 6 percent 
between fiscal year 2012 and fiscal year 2013 while the overall budget 
declines by 1 percent. We believe that we have made budgetary decisions 
designed to protect the readiness of our military forces.
    When making our force structure decisions, we also favored the 
forces that are especially agile. Special Ops forces are a case in 
point. These forces, designed to be agile, continue to increase under 
this budget proposal. We also preferentially retained forces that can 
self-deploy. Accordingly, we maintained funding for a fleet with long-
term level of 11 aircraft carriers and 10 air wings. We also maintained 
funding for the bomber force.
                               conclusion
    In conclusion, I would emphasize again that our budget is an 
interconnected whole, and we ask that Congress consider it as such.
    Thank you again for the opportunity to testify this afternoon. As 
always, thank you for the support of our men and women in uniform, and 
the civilian employees who support them. I welcome your questions.

    Senator Webb. Thank you very much, Secretary Hale.
    Secretary Woodson, welcome.

  STATEMENT OF HON. JONATHAN WOODSON, ASSISTANT SECRETARY OF 
 DEFENSE FOR HEALTH AFFAIRS AND DIRECTOR OF TRICARE MANAGEMENT 
                            ACTIVITY

    Dr. Woodson. Thank you, Mr. Chairman, Senator Graham, 
members of the subcommittee. Thank you for the opportunity to 
appear before you today to discuss the future of the military 
health system and in particular, our priorities for this coming 
year.
    Over the last 10 years, the men and women serving in the 
military health system have performed with great skill and 
undeniable courage in combat. Their contributions to advancing 
military and American medicine are immense. The military health 
system's ability to perform this mission and be able to respond 
to humanitarian crises around the world is unique among all 
military or non-military organizations on this globe. I am 
committed to sustaining this indispensable instrument of 
national security.
    One of the most critical elements of our strategy is to 
ensure the medical readiness of the men and women in our Armed 
Forces. We are using every tool at our disposal to assess our 
servicemembers' health--before, during, and following 
deployment to the combat theaters. For those who return with 
injuries and illnesses, we continue to provide comprehensive 
treatment and rehabilitation services supported by medical 
research and development portfolios appropriately focused on 
the visible and invisible wounds of war.
    Concurrent with our mission of maintaining a medically 
ready force, this ready medical force concept has many 
interdependent parts. It requires our entire medical team to be 
well-trained. It requires development of our physicians in 
active, accredited, graduate medical education programs. It 
requires our military hospitals and clinics to be operating at 
near-optimal capacity, and for our beneficiaries, it requires 
an active decision to choose military medicine as their 
preferred source of care.
    To meet these readiness imperatives means we need to 
compete with the rest of American medicine to recruit and 
retain top talent, to provide state-of-the-art medical 
facilities that attract both patients and medical staff, and to 
sustain a high quality system of care.
    The budget we propose provides the resources we need to 
sustain the system. As we maintain our readiness, we also must 
be responsible stewards of the taxpayers' dollars. The 2011 BCA 
required DOD to identify $487 billion in budget reductions over 
the next 10 years. Health care costs could not be exempt from 
this analysis.
    The military health system is undertaking four simultaneous 
actions to reduce costs: one, internal efficiencies to better 
organize our decisionmaking and execution arm; two, a 
continuation of our efforts to appropriately pay private sector 
providers; three, initiatives to promote health, and reduce 
illness, injury, and hospitalization; and four, propose changes 
to beneficiary costsharing under the TRICARE program.
    The military and civilian leaders in DOD developed these 
proposals and have publicly communicated their support for 
these proposals to you in writing and in person.
    I want to identify the core principles to which we adhered 
when developing these proposals. We believe the TRICARE benefit 
has been one of the most comprehensive and generous health 
benefits in this country and our proposals keep it that way. In 
1996, military retirees were responsible for about 27 percent 
of overall TRICARE costs. In 2012, the percentage share of 
costs borne by the beneficiary has dropped to about 10 percent 
of overall costs. If these proposals we have put forward are 
accepted, beneficiary out-of-pocket costs will rise to 14 
percent of costs by 2017. This is about half of what 
beneficiaries paid in 1996.
    Second, we have exempted the most vulnerable populations 
from our costsharing proposals. Medically retired 
servicemembers and families of servicemembers who have died on 
Active Duty are protected under this principle.
    Additionally, we have introduced costsharing tiers based 
upon retirement pay, reducing the increases for those with 
lower retirement pensions. I would mention that that was led by 
the uniformed line leadership.
    Mr. Chairman, we recognize the concerns of the members of 
this subcommittee and the beneficiary organizations have voiced 
regarding these proposals. I want to emphasize that these 
proposals are targeted to mitigate the burden on any one 
particular group of beneficiaries while simultaneously meeting 
our congressionally-mandated costsaving responsibilities under 
the BCA. We have recently submitted to Congress the Secretary's 
recommended path forward for how to organize the military 
health system. We have learned a great deal from our joint 
medical operations over the last 10 years. We recognize that 
there is much opportunity for introducing an even more agile 
headquarters operation that shares common services and 
institutes common clinical and business practices across the 
system of care.
    The budget we have put forward for 2013 is a responsible 
path forward to sustaining the military health system in a 
changing world and recognizes that the fiscal health of the 
country is a vital element in our national security.
    I am proud to be here with you today to represent the men 
and women who comprise the military health system. I look 
forward to your questions.
    [The prepared statement of Dr. Woodson follows:]
              Prepared Statement by Hon. Jonathan Woodson
    Mr. Chairman and distinguished members of the subcommittee, thank 
you for the opportunity to appear before you today on behalf of the men 
and women who comprise the Military Health System (MHS) and address our 
strategic priorities for the coming year.
    We enter 2012 now having over 10 years of experience in preparing 
for and responding to the consequences of war. We have seen the end of 
one major conflict and the implementation of a concrete timeline for 
the drawdown of the other. Yet, even with these milestones in our 
sights, we have many challenges to address in the coming year, both 
operational and fiscal.
    I am proud of the performance of our military medical personnel on 
the battlefield and here at home. Last year, I provided this committee 
with some of the accomplishments achieved in combat--the lowest levels 
of disease, non battle injury (DNBI) rates in warfare; the highest 
survival from wounds rate; the safety and speed of an aeromedical 
evacuation system that has no peer; and the treatment and 
rehabilitation of wounded warriors that is allowing ever greater 
numbers of our severely wounded to return to their units, or to pursue 
careers in the civilian sector.
    These accomplishments bear repeating. I do this not simply to honor 
the men and women who made them happen, but also to point out that the 
actions and lessons that led to these outcomes are now being replicated 
in trauma centers, surgical suites, and rehabilitation centers around 
the country and around the world. The MHS is transferring our medical 
knowledge gained from battlefield medicine to the rest of society.
    As we share our experiences with our colleagues in American 
medicine, we are also mindful of the need to look internally and assess 
what lessons we have learned--and consider how we should be organized 
to meet our future missions. In June 2011, the Deputy Secretary of 
Defense established an internal task force to study this issue. We have 
now also shared the task force report and the Deputy Secretary's 
planned reorganization with Congress, consistent with Section 716 of 
the National Defense Authorization Act for Fiscal Year 2012. The plan 
we developed increases unity of effort, agility, and the opportunity 
for cost savings both through reduced overhead and, more importantly, 
through the implementation of common clinical and business practices 
across the enterprise. Our ability to implement this model will enhance 
virtually all of the programmatic issues we discuss in the MHS today.
    The Department has proposed a $32.5 billion Defense Health Program 
(DHP) appropriation (Figure 1), reflecting a small increase from the 
fiscal year 2012 enacted budget.

                         Figure 1: Fiscal Year 2013 Defense Health Program (DHP) Summary
                                            [In millions of dollars]
----------------------------------------------------------------------------------------------------------------
                                       Fiscal                           Fiscal                           Fiscal
                                     Year 2011    Price     Program   Year 2012    Price     Program   Year 2013
       Appropriation Summary            \1\       Growth     Growth      \2\       Growth     Growth      \3\
                                       Actual                          Enacted                          Estimate
----------------------------------------------------------------------------------------------------------------
Operation & Maintenance............   29,953.5      721.7      ^89.0   30,586.2      859.6      ^96.6   31,349.3
RDT&E..............................    1,205.8       22.9       38.1    1,266.8       22.8     ^616.6      673.0
Procurement........................      546.7       12.4       73.4      632.5       14.2     ^140.2      506.5
                                    ----------------------------------------------------------------------------
  Total, DHP.......................   31,706.0      757.0       22.5   32,485.5      896.4     ^853.4   32,528.7
----------------------------------------------------------------------------------------------------------------
MERHCF Receipts \4\................    8,600.0                          9,470.6                          9,727.1
                                    -----------                      -----------                      ----------
  Total Health Care Costs..........   40,306.0                         41,956.1                        42,255.8
----------------------------------------------------------------------------------------------------------------
Numbers may not add due to rounding
\1\ Fiscal year 2011 actuals include Operation and Maintenance (O&M) funding of $1,394.0 million and Research
  and Development funding of $24.0 million from the fiscal year 2011 Overseas Contingency Operations (OCO),
  Title IX, Public Law 112-10.
\2\ Fiscal year 2012 enacted (base), excludes O&M funding of $1,215.3 million of OCO.
\3\ Fiscal year 2013 estimate excludes O&M funding of $993.9 million for OCO. The Department of Defense projects
  $135.6 million O&M funding should transfer in fiscal year 2012, and $139.2 million in fiscal year 2013 to the
  Joint Department of Defense-Department of Veterans Affairs Medical Facility Demonstration Fund established by
  section 1704 of Public Law 111-84 (National Defense Authorization Act for Fiscal Year 2011).
\4\ Reflects Departmental DOD Medicare-Eligible Retiree Health Care Fund (MERHCF) for fiscal year 2011, fiscal
  year 2012, and fiscal year 2013 (O&M).

    Our proposal includes realistic cost growth for pharmacy, TRICARE 
contracts and other services provided both in our medical treatment 
facilities (MTFs) and care purchased from the private sector; as well 
as sustained investment in medical research and development.
    I will outline the major elements of our strategy for 2013, using 
the Quadruple Aim--the MHS strategic framework--to discuss our 
initiatives. This framework captures the core mission requirements of 
the MHS: Assure Readiness; Improve Population Health; Enhance the 
Patient Experience of Care; and Responsibly Manage the Cost of Care.
                           assuring readiness
    The MHS continues to closely monitor the health and medical 
readiness of the military force. We have consistently witnessed 
improvements in the medical preparedness of our servicemembers, both 
Active and Reserve component.
    We have ensured that our medical forces are also ready through 
sustained investments in our enlisted and officer training programs, 
through our comprehensive Graduate Medical Education (GME) programs 
conducted at a number of our MTF training platforms throughout the MHS 
and with select civilian partners; at the Medical Education and 
Training Center (METC) in San Antonio, TX, in our military medical 
school, the Uniformed Services University of the Health Sciences.
    We also assess the health of the force upon their return from 
deployment. In our continued commitment to ensuring the mental health 
of our servicemembers, the Department has issued policy that 
servicemembers deployed in connection with a contingency operation 
receive a person-to-person, privately-administered mental health 
assessment before deployment, and three times after return from 
deployment. These person-to-person assessments are conducted by 
licensed mental health professionals or by designated individuals 
trained and certified to perform the assessments.
    As part of our monitoring of the medical readiness of the force, we 
also assess our performance in ensuring that those servicemembers who 
are identified as needing behavioral health services receive a referral 
and seek treatment. In this area, we have also witnessed improvement 
each year in both the referral for behavioral health services, and the 
rate at which servicemembers seek ongoing treatment.
    Senior leaders, both officer and enlisted, have led the effort to 
reduce the stigma associated with seeking mental health care. A DOD 
Mental Health Advisory Team (MHAT) survey from February 2011 showed 
that Marines who screened positive for mental health issues, had a 
substantial (and statistically significant) decrease in behavioral 
health stigma levels from 2006. The percent of marines who agreed that 
seeking mental health care would harm their career dropped by more than 
50 percent. Responses by the Marines on whether seeking mental health 
care would cause members of their unit to have less confidence in them, 
cause unit leaders to treat them differently, cause unit leaders to 
blame them for the problem, or cause the Marine to be seen as weak, 
also saw similar statistically significant decreases.
    Together with the Department of Veterans Affairs (VA), we have 
developed an integrated Mental Health Strategy that has 28 discrete 
strategic actions designed to strengthen access to clinical services, 
improve continuity of care across the Departments, streamline the 
adoption and implementation of evidence-based practices and ensure our 
mental health providers are delivering state-of-the-art care.
    We have increased the number of behavioral health care providers 
over the past 3 years and embedded more in frontline units. Along with 
providing care, we have undertaken the largest study of mental health 
risk and resilience ever conducted among military personnel. This study 
will identify risk and protective factors as well as moderators of 
suicide-related behaviors by 2014. The Department continues to improve 
access to behavioral health services through a number of initiatives. 
In fiscal year 2012, we have begun the process of embedding, over a 4-
year period, over 400 behavioral health providers into our patient-
centered medical homes. We enhanced confidential, non-medical 
counseling through the Military Family Life Consultants (MFLC) and 
Military OneSource (MOS) programs, to include surge support--for both 
deployment/reintegration points in time, as well as other crises that 
emerge on a short-notice basis, such as the Ft Hood shooting and the 
Japanese earthquake/tsunami/nuclear incident. Recent legislation now 
permits mobile VA Readjustment Counseling Services to provide outreach 
and readjustment counseling to active duty servicemembers.
    We have also made efforts to ensure continuity of behavioral health 
care for members in transition--to a new installation, from active to 
Reserve status, or to the VA. We offer a diverse set of services to 
reach those military members seeking greater support. One notable 
program--``inTransition''--was developed in response to the Mental 
Health Task Force recommendation to ``maintain continuity of care 
across transitions for servicemembers and veterans,'' and offers a 
voluntary telephonic coaching program designed to facilitate a smooth 
transition to a new source of care. Afterdeployment.org is another 
program, serving over 5,000 users monthly, that provides servicemembers 
and their families with behavioral health information in a setting that 
preserves anonymity, and offers tools to help them recognize 
problematic behavioral health issues early and how to address these 
challenges. Recently, the VA has been using the site's interactive 
workshops in their walk-in clinics.
    Just as the Department has established a comprehensive approach to 
its mental health destigmatization efforts, we have employed the same 
model for our suicide prevention programs. The Deputy assistant 
Secretary of Defense for Readiness is standing up the Defense Suicide 
Prevention Office that will be staffed and resourced to develop, 
implement, integrate, and evaluate suicide prevention policies, 
procedures, and surveillance activities across the Department. This 
action specifically addresses a key recommendation contained in the DOD 
Task Force Report on Suicide Prevention and will greatly facilitate the 
timely implementation of additional recommendations contained in the 
report.
    The Department of Defense has made great strides in implementing 
early identification and treatment programs for traumatic brain 
injuries (TBIs). Through the work of the Defense Centers of Excellence 
for Psychological Health and Traumatic Brain Injury (DCoE), the DOD in-
theater concussion policy has significantly improved the early 
detection of servicemembers with concussion by providing clear and 
specific guidelines for the management of acute concussions. The 
Department's focus on TBI treatment has resulted in the standardization 
of 62 TBI programs at military treatment facilities (MTFs) in the 
nondeployed setting and the cultivation of 11 concussion restoration/
care centers in the deployed setting. We have also helped update the 
behavioral health curriculum for all medical technicians and corpsmen 
at our Medical Education and Training Center (METC) to ensure our 
knowledge base is advanced throughout the MHS.
    Our fiscal year 2013 program sustains the significant investments 
we have made in all of our medical research and development programs, 
and in particular in the area of TBI and Post-Traumatic Stress (PTS). 
The Center for Neuroscience and Regenerative Medicine (CNRM) is a 
collaborative intramural Federal program that bridges DOD and the 
National Institutes of Health (NIH) in order to catalyze innovative 
approaches to TBI research, and emphasizes research that is relevant to 
military populations. Our other focus areas for the Defense Medical 
Research and Development Program include polytrauma and blast injury; 
operational health and performance; regenerative medicine; 
rehabilitation; psychological health and well-being for military 
personnel and families; and military medical training systems and 
health information technology applications.
    Within the readiness area, the health of our servicemembers is also 
protected through sound occupational health practices. This past fall, 
the Institute of Medicine (IOM) concluded its independent study of the 
long-term health consequences of exposure to burn pits in Iraq and 
Afghanistan. The IOM was unable to identify any long-term health risks 
from these exposures. Nonetheless, DOD and the VA are continuing to 
monitor of the health of deployed servicemembers and veterans and 
provide for a longer period of post-exposure health assessments to 
ensure these initial findings are sustained over time.
    Finally, at the core of our medical readiness posture is our 
people. Our recruitment of medical professionals--physicians, dentists, 
nurses, ancillary professionals and administrators--remains high. With 
the support of Congress, through the use of flexible bonuses and 
special salary rates, we have been able to meet most of our recruiting 
goals. Yet we recognize that competition for medical professionals will 
grow in the coming years, amidst a growing shortage of primary care 
providers and nurses. We will continue to work with Congress on 
potential new flexibilities to ensure we remain competitive in this 
environment.
                      improving population health
    Closely linked with our readiness mission are our efforts to 
improve the health of the entire MHS population. We are going to engage 
in a multi-year effort on two of the greatest contributors to ill 
health--tobacco use and obesity in our population.
    Our servicemembers use tobacco and tobacco products at a much 
higher rate than their peers; we have started to reduce tobacco use, 
but we plan to do more. In addition to the existing suite of smoking 
cessation pharmaceuticals available at MTFs, and counseling services, 
we will soon offer the pharmaceutical benefit through our mail order 
program, and allow for a 24/7 smoking cessation line with counseling 
services over the phone.
    In the area of obesity and overweight persons, in some 
circumstances we reflect what is occurring within the larger society. 
Our active-duty servicemembers--as you would expect--do well in 
maintaining their weight and their fitness, and exceptionally well when 
compared to their peers. However, the influence of nutritional habits 
in the larger society is having effects on the military population and 
particularly on entry-level candidates. When those in uniform leave 
active service, too many reverse the physical fitness habits and 
discipline of military service. There is a financial cost to this; one 
DOD study found that $1.4 billion could be attributed to overweight and 
obesity-related medical problems and services. But, more importantly, 
the quality of life for our overweight and obese beneficiary population 
is often far worse than it should be as many are affected by obesity-
related disease, such as diabetes and heart disease.
    We have worked across the Services to develop and launch both adult 
and childhood obesity management and prevention guidelines, emphasizing 
the provider's role and positive steps to take in assisting and 
advising patients. We have also implemented a demonstration project to 
determine whether monetary incentives can be used to improve the 
overall health and wellness of the MHS population. We do not yet have 
the results of this demonstration project, but will report interim 
findings to Congress this year. Finally, we have joined with a broader 
set of partners in DOD, that includes bringing together everyone on a 
military installation--commanders, senior enlisted advisors, the 
military family program leaders and medical personnel--in a set of 
initiatives aimed at further improving the fitness of our entire 
community. Our military dining halls, schools and child development 
centers are offering healthier food choices--both here and in 
Afghanistan; our commissaries and exchanges will help identify better 
nutritional choices; and we're redesigning our military communities in 
ways that will increase exercise and fitness.
                enhancing the patient experience of care
    As the MHS moves into 2012, we will re-evaluate our efforts and 
mission through the lens of enhancing the patient experience of care by 
focusing on maximizing the value we provide to our beneficiaries.
    The MHS is continuing the implementation of the Patient-Centered 
Medical Home (PCMH), a program with the principle focus of developing a 
cohesive relationship between the patient and the provider team. The 
PCMH is a transformative effort within our system, with the potential 
to positively affect all aspects of our strategic focus--readiness, 
population health, patient experience and per member cost. Begun in 
2009 as a strategic initiative, the MHS has formalized through 
directive and accreditation our PCMH program. In 2011, 44 of our 
facilities were formally recognized by the National Committee on 
Quality Assurance (NCQA), with 93 percent recognized as Level 3 PCMHs 
(as compared to a private sector rate of 60 percent with Level 3 
recognition). Our more mature PCMHs--at facilities throughout the Army, 
Navy and Air Force, and representing more than 25 percent of our 
medical homes--are achieving the outcomes we sought: improved access to 
care (increased percentage of the enrolled population getting an acute 
appointment within 24 hours, and a routine appointment in 72 hours); 
improved continuity with the same team of providers (increased 
percentage receiving care from their assigned primary care manager); 
and reduced emergency room utilization. In fiscal year 2012, we will 
further augment our medical homes with a 24/7 nurse advice line to 
offer both enrollees (and all beneficiaries) access to essential health 
information. This nurse advice line will be linked with MTF appointing 
to further improve access to care, and reduce bureaucratic hurdles for 
our patients.
    The Department has long been a national leader in developing and 
deploying a global, electronic health record (EHR). Our first EHR was 
put into the field in the late 1980s. We are now on the cusp of 
developing our third generation EHR--and the first to be co-developed 
with the Department of Veterans Affairs--the integrated Electronic 
Health Record (iEHR). Both DOD and the VA are encouraged by the 
progress that our interagency teams have made in refining or developing 
the IPO charter, and the principles, strategies and architectural 
framework for the iEHR as we embark upon this landmark effort.
    The DOD/VA Interagency Program Office has been rechartered to give 
them more responsibility and authority as the program execution office 
for the iEHR. In addition, the VA has signed an agreement with the 
Defense Information Systems Agency to move the data centers for two of 
VA's regions into DOD data centers. Most recently, this week we 
announced the selection for the Director of the Interagency Program 
Office.
    As we expand the amount of health care information that we collect 
and share, we remain vigilant about the security of this sensitive 
health information. In the last year, a DOD contractor responsible for 
the maintenance of aspects of our electronic health record experienced 
a serious security breach in which 4.9 million medical records were 
potentially compromised. In the wake of that incident, we have 
conducted a critical review of the contractor's performance, as well as 
a review of our existing policies and procedures, and we have 
strengthened our guidance and future contract requirements for a number 
of security and encryption standards.
    Our work with the VA on the iEHR is only one element of a 
comprehensive strategy to further partner with the Department of 
Veterans Affairs. We have successful joint ventures or fully integrated 
operations at ten locations in the United States, and, in addition, we 
are pursuing other opportunities for joint purchasing, shared education 
and training opportunities, and joint construction, where feasible.
    The Military Construction (MILCON) program continues to 
recapitalize our inventory of MTFs. Our current investment program was 
substantially increased 5 years ago and has been essential in 
facilitating the BRAC transition and continued improvement of our MTFs. 
Both the Walter Reed National Military Medical Center in Bethesda, MD, 
and the Fort Belvoir Community Hospital in Fort Belvoir, VA, have 
opened their doors, showcasing the investments made, using evidence-
based design standards. Construction and renovation of medical 
facilities in San Antonio is also complete. Along with other military 
medical facility projects in the United States over the last 7 years, 
with the support of Congress we have just completed one of the most 
transformative periods in the history of our military medicine 
infrastructure.
    As budgets and force structure are reduced in the Department, we 
recognize that there is a need to reassess the size and scope of major 
construction projects, as we are currently doing with the Landstuhl 
Regional Medical Center in Germany. We will, however, sustain our 
commitment to the operational mission, patient-centered design and 
clinical quality, even if sizing issues are reconsidered. The 
recapitalization of military medical facilities is essential to our 
efforts to recapture health care that has migrated to the civilian 
sector.
                       responsibly managing cost
    We are proud of our achievements in combat and peacetime medicine. 
We offer a superb benefit to our 9.7 million beneficiaries, no matter 
where they live, through our direct health care system and through our 
managed care support contracts. This health care benefit is justifiably 
one of the finest and most generous in the county and is an appropriate 
benefit for those who serve our country. However, the costs of 
providing this care continue to increase more rapidly than overall 
inflation. For a number of years, and through several administrations, 
there have been continuous, incremental steps taken to reduce the rate 
of growth in the costs of healthcare.
    In addition, the requirements of the Budget Control Act of 2011 
compelled the Department to identify $487 billion in budget reductions 
over the next 10 years. The process of identifying these budget cuts 
was developed by the senior civilian, military officer and enlisted 
leadership from throughout the Department. Difficult choices were made. 
Over 90 percent of the cost reductions were external to personnel 
compensation and benefits. Still, health care was not exempt from this 
process. The proposals being put forward in this budget appropriately 
balance the need for a superb benefit that assists with both 
recruitment and retention of an All-Volunteer Force with our need to 
sustain a cost-effective approach for the long-term.
    This administration is pursuing a four-pronged approach by which 
all stakeholders share responsibility for improving the health of our 
population and the financial stability of the system of care.
    Our four approaches--moving from a system of healthcare to one of 
health; continuing to improve our internal efficiencies; implementing 
provider payment reform; and rebalancing cost-sharing--are further 
described below. In some instances, they reflect efforts already 
underway, or new initiatives that the Department is implementing within 
existing legislative and regulatory authorities.
Moving from Healthcare to Health
    The Department of Defense's military medical leaders are leading a 
strategic effort to move our system to one that promotes and sustains 
the optimal health of those we serve, while providing world-class 
healthcare when and where it is needed.
    Central to this effort are the Department's investments in 
initiatives that keep our people well; that promote healthy lifestyles; 
and that reduce inappropriate emergency room visits and unnecessary 
hospitalizations. These initiatives have been addressed in earlier 
parts of my testimony and include the Patient-Centered Medical Home 
(PCMH) initiative; the embedding of behavioral health staff within 
these medical homes; the introduction of a 24/7 nurse advice line; and 
our many population health initiatives. We have also taken a number of 
steps to support preventive services. Our TRICARE beneficiaries--
whether enrolled to TRICARE Prime or in TRICARE Standard--have no 
copayments for recommended preventive services, such as influenza 
immunizations.
    The ``Healthcare to Health'' element of our strategy will not 
produce immediate cost savings. Nonetheless, based on knowledge of 
well-constructed wellness programs in the private sector, we are 
confident that these, and other ongoing enhancements to the TRICARE 
program, will produce improvements to health that also ``bend the cost 
curve.'' In the longer term, it is the strategy most likely to produce 
the greatest amount of savings to our system.
Internal Efficiencies
    The Department has instituted internal cost reduction efforts by 
decreasing headquarters administrative overhead; jointly purchasing 
medical supplies and equipment; and directing patients to lower cost 
venues for medications. The cumulative savings from all of these 
internal efforts for fiscal year 2013 are estimated at $259 million.
    I have also previously noted the proposed reorganization of the 
MHS, following the work of the Task Force on Military Health System 
(MHS) Governance, which evaluated options for the long-term governance 
of the MHS as a whole; governance in those areas where more than one 
Service operates medical treatment facilities--referred to as multi-
service markets, and governance for the National Capital Region (NCR).
    Implementation of any organizational efficiencies resulting from 
this Task Force has been placed on hold at the direction of Congress, 
subject to a review by Congress and by the Comptroller General. We will 
provide congressional committees with the information requested 
regarding the Task Force work and will develop more detailed cost and 
savings estimates for any eventual governance model. After the Deputy 
Secretary of Defense approves the ``way ahead,'' we will be prepared to 
answer any additional questions that you have. We believe that further 
integration of health services across the Services and with the TMA are 
needed in order to provide a continued high quality of care in an 
environment of diminishing resources while ensuring the preservation of 
the health benefit for future generations.
Provider Payment Reform
    We are committed to identifying greater efficiencies and cost 
savings in all areas of our operations. In addition to internal 
efficiencies, we are also seeing significant savings through a number 
of provider payment reforms that we have introduced in the last several 
years. These include the implementation of the outpatient prospective 
payment system; the policy changes we made for reimbursement to select 
hospitals and health plans in the TRICARE network; and further use of 
Federal ceiling prices for acquisition of pharmaceuticals.
    The Department has undertaken a broad-based, multi-year effort to 
ensure all aspects of our provider payments for care purchased from the 
civilian sector are aligned with best practices in Medicare and in 
private sector health plans. The most notable efforts have included 
implementation of changes to the outpatient prospective payment system 
(OPPS) and reform of payment to Sole Community Hospitals.
    OPPS is modeled after the payment process that Medicare uses for 
similar health care services--setting a fixed fee per procedure, 
inclusive of provider and institutional charges for care. In order to 
allow medical facilities to transition to this new method of payment, 
TRICARE phased in the reimbursement levels over 4 years, with the full 
implementation of this policy set to occur in 2013. In fiscal year 
2012, we project $840 million in savings, and $5.5 billion over the 
fiscal years 2012-2017.
    Our provider payment reform for Sole Community Hospitals (SCH) was 
also phased-in over time, and will provide a projected $31 million in 
savings in the first year, and will grow to about $100 million in 
savings through 2017.
    In the area of purchasing prescription drugs, in 2009 we instituted 
a process for obtaining discounts on drugs distributed through retail 
network pharmacies, pursuant to authority provided in the 2008 National 
Defense Authorization Act. Known as Federal Ceiling Prices (FCP), 
prescriptions purchased under FCP are at least 24 percent less than 
non-Federal Average Manufacturer prices. In 2012, the FCP program will 
save the Department over $1.6 billion, and will grow to over $2 billion 
in savings by 2017.
Beneficiary Cost-Shares
    In addition to the focus on internal and external efficiencies, our 
proposed budget introduces changes to the health care out-of-pocket 
costs for our beneficiaries.
    I want to make three critical points related to these proposals. 
First, even accounting for these proposed fee changes, the TRICARE 
benefit will remain one of the finest and most generous health benefits 
available in the country, with among the lowest beneficiary out-of-
pocket costs available to anyone--and certainly lower than costs by 
other Federal Government employees. We believe that is appropriate and 
properly recognizes the special sacrifices of our men and women in 
uniform, past and present.
    Second, as mentioned earlier in my testimony, these proposals were 
developed within the Department, and represent the input and consensus 
of our uniformed leadership, both officer and enlisted.
    Third, we recognize that some beneficiary groups should be 
insulated from increases in out-of-pocket costs. We propose to exempt 
those servicemembers, and their families, who were medically retired 
from military service, as well as the families of servicemembers who 
died on active duty. We also propose to establish cost-sharing tiers, 
with lower increases for retirees based on their military retirement 
pay. More junior enlisted retirees, for example, will experience the 
lowest dollar increases in out-of-pocket costs. Finally, we have also 
avoided any changes in cost-sharing for active duty families with the 
exception of prescription drug copayments obtained outside of our MTFs. 
Prescription drugs distributed within MTFs will continue to be free of 
charge for all beneficiaries.
    For over 15 years, the Department had not increased patient out-of-
pocket costs for any beneficiary. In fact, the TRICARE benefit was 
enhanced in many ways, and a number of out-of-pocket costs were 
decreased. A few of these enhancements include: active duty family 
members enrolled in TRICARE Prime had their copays eliminated; retirees 
and their families using TRICARE Prime had their catastrophic cap 
reduced from $7,500 to $3,000 per year; Medicare-eligible retirees and 
their families received TRICARE For Life coverage, and a TRICARE 
pharmacy benefit. Last year, we introduced very modest changes in one 
segment of our population--increasing TRICARE Prime enrollment fees for 
retiree families by $5/month, and indexed these fees so that future 
increases continue to be modest and beneficiaries can plan for them. We 
greatly appreciate Congress' support for these proposals in the fiscal 
year 2012 budget, and have implemented those fee changes in the current 
year.
    Although last year's changes were a necessary step, the Department 
has proposed further cost reduction efforts in 2013 as an element of 
our strategy to meet the requirements of the 2011 Budget Control Act. 
All of these changes are phased in over time. For select fees the 
Department has proposed ``tiers'' of copays based on the retirement pay 
of the beneficiary. Fee changes are distributed across the various 
TRICARE programs, so that no one beneficiary group bears the entire 
burden for these changes in cost-sharing. Retirees in TRICARE Prime, 
TRICARE Standard and TRICARE For Life each have a share of the 
increases; all beneficiaries (except uniformed personnel) have 
additional costs for prescription drugs outside of MTFs. The following 
sections provide a high-level overview of the proposed changes in 
beneficiary out-of-pocket costs. Figure 2 summarizes the proposed fees:

         Fee increases for TRICARE programs. The following 
        proposed changes represent increases from existing patient out-
        of-pocket costs.

                 TRICARE Prime Enrollment Fees. We propose to 
                raise the enrollment fees in 2013 for retired 
                servicemembers and their families from between $80-$300 
                per year, based on the retirement pay of the 
                servicemember, and continue to provide similar 
                increases through 2016.
                 TRICARE Deductibles. We propose to increase 
                deductibles for the TRICARE Standard program for 
                retired servicemembers and their families beginning in 
                fiscal year 2013. TRICARE deductibles have not been 
                changed since before the TRICARE program was 
                introduced, having last been adjusted over 20 years 
                ago.
                 TRICARE Pharmacy Copays. We propose to 
                increase pharmacy copayments for generic, brand name 
                and non-formulary prescriptions in both the retail and 
                mail order settings, although we will continue to offer 
                significant incentives for beneficiaries to elect mail 
                order over retail pharmacy networks. Additionally, non-
                formulary prescription drugs will no longer be 
                available in the retail network. These changes are 
                proposed for all non-active duty beneficiaries, to 
                include active duty family members. Prescription drugs 
                obtained in military hospitals and clinics will 
                continue to be provided without copay for any 
                beneficiaries.

         New fees for TRICARE programs. Our proposed budget 
        also calls for the introduction of new fees not previously part 
        of the TRICARE program.

                 TRICARE Standard/Extra Enrollment Fee. We 
                propose to introduce an annual enrollment fee in 
                TRICARE Standard for retired servicemembers and their 
                families. The proposed fee for 2013 will be $70/year 
                for an individual retired beneficiary, or $140 per 
                retired family.
                 TRICARE For Life (TFL) Enrollment Fee. When 
                TFL was introduced in 2002, there was no enrollment fee 
                in the program, only a requirement that beneficiaries 
                be enrolled in Medicare Part B to enjoy their TFL 
                benefit. Medicare Part B was always a step that we 
                recommended our retirees elect, and prior to 2002, over 
                95 percent of eligible military retirees were enrolled 
                in Medicare Part B. The TFL benefit has reduced 
                beneficiary out-of-pocket costs by thousands of dollars 
                per year in copayments or Medicare supplemental health 
                insurance plan payments. The proposed TFL enrollment 
                fees, similar to the TRICARE Prime enrollment fees, are 
                tiered, based on an individual's retirement pay--and 
                range from $35 to $115 per beneficiary per year in 
                fiscal year 2013.
                 Exclusion of Enrollment Fees from the 
                Catastrophic Cap. We propose that enrollment fees, 
                which had previously accumulated toward a retiree's 
                catastrophic cap limit, will not be counted toward the 
                cap beginning in 2013.
                 In addition to the indexing of the TRICARE 
                Prime enrollment fee, which is already indexed, we 
                propose to index other beneficiary out-of-pocket costs 
                identified in this set of proposals, to include the 
                TRICARE Standard deductible, TRICARE Standard 
                enrollment fee, TRICARE For Life enrollment fees, 
                pharmacy copayments, and catastrophic caps.
      


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    These proposed changes continue to be modest by historic standards 
of cost-sharing in the TRICARE program. In 1996, when TRICARE was 
implemented, a working age retiree's family of three contributed 
approximately 27 percent towards the total cost of their care; today 
that percentage has dropped to just over 10 percent. Even with these 
proposed changes, the percentage would still remain below the 
percentage originally set by Congress, averaging approximately 14 
percent of range of overall health care costs in 2017--and stabilizing 
at that level for the out-years.
    These adjustments are an important step to setting the TRICARE 
benefit on a more sustainable path that maintains the quality of the 
medical benefit for future generations. Moreover, the overwhelming 
majority of these adjustments will be phased in over a 4- to 10-year 
period and will be appropriately indexed to ensure future 
sustainability and guarantee transparency. These proposals--one element 
of a four-pronged effort at cost control--will help shift us toward 
more effective and cost-efficient processes that will allow us to 
provide better care while meeting our obligations to help reduce our 
budgets.
    We are cognizant of the strains placed on our economy and the 
government by Federal budget deficits and long-term debt. We recognize 
that the Department of Defense must shoulder its share of 
responsibility and that we must tighten our belts just as so many 
Americans have been forced to do in recent years. We have not taken any 
proposed change lightly. The health benefit exemplifies the 
Department's gratitude to veterans for their service and acts as an 
integral part of recruiting, retaining, and maintaining a healthy 
force. We worked to ensure that cost changes would be minimized and 
that any reforms would not degrade the quality of the benefit. We are 
confident that this is the case.
    I am honored to represent the men and women of the Military Health 
System before you today, and I look forward to answering any questions 
you may have.

    Senator Webb. Thank you very much, Secretary Woodson.
    Secretary McGinnis, welcome.

 STATEMENT OF DAVID L. McGINNIS, ACTING ASSISTANT SECRETARY OF 
                  DEFENSE FOR RESERVE AFFAIRS

    Mr. McGinnis. Chairman Webb, Senator Graham, distinguished 
members of the subcommittee, thank you for the opportunity to 
appear before you today and discuss the Reserve and our 
National Guard.
    Today, I can report to you that we have over 72,000 members 
of the Guard and Reserve on involuntary orders for mobilization 
supporting operations in U.S. Central Command (CENTCOM). In 
addition, we have another 86,000 on a snapshot. At the end of 
the month, we provided to the Secretary, 86,000 guardsmen and 
reservists deployed on 6 continents supporting our regional 
commanders in various duty statuses from annual training to 
mobilization. This is reflective of the emerging new role of 
our Reserve components described by many as the operational 
reserve.
    The President's fiscal year 2013 budget supports this 
operational reserve providing funding and programmatic support 
to three key readiness imperatives: training, equipping, and 
recruiting and retention.
    Training is focused on, first of all, maintaining 
capability and capacity identified within DOD for the 
particular organizations and leveraging available training 
technologies so we can make the maximum use of available time 
of our guardsmen and reservists when they are in training. We 
are focused on developing a common readiness standard across 
the components of each Service so we have standardized 
expectations on what we are looking for the Guard and Reserve 
to do.
    Equipping within my office first focuses on transparency. 
That is a bumper sticker for assuring that the equipment that 
you authorize for the Reserve components gets to those Reserve 
components you expected in a timely manner. We have also 
expanded this program to now develop a life cycle view of that 
equipment and track it throughout the system.
    We are also working very hard to ensure that the Guard and 
Reserve organizations have the right equipment to train with, 
including command and control and communications equipment, so 
they can integrate within the Total Force.
    Recruiting and retention are obviously an essential element 
of a ready force, and our recruit quality remains high. We 
expect some shifts in that as we move forward with individuals 
leaving the Active component, as we mentioned earlier, and we 
are working very strongly to come up with ways to integrate 
them into the Reserve components as they leave Active service.
    Retention currently is very solid, and we know that while 
we recruit the servicemember, we must maintain the family and 
retain the family. The Yellow Ribbon Reintegration Program 
(YRRP) is a wonderful tool that you provided us, that helps us 
do that. The use of the Reserve components in an operational 
role is necessitating that we begin to move the YRRP, or at 
least portions of it, into the base budget. With Secretary 
Hale's help and the help of others, we have started to do that 
in 2013, and we are working on doing that as we develop the 
future defense program.
    Continuing evolving requirements now also include 
employment programs, employment assistance, and training. We 
are working very hard at that. I will talk about that in a 
minute.
    As we learned from our members and their families on 
multiple deployments, we are finding that the tension to pre-
enduring deployment activities within the YRRP really enhances 
the post-deployment period. We are putting a lot of emphasis on 
that.
    Hero2Hired (H2H) is a joint initiative between the YRRP and 
the National Committee on Employer Support to the Guard and 
Reserve which is focused on unemployment and under-employment 
of this distinct category of servicemembers within the Reserve 
components.
    Second, this focuses on the reality that is really, 
unemployment of our guardsmen and reservists is a key element 
of individual military readiness. Successful guardsmen and 
reservists are established in the community and have good jobs. 
We know that.
    Finally, sir, I could not appear before you without 
highlighting the 20-year history of the building of enduring 
international partnerships with the National Guard State 
Partnership Program. We currently have a total of 63 
partnerships, but I would like to focus on the 22 in Eastern 
Europe and the 5 in CENTCOM. The 22 in Eastern Europe have 
helped us build the North Atlantic Treaty Organization (NATO) 
and expand NATO and also account today, as we speak, for about 
9,500 Eastern European military members as part of the 
International Security Assistance Force (ISAF); and the 5 
CENTCOM programs give us expanded access and understanding of 
the CENTCOM theater.
    I thank you very much again. I look forward to your 
questions.
    [The prepared statement of Mr. McGinnis follows:]
                Prepared Statement by David L. McGinnis
                              introduction
    Chairman Webb, Ranking Member Graham, and members of the 
subcommittee; I thank you for your invitation to participate in this 
hearing. I welcome the opportunity to give you an overview of the 
issues we are addressing in the Reserve components.
    The fiscal year 2013 budget supports the National Defense Strategy 
and will enable our Reserve components to continue to fulfill their 
vital national security role. The budget provides funding and 
programmatic support for the training, equipping, recruiting and 
retaining of the Guard and Reserve.
    The Department's Ready Reserve totaling about 1.1 million members 
contributes 43 percent of total military end strength at a cost of 9 
percent of the total base budget. The National Guard and Reserve 
provide trained, ready and cost-effective forces that can be employed 
on a regular operational basis, while also ensuring strategic depth for 
large-scale contingencies or other unanticipated national crises. 
Reserve component forces can:

         Provide critical capabilities for meeting national 
        defense objectives
         Enable mitigation of strategic risk at lower cost than 
        a large standing full-time force
         Provide cost effective returns on significant 
        Department of Defense (DOD) investment
         Reduce stress on the Total Force
         Provide the capability to rapidly ``reverse'' given a 
        change in our national strategic objectives

    Prior to 2001, the Reserve components were primarily a strategic 
reserve with occasional operational missions as needed to augment 
Active Forces. Since 2001, Reserve component units and individuals have 
been heavily employed across the full spectrum of military operations 
ranging from combat missions overseas, to homeland emergencies, to 
National Special Security Events and have demonstrated their readiness 
and utility. The current National Guard and Reserve is, arguably, the 
most combat seasoned Reserve Force ever, and the Department seeks to 
capitalize on this significant investment to provide needed military 
capacity during current austere economic times.
    To ensure the Reserve component can continue to provide both 
operational and strategic forces, the Department included funding and 
programs in its fiscal year 2013 budget request for their training, 
equipping, recruiting and retention.
  training and utilization opportunities for the military departments
    After a decade of sustained engagement in combat operations, the 
Reserve components of our Armed Forces continue to transform into a 
dependable operational force that provides full-spectrum capability to 
the Nation. As of 31 December 2011, 835,689 Reserve component members 
(809,913 Selected Reserve and 25,776 Individual Ready Reserve) have 
served in support of contingency operations since September 11, 2001 
and 80 percent of those service men and women have deployed in the U.S. 
Central Command area of responsibility. Today there are over 85,000 
National Guard and Reserve men and women on active duty around the 
world and at home, serving in missions ranging from combat in 
Afghanistan to defending the air space here in Washington and our 
borders in the southwest.
RC Utilization
    The contribution of the Reserve components has increased 
dramatically in the last two decades, and during that time the Reserve 
component has become an integral part of the Nation's military force 
participating in nearly every mission worldwide. The increased 
utilization of the Reserve components supports the recent Strategic 
Guidance, and the Department has managed the use of the Reserve 
component to help mitigate the stress on the Total Force.
      


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    Today's Reserve component is a force multiplier which provides 
access and flexibility at an incredible value allowing the Services to 
utilize full capabilities in an operational capacity while retaining 
strategic depth. An optimal Active component/Reserve component force 
mix will allow the department to not only preserve previous investments 
in readiness, capability, and capacity, but also protect the 
operational expertise of the force for future use while ensuring a 
rapidly expandable, trained, and ready military.
Innovative Readiness Training
    The Innovative Readiness Training (IRT) Program is an outstanding 
volunteer training opportunity for our National Guard and Reserve. 
IRT's focus is to provide a varied and challenging menu of training 
opportunities that exercise the Mission Essential Task List (METL) 
requirements of combat support and combat service support units and 
individuals. Each year, new training opportunities are presented by 
Federal, State, or local government agencies or nonprofit organizations 
to the Services for their selection. Military units are provided METL 
training in a realistic, hands-on setting while providing quality 
services to communities throughout the United States and U.S. 
territories.
    Examples of IRT activities include infrastructure development, 
constructing rural roads and runways, small building and warehouse 
construction and providing medical and dental care to medically 
underserved communities. These opportunities result in interoperability 
and readiness training ensuring our Nation always has a fully capable 
National Guard and Reserve. Historically, this office's IRT program 
budgets for, and executes a $20 million fiscal year training program.
Cyber Workforce
    Operating effectively in Cyberspace is vital to DOD and the Nation. 
``Cyber'' as a Warfare Domain is newly organized and rapidly expanding. 
The need for personnel with cyber skills, the limited number of workers 
with those skills, and increasing competition within U.S. Government 
and the private sector for the same set of skills require a long-term 
and robust cyber workforce strategy. The Secretary of Defense has 
stressed the need for a flexible approach to attract, develop, and 
retain Cyber, and specifically Cybersecurity, professionals along with 
endorsing innovative use of the Reserve component for cyber missions.
    Innovative use of the Reserve component as proposed by the 
Secretary is well underway, with forces assigned to the National 
Security Agency, U.S. Cyber Command (CYBERCOM), the Defense Information 
Systems Agency and to each of the four Service component commands 
supporting CYBERCOM. There are multiple Air and Army Guard units 
engaged in the cyberspace mission and Computer Network Defense teams 
are authorized in all 54 States and territories. The Reserve component 
offers very highly qualified individuals from the private sectors whose 
civilian skills may be maximized when supporting DOD.
State Partnership Program
    The National Guard State Partnership Program (SPP) mission is to 
establish and sustain enduring relationships with partner nations of 
strategic value in conjunction with the National Security Strategy, 
National Military Strategy, Department of State and Combatant Command 
Theater Security Cooperation guidance to promote national objectives, 
stability, partner capacity, better understanding and trust.
    Program partners engage in security cooperation activities to 
include homeland defense and security, disaster response/mitigation, 
consequence/crisis management, interagency cooperation, border/port/
aviation security, combat medical, fellowship-style internships, and 
bilateral familiarization events that create training and exercise 
opportunities. SPP provides the ability to focus a part of DOD, a 
State's National Guard, with a single country or region in support of 
U.S. and partner country objectives. Currently, 48 States, 2 
territories, and the District of Columbia are partnered with 63 
countries around the world.
    This program directly supports the Secretary's strategic goal of 
building innovative partnerships. The program has been funded at $13.36 
million for fiscal year 2012 and the President's fiscal year 2013 
budget includes a request for $16.5 million. Many of these partnerships 
have resulted in collaborative working relationships through police and 
military operational mentoring and liaison teams with our new NATO 
partners who are part of the effort in Afghanistan.
                    equipping the reserve components
Equipment Procurement
    There currently is no specific appropriation that provides 
equipment directly to the Reserve components. The Reserve component 
relies on the active procurement account to meet equipment requirements 
and provide adequate capabilities. Congress has been generous in 
providing additional support through the National Guard and Reserve 
Equipment Appropriation ($1 billion for fiscal year 2012), which 
provides funding for Reserve component equipment modernization and 
critical dual-use equipment.
P-1R
    We thank Congress for their continued generous support of the Guard 
and Reserve equipping (P1R fiscal year 2012 - $4.6 billion/fiscal year 
2013 - $3 billion). The current challenge is that the P-1R has 
historically been treated as a non-binding projected subset of the 
Procurement Programs (P-1). In my view it is time to make the National 
Guard and Reserve equipment a sub-line within the P-1 and eliminate the 
P-1R. This will better ensure that Guard and Reserve component 
equipment is part of the Service plans throughout the entire 
procurement process.
Resetting
    Currently, funding for reset of equipment returning from theatre 
for the Guard and Reserve comes from overseas contingency operations 
appropriations. As we prepare to move away from reliance on these 
supplemental funds, it is important to have a continued source of 
funding built into the base budget for Reserve component equipment 
reset. It is critical that the Guard and Reserves are able to continue 
to train on high quality equipment for which funds have already been 
allocated.
RC Equipment Transparency
    Full transparency and accountability can only be achieved through a 
full life cycle, enterprise approach to reserve equipping. The life 
cycle includes requirements determination, budget requests, 
appropriation, purchase, and delivery of hundreds of thousands of 
pieces of equipment. The importance of transparency doesn't stop when 
an item is delivered to a Reserve component unit; the value of 
transparency in the life cycle approach to equipping continues beyond 
delivery. Plans to return borrowed Reserve component equipment are 
included as key deliverables in this process.
Military Construction
    The fiscal year 2013 Reserve component budget includes $1.02 
billion, $21 million less than fiscal year 2012, for military 
construction which will meet both current and new mission requirements 
for Reserve component operations, readiness, and training facilities. 
The budget also funds sustainment, which is essential to maintaining 
facilities at a level that supports readiness and preserves the 
substantial investment the country has made in infrastructure. However, 
with urgent Reserve component facilities deficiencies and funding 
constraints, we must work to exploit opportunities to utilize existing 
DOD facilities and continue to pursue the efficiencies of joint use 
construction opportunities. The benefits of doing this go far beyond 
cost savings by promoting cooperation, building trust, and providing 
opportunities for joint training.
Regional Integrated Training Environment
    The Regional Integrated Training Environment (RITE) concept is a 
joint effort that identifies and matches Services' training 
requirements to a vast network of local training facilities and 
resources. The purpose of the RITE initiative is to help sustain the 
total force readiness posture and surge capability as determined by 
service rotational readiness models while reducing overhead training 
costs through innovative management of facilities, training assets, 
advance simulators and Joint Live Virtual and Constructive capability, 
pooled, shared equipment, and coordinated through a web-based 
scheduling/visibility program. As the concept matures, collaboration 
will expand with key internal and external DOD stakeholders.
          recruiting and retaining the reserve component force
    In approximate numbers, as of December 31, 2011, the Ready Reserve 
currently consists of the following end-strengths:

         Selected Reserve: 844,400
         Individual Ready Reserve: 220,000
         Inactive National Guard: 3,700

Continuum of Service, End Strength and Readiness Management
    Meeting Reserve component end strength objectives is a priority of 
the Department. The following table depicts the current prescribed and 
actual end strengths for the Reserve components as of December 2011. 
The Department's Continuum of Service efforts have contributed to all 
six DOD Reserve components remaining within the variance allowed for 
their congressionally-mandated end strength objective. The Services 
have implemented recruiting, retention, and force shaping policies and 
programs to achieve end strengths for fiscal year 2012. We appreciate 
the congressional support of the fiscal year 2012 end strength levels 
and the legislative initiatives that assist in recruiting and retaining 
Reserve component servicemembers. Fiscal year 2013 end strength levels 
will provide the Reserve components with the forces necessary to meet 
strategic and operational demands while maintaining a dwell consistent 
with Departmental policy.
      


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Recruit Operational Ready Reserve Strength
    Thus far, for 2012, Reserve recruiting efforts show continued 
success. Through January, five of the six Reserve Services are within 
tolerance for recruit quantity objectives. Also, all Reserve components 
have met recruit quality objectives. The Reserve components continue to 
exceed the DOD Benchmark of 90 percent of new recruits being High 
School Diploma Graduates, with 97 percent of Reserve component recruits 
holding that credential.
      


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    It is important that we have a military that reflects the society 
it defends, both in the enlisted ranks and our commissioned officers. 
This is particularly important as less than 1 percent of the American 
public serves in uniform.
    We continually review our recruiting programs to align funding and 
policies with current realities. Each of the Services has made 
significant adjustments to recruiting programs in light of our austere 
fiscal environment and draw-downs, and continues to look for additional 
cost savings but we must be cautious and resist the temptation to cut 
too deeply and too fast. Stable adequate investments in recruiting 
resources are necessary to maintain long-term success. Although 
enlistment incentives can be adjusted quickly to meet market 
fluctuations and force management needs, history has shown that the 
time required to redeploy advertising/marketing campaigns and/or 
qualified recruiters is significant.
    Acknowledging and understanding these factors and the need to 
expand our recruiting areas for the Reserve components, we continue to 
enhance DOD influence in underserved communities by working with local 
school administrators, specifically from Title I school districts, and 
implementing programs like the DOD STARBASE Program that have potential 
long-term impacts on students' on-time high school graduation; college 
enrollment; and interest in learning science, technology, engineering 
and mathematics. DOD STARBASE is an outreach and educational program 
that focuses on science, technology, engineering, and mathematics 
(STEM). STARBASE provides students underrepresented in the STEM areas 
of study and careers with 25 hours of instruction through an inquiry-
based curriculum with ``hands-on, minds-on'' experiential activities 
and exposing them to military's technological environment to solidify 
their attachment to and engagement with learning. The program's 
influence has resulted in former DOD STARBASE students being invited to 
attend and participate in the White House Science Fairs for the last 2 
years.
    My staff and I have been working with the Office of Management and 
Budget to challenge States, industries, and nonprofits to invest in 
intervention programs like the National Guard Youth Challenge Program. 
I am also working with General McKinley, Chief of the National Guard 
Bureau, to provide oversight and management of the Program by 
collaborating with Governors to eliminate State resident issues; and to 
ensure every qualified high school dropout has an opportunity to attend 
the program. The Challenge program is currently operating in 27 States 
and Puerto Rico. Its goal is to improve the education, life skills and 
employment potential of America's high school dropouts. We provide 
quasi-military based training, supervised work experience to advance 
the program's core components. The core components include obtaining a 
high school diploma or equivalent, developing leadership, citizenship, 
life coping and job skills and improving physical fitness, health and 
hygiene. Since the program's inception over 100,000 students have 
successfully graduated from the program. The average cost per Challenge 
student is approximately $16,000. The fiscal year 2013 budget will 
support increasing annual enrollment and/or start up new programs in 
States that have the fiscal resources to match the cost-share funding 
requirements and to sustain the program's viability in States that have 
budget limitations.
    These two successful DOD youth outreach programs provide the 
Department a unique connection to the American public and working with 
our most valued resource--our young people.
    The Montgomery GI Bill-Selected Reserve (MGIB-SR) has been a 
cornerstone of our military recruiting efforts since 1985, and a major 
contributor to the success of the All-Volunteer Force. The new Post-9/
11 GI Bill appears to enhance our recruiting efforts even more 
especially after signing the Post-9/11 Veterans Educational Assistance 
Improvements Act of 2010--providing additional benefit options that 
include the eligibility of National Guard and Reserve members who were 
inadvertently omitted from the original Bill, vocational and other non-
college degree training, and living stipends for those enrolled in 
distance learning programs.
Individual Readiness
    We understand that maintaining the highest level of individual 
readiness for our military manpower and civilian employees is a 
requirement for continuing to be utilized as a viable part of the 
operational force. Employing the Reserve components as operational 
forces requires modifications to training schedules and funding 
requirements. Ancillary training must be properly managed and 
prioritized in order to allow our members to focus on training for the 
skills that will be required of them when deployed or activated. Before 
DOD operationalized the Reserve component, the normal minimum training 
profiles consisted of training 2 days per month plus 14-15 days of 
active duty for training annually. While that training profile remains 
in-place for some types of units, current Department policy states that 
for those with planned deployments, training days prior to mobilization 
increases. This training profile, with more training pre-deployment and 
less post-deployment, minimizes mobilized time away from families and 
civilian. Increasing individual readiness by modifying training 
profiles with resources and policies is a major focus area that will 
allow the Guard and Reserve to capitalize on the gains made during the 
last decade and enable the continued use of the Reserve component as an 
operational force.
Individual Medical Readiness
    The Individual Medical Readiness of the National Guard and Reserve 
continues to be a priority for the Department to ensure availability of 
Ready Reserve component members for deployment. As of the fourth 
quarter of fiscal year 2011, the Reserve component has increased its 
Fully and Partially Medically Ready rate 5 percent over first quarter 
fiscal year 2011 rates, and reduced the Indeterminate population by 6 
percent. Most notably, the Marine Corps Reserves improved their Fully 
Medically Ready status by 16 percent and reduced the Partially Medical 
Ready rate by 14 percent, over half of the fiscal year 2011 first 
quarter rates. The U.S. Coast Guard Reserve also made great 
improvements increasing their Fully Medically Ready rate by 9 percent, 
and reducing their Indeterminate and Not Medically Ready population by 
4 percent and 6 percent respectively. While we continue to face 
challenges with Dental Readiness, all Services are over the 75 percent 
goal except Army Reserve and Army National Guard which are at 71 
percent and 73 percent respectively. My office is working within P&R 
and across the Services to improve access to medical and dental 
services for Reserve component members. For example, the Army Reserve 
now budgets additional medical and dental services into their readiness 
accounts for Reserve component members.
TRICARE for the Reserve Components
    The Department offers various health and dental coverage options to 
eligible members of the Reserve components and their families. Members 
of the Selected Reserve (SELRES) who actively participate in the 
Reserve component may purchase individual or family TRICARE Standard/
Extra coverage under TRICARE Reserve Select (TRS). Members pay premiums 
that reflect 28 percent of the total cost of the coverage and incur 
cost shares after meeting an annual deductible (a government subsidy 
covers 72 percent of premium cost).
    For Reserve component members who have been activated in support of 
a contingency operation, premium-free TRICARE coverage may begin up to 
180 days before the member is activated (Early Identification) and 
continues for 180 days after the member is deactivated (Transitional 
Assistance Management Program (TAMP)) for the member and his/her 
family. After this period, qualified SELRES members may re-enroll and 
purchase TRS coverage again if desired. As of December 2011, there were 
a total of 81,465 TRS plans in effect: 29,204 TRS member-only plans and 
52,261 TRS member and family plans with a total of 215,545 
beneficiaries covered by TRS. Additionally, the Continued Health Care 
Benefit Program (CHCBP) is a premium-based health care program that 
offers temporary transitional health coverage for 18-36 months after 
TRICARE eligibility ends. CHCBP acts as a bridge between military 
health benefits and civilian health plans. Qualified members may 
purchase CHCBP within 60 days of loss of eligibility for either regular 
TRICARE or TAMP coverage.
    TRICARE Retired Reserve (TRR) is a full cost (no government 
subsidy) premium-based, worldwide health plan that qualified retired 
Reserve members and survivors may purchase. TRR offers comprehensive 
health coverage from any TRICARE-authorized network or non-network 
provider. TRR members may receive care in military treatment facilities 
on a space-available basis. TRICARE Young Adult is a premium-based 
health care plan that qualified dependents may purchase. TRICARE Young 
Adult provides medical and pharmacy benefits, but dental coverage is 
excluded. TRICARE Young Adult allows dependent adult children to 
purchase TRICARE coverage after eligibility for ``regular'' TRICARE 
coverage ends at age 21 (or 23 if enrolled in a full course of study at 
an approved institution of higher learning) and are not yet age 26.
    Collectively, these options for health care coverage provide a 
comprehensive and affordable health care plan for Reserve component 
servicemembers and their families. TRICARE insurance has provided 
servicemembers the opportunity to maintain their individual medical 
readiness requirements, increasing the overall readiness of our Reserve 
component units.
Yellow Ribbon Reintegration Program
    The Yellow Ribbon Reintegration Program (YRRP) is a statutorily 
created, joint effort to support the Services in providing National 
Guard and Reserve servicemembers and their families with critical 
support, information, services, and referrals throughout the entire 
deployment cycle (pre, during, and post) to maximize successful 
transitions as servicemembers move between their military and civilian 
roles and to create strong, resilient military families. The YRRP is 
also responsible for providing Reserve component members and those who 
support them with training in suicide prevention and community healing. 
In fiscal year 2013, the YRRP will continue collaborating with suicide 
prevention experts to develop a strategic approach in identifying 
promising practices, strengths, challenges and gaps. We in Reserve 
Affairs continue to work with the Services as well as the newly created 
Defense Suicide Protection Office within the Office of the Under 
Secretary of Defense for Personnel and Readiness to address this 
important issue. The Services, along with Reserve Affairs, have taken 
current suicide rates very seriously and have committed resources to 
significantly reduce this trend.
    Guard and Reserve, Federal and State employees, volunteers and 
nonprofit organizations have worked tirelessly to ensure our 
servicemembers and those who support them have access to resources as 
they transition back into their communities. During the past 3 years, 
the YRRP has evolved into a successful, forward-leaning program 
providing essential readiness and resiliency training and resources to 
over 800,000 servicemembers and designees through direct-contact YRRP 
events. In fiscal year 2011, the Services conducted a total of 2,151 
YRRP events across the country, providing vital information and 
resources to 309,753 servicemembers, their families and/or designated 
representatives. To support the use of the operational reserve in the 
future, we need to work towards YRRP funding in the base budgets to 
ensure continuation of these important programs.
    In fiscal year 2011, Congress appropriated an additional $16 
million to the YRRP for enhanced outreach and reintegration activities 
which allowed the department to provide one-time support to various 
State led initiatives. Our Center of Excellence is working to collect 
data and metrics from these various programs to ensure we are funding 
the most effective outreach.
Employer Support of the Guard and Reserve (ESGR)
    Employer Support of the Guard and Reserve engagement has grown 
significantly in recent years. The vision is ``to develop and promote a 
culture in which all American employers support and value the military 
service of their employees with ESGR as the principal advocate within 
DOD.'' ESGR has a footprint in all 50 States, U.S. Territories, and DC 
with over 4,800 volunteers assisting employers and servicemembers on a 
daily basis. The support of employers and families has never been more 
critical to our national defense. Through its network ESGR accomplished 
the following during the past year:

         Through Employer Outreach, ESGR volunteers briefed 
        153,062 employers regarding their rights and responsibilities 
        in accordance with Uniformed Services Employment and 
        Reemployment Rights Act (USERRA). Also, ESGR attained 45,140 
        Statements of Support. Employers signing a Statement of Support 
        pledged support for their employees serving in the Guard and 
        Reserve, while also focusing on opportunities to hire 
        guardsmen, reservists, and veterans.
         Through Military Outreach efforts, ESGR volunteers 
        briefed 473,891 servicemembers regarding their rights and 
        responsibilities under USERRA. In turn, servicemembers 
        recognized supportive employers with 4,049 nominations for the 
        2011 Secretary of Defense Employer Support Freedom Award and 
        acknowledged 16,559 supervisors with ESGR's Patriot Award.
         ESGR's Ombudsman services are supported by over 600 
        trained USERRA experts spread across the country and by a 
        National Customer Service Center. Together, the Ombudsmen 
        fielded 29,727 USERRA inquiries and handled 2,884 cases. ESGR 
        Ombudsmen provided free, neutral mediation to resolve nearly 80 
        percent of all cases, in less than 9 calendar days. For cases 
        that cannot be resolved by the Ombudsman, servicemembers are 
        informed of their option to file a complaint with the 
        Department of Labor, where a formal investigation will be 
        conducted as to the merits of the complaint.
Reserve Component Unemployment and Underemployment
    The Department knows that civilian employment is an important piece 
of a Reserve component servicemember's readiness, and the current high 
unemployment rate is a clear threat to the readiness of our force. The 
Bureau of Labor Statistics January 2012 report showed that the 
unemployment rate for all Veterans (including Guardsmen and reservists 
who previously served on active duty) was 7.5 percent nationwide. The 
unemployment rate among Gulf War era II veterans (those serving since 
September 11) was 9.1 percent. For reservists and guardsmen, the 
January 2011 Status of Forces Survey of Reserve Component Members shows 
a self-reported 23 percent unemployment rate among junior enlisted 
members in the grades of E-1 to E-4.
    As a result of these unemployment rates, ESGR and YRRP launched an 
Employment Initiatives Program (EIP) in January 2011. Under the Office 
of the Assistant Secretary of Defense for Reserve Affairs (OASD (RA)) 
our ESGR volunteers increased their focused activities to address the 
unique unemployment needs of Reserve component servicemembers. Our ESGR 
Committees, representing the 54 States, Territories. and District, 
began focused efforts such as employment assistance workshops, job 
fairs, employment summits, and many other local community programs. 
ESGR conducted numerous workshops whereby servicemembers were trained 
on how to create civilian resumes, undergo mock interviews, dress for 
success, and received career counseling.
    Beginning in March 2011, ESGR volunteers assisted the U.S. Chamber 
of Commerce in the launch of their mega-hiring fairs around the 
country. As of the latest Chamber report, there have been 88 events, 
connecting more than 84,000 Veterans, Reserve component members and 
military spouses, to over 4,300 different employers. As a result of the 
combined effort, the National Chamber reports that more than 7,300 
veterans, servicemembers, military spouses, and 50 wounded warriors 
have gained employment.
    This past December 2011, our office launched a comprehensive, 
multi-faceted program called ``Hero2Hired'', better known as H2H, using 
lessons learned from our own efforts this past year and from the U.S. 
Army Reserve Employer Partnership of the Armed Forces program, H2H was 
developed to address the gap in employment assistance services and 
support for Reserve component servicemembers who are not considered 
veterans in law and so are ineligible for VA employment programs. H2H 
focuses on helping Reserve component servicemembers connect to and find 
jobs with military-friendly companies that seek employees with specific 
training and skills. H2H is a powerful, comprehensive employment 
program with a powerful job search site (www.H2H.jobs) and online 
community that is made available at no cost to servicemembers and 
employers. It contains all the tools a job seeker needs to find a job: 
job listings, career exploration tools, education and training 
resources, advice and tips, hiring events, virtual career fairs, mobile 
phone app, and networking opportunities. In 2012, H2H is sponsoring and 
participating with the U.S. Chamber of Commerce in 40 job fairs in high 
Reserve component unemployment areas. H2H booths will be available and 
staffed by H2H, YRRP, and ESGR State Committee volunteers.
    Together, YRRP and ESGR are delivering meaningful services to 
assist Reserve component servicemembers to transition and reintegrate 
into their civilian community through full spectrum assistance with 
employment and by promoting positive employer relations through USERRA 
education.
    Individual and Family Support Policy (IFSP) is participating in DOD 
studies on Child Care Subsidy, Military Family Life Consultants, 
Effectiveness Tracking, Resilience Programs, Websites and Help-lines, 
State Liaisons, and Communication with Families. OSD Reserve Affairs 
will continue to be an active partner in the DOD process to ensure that 
as family support resources are realigned, the 1.1 million National 
Guard and Reserve members and their families are considered in the 
decisionmaking process and that family support functions at a level 
that sustains full mission readiness.
                               conclusion
    Secretary Panetta has recently testified on the need to maintain 
the tremendous expertise that has been developed in the Reserve 
components during the last decade of sustained engagement. The 
Department's recently released strategic guidance highlights the need 
for our National Guard and Reserves' continued capabilities and 
contributions as an agile, flexible and ready force in our national 
security. It is wise to build on the success and capitalize on these 
investments as we continue to develop the Reserve components to provide 
full-spectrum capability to the Nation. The Quadrennial Defense Review 
directed Comprehensive Review of the Future Role of the Reserve 
Component, released last year, provides a foundation upon which to 
build a cohesive execution strategy that preserves current Total Force 
competencies, efficiently integrates multiple capabilities, and 
leverages Reserve component value.
    Additionally, the 2012 National Defense Authorization Act requires 
an assessment of Reserve component force structure and end strengths in 
total force structure, and we are working within the Department to 
complete this requirement. These analyses and others that are ongoing 
will support the Department's strategic guidance to examine the mix of 
Active component and Reserve component elements best suited to support 
the strategy while maintaining a balance between the available 
resources and our security needs for the next decade.
    The fiscal year 2013 budget anticipates the Department will 
continue to use the Guard and Reserve as a vital part of the 
operational force, and where it makes sense, as a force of first 
choice. Today's Citizen Warriors have made a conscious decision to 
serve since September 11, with full knowledge that their decisions mean 
periodic recalls to active duty under arduous and hazardous conditions. 
To keep faith with their commitment, we will need your continued 
support of the funding requested for their training, equipping, 
recruiting, and retention. Thank you again for allowing me an 
opportunity to give you an overview of the issues we are addressing in 
the Reserve components.

    Senator Webb. Thank you, Secretary McGinnis.
    I will start and I will also adhere to the 7-minute rule 
that I asked everyone else to adhere to at the beginning of my 
statement.
    Actually, Secretary McGinnis, I would like to start with 
just where you ended up because when we look at the 
unemployment figures for those who served, we essentially, in 
my view, have three different groupings of people who have 
served. We have the one-term or non-career enlistees, which I 
think a lot of people up here misunderstand in terms of the 
size of that group. We tend to think if you have an all-
volunteer system, you have an all-career system, and in truth 
and particularly in the Marine Corps and the Army, the majority 
of people leave before they enter their first enlistment. That 
group has one set of challenges in order to reassimilate into 
the civilian society.
    Then we have the Guard and Reserve as a particularly 
difficult problem right now, and I want to get back to it.
    Then third, we have the retirees who have another different 
set of circumstances when they leave.
    But with respect to the Guard and Reserve, I had the 
position that you are acting in right now for 3 years and 
responsibility for the oversight of these programs. We never 
could have comprehended the rate that they are being called to 
Active Duty and the percentage of their professional career 
that they are actually spending in uniform. We are seeing some 
really disturbing data in terms of the unemployment rates. I 
understand there are a lot of complexities that go into the 
fact that the employment numbers are down, but could you give 
us a better description of what the challenges are?
    Mr. McGinnis. Yes, sir. The first challenge is the group 
that has the biggest unemployment, going as high as 24 to 26 
percent, depending on when you measured it, and that is junior 
enlisted personnel. We have increased the number of non-prior 
service enlistments over the last decade in the Guard and 
Reserves, especially Army components, and of course the Marine 
Corps has always had a high percentage. But in the Guard and 
Reserve, particularly in the Army Guard and Army Reserve, the 
numbers are now up to about 55 percent or more. They used to be 
lower than that by about 10 or 15 percent. We used to rely a 
lot more on prior service before stop-loss.
    A lot of those individuals enlisted directly out of high 
school, came into the Guard, and went through their initial 
entry training and then deployed. Now they are coming back, and 
they have never been in the workforce before. So that is one 
unique group we are focusing on. That is why I mentioned in my 
opening statement that this is a unique group that we have to 
segment, as you explained, because then we have the individuals 
coming back who, because of the economy and other reasons, may 
have lost their jobs for reasons that their employer could not 
help and that number is running about 12 percent.
    So we are working with the Employer Support Committee in 
each State and their 4,800 volunteers with the Chamber and 
their effort and with H2H, which we have joined with the Army 
and the Army Reserve to focus on both of these groups in 
different ways. So we are getting a lot of momentum, and we 
have been working on it for about 18 months.
    The initial problem we looked at was under-employment. We 
had some momentum working on under-employment for people coming 
back who were looking for better jobs based on their experience 
in theater. We did have some momentum.
    But those are the two areas that we are focused on and they 
are two distinct areas.
    Senator Webb. Do you see any indication of a resistance in 
the employer community because of the deployment cycles?
    Mr. McGinnis. No, sir. We have just completed a survey 
which is now being assessed of employers. The Employers Support 
Committee did that, and when it is available, we will make it 
available to you. But initial indications are while if you look 
at the groups who have to support us, the individual 
themselves, the families, the employers, the employers have the 
lowest level of support, but it is not below 50 percent. The 
employers on par have been very patriotic and very supportive 
of the efforts. We do not see a reluctance to hire. In fact, we 
see people who are coming to us who want to hire. The biggest 
issue we have--and it has been the issue since the program 
started--is the small employer and in some cases the medium 
employer. We need to continue to work with them. Hopefully from 
the survey we will figure out some ways that we can bring to 
you on how we can help them. But that is a large group of 
employers.
    Senator Webb. Secretary Hale, you mentioned the cross 
section of the Total Force when it comes to the reductions that 
we are looking at. Could you give us a comparative examination 
or a statement on the civilian employees and contractor 
employment?
    Mr. Hale. The civilians are down slightly, roughly similar 
to the military from 2012 to 2013, down about 2 percent. In the 
out-years, our civilian employment drops not very much, just a 
couple more percent. In fact, we are looking at that now. I 
believe what happened is we were pretty busy in the last 
program budget review, and, I think, we did not have a chance 
to look at support personnel as much as we could or should 
beyond 2013. So I know it will be an issue as we look at the 
2014 to 2018 program.
    Regarding contractors, we struggle with good information. 
They are down in dollar terms from 2012 to 2013. Frankly, in 
the out-years, we do not have reliable data on contractors 
because we just do not formulate it in the same way. We are 
working to do that and I hope we will have better information, 
but they are down slightly from 2012 to 2013.
    Does that answer your question?
    Senator Webb. Roughly, what would the percentages look like 
compared to the Active Force?
    Mr. Hale. Similar. From 2012 to 2013, down 1 to 2 percent 
for both Active and civilians. Let me correct the details for 
the record. Similar for contractors in dollar terms, which is 
the best data I have.
    Senator Webb. Are the out-years the same?
    Mr. Hale. Well, no. For Active Duty personnel, including 
Guard and Reserve together, about 5 percent over the FYDP 
period. More like 2 for civilians. As I said, I think we need 
to relook at that issue. I do not have contractor data beyond 
2013. We keep track of how much we are going to spend in 
operation and maintenance buckets. We do not in the 
contractors, and we are trying to do a better job, but we are 
not there.
    Senator Webb. We may ask you a follow-on question on that.
    Senator Graham.
    Senator Graham. Thank you, Mr. Chairman.
    Just to pick up with where the chairman left off, I think 
it is very important before we make a decision how to get to 
$87 billion, that the civilian workforce, if it is going to be 
reduced just a fraction of the Active-Duty Forces and Reserve 
folks who wear the uniform, I would like to know more about how 
we could maybe shift some of this reduction, look at the 
civilian side a little bit harder, and make sure that we get to 
$87 billion with as many people that are available to go to war 
if we have to have a war. So I just want to echo what the 
chairman said there.
    Dr. Woodson, in 1996, I think you said the amount of money 
collected from people on the program through premiums for 
TRICARE was about 26 percent?
    Dr. Woodson. Sir, the cost share was about 27 percent.
    Senator Graham. 27 percent. So 27 cents of every dollar of 
cost came from the people on the program, right?
    Dr. Woodson. Correct.
    Senator Graham. It is down to 10 now. Is that right?
    Dr. Woodson. Correct.
    Senator Graham. Is that just because we have never adjusted 
the premiums and the costs have gone up?
    Dr. Woodson. Correct, and also remember we have added 
substantial benefits to the program over the last decade.
    Senator Graham. So what you are proposing is to try to get 
the premium cost share up to 14 percent?
    Dr. Woodson. Correct, on average.
    Senator Graham. Based on retirement benefits reschedules, 
based on how much money you make in retirement?
    Dr. Woodson. Correct.
    Senator Graham. In terms of overall budget, if it continues 
on the course that it is now, what percentage of DOD's budget 
would be consumed by health care?
    Dr. Woodson. Sir, that is a great question, Senator. If you 
look at the numbers right now and you look at a base budget of 
$525 billion, our unified medical plan this year was $53 
billion. So we are at 10 percent now. If you look at the issue 
of a modest 5.3 percent growth in health care--and you can do 
the calculations--particularly the top line of DOD comes down. 
The implications of this, of course, are that health care will 
consume a greater percentage of the DOD budget, but it also 
produces a palpable tension, if you will, between providing 
health care and training, manning, and equipping the force. I 
think that is what Secretary Hale was alluding to before.
    Senator Graham. I would just like to be on the record 
saying I would like to work with the administration to find 
some way to change this dynamic because the BCA requires $87 
billion. I do not know if that is set in stone. If we can 
change that number, I would be willing to. But we have to 
balance the budget. We are $15 trillion in debt. Everything has 
to be on the table.
    When it comes to the Guard and Reserve, Mr. McGinnis, the 
Air Guard seems to get hit pretty hard here. Are you familiar 
with the proposed cuts in the Air Guard?
    Mr. McGinnis. Yes, sir. The Secretary of the Air Force is 
in the process of reorganizing his force and has presented this 
to DOD. I have made my recommendations to the Secretary, and 
the Secretary is in the process of reviewing that now.
    Senator Graham. I appreciate it.
    Mr. McGinnis. Secretary Hale is very much a part of that, 
and hopefully in the near future, we will have a decision.
    Senator Graham. Secretary Rooney, if you allowed people who 
were 50 percent disabled to access commissaries and exchanges, 
could you get back to us later on and see what impact that 
would have? Because I think the rule is now that only 100 
percent disabled people have commissary and exchange 
privileges. Is that correct?
    Dr. Rooney. I believe you are correct, sir.
    Senator Graham. Okay, if you could look at that. What I am 
getting at is our commissaries and exchanges are good deals for 
the members and their families, and we want to make it 
sustainable. If we are going to draw down the force, then you 
lose customers, and this might be one way of getting a larger 
customer base and reward people who have sacrificed for the 
country. I just want you to look at that and I will talk with 
Senator Webb about it.
    Thank you all for your service, and we will see what we can 
do to work through this.
    Mr. Hale. Senator Graham, could I add briefly to your 
opening, underscoring the chairman's point on civilian 
personnel? I agree we need to look at them. We need to look at 
contractors as well. But we need to remember that civilians run 
our acquisition, they run logistics, they run finance, they fix 
our ships and planes. We cannot fight effectively without them. 
So we need to be a little careful, in my view, about damning 
our civilian workforce which we sometimes, I think, lean toward 
doing. We just cannot work without them.
    Senator Graham. They are a very valuable part of the team, 
cannot do the job without them. But again, we are going to have 
to set our priorities in this country and figure out where we 
go.
    Mr. Hale. We need to be careful.
    Senator Webb. Before I call on Senator Blumenthal, just let 
me first of all say I am looking for data here when it comes to 
civilian numbers and Active numbers. There is a reality that I 
think we all acknowledge that when you end a long period of 
sustained ground combat, you reduce your ground forces. So, it 
is not necessarily an apples-to-apples comparison when you look 
at the civilian side. But my question really was to get the 
numbers.
    Another thing, just from my own experience, Senator Graham, 
I was talking to staff on your question as to the percentage 
disability being able to use commissary and exchanges.
    Senator Graham. Am I wrong?
    Senator Webb. If you are medically retired from the 
military, it is 30 percent or above where you can use 
commissary and exchange. There is a different system if you go 
to the VA for a percentage. But I wanted to clarify that if you 
are retired, which is 30 percent or higher, then you are able 
to use those benefits.
    Dr. Rooney. Correct.
    Senator Webb. Senator Blumenthal?
    Senator Blumenthal. Thank you, Mr. Chairman, and thank you 
for your leadership and Senator Graham's on this subcommittee. 
Thank you to the witnesses for the excellent work that you are 
doing in a very difficult time, perhaps more difficult than any 
within recent memory.
    Many of the issues that have been raised both by my 
colleagues and by you in your testimony are of very great 
interest to me. I want to focus on one, though, that may not be 
directly related to the budget. I know the budget consumes a 
lot of time. You have discussed in your testimony, Secretary 
Rooney, the issue of sexual assault, which I know troubles you 
and the Secretary greatly, a great concern to you, and there is 
a zero tolerance policy. It is a leadership issue.
    You say in your testimony that the estimates now are about 
19,000 sexual assaults a year, which is down from the estimate 
of 34,000 in 2006. Are you suggesting that the rates or numbers 
of sexual assaults have been reduced over the last 6 years?
    Dr. Rooney. Sir, the way we get to that number is we look 
at the number of reported sexual assaults as a percentage of 
the overall force and then actually multiply it. The number 
appears to come down, but quite frankly, as you indicated, our 
concern is that there are any at all. 19,000 are 19,000 too 
many, or whatever the exact number is, because again, that was 
extrapolated from actual reported numbers. So while we believe 
that the attention being focused, the programs being put in 
place, and frankly the leadership taking this on as such a 
critical area to be able to address because it goes right to 
the heart of what our military believes in terms of their work 
and their respect for each other, that that number will come 
down. But we realize we have a great deal of work to do, sir.
    Senator Blumenthal. But it may not have come down in the 
last 6 years. Obviously, your objective is to make it come 
down. But I am just asking whether you have confidence in that 
number because, quite honestly, I am not sure that I do.
    Dr. Rooney. I believe that number indicates that we have a 
substantial problem. But again, it is not a specific number. It 
is extrapolated from those reports we have.
    Senator Blumenthal. Of the defendants who are reported--and 
in those incidents, 3,192 in fiscal year 2011--what percentage 
faced court martial?
    Dr. Rooney. Sir, I will take that question for the record 
and get back to you on the specifics.
    Senator Blumenthal. The information I have is fewer than 21 
percent.
    Dr. Rooney. That percentage is correct.
    Senator Blumenthal. What is the reason that they are not 
brought to court martial?
    Dr. Rooney. Often, sir, it is many of the same challenges 
that we see on the civilian side, which is in order to go 
through the court martial, obviously, we need to be able to get 
the evidence and make sure that our folks are trained to be 
able to take and prosecute those particular cases. Those are 
specific areas we are working on now to make sure people are 
trained in the specific areas of how to be able to not only get 
the evidence, but to present that forward. That is often the 
roadblock.
    Senator Blumenthal. So you are upgrading the procedures for 
collection of evidence, and what about retention of evidence?
    Dr. Rooney. Yes, sir. We actually are retaining the 
evidence at this point, if it is an unrestricted report, for 50 
years.
    Senator Blumenthal. Are you making efforts to speed up the 
process? In one instance that has been reported to me--and I 
can get you the name and perhaps you can get me more details--
there was a 3-year gap. By the way, I am very familiar with the 
defects in the civilian area since I was involved in it.
    Dr. Rooney. I know you are, sir.
    Senator Blumenthal. So this is by no means to say that you 
should use it as a model necessarily, but I know the military 
sets its own standards for what excellence is and you have your 
own goals.
    But that 3-year gap makes evidence, even if it is 
collected--that is, the eyewitness testimony that may be 
provided--more difficult to get. I just wonder what steps are 
being taken to make sure that these cases are brought to court 
martial and brought, in effect, to trial more quickly.
    Dr. Rooney. Actually, we are working directly with the 
Services on this, and the Joint Chiefs have been actively 
involved in looking at how do we not only streamline the actual 
court process, but also streamline from the point of reporting, 
we have such things in place as expedited transfers. So all 
through the process, making sure that we are able to still 
protect due process, if you will, for the accused, but move 
that through the system from the first report through. So that 
is something we are actually engaged, right now, with the 
Services to do.
    Senator Blumenthal. Do you have numbers as to the median or 
average length of time it has taken and what percentage involve 
eventual findings of guilt, culpability, and also what the 
eventual penalties are in those cases?
    Dr. Rooney. Sir, we do have those numbers, but if I could 
take that for the record and give them to you as opposed to 
trying to get them from memory, we do have them. I have seen 
them, sir.
    Senator Blumenthal. I would appreciate that.
    Dr. Rooney. We will.
    [The information referred to follows:]

    The length of time for the investigation and adjudication of sexual 
assault reports varies greatly with the facts of each case. Of the 
2,439 Unrestricted Reports opened and investigated in fiscal year 2011, 
66 percent (1,612) of investigations were completed by the end of the 
fiscal year. Based on past case flow, we would expect that the 
investigations and subject dispositions for over 90 percent of the 
remaining 827 Unrestricted Reports received in fiscal year 2011 should 
be completed in time for reporting in the fiscal year 2012 Annual 
Report on Sexual Assault in the Military.
    In fiscal year 2011, 1,518 subjects investigated for sexual assault 
were military servicemembers. However, legal factors sometimes prevent 
disciplinary action from being taken against some subjects. For 
example, commanders were precluded from taking disciplinary action 
against 482 of these military subjects because there was insufficient 
evidence of an offense to prosecute, the victim declined to participate 
in the military justice process, or the statute of limitations had 
expired. These factors do not fall under the discretion of a military 
commander to remedy and precluded these military subjects from 
receiving disciplinary action. Commanders declined taking action 
against 47 military subjects because they determined the sexual assault 
allegations against those subjects were unfounded.
    Of the 1,518 subjects investigated, commanders had sufficient 
evidence and the legal authority to support some form of disciplinary 
action against 989 subjects. Of the 989 subjects, 791 subjects had 
command actions taken against them for sexual assault: 62 percent (489 
subjects) had courts-martial charges preferred (initiated) against 
them, 24 percent (187 subjects) received nonjudicial punishment under 
Article 15 of the UCMJ, and 14 percent (115 subjects) received a 
discharge or another adverse administrative action. For 198 subjects, 
evidence supported command action for other misconduct that came to 
light during the sexual assault investigation (such as making a false 
official statement, adultery, and other crimes under the UCMJ) but not 
a sexual assault offense. Of these, another 198 military: 9 percent (17 
subjects) had court-martial charges preferred against them; 46 percent 
(92 subjects) received nonjudicial punishment; and 43 percent (85 
subjects) received some form of adverse administrative action or 
discharge (no data was available for the remaining 2 percent of 
subjects).
    As noted previously, of the 791 military subjects who had 
disciplinary action initiated on a sexual assault offense, 489 had 
court-martial charges preferred against them. The dispositions and the 
sentences imposed by courts-martial are for those subjects with at 
least one sexual assault charge adjudicated in fiscal year 2011. Of the 
489 subjects who had courts-martial charges preferred against them in 
fiscal year 2011, 370 subjects' court-martial outcomes were completed 
by the end of the fiscal year. Of the 240 subjects whose cases 
proceeded to trial, 80 percent were convicted, and most convicted 
servicemembers received at least four kinds of punishment: confinement, 
reduction in rank, fines or forfeitures, and discharge (enlisted) or 
dismissal (officers) from service. Thirty-nine subjects were allowed to 
resign or were discharged instead of court-martial. Court-martial 
charges were dismissed against 91 subjects. However, commanders used 
evidence gathered during the sexual assault investigation to take 
nonjudicial punishment against 25 of the 91 subjects. Most of the 25 
subjects who received nonjudicial punishment received three kinds of 
punishment: reductions in rank, fines or forfeitures, and restrictions 
on liberty.
    Of the 791 military subjects who received disciplinary action on a 
sexual assault offense, 187 received nonjudicial punishment. Of the 168 
subjects whose nonjudicial punishments were completed in fiscal year 
2011, 93 percent of subjects were found guilty by the commander. Most 
subjects who received nonjudicial punishment received at least three 
kinds of punishment: reduction in grade, a fine or forfeiture of pay, 
and restriction of their liberty for a period of time. In addition, 
almost half of these subjects received extra duty or hard labor as part 
of their punishment. For 6 percent of subjects, the nonjudicial 
punishment served as ground for a subsequent administrative discharge.
    Commanders administratively discharged 48 subjects investigated for 
a sexual assault offense. There are three types of administrative 
discharges: Honorable, General, and Under Other Than Honorable 
Conditions (UOTHC). Most of these 48 subjects received either a General 
or a UOTHC discharge.
    In fiscal year 2011, commanders took adverse administrative actions 
against 67 subjects investigated for a sexual assault offense. These 
actions may consist of Letters of Reprimand, Letters of Admonishment, 
and Letters of Counseling. These actions may also include but are not 
limited to denial of reenlistment, the cancellation of a promotion, and 
the cancellation of new assignment orders. Adverse administrative 
actions are typically used when the misconduct alleged is of a lesser 
degree or when available evidence does not support more serious 
disciplinary action.
    The sexual assault investigations conducted by the Military 
Criminal Investigative Organizations sometimes do not find sufficient 
evidence to support disciplinary action against the subject on a sexual 
assault charge. However, the investigations sometimes uncover other 
forms of chargeable misconduct. When this occurs, DOD holds those 
servicemembers who have committed other misconduct appropriately 
accountable based on the available evidence.
    DOD released the fiscal year 2011 Annual Report on Sexual Assault 
in the Military on April 13, 2012. The preceding information and 
supplementary charts and graphs detailing the subject case dispositions 
and punishments imposed are available on pages 42 through 49. The 
report is available at: http://www.sapr.mil.
      


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Senator Blumenthal. Can you also provide percentages as to 
what numbers or in what rate you give defendants the option of 
a discharge or a resignation in lieu of court martial?
    Dr. Rooney. I will get the information as to what the 
eventual resolution was as to whether that was a negotiated 
plea or something in that regard. That will be a little harder, 
but I can certainly tell you article 15 and various steps of 
penalties.
    [The information referred to follows:]

    Of the 370 military subjects whose courts-martial action was 
completed in fiscal year 2011, 39 subjects (or 10.5 percent) were 
discharged (enlisted) or allowed to resign (officer) in lieu of court-
martial. In cases in which a resignation or discharge in lieu of court-
martial is requested and approved, the characterization of the 
discharge is usually Under Other Than Honorable Conditions, unless a 
higher characterization is justified.

    Senator Blumenthal. Finally on this subject, can you tell 
me when Secretary Panetta is going to be releasing the 
recommendations he is going to be having both administrative 
and legislative? Do you know?
    Dr. Rooney. Actually, we have been working on the possible 
legislative proposals as recently as today. So I am expecting 
those to be coming up soon, and within the next 3 to 6 months, 
we will also have some additional ways forward on specific 
recommendations coming out from the Services, as well as 
follow-up on the ones we mentioned with the expedited transfer 
and the document retention.
    Senator Blumenthal. Thank you.
    On the issue--and you raise it in your testimony--
concerning suicides, can you talk a little bit about what steps 
are being taken to address this issue more effectively?
    Dr. Rooney. Absolutely, and you are right that the numbers 
right now, despite many of our efforts, have not shown a 
significant decrease. But what we have done, in fact, is taken 
the task force that had their report forward. One of the 
recommendations was to create a specific suicide prevention 
office, which we have done in the last few months. The purpose 
of that office is not to create yet another layer, but it is to 
look across all of the Services and actually be the conduit for 
what are best practices, where are we missing some potential 
opportunities, getting rid of the redundancies. That has at 
this point a temporary staff, but in the fiscal year 2013 
budget, we have the full appropriations we are requesting on 
that to have that staff stand up.
    In addition to that, we are working directly with the 
Services in each of their component areas to see what practices 
they have in place.
    The next thing--and I think you have seen it also from the 
medical side--is we are embedding behavioral health not only 
within the units but also making it available to the families 
through a number of our family programs. Again, we are 
continuing to monitor what has been the outreach and where have 
we seen some successes or not as it were.
    Those are the steps at this point with many more coming 
forward.
    Also, collecting data has been a big challenge that we have 
had, contemporaneous data. So we are working closely with the 
Department of Veterans Affairs (VA) in particular at this point 
to share information not only from the DOD side but also what 
the VA is getting. We are doing a lot of joint work with them. 
So we are getting data that is within 30 to 60 days old as 
opposed to a year or 2, which is what we had been getting, as 
the way the States are gathering it, and sharing that 
information and trying to trend directly with the VA.
    Senator Blumenthal. Thank you, thank you very much. My time 
has expired.
    Thank you, Mr. Chairman.
    We hear a lot and I profoundly agree with the statement 
that we have heard again and again that our most important 
asset is our people, and you are the folks who are dealing with 
that asset. So I want to thank you for your great work. Thank 
you for being here.
    Thank you.
    Senator Webb. Thank you, Senator Blumenthal.
    Senator Begich.
    Senator Begich. Thank you very much, Mr. Chairman.
    Thank you all for being here. I appreciate it.
    Let me start with a couple of questions, but first, Mr. 
McGinnis, there is a piece of legislation that Senator Graham 
and I have sponsored on space availability for widows of combat 
veterans, as well as Guard and Reserves. To be very frank with 
you, we are not changing any of the prioritization. We are just 
making sure if there is a seat open and all the prioritization 
has occurred, then there is opportunity. The response we got 
informally was not very thoughtful in my view. I will not 
belabor it here, but I would like you, if you could, to take a 
look at that legislation and give your thoughts on it.
    We have a lot of bipartisan support. As a matter of fact, a 
lot of people on this committee have sponsored it. We think it 
is a fair way to approach. It is like an airline industry. When 
there is a seat empty, there is no value to it, and if there is 
an opportunity, we should explore that. I think what we have 
tried to do is recognize the rules and regulations of 
prioritization of utilization of space available and 
recognizing that, but not overtaking that and leaving a lot of 
authority to DOD.
    So if you could take a look at that bill, that would be 
great.
    Mr. McGinnis. I will, sir.
    Senator Begich. My staff will be happy to talk with your 
staff about that.
    I will not belabor it more than that, to say the response 
was not as thoughtful as I thought it would be. I will leave it 
at that.
    Mr. McGinnis. I will look at it.
    Senator Begich. Thank you very much.
    Secretary Hale, this might be to you and to Secretary 
Rooney also. I want to understand the process. You have to 
understand where I come from. I come from being a former mayor 
where if I have a CFO, they know all, and at the end of the 
day, they have to sign off on money things. No department can 
go do their own stuff, and even when personnel has stuff, 
someone has to sign off their savings or costs. So I do not 
necessarily say that is the way it all works in the military. I 
am not suggesting that.
    But let me walk through an example and help me understand 
how you would be engaged in this or in your case, Secretary 
Rooney.
    I am dealing with, and a lot of folks are dealing with, 
this around the country with bases that are being reviewed for 
potential reductions or reductions of services or personnel, 
may they be military and/or civilian. We are dealing with this 
at Eielson Air Force Base right now. Here is the scenario. The 
proposal was laid out. It will save X amount of dollars. We 
then, of course, questioned this. Now they are sending a team 
up to analyze what the savings will be, which seems odd that 
you would propose a savings and then analyze it later, but I 
will leave that for a second.
    First of all, I will start with you, Secretary Hale. When 
the Secretary of the Air Force--I am using them as an example, 
I do not mean to pick on them, but they are the ones we are 
dealing with with Eielson. They propose these savings that 
recognize a certain amount of money that will be saved. What is 
your interaction with those activities? Do you accept those 
based on that information? Then holding that thought, the 
question I would have for you, Secretary Rooney, is when they 
propose this--and it is basically a bulk of personnel savings--
how are you engaged in that, in analyzing that number, may they 
be civilian and/or personnel or military active personnel? 
Secretary Hale, to the first question. What is that engagement?
    Mr. Hale. We are dealing with one of the world's largest 
organizations, Senator Begich, and many of these proposals do 
work up through our Military Services and departments which 
have cost analysts and staff similar. They are not formally 
CFOs, but they have assistant secretaries for financial 
management and comptroller. My staff tends to review the ones 
that are in contention or perhaps cut across all the Services.
    I do not know for sure on the Eielson one, but my guess is 
it was an Air Force estimate and reviewed by them.
    Senator Begich. So you accept because they go through this 
kind of chain, to a certain extent, I am not saying all the 
time.
    Mr. Hale. If we have reason to question it, no, but we do 
not review every single proposal that comes forward. I do not 
know on the particular one you are referring whether we did. I 
would need to find out.
    Senator Begich. Let me ask then on the personnel. So when 
they recommend or suggest that it will save this amount of 
military personnel and X amount of civilian personnel, again 
recognizing they go through this chain, what happens at your 
level, if anything? I do not know.
    Dr. Rooney. Actually, it would. Two of the areas within 
personnel and readiness deal with military personnel policy and 
civilian personnel policy, but embedded in that is this idea of 
Total Force. Our role typically at that point is working with 
the Services to ask them what, in fact, are they going to use 
as tools, specific drawdown tools available potentially for the 
military, if they are seeing that the reduction would come from 
the personnel side, and walk through with them from a policy 
standpoint what exact shaping tools are they using and making 
sure they are understanding the costs or the implication of 
those.
    The same with the civilian side. We have set processes and 
procedures to, hopefully, reintegrate the civilians within the 
workforce, and walk through whether, in fact, they are 
following those procedures and have considered that in cost 
estimates.
    Senator Begich. I appreciate that answer. But I would have 
expected that from our personnel department in the city would 
have done that. The departments do their thing and then the 
personnel walks through it because sometimes departments will 
over-estimate for the benefit of getting past the Office of 
Management and Budget (OMB). Getting past OMB, life is better. 
But in the mayor's office we always had to say, well, are these 
real, what does it mean?
    In this situation, I am assuming they then submit to you 
something that says here is what we guess, here is how much 
civilian, here is how much Active, and then you walk through 
this process. Sometimes it is easy because it is clear, but 
sometimes more complicated. Is that a fair statement? Depending 
on what it is, is that fair?
    Dr. Rooney. A fair statement.
    Senator Begich. Can I ask for the record--and again, I do 
not expect you to have it off the top of your head here--what 
role, maybe limited or extensive, that you might have had in 
this review within your area with regard to this redirection? 
It is a lot of people. Actually, they do not know how many. 
That is the challenge, to be very frank with you. They have 
estimated Active military, but they cannot give us an answer to 
this day on civilian. We have asked them four times. I know 
there is a document that exists that says here is what we 
anticipate because someone had to review it to say here is what 
it will save. I have not seen it. We have asked for it over and 
over and over again.
    So is that something you could look at and respond? If your 
answer is, well, we did not get anything, okay. Or we did, and 
we cannot give it to you yet, okay. Or, yes, we have it, here 
it is. I would prefer the latter, to be very frank with you. I 
am hoping it is the latter.
    Dr. Rooney. What we will do is look at it. Based on what 
you are indicating, it is very possible it has not reached the 
level yet where we would see it fleshed out to the point to be 
able to give some feedback. But what I will do is check with 
our team, if they have been involved to this point, and if not, 
be able to check and see what work has been done, and then we 
can give you a better idea when it would, in fact, come to us 
for a review. But it usually has a little more detail than what 
you described before we would actually see it to be able to 
give some reaction.
    [The information referred to follows:]

    The fiscal year 2013 budget reflects a balanced workforce that 
decreases spending on military personnel, civilian full-time 
equivalents, and contracted services. It reflects our best judgment 
today, representing a carefully coordinated approach based on our 
strategy and policy, balancing operational needs and fiscal reality. 
Furthermore, we must budget for a future where we face a decreasing top 
line, and in order to help components do so, the Department of Defense 
(DOD) established civilian manpower targets at fiscal year 2010 levels, 
with certain exemptions and exceptions in critical growth areas. 
Individual components develop their workforces to meet their missions, 
tasks, and functions based on their operational requirements, workload 
needs, and available funding. At the departmental level, we do not 
prioritize the components' missions for them or tell them how to size 
their workforces. As such, we do not require the components to submit a 
report estimating civilian drawdown.
    However, we are committed to ensuring the components have a 
balanced, flexible, responsive workforce that is the appropriate mix of 
military, civilian, and contracted support; efficiently mitigates 
risks, ensures continuity of operations, and promotes an organic 
knowledge base; and ensures mission requirements are met most cost 
effectively and efficiently.
    In developing budget requests and making manpower determinations, 
Personnel and Readiness works together with other elements of the 
Secretary's and DOD's leadership team to ensure that risk mitigation, 
continuity of operations, and mission attainment shall take precedence 
over cost of performance.

    Senator Begich. My time is up.
    I would have anticipated even the kind of detail you are 
talking about that you would expect I would expect when they 
make a reduction to a military base to shift 600-plus people 
plus more civilians, which we do not know of, that you would 
have more information to make those judgments because we have 
to make the decision that, okay, this is an okay budget and we 
have to check off. But if we do not understand how they got 
there, we cannot make a rational decision. So that is why I am 
in this quandary.
    I will tell you there has been a lot of this--pointing--and 
I know the way it works, especially within the military. There 
are more forms about forms to have more forms. So somewhere in 
this mix someone wrote down in 2013 and 2014 and 2015 we 
anticipate this civilian reduction, this military reduction for 
the savings of X so that we can then get past OMB and the CFO. 
Someone did it somewhere. If they did not, then to be very 
frank with you, that is incompetency. But somewhere it is done. 
I just know it. That is how DOD works here, more reams of paper 
than paper can be produced every day, is my view. So that is 
just a thought there.
    I have some other questions which I will submit for the 
record for generally all of you. They are broader in the sense 
of some policy issues, and I will submit those.
    I thank you for you letting me have my rant. Thank you, Mr. 
Chairman, for letting me rant.
    Senator Webb. Thank you, Senator Begich. Actually, we will 
have another round if you want to come back and ask more 
questions.
    Senator Begich. I will submit them.
    Senator Webb. Having spent 5 years in the Pentagon, I can 
say a lot of the reams of paper that grow around the Pentagon 
have been produced at the behest of the Senate and the House of 
Representatives. [Laughter.]
    Senator Begich. The good news is I am not asking for more 
paper. I am just looking for a piece of paper that they 
produced.
    Senator Webb. Senator Ayotte?
    Senator Ayotte. Thank you, Mr. Chairman.
    Speaking of paper, I wanted to ask Secretary Hale about 
where we are on audit because I was able to ask the Chief of 
the Air Force. I know that the Air Force may have the most 
difficulty in meeting Secretary Panetta's goal of a 2014 
statement of budgetary resources. This is something I have been 
very interested in. In fact, I introduced an amendment to the 
National Defense Authorization Act (NDAA) in this past go-
around wanting to codify that you meet the audit requirements.
    Just wondering where we are. Are we going to meet the 2014 
deadline for a statement of budgetary resources in each of our 
Services and within the overall DOD?
    Mr. Hale. I am reasonably confident. This is a tough 
problem, tougher frankly than I anticipated. But we have 
several things going for us.
    The first is the strong endorsement by Secretary Panetta 
which has opened doors wider than I expected, and we are doing 
everything we can to leverage it. In particular, I think what 
we are doing that we have not been able to do in the past is 
get this out of being a comptroller issue and into being a 
commander issue. We absolutely have to do that because we have 
to change business processes, and only the commander can do 
that. We have the money. We have the governance process. We 
have interim goals which are critical. You probably heard me 
say before no one wakes up thinking, I really got to work hard 
today for a 2014, let alone a 2017, goal. So we have interim 
dates.
    The Secretary convened a meeting of all the Service 
Secretaries and Service Chiefs. We had everyone there. Amazing 
to me. They get it that it is important now.
    Senator Ayotte. It is important. This is not just any 
paperwork.
    Mr. Hale. So I am going to stop with reasonably confident.
    Senator Ayotte. Okay. I appreciate that.
    We did talk about a lot of paperwork, but this is really 
important particularly when we are asked to make some very 
difficult decisions about DOD in terms of it being a management 
tool as well as an information tool for Congress. Would you 
agree with me on that?
    Mr. Hale. I would. We have over-promised and under-
delivered for a long time. So that is why the best you get is 
reasonably confident, Senator.
    Senator Ayotte. Reasonably confident. I will take it. How 
is that?
    I wanted to ask Secretary Rooney, yesterday you and I had a 
chance to meet and talk about New Hampshire's deployment cycle 
support program within our Guard. It is one of the challenges 
that we have had that our guardsmen and women and our 
Reserves--we have really used them in these conflicts in Iraq 
and Afghanistan. They have been part of our Total Force. We 
would not be able to have fought in Iraq and Afghanistan 
without our Guard or Reserve. Yet, often the whole deployment 
cycle support is not there for them.
    So, New Hampshire came up with a very strong public/private 
partnership. We partnered Federal Government resources with 
State government, as well as private organizations like Easter 
Seals. We have been keeping metrics on it so that we can 
measure the results, and, in fact, the results have been 
getting our veterans to work, reintegrated into work. We have 
actually saved someone's life in a suicide, which we are very 
proud of, and really serving our families.
    So, I wondered Secretary Rooney, if you have had a chance 
to look at that after we talked yesterday, what are your 
impressions of it. I would also ask Mr. McGinnis as well, and 
then I would also love to invite both of you to New Hampshire 
to see firsthand how this program works.
    Dr. Rooney. Thank you, Senator. Starting with your last 
point, as I indicated to you yesterday, I would welcome the 
opportunity, particularly if I am back home in New England on 
the weekend, to join you and actually see the program.
    I appreciate the additional information you did send over.
    You hit upon a key aspect. When we talk about the 
challenges that we have in managing to leverage resources and 
be efficient, it is how do we not only extend what we are doing 
in DOD, but reach out and form more of these public/private 
partnerships. It is going to be a way that we have to be very 
diligent about looking for those opportunities, finding those 
situations that work the best, and how can we replicate them.
    After I left you, I was meeting with the senior enlisted, 
and we started talking about this, about how do we successful 
transition, and whether it is Guard and Reserve or Active, it 
is just how do we transition our folks from the military and 
reach out. They indicated to me too that they were aware of the 
New Hampshire program and also possibly another one in Oregon 
and maybe another State.
    I think what all of us need the responsibility for doing, 
myself and Mr. McGinnis, is to look for those opportunities, 
learn more about how they work, and see if we can duplicate 
them so that we are addressing the issues, as we heard of, 
suicide and unemployment and transition. Our job can be to more 
tightly align with how do we translate military skills into 
skills that the civilian workforce can use. We can do a good 
job about that, but then really rely on those public/private 
partnerships. We are seeing in several cases that they work.
    Senator Ayotte. I think one of the reasons it works in New 
Hampshire is because we know there are limited resources, but 
we are leveraging those with the State and with the nonprofit 
community to take advantage of all the services in a way that 
is very proactive for those that return from overseas or return 
from deployment.
    I do not know if you wanted to add anything, Mr. McGinnis?
    Mr. McGinnis. Yes, ma'am. The funding that has been 
provided for these programs in the past has been congressional 
adds. There has been a number of State programs that have been 
supported. The appropriated dollars both to the Services and to 
DOD--and YRRP is focused on the long list of mandated 
requirements I have to make sure happens within the YRRP. We 
are focused on that.
    However, our YRRP Center for Excellence (CFE) is putting 
together a process to be able to evaluate all these programs, 
as Dr. Rooney mentioned. We share a very similar problem with 
my colleague in military communities and families, Secretary 
Gordon, and we are working with him to put together a process 
where we can evaluate these programs. But like Secretary 
Rooney, I would very much want to come up and see your program.
    Senator Ayotte. We would love it. Come in the fall. It is 
gorgeous. We will have you sooner too.
    Mr. McGinnis. Thank you.
    Senator Ayotte. I wanted to ask Dr. Rooney, certainly 
Secretary Woodson, where we are. Our All-Volunteer Force--I 
think you would all agree that our troops have done everything 
we have asked of them and more.
    So last year, did we not increase TRICARE enrollment fees?
    Dr. Rooney. Modestly we did, yes.
    Senator Ayotte. But we did.
    We tied it to cost-of-living adjustments, correct? Now you 
are back before us--I know, Secretary Hale, you certainly have 
an opinion on this--to ask for additional TRICARE increases. 
These increases are very significant.
    I know my time is up here, but I think this is a really 
important issue. So I will wait for another round.
    But for some individuals, these are not trivial. For 
example, a retiree receiving between $22,000 and $45,000 a 
year--their annual fees will go from $500 to $1,500 a year, 
threefold in only about 4 years. So this is a pretty 
significant issue.
    I think we have a duty, given what our servicemen and women 
have done, to really have a very hard discussion about this. I 
am really concerned about it.
    I know my time is up. I will stick around to ask more 
questions and turn it back to the chairman.
    Senator Webb. Thank you, Senator Ayotte.
    Actually, I am going to get into that. So I welcome your 
participating when I do.
    I have one other little item that I would like to raise 
now, and there may be other questions that I or other members 
will submit for the record. They will have until close of 
business tomorrow in order to do so.
    I want to follow on what Senator Ayotte just said.
    Before I do that, Dr. Rooney, last year Secretary of 
Defense Gates made a decision to eliminate, reduce, or 
reallocate 140 general and flag officer positions. We held a 
hearing on that issue, as you may recall. Can you give us an 
update on the status of that?
    Dr. Rooney. Yes, sir. As of now, we have eliminated 49 of 
the positions. As you are aware, this is a process that we 
expect between now and 2016 to reach the number that you 
indicated. But right now we are at 49. We are expecting, as we 
continue the drawdown in our overseas operations, that we will 
continue to actually increase that number of those that have 
been eliminated or reduced.
    Senator Webb. So you are continuing the process that was 
begun when Secretary Gates initiated it?
    Dr. Rooney. Yes. In fact, Secretary Panetta was affirmative 
in his support for continuing that process.
    Senator Webb. All right.
    Now, I would like to follow on to what Senator Ayotte said 
and add some of my own concerns here, as I did in the full 
committee hearing about a week ago.
    First, I have said many times--I think all of you know that 
I believe whether there is a specific contractual obligation or 
not, when someone has served a full career, we have a moral 
obligation to provide them with lifetime medical care. Would 
you agree or disagree?
    Dr. Rooney. Sir, I believe we have to offer the best 
medical care possible in respect of their service, yes.
    Senator Webb. Secretary Woodson?
    Dr. Woodson. Yes, I do believe we have a responsibility, 
particularly for the wounded, ill, and injured, to provide 
long-term lifetime medical care.
    Senator Webb. What about for those who serve a career?
    Dr. Woodson. I think we have an obligation to provide them 
with a benefit package that is very generous and reflects their 
sacrifice and service.
    Senator Webb. Thank you. That defines the struggle that we 
all have here. I know how difficult it has been to put together 
these numbers.
    Secretary Woodson, I want to go back and examine the 
percentage that you raise with respect to 1996 versus today. I 
want to just have my staff take a look at that and get back to 
you. I may have some further questions about how that number 
was arrived at.
    I would like to put up a chart that you had in your written 
testimony over here because this is another piece of the 
reality, and that is that if you look at cost per enrollee in 
the system, that cost has grown at pretty much the same pace as 
civilian health care. As I have said many times, our health 
care difficulties, as we have seen from the last 3 days in the 
Supreme Court, is a national problem. It is not a DOD problem. 
It is a challenge for all of us. But we are pretty much seeing 
the same percentage increase if you use 2005 as a baseline as 
we have seen nationally. Is that a correct statement?
    Dr. Woodson. That is correct. Thank you for putting up that 
chart because I have the very same chart.
    [The chart referred to follows:]
      


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    
      
    Senator Webb. I think it is a great starting point for this 
discussion.
    Another clarification is, as far as I know, when we 
summarize the costs even for TRICARE For Life, we do not take 
the costs of Medicare Part B and apply it when you are looking 
at the health care costs inside DOD. Right?
    Dr. Woodson. Let me make sure I understand your question.
    Senator Webb. Let me be clearer. When a retired 
servicemember reaches the age of 65, they are required to sign 
up for Medicare Part B before they can get TRICARE For Life.
    Dr. Woodson. That is correct.
    Senator Webb. The cost of Medicare Part B--just to 
summarize, when you reach the age of 65, you are automatically 
entitled to Medicare Part A. But you have to elect to get 
Medicare Part B. It is wider coverage. But for a retired 
servicemember who wants TRICARE For Life, the DOD benefit, they 
are required to sign up for Medicare Part B.
    Dr. Woodson. That is correct.
    Senator Webb. When we look at the increase in the costs or 
the percentage increase in the costs inside DOD, we do not 
factor in Medicare Part B. That is a total separate account. 
Correct?
    Dr. Woodson. That is correct, but remember 90 percent of 
folks will and have taken Part B. TRICARE For Life represents 
that wraparound insurance for that other 20 percent, which 
includes a Part D, which is a pharmacy benefit. Remember prior 
to 2001 when TRICARE For Life came on board, many folks were 
paying independently for that wraparound insurance. So you are 
correct in your statement about Part B, but most folks will be 
paying Part B anyway.
    Senator Webb. Medicare Part B is a very expensive program, 
and we do not count that when we look at the cost of TRICARE in 
terms of DOD funding. Correct?
    Dr. Woodson. That is correct.
    Senator Webb. Can you put up this other chart?
    [The chart referred to follows:]
      


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    
      
    Senator Webb. If you are looking at this from the 
perspective of a retired servicemember--I spoke to this in a 
full committee hearing. But when you are on Active Duty, 
obviously all your medical care is provided for. When you 
retire before the age of 65, presently you are at where the red 
marks are on this line. You hit 65. You are where that far 
right bar is in terms of how much you are required to pay in. 
The blue represents the proposal from DOD for the increases in 
TRICARE fees.
    So if you are somebody out there, having retired, looking 
at what it is going to cost you for health care, you are 
seeing, first of all, as Senator Ayotte pointed out, a 
significant jump with the proposals from DOD, but if you are 
over here past 65, you are seeing just a really large, sudden 
expenditure.
    Dr. Woodson. Yes. Thanks for bringing this up because this 
is an interesting chart. First of all, it does not include the 
average out-of-pocket costs. The figures you have given there, 
where you are looking at a premium of $7,000 or a cost $7,672, 
represents the upper tier of folks who pay Part B. They would 
have to be making $428,000 a year in order to pay that premium.
    Senator Webb. The couple, not the individual. Actually, if 
you will see the first line there, that is the lowest tier. 
Also, let us remember if somebody is on that upper tier, they 
are also paying Medicare again for the money that they are 
making. They are paying three times. They are paying Medicare 
Part B. They are going to be paying TRICARE, and they are going 
to be paying for Medicare on the income that they are making.
    Dr. Woodson. Yes, but the important issue, in terms of the 
optics relative proportion, is that Medicare Part B--they do 
not start tiering until about $170,000 a year. So you are 
really talking about an upper echelon.
    The other thing about the chart is, again, you are not 
talking about total out-of-pocket costs. That is why the 
differential looks so wide there. If you looked at the other 
out-of-pocket costs, you would see that it would not be as----
    Senator Webb. Actually, that goes to another point, and 
then I am going to let Senator Ayotte follow on here, and that 
is that people who think that the TRICARE fee by itself is all 
that somebody is paying is not correct. For instance, if you 
are talking about TRICARE standard, you pay a 25 percent cost 
share after you pay your fee. So when people are talking about 
the notion that the amount that our retirees are paying for 
health care is very small, I agree with you that is not 
reflective of the amount that they are paying.
    Dr. Woodson. That is exactly why we talk about cost share 
because that takes into account the relative out-of-pocket 
costs, and so the statistics I gave you before were correct, 
that in 1996 the relative contribution cost share was 27 
percent. It has dropped to about 10 percent, even less if you 
look at prime. What we are talking about is a rebalancing so 
that even in 2017 and beyond, the relative cost share is only 
going to be about 14 percent, which is about half of what it 
was originally. So you have to talk about out-of-pocket costs.
    Senator Webb. Right. We will look at your figures.
    Dr. Woodson. Oh, absolutely. We can provide you details on 
that.
    Mr. Hale. Could I just add one more point that I think is 
important to this comparison? Although we should not copy the 
civilian system, we need to keep it in mind. Good Medigap 
coverage for a couple is probably $4,000 a year. We are talking 
TRICARE For Life at the highest tier of $900, at the lowest 
tier for $22,000 and less, more junior retirees, $300. It is 
meant to be generous. I think that is right. But I think we 
have to keep this in mind. This is a dynamic health care 
system, and we have to make some of those or----
    Senator Webb. Look, that is in addition and in addition 
to----
    Mr. Hale. Yes, but it would be in addition for the 
civilians as well. They would be paying that $2,000----
    Senator Webb. What we are talking about is an obligation to 
provide them medical care for the rest of their life based on a 
compensation package that begins the day that they enlist and 
is amortized over the rest of their life. It is not a direct 
comparison, in my view.
    Now, we are going to continue this probably for the next 4 
or 5 months. But I appreciate your views and you have heard 
mine.
    Mr. Hale. Okay. I understand. May I add one more thought? 
That is, you keep this in the context that we owe them not only 
good medical care, we have to provide training and equipment 
for them, as you know a lot better than I do given your 
military service. We have to have a balanced package as we 
respond to the----
    Senator Webb. I totally agree with that, but what I am 
saying to you is you cannot renegotiate the front end once the 
back end is done. This is an obligation that has been made to 
people whose military careers are now done. If you want to 
reexamine the whole compensation package, that is something 
that actually is on the table.
    Senator Ayotte.
    Senator Ayotte. I would agree very much with the chairman 
on this. Just in terms of what we are talking about, as far as 
a comparison, there is a reason that in President Lincoln's 
second inaugural address he said that we have a duty. Really, 
we have to ``bind up our Nation's wounds to care for him who 
shall have borne the battle and for his widow and his orphan.'' 
This is different than the rest of the population in terms of 
what they have sacrificed and what they have put on the line 
for us and what they were promised. What is it that they 
expected in all this? So I think that that is what we are 
talking about here.
    What bothers me about this is that the reason that you are 
here in this position is that--let's face it. Something like 
the BCA--you came with us last year to ask for TRICARE 
increases, and that was not easy, was it, Secretary Hale? That 
was a difficult question. I know you did not get everything you 
wanted.
    Mr. Hale. We appreciate your support.
    Senator Ayotte. No, exactly. We supported you on that, and 
you are back before us this year.
    In the context of what we are looking at with something 
like the BCA, you have been handed a number. You are under 
additional budgetary pressures. Health care costs are rising in 
every sector. But we have not, as a Congress, dealt with the 60 
percent of the spending that is going up in Federal spending 
that includes Medicare, that includes Medicaid, that includes 
the mandatory programs. I understand why you are here before 
us.
    I do not think, though, that we should put that, if we do 
not show the courage to deal with the entire budget--to really 
put a significant increase and burden after we just did an 
increase last year on this group of individuals who have served 
our Nation, given what they had as anticipation when they came 
into Service, as Senator Webb has said, and where we are making 
these changes. So that is one of the overall concerns I have 
about this.
    I understand that you were handed a number in the BCA. 
Would you be here asking for these increases immediately after 
you got some last year but for the BCA?
    Mr. Hale. I suspect the answer to that is no, but the BCA 
is a law that you passed and we do need to be consistent with 
it. My worry is that if we choose not to make these decisions, 
we will have to take it out of force structure and investment, 
and I believe that we have already, consistent with the 
strategy, done what we should there. It is actually quite 
disproportionate toward the investment side and very 
disproportionate on the low side for personnel. So if you do 
not support this, I am not sure where we go.
    Senator Ayotte. But my point in the bigger picture in all 
this, which is really not your fault that you are put in this 
position--is that because in Congress we are not looking at the 
whole picture, that you are in a position where you are handed 
the BCA, you are coming before us, you are going to ask for 
these health care increases after just having increased TRICARE 
last year. I think that we also on our end, to put this a 
little bit on us, that we have to take on the big picture here 
or we are going to be in a place like sequestration. We are 
going to be in a place where there is no question, reductions 
are going to happen to our military with withdrawal from Iraq 
and drawdown in Afghanistan. But you are here. It is troubling 
to me that we are going to take it out of that group first 
instead of dealing with the big picture of our budget problem.
    Mr. Hale. I would love a grand budget deal.
    Dr. Woodson. But the truth of the matter is we are not 
taking it out of that group first. As Secretary Hale said in 
his opening statement, while personnel costs at 30 percent--
when the Secretary laid out the policies and procedures for 
looking at the budget, 90 percent came from troops, weapons 
programs, ships, planes. 10 percent came from personnel costs, 
and the truth of the matter is these TRICARE fee adjustments 
represent only slightly less than 5 percent.
    Senator Ayotte. I do have one substantive question. You 
received the Government Accountability Office (GAO) report 
which recommended a consolidation among the Services of health 
care as a way of a significant cost saving measure. I do not 
see that in all of this. I do not see a significant move in 
terms of changing and consolidation in trying to look at other 
ways where we could save money in health care. In fact, GAO 
recommended that you could achieve between $281 million and 
$460 million in annual savings from that. Have we gone down 
that road at all?
    Dr. Woodson. Yes. So you may be aware that we delivered to 
Congress the required report to Congress in the NDAA looking at 
the restructuring of the military health system. We were ready 
to move out on that last fall when at the 11th hour, we got a 
prohibition in the NDAA saying that we could not make any 
changes in the military health system. So we have gone down 
that path in terms of analyzing what we need to get the 
greatest amount of efficiencies by looking at common business 
practices and common service orientation.
    I would suggest to you again that as much as we are 
bringing focus and energy to reorganizing the structure of the 
military health system--can we put up chart 1 please?
    [The chart referred to follows:]
      


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    
      
    Dr. Woodson. You need to understand that headquarters 
functions actually represent only about 2 percent of budget, 
and we affectionately call this slide ``the planet slide'' 
because it shows the relative amounts of money in the budget. 
If you look to the far right, that really represents 
headquarters function, and where we spend the bulk of the money 
is actually in delivery of care and private sector care and 
maintenance----
    Senator Ayotte. I apologize. I will grab that report and 
look at it right away. So is this something you would still 
want to do?
    Dr. Woodson. Absolutely.
    Senator Ayotte. If you did it, could you also not have to 
ask for the increases that you are asking for?
    Dr. Woodson. The answer is no because if you look at that 
slide, again headquarters function, while we want to squeeze 
that lemon very hard, only represents about 2 percent of really 
our costs. So the headquarters function is not going to get us 
to where we need to go.
    The other thing that you have to remember is that it is 
about putting the program on a sustainable course so that it 
will be there for future generations and men and women who 
stand up and raise their right hand and say I will protect and 
defend, that a benefit will be there, a generous benefit will 
be there, to take care of their lifelong needs and medical 
care. The issue is that because we have had prohibitions for 16 
years, we actually are far behind the curve and not on a 
sustainable course.
    Put up number 4 there, please.
    [The chart referred to follows:]
      


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    
      
    Dr. Woodson. I want to show to you how dramatic this is. If 
you look at particularly the private sector--and I know we do 
not want to talk about comparisons--over the course of the last 
decade or so, contributions to premium costs in health care 
have gone up 168 percent. Premium costs have gone up 160 
percent. If you look at the blue line at the bottom, you can 
see that there has been no increase until last year when we had 
these very modest increases of $2.50 per month for singles and 
$5 a month for families.
    The issue is that we have not been on a sustainable course, 
and we need to certainly slightly rebalance it. With all of the 
proposals, we will not go back to what was the original agreed 
upon cost share. We will only be at half of that, but we will 
be on a more sustainable course. This is about a national 
security issue that goes on for decades.
    Senator Ayotte. This in my view--with all respect to the 
private sector, they do not endure what our soldiers do in 
battle----
    Dr. Woodson. I understand.
    Senator Ayotte.--or shot at--the things that they have to 
experience. So I do not find the comparison good.
    I think that if we as Congress would actually say that this 
is a commitment we want to follow through on, that we could 
find a way to do it if we are willing to take on entitlements, 
if we are willing to take on the rest of the budget rather than 
you all trying to find a way to pass this on to our veterans in 
the first instance. That is my big-picture concern here.
    But I understand that health care is going up everywhere, 
but I do not find the comparison the same.
    Senator Webb. Let me just have the final word here, seeing 
as I have the gavel. [Laughter.]
    Just a couple of things. This is almost going the way that 
the lawyer hearing went when we had all the Judge Advocates 
General up here. It is going for another half hour.
    We will have further discussion about this and we will 
actually want to come back to you again, Secretary Woodson. 
There are some data that I may want.
    But let me just make three final points here in terms of 
where our concerns are.
    First, I understand the hand that you are dealt. I spent 5 
years in the building. I was on the Defense Resources Board for 
4 years. I understand the hand you are dealt.
    Second, I understand the notion of getting a sustainable 
course. The difficulty here is if you are going to look at the 
back end after someone has completed their career, that is a 
different situation than analyzing the whole context of the 
moral contract that goes into service. That is a concern.
    Then third, the reason I put that chart up there with 
Medicare Part B is I do not think there are very many members 
up here who understand that a military retiree has to buy into 
Medicare Part B before they get TRICARE For Life. They do not 
understand that. They see the little bar at the very top, the 
red part of the bar. They do not understand the blue part. I 
think I got that right. So it is an important part of the 
decision process up here when people look at that because it 
does not show up in the DOD budget, but it does show up in 
somebody's bank account.
    So we will continue this discussion. Again, I very much 
appreciate your all coming to testify today.
    This hearing is adjourned.
    [Questions for the record with answers supplied follow:]
               Questions Submitted by Senator Mark Begich
                              tricare west
    1. Senator Begich. Dr. Woodson, I understand you made a decision 
recently on the TRICARE contract in the West Region, which serves my 
home State of Alaska. As you know, Alaska is just beginning to move 
towards delivering military care in a somewhat similar manner as is 
done in the lower 48 States. It's been a long and challenging process. 
So, the decision on the contract award will have a substantial impact 
on my constituents. I understand this award went to the higher price 
bidder. The contract award process is more detailed than simply price, 
but price is pretty important these days. Is it accurate that the 
contract was awarded to a higher bidder?
    Dr. Woodson. Yes, the contract was awarded to the higher priced 
offeror. The source selection factors for this solicitation gave 
greater weight to technical and performance-related factors than to 
cost and price-related factors. The Source Selection Authority compared 
offers and, within the parameters of this authority, determined that 
the higher price was more than offset by the added value offered.

    2. Senator Begich. Dr. Woodson, will you provide me with a full 
briefing on the decision from the Department of Defense (DOD) so I may 
better understand it, as it will have a tremendous impact on all men 
and women in uniform, but especially on constituents in Alaska, as we 
don't want to go backwards with progress that has been made in the 
State.
    Dr. Woodson. I would be happy to arrange for a briefing once this 
protest is settled. The decision in the West is under protest and a 
briefing prior to the outcome of that proceeding would be guide 
limited.

                           tricare increases
    3. Senator Begich. Secretary Hale and Dr. Woodson, in years past, 
DOD has proposed to increase TRICARE fees, and thereby achieve savings, 
that were based in part on the principle that beneficiaries would 
either opt out of TRICARE completely, or decrease the amount of health 
care they used. This year DOD's proposal for TRICARE Prime enrollment 
fees is for a first-year increase of 30 percent to 78 percent. That, 
plus other increases in health care costs to retirees, will result in 
$12 billion in savings to DOD over 5 years. How much revenue does DOD 
expect to generate from the proposed fee increases?
    Mr. Hale and Dr. Woodson. The fiscal year 2013 health reform 
proposals are expected to save DOD a total of $12.9 billion through 
fiscal year 2017. These savings are derived from four effects:

         First, we project some savings from stopping and 
        reversing the increase in the number of retirees who use 
        TRICARE as their primary health insurance vice using their 
        employer-sponsored insurance. In fiscal year 2000, 
        approximately 60 percent of retirees relied on TRICARE. Today, 
        it is roughly 84 percent with projections that it will reach 90 
        percent by fiscal year 2017. Our estimate is that these 
        proposals will reduce this reliance to 79 percent, roughly what 
        it was in fiscal year 2008. For fiscal year 2013, these savings 
        amount to $201 million.
         Second, we project a minor decrease in health care 
        utilization due to the higher fees.
         Third, we project that beneficiaries will use health 
        care options that are less costly for DOD. We project more 
        beneficiaries will use TRICARE Standard vice Prime, that they 
        will use more generic prescriptions vice brand, and that they 
        will use military treatment facility (MTF) and mail order vice 
        retail pharmacies.
         Finally, there is the direct savings from increased 
        fees that will offset DOD's cost of health care.

    For fiscal year 2013-fiscal year 2021, we project that 25 percent 
of the savings will come from the increased reliance on employer-
sponsored health care, 7 percent of the savings will come from the 
decrease in utilization, 28 percent will come from the use of less 
costly options, and that 40 percent will come directly from the 
increased fees.

    4. Senator Begich. Secretary Hale and Dr. Woodson, how much does 
DOD expect to save from beneficiaries changing their behavior with 
regard to health care use?
    Mr. Hale and Dr. Woodson. The fiscal year 2013 health reform 
proposals are expected to save DOD a total of $12.9 billion through 
fiscal year 2017. These savings are derived from four effects:

         First, we project some savings from stopping and 
        reversing the increase in the number of retirees who use 
        TRICARE as their primary health insurance vice using their 
        employer-sponsored insurance. In fiscal year 2000, 
        approximately 60 percent of retirees relied on TRICARE. Today, 
        it is roughly 84 percent with projections that it will reach 90 
        percent by fiscal year 2017. Our estimate is that these 
        proposals will reduce this reliance to 79 percent, roughly what 
        it was in fiscal year 2008. For fiscal year 2013, these savings 
        amount to $201 million.
         Second, we project a minor decrease in health care 
        utilization due to the higher fees.
         Third, we project that beneficiaries will use health 
        care options that are less costly for DOD. We project more 
        beneficiaries will use TRICARE Standard vice Prime, that they 
        will use more generic prescriptions vice brand, and that they 
        will use MTF and mail order vice retail pharmacies.
         Finally, there is the direct savings from increased 
        fees that will offset DOD's cost of health care.

    For fiscal year 2013-fiscal year 2021, we project that 25 percent 
of the savings will come from the increased reliance on employer 
sponsored health care, 7 percent of the savings will come from the 
decrease in utilization, 28 percent will come from the use of less 
costly options, and that 40 percent will come directly from the 
increased fees.

                          personnel decreases
    5. Senator Begich. Secretary Rooney, DOD is proposing a decrease of 
8,000 personnel in fiscal year 2013. How did DOD determine 8,000 
personnel decreases were feasible and will not undermine the workforce?
    Dr. Rooney. DOD's fiscal year 2013 budget request, including the 
proposed reduction in personnel, 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. Reductions in civilian personnel are predominantly 
associated with ongoing organizational assessments and mission/function 
prioritization in an effort to reduce administrative workload. These 
reductions preserve DOD's civilian workforce's capability to perform 
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.

    6. Senator Begich. Secretary Rooney, what assessment was conducted?
    Dr. Rooney. The reductions in the workforce reflect, in part, a 
continuation of DOD's efficiency initiative, directed by Secretary 
Gates and first included in the fiscal year 2012 budget. Specifically, 
they reflect the direction given to complete organizational assessments 
and mission/function prioritization, reflecting DOD's commitment to 
challenge workload requirements and more appropriately size the 
workforce to meet the most pressing and critical priorities with a 
focus on reducing administrative functions associated with headquarters 
staffs. Additional reductions planned and reflected in the fiscal year 
2013 budget correlate to changes in DOD's force structure, strategy, 
posture, and operational tempo.

    7. Senator Begich. Secretary Rooney, of the 8,000 civilian 
personnel reduction, please provide how many each Service will have to 
decrease by and in what areas--base support, et cetera.
    Dr. Rooney. Total U.S. Direct Hire (USDH) full-time equivalents 
(FTE) decreased by 7,367 from the fiscal year 2012 level of 751,172 to 
the fiscal year 2013 level of 743,805. There was a net decrease of USDH 
(reimbursable) FTEs of 12,194 (see charts by Service component and 
appropriation below), which were offset by a net growth of 4,827 USDH 
(direct) FTEs, resulting in the overall decrease of 7,367.

         The decrease in USDH reimbursable FTEs is primarily in 
        the Military Departments' Operation and Maintenance and 
        Revolving Funds accounts, as shown in the chart attached. 
        Reimbursable functions include logistical support functions 
        such as depot-level equipment/aircraft repair and maintenance 
        and ship maintenance and operations.
         Of the Defense-wide reductions, 306 USDH reimbursable 
        FTEs were converted to USDH direct FTEs. The remaining Defense-
        wide reductions were in the drug demand reduction and 
        intelligence programs. 


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


                              joint basing
    8. Senator Begich. Secretary Rooney, you mention in your written 
testimony submitted for the record that there have been some exceptions 
for growth and increases to the civilian workforce--to include joint 
basing requirements for the Navy and Air Force. Why have these 
exemptions not also been extended to Air Force and Army joint bases--
such as Joint Base Elmendorf-Richardson (JBER)?
    Dr. Rooney. When DOD directed its components to hold civilian 
funding to fiscal year 2010 levels, we recognized that some allowances 
had to be made for new missions or legislative requirements. One such 
allowance, as needed, was for implementing certain Base Realignment and 
Closure (BRAC) 2005 directed initiatives associated with selected joint 
basing agreements.
    Joint basing generated civilian workforce transfers between the 
Services. As a result, both the Air Force and Navy increased, while the 
Army saw its civilian workforce decrease as joint basing was 
implemented. Therefore, the Army did not require a growth exception for 
joint basing. Based on workforce shifts of installation support 
realignments, the Navy and Air Force requested exceptions to their 
overall civilian workforce levels. Based on overall joint basing 
requirements, the Army did not request an exception.

    9. Senator Begich. Secretary Rooney, I am concerned the Air Force, 
as the installation's executive agent, is not meeting joint basing 
requirements at JBER. JBER lost more than 220 civilian personnel 
billets previously identified as necessary to accommodate joint basing 
and the increase in Army end strength at the installation. Has the Air 
Force sought exceptions for joint bases where they are the lead or just 
the tenant? Why or why not?
    Dr. Rooney. The Air Force actively sought exceptions to protect 
civilian growth associated with joint basing, acquisition excellence, 
plus operations and maintenance in-sourcing. While some exceptions were 
granted, DOD had to also respond to the Budget Control Act (BCA) of 
2011. As such, the Air Force focused on reductions in overhead and 
support areas while minimizing the impact to functions tied to joint 
basing, acquisition excellence, the nuclear enterprise, and its flying 
missions.
    BRAC 2005 created joint basing as a means to identify, capture, and 
continue significant savings through consolidation thus freeing 
resources for other priorities. The joint bases for which the Air Force 
is the last Service are now in the process of reducing some of its 
previously planned growth by consolidating and centralizing many base 
support functions; examples include the ``Tailoring Installation 
Support'' and ``Civil Engineer Transformation'' initiatives. Their 
joint base commanders have the authority to, and will, reallocate 
manpower and dollars across their functions to maximize capabilities 
while mitigating impact to the services they provide. In spite of these 
fiscal challenges, Air Force remains committed to joint basing while 
meeting or exceeding the needs of our mission customers.

                             base services
    10. Senator Begich. Secretary Rooney, as you know, to meet the 
fiscal year 2010 cap, the Services decreased civilian personnel 
primarily in base support services. Do you have any concerns the 
Services will take the additional reductions in base support services 
and thereby compromise quality of life and installation support?
    Dr. Rooney. No, I am not concerned that quality of life and 
installation support will suffer. The reductions in DOD's civilian 
workforce, including those in base support services, are correlated to 
workload and based on mission/function prioritization, reflecting the 
changes in DOD's strategy and force structure. DOD has established an 
internal, multi-level governance process for monitoring implementation 
of all efficiencies and associated budget reductions. Through such 
governance processes, the Service and Department's leadership ensures 
that base operating and infrastructure services, critical training to 
ensure readiness, equipment modernization and reset, medical care, and 
family support are delivered in a manner and with sufficient personnel 
to maintain quality of life and warfighting capabilities.

                               separation
    11. Senator Begich. Secretary Rooney, I understand it is DOD's 
intent to utilize voluntary separation measures when implementing 
civilian personnel reductions. Yet, most applicants are being turned 
down when they apply for voluntary separation or retirement. In these 
economic times, a lay-off is unacceptable. Does DOD have the 
flexibility it needs to utilize voluntary incentives to the fullest?
    Dr. Rooney. Yes, these incentives have served DOD well in avoiding 
involuntary separations. In accordance with the governing statute, 
Voluntary Separation Incentive Pay (VSIP) and/or Voluntary Early 
Retirement Authority (VERA) can only be granted when a voluntary 
separation would avert an involuntary separation, or when the vacated 
position can be restructured to meet organizational needs. It is 
management's responsibility to determine when it is necessary to use 
these authorities and to determine who is in the eligible population. 
As a result, employees who do not work in areas targeted for VSIP/VERA 
are not eligible and they generally represent the group of applicants 
who claim they are being turned down.
    To minimize involuntary separations, DOD has a statutory limit of 
25,000 VSIP payments annually. We do not anticipate exceeding the 
statutory limit in the current environment. There is no ceiling on 
VERA, but the number may be limited by the 25,000 VSIP limit because 
most employees who apply for VERA also apply for VSIP. In fiscal year 
2011, DOD approved 3,854 VSIPs and 712 VERAs (649 with VSIP). As of 
March 31, 2012, DOD has approved approximately the same number of VSIPs 
and VERAs as it did in fiscal year 2011.
    If the use of voluntary separation incentives does not avoid the 
need for involuntary separations, DOD relies on the DOD Priority 
Placement Program (PPP), DOD's civilian career transition assistance 
program. When employees are scheduled for displacement due to 
downsizing or organizational restructuring, they receive hiring 
preference for DOD job vacancies through the PPP. Almost 260,000 
civilians have been successfully placed through this program, and it 
remains the centerpiece of DOD's overall efforts to maintain a stable 
workforce.

                                   Voluntary Separation Incentive Pay Approved
----------------------------------------------------------------------------------------------------------------
                                                                    Fiscal Year
                                 -------------------------------------------------------------------------------
                                                                                              2012  (1st and 2nd
                                         2009                2010                2011                qtr)
----------------------------------------------------------------------------------------------------------------
Army............................                820                 790               2,143               1,679
Navy............................                364                 540                 812                 265
Air Force.......................                496                 236                 247               1,107
Other DOD.......................                313                 463                 652                 427
                                 -------------------------------------------------------------------------------
  Total.........................              1,993               2,029               3,854               3,496
----------------------------------------------------------------------------------------------------------------


                                 Voluntary Early Retirement Authorities Approved
----------------------------------------------------------------------------------------------------------------
                                                                    Fiscal Year
                                 -------------------------------------------------------------------------------
                                                                                              2012  (1st and 2nd
                                         2009                2010                2011                qtr)
----------------------------------------------------------------------------------------------------------------
Army............................                280                 250                 250                 399
                                    (241 with VSIP)     (197 with VSIP)     (234 with VSIP)     (381 with VSIP)
Navy............................                149                 150                 186                  71
                                    (102 with VSIP)     (125 with VSIP)     (175 with VSIP)      (60 with VSIP)
Air Force.......................                157                 107                 142                 247
                                    (151 with VSIP)      (99 with VSIP)     (136 with VSIP)     (241 with VSIP)
Other DOD.......................                173                 293                 134                  77
                                    (108 with VSIP)     (157 with VSIP)      114 with VSIP)      (74 with VSIP)
                                 -------------------------------------------------------------------------------
  Total.........................                759                 800                 712                 794
                                    (602 with VSIP)     (578 with VSIP)     (659 with VSIP)     (794 with VSIP)
----------------------------------------------------------------------------------------------------------------


    12. Senator Begich. Secretary Rooney, are there legal restrictions 
or barriers to more lenient use to avoid a reduction in force?
    Dr. Rooney. Yes. As explained in my previous response, VSIP and the 
VERA are governed by law. Section 9902 of Title 5 of the U.S. Code, 
imposes limits on the Secretary's independent authority to use these 
separation incentives. These tools may only be used for two purposes:

    1.  To reduce involuntary separations that would otherwise occur.
    2.  To restructure the workforce to meet mission objectives without 
reducing the overall number of personnel. We cannot approve VSIP or 
VERA requests unless the voluntary separations would achieve one of the 
two specified purposes.

                             family support
    13. Senator Begich. Secretary Rooney, family support programs are 
protected in the budget but indications are they will not see any 
growth in budget in the out-years. How does DOD intend to ensure 
funding of family support programs keeps pace with inflation?
    Dr. Rooney. To ensure that funding of family support programs keeps 
pace with inflation and family programs are not reduced, I emphasized 
the need for Services to safeguard and sustain funding levels for their 
family programs. This resulted in implementation of a Comptroller-
mandated, in-depth, mid-year review of the Services' budgets. The 
Services are in the process of scrutinizing their budgets, tracking 
program funding, and disclosing discrepancies that could indicate 
diversion of funds from programs for which the funds were originally 
intended. Ongoing tracking of budgets and reporting on status of 
budgets supports the Secretary's position of ``keeping faith'' with 
servicemembers and their families to protect family assistance 
programs. Additionally, resourcing plans must maximize leveraging 
community-based organizations that offer legitimate resources to 
support and empower our military families. DOD's ability to adapt 
programs and establish partnerships that more effectively and 
efficiently meet the needs of our military families are key to DOD's 
continued success in an ever more fiscally-constrained environment.

                         assignments for women
    14. Senator Begich. Secretary Rooney, I've long been an advocate 
for eliminating assignment restrictions for women in the military. 
Please describe the recent DOD changes with respect to women serving in 
the military.
    Dr. Rooney. On February 9, the Secretary of Defense notified 
Congress of his intention to remove the co-location restriction and 
permit an exception to policy that allows women to be assigned to the 
battalion-level of specific direct ground combat units. Co-located 
positions are not part of ground combat units, but by virtue of the 
duties or missions involved, must be co-located with the ground combat 
units. In addition, positions opened under an exception to the existing 
DOD policy permit assignment of women to specific direct ground combat 
battalions in select occupations open to women. The experience gained 
by assigning women to these select positions will help assess the 
suitability and contemporary relevance of the direct ground combat unit 
assignment prohibition and inform future policy decisions. In total, 
14,325 positions are opening as a result of these changes. The Services 
will begin implementing these changes effective May 14, 2012.

    15. Senator Begich. Secretary Rooney, what more is DOD doing to 
give women a larger role in the Services?
    Dr. Rooney. See response to question #14.

                           reserve component
    16. Senator Begich. Mr. McGinnis, I was pleased in your opening 
statement that you mention the Innovative Readiness Training (IRT) 
program. I am pleased to see this program's funding remained stable in 
the budget request at $20 million. Please elaborate on the benefits of 
the program to our Reserve component and civilian and military 
partnerships.
    Mr. McGinnis. The IRT program provides real world training 
opportunities for DOD servicemembers, which prepares them for wartime 
missions while supporting the needs of America's underserved 
communities, many in rural areas. Through this program, the National 
Guard and Reserve and various Active component military units refine 
their planning, logistical, engineering, health care, driving, and 
transportation skills by performing services and developing projects in 
and for communities that otherwise would not have the resources to 
conduct them on their own. In many cases, the community provides the 
materials and the military provides the manpower, equipment, and 
training to sustain the improvements.
    This year, along with significant training in logistics, joint 
operational planning, coordination, and communication, Navy Seabees, 
Marine Combat Engineers, Army Reserve, and Air Force Red Horse teams 
will gain vertical and horizontal engineering experience. In West 
Virginia, over 1,300 Reserve component engineers and support personnel 
will build roads and helipads. In New Mexico, houses for homeless 
Navajos will be constructed, and in Arizona, a school for exceptional 
children will expand.
    In Arkansas last year, 5 communities were provided much needed 
medical, dental, optometry, and veterinary care; over 6,000 residents 
received direct medical care. Just last month, over 10,000 residents of 
Kauai, HI received similar medical services and 3,500 pairs of glasses 
were fabricated. Currently, the Arctic Care mission is underway in 16 
villages in partnership with the Norton Sound Health Corporation in 
Nome, AK. Next month, three rural communities in Alabama will provide 
the back drop for medical training and many residents will receive much 
needed health care. Over 300 military medical personnel train at each 
of these health care missions.
    As overseas military operations wind down in the coming years, it 
is imperative to have sustainment training opportunities available to 
the Guard and Reserve. This program provides that unique niche of high-
value mission essential training in support of the Nation's underserved 
and remote communities.

    17. Senator Begich. Mr. McGinnis, you highlight the alarming 
Reserve component unemployment rate in your testimony. I understand the 
Army Reserves has a program called the Employer Partnership of the 
Armed Forces (EPAF). This program is having tremendous success ensuring 
members are trained and receive credentials for civilian work while 
staying qualified for their military work. The Army Reserves is working 
hand-in-hand with employers to understand what credentials and skill 
sets are required for employment, training the force, and then placing 
members into jobs. Are you familiar with this program?
    Mr. McGinnis. Yes, my office is very familiar with this program. 
The EPAF was developed by the Office of the Chief, Army Reserve to work 
with employers to facilitate employment opportunities for Army 
reservists. After careful review of the success of EPAF, and with the 
concurrence of the Chief, Army Reserve, EPAF has transitioned to a 
multi-Service program known as ``Hero2Hired (H2H)'', which is 
administered by my office, and is available for use by servicemembers 
in all seven Reserve components. H2H, with a web site H2H.jobs, retains 
many of the great features and lessons learned in EPAF and has expanded 
tools designed to provide outreach, support, and mentorship to the 
unique Reserve component population. The tools help all unemployed and 
under-employed Reserve component servicemembers and spouses with 
employment assistance.

    18. Senator Begich. Mr. McGinnis, how is DOD leveraging the lessons 
learned from successful initiatives such as this one?
    Mr. McGinnis. The Yellow Ribbon Reintegration Program (YRRP) 
applies lessons learned to its operations on a continuous basis, 
constantly improving the quality of curriculum, materials, and 
resources provided to the Service components. H2H is a program provided 
by YRRP to address the needs of unemployed and under-employed Reserve 
component servicemembers. YRRP also made significant enhancements to 
the DOD YRRP Center for Excellence whose primary mission is to gather 
lessons learned, conduct analysis, and propagate the end results 
throughout the Services for their use.

    19. Senator Begich. Mr. McGinnis, the 168th Air National Guard Wing 
at Eielson Air Force Base has a critical need for a communications 
facility. Unfortunately, funding for this facility has not been 
provided and funding for it continues to slip into the future years. 
Without construction and modifications to the existing facility, 
communications will fail for this wing. Would you please look into this 
issue and provide an update?
    Mr. McGinnis. While my office provides policy oversight of the 
Reserve components, any final decisions on construction and funding for 
National Guard facilities falls within the purview of the Services. As 
such, my office did not play a direct role in any ultimate decisions 
related to the 168th. However, upon reviewing the matter, I was 
informed of the following information:
    The communications facility is scheduled for design and subsequent 
construction in fiscal years 2012 and 2013. This facility requirement 
was reviewed and found to be better suited for accomplishment using a 
combination of minor construction and sustainment, restoration, and 
modernization (SRM) funds instead of military construction (MILCON) 
funds.
    The project calls for a repair of the existing roof, construction 
of an addition, and renovation of the existing space. The roof was 
repaired in 2011. Construction of a 3,650-square-foot addition for $2 
million is under design for the fiscal year 2012 program and will be 
executed using minor construction funding. A companion project 
renovating 5,504 square feet for $1.85 million is under design for the 
fiscal year 2013 program.

    20. Senator Begich. Mr. McGinnis, I am especially concerned with 
the decreases proposed by the Air Force in Air Guard equipment and 
manning. What role did you play in the deliberations this year and what 
role did the States play?
    Mr. McGinnis. The Assistant Secretary of Defense for Reserve 
Affairs serves as an advisor to the Secretary of Defense through the 
Under Secretary of Defense for Personnel and Readiness on all matters 
pertaining to the planning, programming, budgeting, and execution 
system for the Reserve components within DOD.
    The budgets are developed by the Secretaries of the Services based 
on their views of the future of their Services. The role of Reserve 
Affairs is to advise the Secretary of Defense, but we do not play a 
direct role in development of these budgets. However, we did 
participate in the Office of the Secretary of Defense review of the 
Services' budget submissions.
    I am not aware of whether the States Adjutants General were 
involved in the development of this budget. It is the responsibility of 
the Service Secretaries to communicate, through the National Guard 
Bureau, with the State Governors and representatives, and I fully 
support that interaction and communication. If that was done this year, 
my office would not necessarily have played a role.
                                 ______
                                 
             Questions Submitted by Senator Lindsey Graham
                             sequestration
    21. Senator Graham. Secretary Hale, the BCA requires DOD to reduce 
all major accounts by a total of $492 billion over 10 years. Secretary 
of Defense Panetta has said that this would have a catastrophic impact 
on our military and its ability to protect this country. What is the 
impact on military readiness, equipment, and training?
    Mr. Hale. The initial impact of these reductions would come from a 
potential sequestration in January 2013. 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--Department of Defense 
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 
budgetary resources, primarily the enacted fiscal year 2013 
appropriation and any unobligated balances carried forward at the end 
of fiscal year 2012. Some 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 all of these accounts 
within DOD. Finally, sequestration would force an immediate percentage 
reduction in our operation and maintenance accounts which would impact 
readiness. Funding provided for overseas contingency operations is not 
excluded from sequestration.
    The fiscal year 2014 and subsequent budgets will be developed using 
DOD's planning, programming, budgeting, and execution process. Changes 
to our budget required by revised caps on the defense budget will be 
managed through this process to best allocate potential reductions to 
the currently planned funding to protect our highest priorities. As 
changes of this magnitude will impact all aspects of DOD's budget, the 
process will be implemented in coordination with the White House and 
the Office of Management and Budget (OMB).

    22. Senator Graham. Secretary Rooney, if sequestration is allowed 
to go forward, are we creating a hollow force and diminished support 
for military families and schools?
    Dr. Rooney. I share your concerns about the devastating impact of 
further automatic cuts should Congress fail to enact additional deficit 
reduction measures.
    As the Secretary testified on February 29 to the House Budget 
Committee, sequester would subject DOD to another roughly $500 billion 
in additional cuts over the next 9 years. In fiscal year 2013, these 
cuts would have to be implemented with limited flexibility. These 
changes could hollow out the force and inflict severe damage to our 
national defense and programs that are vital to our quality of life.

    23. Senator Graham. Mr. McGinnis, I am concerned about the current 
cuts in the Reserve and National Guard. What greater catastrophe looms 
in the event of sequestration for the Reserve component?
    Mr. McGinnis. The fiscal year 2013 budget submission supports the 
National Defense Strategy and will enable our Reserve components to 
continue to fulfill their vital national security role. The current 
budget provides funding and programmatic support for the training, 
equipping, recruiting, and retaining of the Guard and Reserve. 
Sequestration will have a direct impact on the operations, maintenance, 
and training of our Reserve components and can run the risk of 
preventing the ability of the National Guard and Reserve to provide 
trained, ready, and cost-effective forces that can be employed not only 
for unanticipated national crises, but also on a regular operational 
basis, providing strategic depth for large-scale contingencies. The 
extent of the impacts of sequestration will depend on congressional 
action or inaction, OMB guidance, and the measures each Service employs 
to implement those measures.

    24. Senator Graham. Dr. Woodson, will access and quality of medical 
care decline in the event of sequestration?
    Dr. Woodson. See response to question #22.

    25. Senator Graham. Secretary Rooney, Secretary Hale, Mr. McGinnis, 
and Dr. Woodson, are you currently conducting any planning in your 
areas of responsibility (AOR) for the impact of sequestration, and if 
so, how are you assessing and mitigating the risk of the potential cuts 
beginning in January 2013?
    Dr. Rooney, Mr. McGinnis, and Dr. Woodson. The President's budget 
makes the necessary budget adjustments to avoid devastating DOD through 
sequestration. If sequestration becomes an inevitability, DOD will 
evaluate all options available to comply with the law.
    Mr. Hale. 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.

                 reductions in active duty end strength
    26. Senator Graham. Secretary Rooney, despite ongoing combat 
operations, it seems clear that budgetary pressures are going to force 
reductions in the number of Active Duty military personnel: Army down 
49,000; Navy down 9,000; and Marine Corps down 16,000. The Air Force 
will downsize to prevent exceeding its end strength limit, due to high 
retention. I am concerned about the need for advance planning to 
implement cuts like these, and particularly with respect to the ground 
forces, the effect this may have on morale and readiness in the 
present. How will cuts in the Army and Marine Corps affect dwell time, 
assuming we are still deploying units to Afghanistan?
    Dr. Rooney. In the near-term, the pace of the reductions will 
account for the completion of our mission in Afghanistan and provide 
the resiliency that comes with sufficient dwell times.
    In the long-term, these reductions are consistent with our plan to 
transition to the new strategic guidance--to build a force that is 
smaller, more agile, and able to adapt to an uncertain future security 
environment.
    The Services are shaping their future force structure in ways that 
protect their ability to maintain and regenerate capabilities 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 will also be key. The seed corn and the 
experience will need to be properly balanced between the Active and the 
Reserve components.

    27. Senator Graham. Secretary Rooney, if we are unable to find the 
mandatory spending authority for the force shaping legislation you 
would like to have (such as early retirement authority and more 
Selective Early Retirement authority), what measures would you have to 
use to achieve these reductions?
    Dr. Rooney. We currently have a limited number of force management 
tools we can use to achieve these reductions. They include, but are not 
limited to: Selective Early Retirement Board (SERB), Temporary Early 
Retirement Authority (TERA), Voluntary Retirement Incentive (VRI), and 
Voluntary Separation Pay (VSP).
    The reinstatement of Enhanced SERB authority, the extension of 
Early Discharge or Reduction in Force (RIF) authority, and expanded 
Time-in-Grade waiver authority, combined with the use of the current 
authorities, will allow the Services to execute a very balanced 
drawdown. These additional authorities allow us to shape the force with 
greater flexibility and fidelity.

                      army and air national guard
    28. Senator Graham. Mr. McGinnis, I'm interested in your views on 
the role of the Army and Air National Guard. There is no question that 
Guardsmen have been essential contributors in Iraq and Afghanistan. In 
the future, in an era of tight budgets, we need to have a clear 
understanding from the Army and Air Force about how the National Guard 
will and should best be employed. What is your view of the appropriate 
role of the National Guard? Stated differently, what does the term 
``operational reserve'' look like for the National Guard as it's 
implemented over the Future Year Defense Program (FYDP)?
    Mr. McGinnis. Missions that are predictable and long-lasting are 
particularly well suited to the Guard and Reserve. This was clearly 
established in the Comprehensive Review of the Future Roles of the 
Reserve Component approved by Secretary Gates on April 27, 2011. The 
legislation expanding authority in title 10, section 12304, that was 
passed last year, facilitates this type of utilization. The Guard and 
Reserve have proven themselves over the last 10 years. From a cost and 
readiness point of view, their continued use makes good sense. Placing 
Reserve component units and individuals in service force generation 
models with appropriate levels of resourcing makes full use of the 
Total Force. It also relieves stress on the Active Force, permits the 
Active Force to train for full spectrum operations, and maintains the 
readiness levels of the Reserve component.

    29. Senator Graham. Mr. McGinnis, data from the Air National Guard 
suggests that operating under today's deployment constraints, the Air 
Guard costs only 53 percent of an equivalent Active Duty Air Force 
Major Command. In light of the cost effectiveness of the Guard and 
Reserve, why do you support cutting the Reserve capability in the Navy 
and the Air Force?
    Mr. McGinnis. The current National Guard and Reserve is, arguably, 
the most combat seasoned Reserve Force ever, and DOD seeks to 
capitalize on this significant investment to provide needed military 
capacity during current austere economic times. Since 2001, Reserve 
component units and individuals have been heavily employed across the 
full spectrum of military operations ranging from combat missions 
overseas to Homeland emergencies and national special security events. 
They have consistently demonstrated their readiness and enduring value.
    To ensure the Reserve component can continue to provide operational 
reserve and strategic capabilities, DOD included funding and programs 
in its fiscal year 2013 budget request for their training, equipping, 
recruiting, and retention. I believe the service force generation 
models provide the best mechanism to maintain a ready Reserve component 
force that can routinely contribute to the operational force. As 
discussed in the recently released Comprehensive Review of the Future 
Role of the Reserve Component, I continue to strongly advocate for the 
value that the Guard and Reserve can bring to the force mix equation; 
value that leverage cost differentials, attainable readiness, and 
inherent strategic depth. I intend to continue to work closely with the 
Services and Joint Staff to ensure a ready Reserve component that 
contributes to the most efficient delivery of required capabilities of 
the Total Force.

    30. Senator Graham. Mr. McGinnis, why is this the correct strategy, 
either from a fiscal or readiness point of view?
    Mr. McGinnis. Even as the pace of operations declines, placing the 
Reserve components in the Service rotational models expands readiness, 
permits the Active Force to reset and train, and provides an efficient 
use of the Total Force. There are currently ongoing studies that will 
provide further guidance on the appropriate force mix to achieve the 
right balance of Active and Reserve components to provide the necessary 
capabilities across the spectrum of operations to effectively support 
the national defense strategy.

                             cybersecurity
    31. Senator Graham. Secretary Rooney, defense against cyberattacks 
is on every American's mind and DOD obviously has a big role to play 
and much at stake in this threat. What policies are being implemented 
to increase the skills and numbers of civilian and military personnel 
with cybersecurity skills?
    Dr. Rooney. To increase the cybersecurity skills of civilian and 
military personnel, DOD is updating its current information technology 
(IT) and information assurance workforce management guidance and 
enhancing training and education offerings. DOD is in the process of 
establishing policy and procedural requirements for the cyberspace 
workforce, leveraging the basic concepts of previous issuances, DOD 
Directive 8570.01, ``Information Assurance Training, Certification and 
Workforce Management,'' and DOD 8570.01-M, ``Information Assurance 
Workforce Improvement Program.'' In addition, under oversight of the 
DOD CIO, the Information Resources Management College (iCollege) of the 
National Defense University has restructured its cybersecurity 
certificate program and recently introduced a cyber leadership program.
    DOD continues to explore optimal tools for recruitment and 
retention. Efforts include establishing a 2-year pilot program to use 
the DOD Information Assurance Scholarship Program to develop IT 
acquisition personnel with cybersecurity skill sets; working with the 
Office of Personnel Management to extend and enhance the Cybersecurity 
Schedule A Hiring Authority (currently due to expire in December 2012); 
and developing a new cyberaptitude test to support military recruiting 
efforts.

    32. Senator Graham. Secretary Rooney, how are you avoiding 
duplication of efforts to train and recruit these specialists across 
the Federal Government as cited by the Government Accountability Office 
(GAO)?
    Dr. Rooney. In light of emerging cyberthreats, cyberworkforce 
roles, responsibilities, and skill requirements continue to evolve, not 
only in DOD, but across the Federal Government. DOD is working on 
Federal-wide efforts through the National Initiative for Cybersecurity 
Education (NICE) and Federal CIO Council to establish a common lexicon 
across government and the private sector; identify current and emerging 
cyberskill requirements; and develop relevant education, training, and 
recruitment strategies. Also, DOD is developing a directive to 
establish policy and guidance for the management of the workforce in 
the cyberspace domain which will include an American National Standards 
Institute (ANSI) accredited, commercial certification requirement, as 
appropriate. Collaborations with other Federal Government entities and 
the use of commercial certification providers reduce duplication by 
establishing a baseline that can be applied across the Government, 
while still allowing DOD, or component-specific training based on 
relevant threat or mission profiles.

    33. Senator Graham. Mr. McGinnis, how can the Reserve components be 
used creatively to enhance DOD's strength in this important area?
    Mr. McGinnis. Many cybersecurity personnel in the Reserves are at 
the forefront of that industry in their employment as civilians. Within 
this evolving domain, Reserve components offer DOD the wide range of 
opportunity, flexibility, and depth of expertise that is difficult to 
capture within Active Forces. The Active component cyberworkforce and 
Active Duty missions are focused and scoped to meet the day-to-day 
Service-specific needs, limiting the ability to maneuver or plus-up in 
a crisis or a shift in threat.
    This originates from the depth and currency of expertise that 
individual reservists bring from their civilian positions that is not 
now captured in the training and development of the Active component 
cyberforces. Changes in the cyberindustry are rapid and the capacity 
for those changes to be reflected in Service cyberschools is slower 
than it is in industry. Reservists bring to the fight depth and up-to-
date information which is then rapidly shared and infused into the 
Active component mission.

                      disability evaluation system
    34. Senator Graham. Secretary Rooney, do you agree that we have a 
large and growing problem for wounded and ill servicemembers who are in 
need of disability evaluation?
    Dr. Rooney. More than a decade of war has increased DOD's 
disability caseload but we are committed to ensuring that the 
evaluation and compensation of our wounded and ill servicemembers is 
fair, correct, and thorough. Many of these wounded and ill 
servicemembers suffer from highly complex injuries that take time to 
manifest, properly diagnose, and evaluate. DOD evaluated 18,393 
servicemembers for disability during 2011, about the same number as in 
2010 and about 22 percent more than in 2001. More than 50 percent of 
those DOD evaluated in 2011 went through the legacy process. Since 
November 2007, 49,478 servicemembers have entered and 19,518 have 
completed the Integrated Disability Evaluation System (IDES). Today, 
fewer than 2,000 servicemembers remain in the legacy process. At the 
same time, the inventory of servicemembers in the IDES has grown 
rapidly as installations complete their older, legacy cases and enter 
new cases in IDES. As of early May 2012, 27,371 servicemembers were in 
the IDES process (68 percent Army, 12 percent Marine Corps, 9 percent 
Navy, and 12 percent Air Force). DOD's number of servicemembers 
undergoing disability evaluation has grown since the beginning of the 
conflicts in Iraq and Afghanistan, and we project that it will continue 
to grow as servicemembers redeploy from Afghanistan and the Military 
Services reduce their end strength. Unfortunately, predicting the exact 
number of referrals into the IDES is complicated because many injuries 
and illnesses may take weeks, months, and years to manifest to the 
point where they prevent a servicemember from performing their duties. 
Nevertheless, we are committed to providing the necessary resources to 
accelerate IDES timeliness and improving all aspects of the Disability 
Evaluation System (DES) for our wounded and ill servicemembers who are 
in need of disability evaluation. We are confident that we have the 
right measures in place to adequately staff and accelerate the IDES so 
it remains manageable for recovering servicemembers and the Military 
Services as they draw down and refit their forces.

    35. Senator Graham. Secretary Rooney, what is the solution to this 
problem?
    Dr. Rooney. DOD leadership is focused on improving the integrated 
disability evaluation process. DOD and the Department of Veterans 
Affairs (VA) leaders meet regularly to review progress toward that end. 
The Secretaries of DOD and VA have met to review progress multiple 
times in the last year and will receive monthly updates on progress 
toward this priority goal. Within DOD, the Military Services' 
disability agencies and medical and personnel communities are expected 
to execute the DOD portion of IDES in 175 days and do so in accordance 
with their 10 U.S.C. Chapter 61 responsibilities and authorities.
    Under the IDES in March 2012, servicemembers averaged 395 days to 
complete both DOD and VA systems, significantly less than in the 
previous legacy system, but still short of our goal to have 60 percent 
of servicemembers complete the IDES in 295 days by the end of 2012. DOD 
is concentrating on accelerating the IDES to meet that goal and will 
not rest until all referred servicemembers experience the most 
efficient IDES possible, even in times of increased caseloads. DOD 
plans to accelerate the IDES by emphasizing the following themes.
Proper Staffing
    The Services have planned their budgets to ensure proper staffing 
of the IDES. Their efforts are underway with the Army completing 1,218 
of 1,400 (87 percent) hiring actions for additional IDES staff. The 
Navy has increased its Informal Physical Evaluation Board staffing by 
47 percent and has reduced processing time from 50 days in January to 
11 days in March 2012, well within the goal of 15 days. It is 
noteworthy that there has been growth in the number of soldiers in the 
IDES. Although the number of servicemembers in the IDES has grown since 
2007, that growth is mainly a result of the transition between the 
prior legacy processes and the IDES. Although DOD expects some increase 
in the number of servicemembers requiring disability evaluation as 
servicemembers redeploy from Afghanistan and the Services reduce end 
strength, DOD believes the right measures are in place to staff and 
accelerate the IDES so the situation remains manageable.
Improving System Execution
    DOD and the Services are focused on fine-tuning the IDES by 
identifying and implementing best practices in training and execution. 
For example, the Navy has made significant gains in accelerating their 
medical evaluation boards (MEB) at Camp Lejeune by using existing 
technology in DOD's Armed Forces Health Longitudinal Technology 
Application (AHLTA) to streamline the medical summaries. The Navy is 
now preparing to implement this improvement at all locations. The Air 
Force has improved their initial IDES referral screening process to 
prevent unnecessary referrals and added workload. The Army recently 
completed a review of its IDES process and is implementing an Execution 
Order (EXORD) to streamline and standardize their IDES operations. Each 
of the Services is taking positive steps to improve execution.
Senior Leadership Involvement
    DOD and VA leaders meet regularly to ensure they oversee and drive 
progress within their commands. The Secretaries of DOD and VA meet 
quarterly to discuss IDES progress. The Vice Chief of Staff of the Army 
and the Navy's Bureau of Medicine leadership both meet monthly with VA 
senior staff to review IDES processes and direct attention to areas 
needing improvement. Recently, these top leaders convened joint VA and 
DOD teams to examine existing capabilities and implement by this summer 
an electronic, paperless, searchable IDES case file transfer system. 
This work is on track and will significantly reduce workload, 
accelerate the process by about 20 days, and save about $600,000 in 
annual mailing costs.
    DOD's goal is to continue to improve the IDES so that 
servicemembers will benefit from a process that is faster, fairer, and 
reduces the benefits gap. While this is appropriate, lasting 
improvement in disability evaluation requires a national dialogue and 
significant legislative work. DOD is in the beginning stages of 
exploring this strategic reform and envisions this to be a long-term 
project that will span several legislative and budgeting cycles. Any 
large-scale effort to revolutionize the DES would eventually require 
your leadership and we look forward to working with you when and if we 
reach that point. Because soldiers comprise approximately 67 percent of 
the current IDES caseload, the Army bears most of that operational 
burden. To accelerate disability processing, the Army issued execution 
and operation orders in the first half of fiscal year 2012. The orders 
direct staffing, standardization, and execution improvements. We are 
confident this effort will produce results for the Army and the DOD as 
a whole.
    On the joint technology front, VA plans to release an improved 
version of the software DOD and VA use for disability evaluation in the 
third quarter of fiscal year 2012. These improvements will enhance case 
management capability and add electronic interfaces that will reduce 
labor-intensive data-entry requirements and free staff to focus on one 
core VA IT system. In the fourth quarter of fiscal year 2012, VA plans 
to implement an electronic case file transfer capability or paperless 
claim file to the available IDES IT support tools. VA, in partnership 
with DOD, is planning future veterans tracking application 
improvements, including synchronization of disability IT improvements 
with efforts to develop an integrated electronic health record and the 
planned virtual lifetime electronic health care record.
    My Wounded Warrior Care and Transition Policy staff is also 
preparing updated IDES program guidance that will streamline and 
consolidate policy. DOD anticipates that this publication will ease 
execution of the IDES policy and procedural guidance and accelerate 
disability evaluation.

    36. Senator Graham. Secretary Rooney, what will this situation look 
like in a year or 2 if we don't come up with a solution?
    Dr. Rooney. Predicting the exact number of referrals into the IDES 
is complicated because many injuries and illnesses may take weeks, 
months, and years to manifest to the point where a member's fitness for 
duty maybe called into question. We project that DOD's number of 
servicemembers undergoing disability evaluation will grow as 
servicemembers redeploy from Afghanistan and the Services reduce their 
end strength. But, we are also confident we have the right measures in 
place to adequately staff and improve the process so the situation 
remains manageable for servicemembers as they recover from their wounds 
and prepare to transition back to their communities and the Services as 
they drawdown and refit their forces.

                            tricare reforms
    37. Senator Graham. Secretary Hale and Dr. Woodson, I've said that 
I support health care reform in DOD. Do you agree with me that if we 
don't control the growth in health care costs, we will pay for it 
through decreased personnel and readiness?
    Mr. Hale and Dr. Woodson. Absolutely. We project that the total 
medical care budget will grow to 10.7 percent of the DOD topline by 
fiscal year 2017 if we do not take additional measures to slow the 
growth in health care costs.
    If Congress does not provide us with needed support for the health 
reform proposals included in the fiscal year 2013 budget, DOD will have 
to find about $12.9 billion from other defense programs to meet its 
health care obligations. Such action would place the new defense 
strategy at risk. Without needed authority, 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 
at a magnitude that could jeopardize DOD's ability to pursue the new 
defense strategy.

    38. Senator Graham. Secretary Hale and Dr. Woodson, we received a 
32-star letter embracing these proposals, so among the senior military 
leaders, there is no dissent, is that correct?
    Mr. Hale and Dr. Woodson. That is correct; these proposals have the 
full support of DOD's senior military leaders.

    39. Senator Graham. Secretary Hale and Dr. Woodson, how does this 
administration's proposal for fee increases compare with the proposal 
put forward in 2006, which we all felt was too much, too fast?
    Mr. Hale and Dr. Woodson. While there are some similarities between 
the 2006 and 2013 proposals, there are also significant differences. 
The 2006 proposal for Prime enrollment fees also involved three tiers 
and the enrollment fees for 2017 for each of the tiers are roughly the 
same as the 2006 proposals. However, the 2006 proposal was based on 
retired rank vice retired pay. In 2006, the tiers were split by junior 
enlisted (E-6 and below), senior enlisted (E-7 and above), and 
officers. Based on current data, roughly 24 percent of retired 
beneficiaries under the age of 65 would fall into the lowest category 
and 28 percent would fall into the highest category. With the 2013 
proposal, 48 percent will fall into the lowest category and only 12 
percent will fall into the highest category. The 2006 proposals for 
Standard also involved implementing an enrollment fee and raising the 
deductible. The 2006 proposals had tiers with the lowest tier having a 
2017 enrollment fee of $410 and the highest tier, $820. The 2013 
proposal has no tiers for Standard and the proposed 2017 enrollment fee 
is $250. The deductibles proposed in 2006 were also tiered with the 
lowest tier having a $542 deductible in fiscal year 2007 and the 
highest tier having an $820 deductible. The 2013 proposal, with no 
tiers, is for a 2017 deductible of $580. There was no TRICARE For Life 
enrollment fee proposed in 2006. Finally, the 2006 pharmacy proposed 
copays were similar to the copays implemented in fiscal year 2012.

    40. Senator Graham. Secretary Hale and Dr. Woodson, from what I 
have heard, one of the most controversial elements of the reforms that 
you are seeking in health care is a three-tiered system that links the 
amount of the fee a retiree pays to his or her military retired pay. 
What is DOD's rationale in moving to means testing for military retiree 
health care benefits and why is it the right approach?
    Mr. Hale and Dr. Woodson. Where feasible, the proposed fee 
increases were tiered by military retirement pay, based on the 
principles of the December 2007 Task Force on the Future of Military 
Health Care. In its deliberations, the Task Force recognized that 
military retirement is not like most civilian retirement systems and 
that the entire military compensation system differs from the typical 
civilian salary system because much of the compensation is in-kind or 
deferred. Thus, changes in the health care benefit were examined in the 
context of this unique system and its compensation laws, policies, and 
programs. The Task Force believed that, for equity reasons, military 
retirees who earn more military retired pay should pay a higher 
enrollment fee than those who earn less. While this tiering approach is 
not commonly used in the private sector for enrollment fees, the Task 
Force believed that it made sense in a military environment.

    41. Senator Graham. Dr. Woodson, under current law, the TRICARE 
Prime benefit is supposed to be cost neutral--that is, the government 
costs for Prime should not exceed the government costs for Standard. 
Does the cost of TRICARE Prime today comply with this requirement? If 
not, what is the difference in government costs between TRICARE Prime 
and TRICARE Standard for retirees?
    Dr. Woodson. The Prime benefit is no longer cost neutral compared 
to Standard/Extra plans.
    Section 731(c) of the National Defense Authorization Act (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 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 copay, and 
the substantial reduction of outpatient copays; 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.
    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. The 
disparity between Prime and Standard/Extra 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 copays until 
fiscal year 2012. The net result is that Prime is not cost neutral to 
the Standard/Extra plans.

    42. Senator Graham. Dr. Woodson, is cost neutrality of a managed 
care option like Prime compared to fee for service still desirable, 
still achievable?
    Dr. Woodson. 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 Centered Medical Home concept that we are implementing will 
bring the cost of Prime closer to Standard/Extra.

    43. Senator Graham. Dr. Woodson, if you want to encourage more 
people to move from Prime to Standard, why make Standard more 
expensive?
    Dr. Woodson. DOD took a balanced approach to benefit reform with 
increases in cost shares for Prime, Standard, and to TRICARE For Life. 
Each program has not kept pace with the cost of medical care and thus 
DOD has been faced with funding a larger share of the total health care 
expenses. While Prime, with the fixed enrollment fee and relatively 
modest outpatient visit copay, saw the more significant change in the 
beneficiary share of the cost, Standard/Extra with no enrollment fee, 
fixed deductible, and especially the relatively low catastrophic cap 
also saw significant change. Both had to be adjusted and indexed so 
that the relationship between what DOD pays and what the beneficiary 
pays moves closer to what was originally intended and remains there.

    44. Senator Graham. Dr. Woodson, your reform proposals to TRICARE 
pharmacy will likely cause people to use mail order pharmacy instead of 
their local pharmacy, is that correct?
    Dr. Woodson. The copay changes included in the President's fiscal 
year 2013 budget proposal are intended to encourage beneficiaries to 
use the most cost-effective venue. Costs to both the government and to 
beneficiaries are lower in the military treatment facilities and the 
mail order pharmacy program than in the retail network pharmacy 
program. For example, review of recent DOD pharmacy data (fourth 
quarter of fiscal year 2011) show that moving 1 percent of the retail 
market of maintenance medication over to mail order would save 
approximately $1 million in fourth quarter of fiscal year 2011 or $4 
million per year. It is worth noting that this 1 percent decrease in 
the retail market would have been a 1.8 percent increase in use at mail 
order pharmacies during the fourth quarter of fiscal year 2011 (because 
the retail market was larger than mail order). Also, these savings 
estimates assume the 1 percent moving over from retail to mail exactly 
matches the mix of maintenance medications that make up the retail 
market basket used in the study.

    45. Senator Graham. Dr. Woodson, can you explain the cost 
difference for DOD for prescriptions obtained at a local pharmacy 
versus those that come from mail order?
    Dr. Woodson. Based on DOD analysis of maintenance medications, 
which was comprised of 19.9 million prescriptions filled during the 
fourth quarter of fiscal year 2011 at all three points of service 
(military treatment facilities, retail, and mail order), the data show 
that the mail order and military treatment facility venues to be more 
cost-effective points of service. The results showed the mean cost per 
90-day supply of a market basket of maintenance medications was 19 
percent lower through either the mail order program or military 
pharmacies, compared to the retail pharmacy network.

    46. Senator Graham. Dr. Woodson, how much does DOD spend in 
pharmacy costs every year and where do you see that cost going in the 
future?
    Dr. Woodson. The table below highlights actual pharmacy costs for 
fiscal years 2009 through 2011. The table shows current projected costs 
for fiscal years 2012 and 2013. We have assumed slower growth in the 
future due to proposed copay changes and project that pharmacy expenses 
will increase at roughly the Consumer Price Index, Medical (3 to 5 
percent per year). Failure to increase pharmacy copayments may result 
in higher actual expense.

                                            [In millions of dollars]
----------------------------------------------------------------------------------------------------------------
                                                                              Fiscal Year
                                                     -----------------------------------------------------------
                                                         2009        2010        2011        2012        2013
----------------------------------------------------------------------------------------------------------------
Under 65 Pharmacy Expense...........................       $3.42       $3.82       $4.32       $3.95       $3.76
Medicare Eligible Pharmacy Expense..................        4.19        4.06        3.71        4.32        4.72
                                                     -----------------------------------------------------------
  Total Pharmaceutical Expense......................        7.61        7.88        8.03        8.27        8.48
----------------------------------------------------------------------------------------------------------------


    47. Senator Graham. Dr. Woodson, what initiatives are underway, 
other than adjustments to cost sharing, to reduce the costs of the 
TRICARE pharmacy program?
    Dr. Woodson. Over the last several years, DOD has made significant 
efforts to control rising pharmacy benefit costs. The strategies and 
efforts pursued have been drawn from private sector best business 
practices, national trends, congressional mandates, professional 
consultants, and independent studies. Each effort has had an effect in 
controlling the rise in pharmacy costs. Many programs and policies 
surrounding formulary management within TRICARE closely mirror what 
commercial plans do to manage drug benefits.
    Implementation of section 703 of the NDAA for Fiscal Year 2008 
granting DOD authority to obtain Federal discounts in the retail 
pharmacy venue has collected over $3.5 billion in refunds as of March 
30, 2012.
    Publication of an Interim Final Rule in December 2009 covering 
seasonal flu, H1N1 flu, and pneumococcal vaccines followed by a final 
rule in August 2011 provided the authority for the TRICARE pharmacy 
benefit to cover all TRICARE-allowed vaccines within the retail 
pharmacy setting, significantly increasing accessibility of vaccines 
for the prevention of diseases. Over 700,000 vaccines have been 
administered through 45,000 retail pharmacies under this program since 
December 2009 at no copay for beneficiaries. In addition to the 
increased accessibility of vaccines for beneficiaries, the discounted 
price to the government was a factor in the decision for this effort.
    The TRICARE Management Activity Beneficiary Education and Support 
Division in conjunction with the Pharmaceutical Operations Directorate 
implemented a comprehensive home delivery (mail order) marketing 
program in 2010. Over the course of 2 years this initiative has 
contributed to an overall increase of 23 percent in home delivery. In 
2011, home delivery prescriptions totaled over 12 million. At the same 
time that the home delivery use increased, the growth in the more 
expensive retail use has slowed, declining for the first time in 2011. 
In the first quarter of fiscal year 2012 the government cost savings 
associated with this enhanced communication effort totaled $17.2 
million.
    Substantial additional cost avoidance (over and above the standard 
retail rebate) is realized as a result of the ongoing clinical and cost 
effectiveness evaluations of drugs and drug classes for the TRICARE 
Uniform Formulary (first implemented mid-2005), which allowed for 
tiered formulary copays and the ability to negotiate with manufacturers 
for better pricing based on formulary status. As an example, the 
additional first-year cost avoidance for drug classes reviewed in 
fiscal year 2010 was estimated to be $131 million. In fiscal year 2011, 
approximately $161 million in cost avoidance was obtained over and 
above the mandatory retail refund. The recent copay changes have also 
added to our negotiation leverage with the pharmaceutical 
manufacturers.
    Step therapy, requiring a trial of a preferred agent prior to 
covering a non-preferred agent--is among the formulary tools used to 
promote evidence-based and cost-effective drug therapy and to negotiate 
better pricing with manufacturers. We estimate that over 4 years 
(August 2007-June 2011), formulary decisions in four major drug classes 
with step therapy programs resulted in at least $786 million in 
voluntary rebates over and above the mandatory retail rebate.
    The NDAA for Fiscal Year 2007 directed implementation of an over-
the-counter (OTC) demonstration project to allow selected OTC drugs to 
be included on the DOD Uniform Formulary thereby allowing access to 
less costly medications in place of the more expensive prescription 
products. The success of the program from both the beneficiary and 
government perspective has resulted in preparation of a legislative 
proposal requesting permanent authority for this program. Through 
November 30, 2011 the program has saved DOD $48.5 million.

    48. Senator Graham. Dr. Woodson, TRICARE is a complex program that 
includes many benefit options. The administration's proposals will add 
to its complexity by creating a three-tiered copayment structure based 
on retired income. Did you take into consideration the increasing 
complexity of administering TRICARE in the development of your reform 
proposals?
    Dr. Woodson. Yes, we did consider the complexity in administering a 
pharmaceutical copayment structure based on retired income. For that 
reason, DOD's pharmacy copayment increase proposal is not linked to 
retirement pay. The proposed fees will be tiered, as they are today, 
based on the drug class status (i.e. generic, brand, or non-formulary). 
For Prime and TRICARE For Life enrollment fees, DOD's decision was to 
tier the premiums. This will add some complexity, which was taken into 
consideration, but it was determined to be achievable and worth the 
effort.

    49. Senator Graham. Dr. Woodson, what are the costs associated with 
the administration of the new benefit structure in fiscal year 2013 
through fiscal year 2017?
    Dr. Woodson. The fiscal year 2013 fee proposals included an 
implementation cost of $33 million in fiscal year 2012. The model 
assumed these costs in fiscal year 2012 on the assumption that contract 
modifications would need to be issued in fiscal year 2012 in order for 
the benefit changes to go into effect for fiscal year 2013. For 
subsequent years, starting fiscal year 2013, the budget also included 
annual administrative costs of $16 million for ongoing administration 
of the enrollment fee process in TRICARE Standard. All of these amounts 
should be viewed as rough order-of-magnitude placeholders, pending 
development and analysis of actual implementation details, timelines, 
et cetera.

    50. Senator Graham. Secretary Hale and Dr. Woodson, you and the 
military leadership have described the fiscal year 2013 budget request 
as an interconnected whole. What is the budgetary and programmatic 
impact on that whole if Congress fails to enact the reforms you have 
requested?
    Mr. Hale. The reforms we requested are an essential element in 
meeting the fiscal controls mandated by the BCA of 2011. Therefore, any 
reduced savings from failure to implement DOD's TRICARE reform 
proposals will have to be replaced with commensurate reductions in 
other DOD accounts. This will undermine DOD's attempt to execute the 
new strategy as stated and raises the risk that readiness will suffer.
    Dr. Woodson. 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 strategy.

    51. Senator Graham. Secretary Hale and Dr. Woodson, how realistic 
are your health care savings targets for fiscal year 2013 in light of 
the timetable for completion of legislation for fiscal year 2013?
    Mr. Hale and Dr. Woodson. DOD will continue dialogue with Congress 
to identify options to achieve savings in fiscal year 2013. Our budget 
estimates are predicated on fee changes going into effect on October 1, 
2012. DOD requires several months of lead time to make the appropriate 
contract and system changes to meet this timeline. Delays in the 
timetable for the completion of legislation will result in reduced 
savings in fiscal year 2013.

    52. Senator Graham. Secretary Hale and Dr. Woodson, what options 
does DOD have to achieve savings in fiscal year 2013 if the NDAA 
becomes law late in fiscal year 2012?
    Mr. Hale. The fiscal year 2013 budget request assumes 
implementation of the TRICARE reform proposals on or about October 1, 
2012. The projected fiscal year 2013 TRICARE savings are $0.7 billion. 
Should the NDAA for Fiscal Year 2013 preclude the TRICARE reform 
proposals, DOD will most likely have to find commensurate savings in 
operational accounts with potential negative impact on readiness.
    Dr. Woodson. Our budget estimates are predicated on fee changes 
going into effect on October 1, 2012. DOD requires several months of 
lead time to make the appropriate contract and system changes to meet 
this timeline. Delays in the timetable for the completion of 
legislation will result in reduced savings in fiscal year 2013. DOD 
will continue dialogue with Congress to determine the appropriate 
course of action and implementation timelines.

                  internal efficiencies in health care
    53. Senator Graham. Dr. Woodson, military family and veterans 
groups have urged that you exhaust internal efficiencies in health care 
before increasing fees. What progress are you making in internal 
reforms and how much money have they saved prior to going ahead with 
this year's proposal?
    Dr. Woodson. We completely agree. We have been working aggressively 
to reduce the administrative overhead of the military health system by 
reducing reliance on contract support; reducing the number of 
government staff; reducing the number of boards and studies conducted; 
implementing leading purchasing practices for buying the best medical 
products at the lowest cost; and simply doing more with less.
    Health care savings initiatives--other than beneficiary cost 
sharing proposals--continue to be proposed and implemented, resulting 
in real cost savings. However, it is important to note that because the 
vast majority of the health care budget is spent on providing direct 
patient care, there is a limit on the amount of savings that can be 
achieved through internal efficiencies alone. As a result, 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.
    Over the past several years, we have made great progress in 
implementing changes that have resulted in real cost savings. Below is 
a summary of these efforts:

         Federal Ceiling Price: In 2008, with the support of 
        Congress, DOD championed changes in law (known as Federal 
        Ceiling Price) that require pharmaceutical manufacturers to 
        provide DOD about $800 million annually in discounts for drugs 
        provided to TRICARE beneficiaries through retail network 
        pharmacies. This authority will provide DOD over $4 billion in 
        collections over the next 5 years, representing substantial 
        savings.\1\
---------------------------------------------------------------------------
    \1\ $1.5 billion in collections since 2009, based on data ending 31 
January 2012; discretionary savings (DHP) and the reductions in outlays 
from the Medicare-Eligible Retiree Health Care Fund (MERHCF) since 2009 
were approximately $3.5 billion.
---------------------------------------------------------------------------
         Outpatient Prospective Payment System: In 2009, by 
        aligning its payments with Medicare rates (known as the 
        Outpatient Prospective Payment System), DOD instituted changes 
        in the way it reimburses private hospitals for outpatient 
        services provided to TRICARE beneficiaries. When fully 
        implemented, these changes will save DOD over $900 million 
        annually. This new system will result in over $4.6 billion in 
        savings over the next 5 years.
         Sole Community Hospital: DOD is in the process of 
        revising its payment rules to reimburse inpatient care claims 
        at sole community hospitals by using Medicare rates; when fully 
        implemented, this action will result in savings of about $100 
        million annually.
         Medical Supply Chain Optimization and Standardization: 
        To further reduce costs, DOD is changing the way it buys 
        medical products, by leveraging the bulk buying power of the 
        military health system. A series of strategic price reduction 
        initiatives are being implemented, saving DOD on average $60 
        million annually.
         Reducing Administrative Overhead: DOD is reducing 
        administrative overhead in the military health system by 
        streamlining its processes; reducing the number of unnecessary 
        reports, studies, and commissions; and initiating other actions 
        which will result in over $200 million in reduced personnel and 
        contract costs annually.
         Reducing Fraud, Waste, and Abuse: DOD is stepping up 
        its efforts to detect fraud, waste, and abuse from fraudulent 
        providers and institutions, and to recover overpayments. We 
        expect these efforts will save DOD on average $35 million 
        annually over the next 5 years.
         Investing in Health: Finally, in effort to control 
        long-term costs, DOD is pursuing a multifaceted strategy to 
        invest in initiatives that keep beneficiaries well, promote 
        healthy lifestyles, and reduce inappropriate emergency room 
        visits and unnecessary hospitalizations while improving patient 
        satisfaction. In the short term, we expect savings on average 
        of over $25 million over the next 5 years.

    54. Senator Graham. Dr. Woodson, how can Congress help you achieve 
them?
    Dr. Woodson. We appreciate Congress' support for past efficiency 
efforts. DOD continues to reduce the administrative overhead of its 
military health system by reducing reliance on contract support; 
reducing the number of government staff; reducing the number of boards 
and studies being conducted; implementing leading purchasing practices 
for buying the best medical products at the lowest cost; and simply 
doing more with less.
    More is achievable with changes in the organizational structure of 
military medicine (report submitted to congressional committees). We 
look forward to Congress' support for these proposed changes.

                      transitional health benefits
    55. Senator Graham. Dr. Woodson and Mr. McGinnis, if the 
administration's plan to reduce military personnel goes forward, some 
who have served may be involuntarily separated. What health benefits 
will those involuntarily separated from Active Duty receive?
    Dr. Woodson and Mr. McGinnis. Active Duty servicemembers who are 
involuntarily separated from the Active component may \2\ qualify for 
180 days of premium free TRICARE coverage under the Transition 
Assistance Management Program (TAMP); (10 U.S.C. 1145(a)(2)(A)). TAMP 
offers comprehensive, premium-free TRICARE coverage to both the sponsor 
and eligible family members on the same basis as an Active Duty family 
member. At the conclusion of this transition period the individual and 
or his family is also eligible to purchase the Continued Health Care 
Benefit Program (CHCBP) plan, which is a premium based, temporary 
health care coverage program (18 months of eligibility) similar to 
better known COBRA program. It provides the Basic program benefits 
generally offered under the TRICARE Standard program. The premium rates 
are based on the Federal Employees Health Benefits program employee and 
agency contributions for a plan with similar benefits.
---------------------------------------------------------------------------
    \2\ Eligibility for the TAMP for sponsors and family members is 
determined by the sponsor's Service branch and information in the 
Defense Enrollment Eligibility Reporting System. TAMP categories are: 
members involuntarily separated from Active Duty and their eligible 
family members; National Guard and Reserve members, collectively known 
as the Reserve component, separated from Active Duty after being called 
up or ordered in support of a contingency operation for an Active Duty 
period of more than 30 days and their family members; members separated 
from Active Duty after being involuntarily retained in support of a 
contingency operation and their family members; and members separated 
from Active Duty following a voluntary agreement to stay on Active Duty 
for less than 1 year in support of a contingency mission and their 
family members.

    56. Senator Graham. Dr. Woodson and Mr. McGinnis, what about for 
those involuntarily separated from the Reserve components?
    Dr. Woodson and Mr. McGinnis. ``A member of a Reserve component who 
is separated from Active Duty to which called or ordered in support of 
a contingency operation if the Active Duty is Active Duty for a period 
of more than 30 days'' may \3\ qualify for 180 days of premium free 
TRICARE coverage under the TAMP (10 U.S.C. 1145(a)(2)(B)). TAMP offers 
comprehensive, TRICARE coverage to both the sponsor and eligible family 
members on the same basis as an Active Duty family member.
---------------------------------------------------------------------------
    \3\ Ibid.
---------------------------------------------------------------------------
    If the Reserve component member is involuntarily disaffiliated from 
the Armed Forces altogether and the member had TAMP, TRICARE Reserve 
Select, or TRICARE Retired Reserve coverage at the time, the member and 
eligible family members may purchase premium-based coverage under the 
CHCBP.

    57. Senator Graham. Dr. Woodson and Mr. McGinnis, are these 
benefits fair and reasonable or should Congress consider some 
enhancement, particularly for the Reserve and Guard?
    Dr. Woodson and Mr. McGinnis. Congress recently enhanced the 
transitional health benefits for Reserve component members. Section 703 
of the NDAA for Fiscal Year 2010 (P.L. 111-84) amended law and offered 
Active Duty dental coverage to the Reserve component sponsor (and 
sponsor only) in TAMP. This provision was implemented by the Final Rule 
published in the Federal Register December 28, 2011 (76 FR 81366-81368) 
and is fully operational as reported in the TRICARE news release http:/
/www.tricare.mil/mediacenter/news.aspx?fid=742.
    Comprehensive coverage under the CHCBP is now available for 
purchase by all individuals who lose coverage under TAMP or any TRICARE 
program under Chapter 55 of Title 10, U.S. Code.
    This is further bolstered by the enhanced health care benefits 
eligibility from the VA enjoyed by combat veterans. This enrollment 
period was extended from 2 years to 5 years by section 1707 of the NDAA 
for Fiscal Year 2008 (P.L. 110-181, January 28, 2008), which amended 38 
U.S.C. 1710(e)(3).
    DOD has proposed a legislative change to extend eligibility for 
TRICARE Reserve Select and TRICARE dental coverage for a period of 180 
days for members of the Selected Reserve who are involuntarily 
separated.

                        family support programs
    58. Senator Graham. Secretary Rooney, Secretary of Defense Panetta 
has assured Congress that support for family support programs is 
protected throughout DOD even in this austere budget. Yet, testimony 
provided by the National Military Family Association argues that 
``family programs are being short-changed,'' by reductions in child 
care and family support.
    Our expectation is that the Secretary's pledge will be fulfilled. 
What are you doing in your oversight capacity to ensure that family 
programs are not reduced during this time of war?
    Dr. Rooney. To ensure that family programs are not reduced during 
this time of war, I emphasized the need for the Services to safeguard 
and sustain current funding levels for their family programs. This 
resulted in implementation of a comptroller-mandated, in-depth, mid-
year review of the Services' budgets. The Services are in the process 
of scrutinizing their budgets, tracking program funding, and disclosing 
discrepancies that could indicate diversion of funds from programs for 
which the funds were originally intended. Ongoing tracking of budgets 
and reporting on status of budgets supports the Secretary's position of 
keeping faith with servicemembers and their families to protect family 
assistance programs.
                                 ______
                                 
             Question Submitted by Senator Saxby Chambliss
       uniformed services employment and reemployment rights act
    59. Senator Chambliss. Secretary Rooney and Mr. McGinnis, the 
Uniformed Services Employment and Reemployment Rights Act (USERRA) 
protects millions of people, largely National Guard and Reserve 
members, as they transition between their Federal duties and civilian 
employment. USERRA is intended to eliminate or minimize civilian 
employment disadvantages resulting from service in the Reserve 
components and protect the rights of those members when they deploy. 
Since September 11, 2001, over 835,000 citizen soldiers have mobilized 
to fight the war on terrorism. Many American soldiers have served more 
than one tour of duty and may be required to serve more. As we downsize 
the Active Force and operationalize the Reserve Force, it is likely 
that Reserve soldiers will continue to mobilize to fill the gaps of the 
smaller Active Force. In light of this stress on the Reserve 
components, do you see the need for any changes to USERRA to provide 
additional protection to our Guard and Reserve members?
    Dr. Rooney and Mr. McGinnis. No changes to USERRA are required at 
this time. On balance, our Nation's employers have proven to be full 
partners in the 21st century Total Force. Moving forward, as we believe 
civilian employment is a key part of individual readiness, we are 
committed to ensuring strong protections for Reserve component 
servicemembers. As such, we will continue to review existing laws to 
ensure that they are keeping up with the needs of the servicemembers.
                                 ______
                                 
              Questions Submitted by Senator Kelly Ayotte
                          medicare and tricare
    60. Senator Ayotte. Dr. Woodson, the Centers for Medicare and 
Medicaid Services (CMS) are engaged with a number of States in seeking 
ways to enhance care and reduce costs for Medicare/Medicaid dual-
eligible beneficiaries. The nearly 2 million TRICARE For Life 
beneficiaries are another large population that is dually entitled--to 
Medicare and TRICARE in this case. Have you explored with Medicare 
leadership the possibilities for interagency cooperation to evaluate 
potential approaches to coordinating benefits and enhancing care for 
TRICARE For Life beneficiaries?
    Dr. Woodson. TRICARE For Life provides Medicare wraparound coverage 
when health care is a benefit under both programs, as long as the 
beneficiary is enrolled in Medicare Part B. Medicare pays 80 percent of 
their allowed amount, and claims automatically cross over to TRICARE 
where TRICARE processes the remainder for payment.
    Recently, TRICARE Management Activity staff met with 
representatives from the CMS' Innovation Center to discuss the 
Comprehensive Primary Care Initiative that CMS is developing. This 
initiative will use a managed care approach to providing preventive 
care and disease management for Medicare and other patients. It will 
reward providers when costs are reduced as participants in the 
initiative achieve desired health outcomes. Many TRICARE For Life 
beneficiaries are likely participants in the initiative, and TRICARE 
intends to monitor progress and results of the initiative to assess how 
and whether to apply the care approach to a broader segment of our 
TRICARE For Life population.
    We have also instituted new management controls that are applicable 
when TRICARE becomes primary payer for a TRICARE For Life beneficiary's 
stay in a skilled nursing facility (SNF). This occurs after exhaustion 
of the 100-day SNF care coverage provided by Medicare. We have found 
that bills for SNF care are among the largest of any that TRICARE For 
Life must cover. Now we require that SNF care beyond 100 days be 
preauthorized and base the decision upon review of medical records to 
ensure: (a) that skilled care truly is required; and (b) if skilled 
care is required, that it is of such intensity that it cannot be safely 
provided at a lower, less expensive, level than in a SNF.

    61. Senator Ayotte. Dr. Woodson, would this be a way to provide 
better care at a lower cost to the taxpayers for TRICARE For Life 
beneficiaries?
    Dr. Woodson. There is potential that Medicare's Comprehensive 
Primary Care Initiative will demonstrate an improvement in outcomes and 
will lower cost. That is why we are supportive of the initiative and 
intend to monitor its progress and results closely to determine if the 
approach is one that would have application to a broader set of our 
TRICARE For Life beneficiaries.

                         defense health program
    62. Senator Ayotte. Secretary Hale, I understand that in their 2007 
report, the Task Force on the Future of Military Health Care called on 
DOD to conduct an audit of financial controls on the DHP, to include 
establishment of a common cost accounting system. Did you serve on this 
task force?
    Mr. Hale. Yes, I did serve on the Task Force on the Future of 
Military Health Care before assuming my current position. As noted 
above, the Task Force recommended: (1) the conduct of an external audit 
to ensure the proper financial controls with respect to health care 
eligibility and coverage, and (2) the establishment of a common cost 
accounting system to provide a more accurate level of accounting for 
costs across the Military Health System (MHS).
    The Defense Manpower Data Center (DMDC), a component of the Defense 
Human Resources Activity (DHRA), provides the beneficiary data upon 
which eligibility for health care benefits is determined. The data is 
maintained in the Defense Enrollment and Eligibility Reporting System 
(DEERS) database. Both DMDC and DHRA understand and support the value 
of an independent, external audit of financial controls on the DHP.
    DMDC is audited twice yearly by auditors external to the DHRA and 
the DHP. In that regard, the DOD Inspector General conducted an Audit 
of Beneficiary Data in the DEERS database (Project No. D2010-D000FR-
0149.000) ``to assess the completeness and accuracy of beneficiary data 
contained in DEERS used to estimate health care liabilities on DOD 
financial statements,'' and actions are underway to address the 
findings of the audit.
    With respect to the establishment of a common cost accounting 
system, DOD is in the process of developing a statement of work to seek 
expert assistance in evaluating a set of alternatives for creating a 
common cost accounting structure and universal application across MHS. 
More specifically, DOD will evaluate the feasibility of overlaying a 
common cost accounting structure across the various disparate financial 
systems of the Service Medical Departments and the TRICARE Management 
Activity. In addition, DOD will evaluate the option of adopting a 
single financial system across the MHS, with special consideration to 
Service or Department systems further along in their development. We 
strongly believe that having a common cost accounting structure is a 
key component for improving financial transparency across the MHS and 
we are working on an aggressive schedule to accomplish this critical 
evaluation.

    63. Senator Ayotte. Secretary Hale, is that recommendation still 
valid today?
    Mr. Hale. Yes, the recommendation is still valid today. As 
mentioned previously, both the DMDC and the DHRA understand and support 
the value of an independent, external audit of financial controls on 
the DHP, to include the establishment of a common cost accounting 
system. In addition, DOD is working aggressively to evaluate options 
for improving financial transparency across the MHS.

    64. Senator Ayotte. Secretary Hale, what actions are underway to 
achieve greater accountability and additional savings for the DHP, to 
include protection against fraud and recovery of payments from other 
health insurance?
    Mr. Hale. DOD is employing a multi-prong approach for achieving 
greater accountability and additional savings for the DHP, to include: 
(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 
MHS; and (3) Reforming Provider Payments; by responsibly paying private 
care providers. We are also stepping up our efforts to reduce fraud, 
waste and abuse and increase our recovery of payments from other health 
insurance. Specific strategies include utilizing third party entities 
to detect other health insurance coverage and prepare these cases for 
recovery; educating beneficiaries about legal requirements to disclose 
other health insurance coverage; and training MTF staff in proper 
patient intake procedures and tools available to increase recovery of 
payments.

    [Appendices A through F follow:]



[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    
      
    [Whereupon, at 3:39 p.m., the subcommittee adjourned.]


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

                              ----------                              


                       WEDNESDAY, APRIL 25, 2012

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

 CONTINUATION OF TESTIMONY ON THE ACTIVE, GUARD, RESERVE, AND CIVILIAN 
                           PERSONNEL PROGRAMS

    The subcommittee met, pursuant to notice, at 1:07 p.m. in 
room SR-232A, Russell Senate Office Building, Senator Jim Webb 
(chairman of the subcommittee) presiding.
    Committee members present: Senators Webb, Blumenthal, 
Graham, Brown, Ayotte, and Vitter.
    Committee staff member present: Leah C. Brewer, nominations 
and hearings clerk.
    Majority staff members present: Jonathan D. Clark, counsel; 
Gabriella E. Fahrer, counsel; and Gerald J. Leeling, counsel.
    Minority staff member present: Richard F. Walsh, minority 
counsel.
    Staff assistant present: Jennifer R. Knowles.
    Committee members' assistants present: Gordon Peterson, 
assistant to Senator Webb; Ethan Saxon, assistant to Senator 
Blumenthal; Brad Bowman, assistant to Senator Ayotte; Sergio 
Sarkany, assistant to Senator Graham; and Joshua Hodges, 
assistant to Senator Vitter.

        OPENING STATEMENT OF SENATOR JIM WEBB, CHAIRMAN

    Senator Webb. The hearing will come to order.
    The subcommittee meets today to continue to receive 
testimony from the military Services on military and civilian 
personnel programs contained in the administration's Defense 
Authorization Request for Fiscal Year 2013 and the Future Years 
Defense Program (FYDP).
    I would like to begin this hearing by thanking everybody 
for adjusting their schedules. As you have been informed, we 
have a series of votes that will begin in approximately 1 hour. 
So I am going to summarize my statement, at the end of which I 
will have my full statement entered into the record. Then I 
think we previously asked that the civilian assistant 
secretaries give a brief overview of theirs. All of the written 
statements will be entered into the record, and hopefully we 
can allow enough time for members who wish to ask questions to 
use this next hour in a fruitful manner.
    As always, the hearing record will be open until close of 
business tomorrow if there are written questions for the record 
for any of those of you who are here today.
    We have today the senior leaders responsible for military 
and civilian personnel matters within the Services. We will 
discuss, as always, the plans and programs for fiscal year 2013 
and also specific budget items in furtherance of this 
subcommittee's oversight responsibilities.
    We have Hon. Thomas R. Lamont, Assistant Secretary of the 
Army for Manpower and Reserve Affairs; Hon. Juan M. Garcia III, 
Assistant Secretary of the Navy for Manpower and Reserve 
Affairs; Hon. Daniel B. Ginsburg, Assistant Secretary of the 
Air Force for Manpower and Reserve Affairs; Lieutenant General 
Thomas P. Bostick, USA, Deputy Chief of Staff G-1, U.S. Army; 
Vice Admiral Scott R. Van Buskirk, USN, Chief of Naval 
Personnel, U.S. Navy; Lieutenant General Robert E. Milstead, 
Jr., USMC, Assistant Commandant for Manpower and Reserve 
Affairs, U.S. Marine Corps; and Lieutenant General Darrell D. 
Jones, USAF, Deputy Chief of Staff for Manpower, Personnel and 
Services, U.S. Air Force.
    We had originally scheduled this hearing for a few weeks 
ago. At that time, General Milstead was recovering from some 
very serious surgery. We are pleased that you have successfully 
recuperated, although you might have been better off being able 
to avoid this hearing a couple of weeks ago. But we are very 
happy to have you with us today, General.
    As I stated at our oversight hearing with the Office of the 
Secretary of Defense (OSD) witnesses in March, we have some 
very serious challenges here. General Schwartz, Air Force Chief 
of Staff, called these challenges with personnel programs ``the 
monumental defense issue of our time.'' These challenges, as 
everyone knows, have been made more difficult by the Budget 
Control Act (BCA).
    Much of the subcommittee hearing last month was devoted to 
the TRICARE fee issue. I am not going to go into that in any 
detail today. Just suffice it to say that it is an issue of 
great concern to me and some other members on this 
subcommittee.
    We are concerned about the planned reduction of large 
numbers of military personnel, more than 120,000 across Service 
components. I have been able to have personal discussions with 
a number of you about that issue. It may come up again today.
    The Integrated Disability Evaluation System does not seem 
to be working. I have been able to have discussions again out 
of this hearing room with people about that. It is being 
implemented worldwide. There are some 23,000 servicemembers in 
the system, that at least by our count, are still awaiting some 
sort of resolution.
    We are interested in examining the roles and opportunities 
for service by women. The Marine Corps, particularly, has had 
an interesting week in that regard. We will have a discussion 
about that.
    Sexual assault prevention and response remain a priority, 
as always, for our subcommittee.
    Another priority is the many discussions we have had 
regarding total force mix of military personnel, Department of 
Defense (DOD) civilian personnel, and contractors. This has 
come up a number of different times. It was a major part of our 
hearing last year. It will come up again today.
    Lastly, we continue to be interested in the DOD's and the 
Services' efforts to eliminate, reduce, and reallocate 140 
general flag officer positions and 150 Senior Executive Service 
positions.
    At the outset of the hearing, I think it is important for 
those of us who are on this end of the table to express our 
great appreciation to all of you for what you and the people 
who serve alongside you do every day to make our country more 
secure and also to make DOD a better functioning place.
    At this time, I will enter my full statement for the 
record.
    [The prepared statement of Senator Webb follows:]
                 Prepared Statement by Senator Jim Webb
    The subcommittee meets today to receive testimony from the Military 
Services on military and civilian personnel programs contained in the 
administration's Defense Authorization Request for Fiscal Year 2013 and 
the Future Years Defense Program.
    With us today are the senior leaders responsible for military and 
civilian personnel matters within the Services. We will discuss not 
only their plans and programs for fiscal year 2013, but also specific 
budget items in furtherance of this subcommittee's oversight 
responsibilities. We will begin marking up the 2013 defense bill in the 
next few weeks. Your statements and testimony today are extremely 
important as we prepare for that important activity.
    Our witnesses today are:

         The Honorable Thomas R. Lamont, Assistant Secretary of 
        the Army for Manpower and Reserve Affairs;
         The Honorable Juan M. Garcia III, Assistant Secretary 
        of the Navy for Manpower and Reserve Affairs;
         The Honorable Daniel B. Ginsberg, Assistant Secretary 
        of the Air Force for Manpower and Reserve Affairs;
         Lieutenant General Thomas P. Bostick, USA, Deputy 
        Chief of Staff G-1, U.S. Army;
         Vice Admiral Scott R. Van Buskirk, USN, Chief of Naval 
        Personnel, U.S. Navy;
         Lieutenant General Robert E. Milstead, Jr., USMC, 
        Assistant Commandant for Manpower and Reserve Affairs, U.S. 
        Marine Corps; and
         Lieutenant General Darrell D. Jones, USAF, Deputy 
        Chief of Staff for Manpower, Personnel and Services, U.S. Air 
        Force.

    Lieutenant General Milstead, I understand you tried to avoid this 
hearing the first time by scheduling surgery. I am pleased that your 
plan failed, and we are happy to see you back in good health.
    As I stated at our oversight hearing with the Office of the 
Secretary of Defense witnesses in March, this subcommittee faces a very 
clear challenge this year as we address the need to control the 
increasing costs of personnel programs. General Schwartz, the Air Force 
Chief of Staff, called this challenge ``the monumental defense issue of 
our time.''
    This challenge is made more difficult by the funding limitations 
imposed by the Budget Control Act. To comply with the discretionary 
funding caps, the administration has made several proposals to reduce 
military personnel costs, including end strength reductions of more 
than 120,000 military personnel, limiting pay raises beginning in 2015, 
establishing a BRAC-like commission to conduct a comprehensive review 
of military retirement, and increasing TRICARE fees for military 
retirees and their families.
    Much of this subcommittee's hearing last month was devoted to the 
TRICARE fee issue, and I won't rehash that here. Suffice to say, I 
believe we have made a moral contract with servicemembers past and 
present to provide them a lifetime of medical care in exchange for a 
career of military service. The Department's proposal to institute fees 
for TRICARE for Life, in my view, does not fully take into account 
other fee requirements that already are in place.
    We are also very concerned about the planned reduction of large 
numbers of military personnel--more than 120,000--across all Service 
components. I want to hear from the personnel chiefs in particular 
about their plans to reduce the size of their forces, how they will 
ensure adequate dwell time, and how they will avoid the need to 
involuntarily separate soldiers, sailors, airmen, and marines. Our 
witnesses today are well aware that our men and women in uniform have 
sacrificed much on behalf of our Nation during the past decade. I 
specifically would like to know what force-shaping tools the Services 
must have in place to achieve force reductions in a compassionate and 
sustainable manner.
    In a related issue, the Integrated Disability Evaluation System 
(IDES) does not seem to be working as initially planned. It is 
bureaucratic and timeconsuming. It has been fully implemented worldwide 
for some 15 months, and yet there are more than 23,000 servicemembers 
in the system according to the latest data provided to the committee. 
For the Army alone, its IDES population would equal six brigade combat 
teams. I would like to hear from the personnel chiefs their view of how 
this new evaluation system is progressing and what we can do to make it 
more efficient and fair.
    Many of us on the committee continue to be interested in examining 
the roles and opportunities for service by women. The Department 
recently proposed to Congress policy changes that would open more than 
14,000 positions to women. Additionally, last week the Marine Corps 
announced opening a limited number of training slots in combat 
specialties to women, a significant departure from current 
restrictions. As our witnesses know better than anyone, for a variety 
of reasons, more than 75 percent of the Nation's youth do not qualify 
for enlistment in the military. Maintaining unnecessary barriers to 
service of those who are qualified and motivated to serve magnifies the 
challenge in recruiting the most qualified individuals for service in 
the All-Volunteer Force. At the same time, this subcommittee has an 
obligation to ensure policy changes continue to move us in the right 
direction. I look forward to learning more from our witness today.
    Sexual assault prevention and response remain a priority for this 
subcommittee. Last year, we enacted a number of legislative provisions 
to assist victims of sexual assault. Additionally, Secretary Panetta 
recently announced several initiatives in this area, some of which may 
require legislation. I would like to hear what the Services are doing 
to reduce incidents of sexual assault in the military, prosecute 
offenders, and provide greater assistance to victims of such crimes.
    Another continuing priority is accounting for the total force mix 
of military personnel, DOD civilian personnel, and contractors. At last 
year's hearing, with all the same witnesses except for Admiral Van 
Buskirk, I asked how you account for civilian contractors when you 
build your manpower models. There was a good deal of difficulty in 
pinning down actual numbers. I would like to know how we have 
progressed on addressing this issue since last year.
    Lastly, this subcommittee continues to be interested in the 
Department of Defense and the Services' efforts to eliminate, reduce, 
and reallocate 140 general and flag officer positions and 150 Senior 
Executive Service positions. I would like to know what progress has 
been made in executing these reductions.
    I'm sure that we all agree that there is no greater responsibility 
for Congress and our military leaders than to care and provide for our 
servicemembers and their families. That includes making careful, 
deliberate, and sometimes painful budget choices necessary to protect 
the viability of the All-Volunteer Force and to ensure our military 
remains the finest in the world. Tradeoffs must be made between what is 
nice to have and what we must have--not just in terms of weapons, 
planes, and ships, but most importantly in terms of our people. We must 
have the right number with the right qualifications and skills.
    I look forward to hearing your testimony about the health of your 
Services, military personnel and their families, and your assessment 
and counsel concerning the difficult choices ahead. As always, I 
encourage you to express your views candidly. Let us know how we can 
best assist our servicemembers and their families to ensure that our 
military remains steadfast and strong.
    We will now hear opening statements from our witnesses. Given the 
number of witnesses, I ask that the witnesses keep their oral 
statements to 3 to 5 minutes. Their complete prepared statements will 
be included in the record. Following the opening statements, we will 
limit our questions to 7 minutes per round. I am going to call witness 
by Service, starting with the Army.
    Finally, I would like to note that this will be the last 
subcommittee hearing for Dick Walsh, minority counsel to the committee. 
Dick has been with the committee for over 10 years and has made 
innumerable contributions always in a bipartisan fashion. We will miss 
him, and we wish him luck.
    We have received a statement from the Reserve Officers Association. 
If there is no objection, it will be entered into the record.

    Senator Webb. With that, Senator Graham, welcome.
    Senator Graham. Thank you, Mr. Chairman. I will just forgo 
an opening statement and look forward to receiving the 
testimony.
    Senator Webb. Thank you.
    We have received a statement from the Reserve Officers 
Association, and if there is no objection, that will be entered 
into the record.
    [The information referred to can be found at Appendix A:]
    Senator Webb. With that, we will start with Secretary 
Lamont. Hopefully, you can summarize your statement in about 3 
minutes or so.

STATEMENT OF HON. THOMAS R. LAMONT, ASSISTANT SECRETARY OF THE 
   ARMY FOR MANPOWER AND RESERVE AFFAIRS; ACCOMPANIED BY LTG 
  THOMAS P. BOSTICK, USA, DEPUTY CHIEF OF STAFF G-1, U.S. ARMY

    Mr. Lamont. I will try to do it in half of that, if you do 
not mind. I have truncated my lofty words and will rely upon 
our written statement.
    Senator Webb. Your written statement in full will be 
entered into the record.
    Mr. Lamont. Thank you.
    Chairman Webb, Senator Graham, and members of this 
subcommittee, thank you for taking the time to explore the 
issues that are so critical to the men and women in our All-
Volunteer Army and to our national defense both today and in 
the future.
    It is an honor to serve as the Army's Assistant Secretary 
for Manpower and Reserve Affairs.
    After a decade of war, the Army is poised to draw down both 
our military and civilian forces. We must do this smartly and 
compassionately. Thousands of individuals will transition out 
of military and civil service after serving faithfully and 
honorably. They will need the support of the Nation and deserve 
quality transition assistance.
    Wartime experiences over the past decade have taught us 
that we must have a total Army. The Army National Guard and 
Army Reserve provide 51 percent of the Army's military end 
strength for around 16 percent of the base budget. We look 
forward to working with you to transform the Army National 
Guard and Army Reserve into an operational force that provides 
not only ready access to 1 million trained soldiers but also an 
historic opportunity for our Nation to achieve the most cost-
effective use of its Army.
    We are increasingly aware of the physical and emotional 
toll a decade of war has taken on our force, and we are 
committed to providing quality assistance to soldiers and 
family members who are struggling with issues such as substance 
abuse, depression, post-traumatic stress disorder (PTSD), and 
sexual harassment and abuse. These issues affect readiness and 
weaken our force. The Army continues to take aggressive action 
to promote health, identify and reduce risky behaviors, and 
prevent suicides. Further, at all levels of the Army, we are 
reinforcing the Army value of respect in order to establish a 
climate where sexual harassment, sexual assault, and hazing 
will not be tolerated.
    While we transform to a smaller Army, we remain dedicated 
to improving readiness and building resilience in our soldiers, 
civilians, and families. The Army must not and will not 
sacrifice readiness as it draws down. We will emerge from the 
forthcoming budget reductions a leaner force but one still 
capable of and committed to meeting our obligations to the 
Nation, the American people, and the dedicated men and women 
who serve. Although our Army will become smaller in the coming 
months and years, we will preserve the quality of our All-
Volunteer Force. This fighting force will retain the confidence 
and pride of the American people as it has for more than 236 
years.
    I appreciate the support of the committee and your 
commitment to taking care of our soldiers, civilians, and 
families. The well-being of our force, regardless of its size, 
is absolutely dependent upon your tremendous support.
    Thank you very much. I look forward to your questions.
    Senator Webb. Thank you, Secretary Lamont. General Bostick, 
your written statement will be entered into the record as well. 
I know you will be receiving some questions during the question 
period.
    [The joint prepared statement of Mr. Lamont and General 
Bostick follows:]
  Joint Prepared Statement by Hon. Thomas R. Lamont and LTG Thomas P. 
                              Bostick, USA
                              introduction
    Chairman Webb, Senator Graham, distinguished members of this 
committee, thank you for the opportunity to appear before you on behalf 
of America's Army. The U.S. Army is a values-based organization that 
exists to serve the American people, to defend the Nation, to protect 
vital national interests, and to fulfill national military 
responsibilities. We are now poised to execute an historic drawdown of 
both our military and civilian personnel, and we are proposing to do it 
in a deliberate and careful manner. Thousands of individuals will 
transition out of military and civil service and deserve quality 
transition assistance.
    While the future Army will be smaller, the Army is implementing a 
number of improvements in force structure and other capabilities to 
ensure it remains the best led, best-trained, and best-equipped land 
force in the world today and in the future. Our soldiers have performed 
superbly over the last 10 years of war, displaying the values, 
character and competence that make our Army second to none. We must not 
waver on our commitment to support all those who have served with 
courage, pride, and honor.
    Thank you for your steadfast commitment to ensuring that the needs 
of our soldiers, their families, and our civilian workforce are met by 
supporting our personnel initiatives to ensure growth, sustainment and 
well being of our All-Volunteer Force.
                           strategic overview
    America's Army, our soldiers, families, and civilians are strained 
by nearly a decade of persistent conflict. More than 1.1 million 
soldiers have deployed to combat, impacting not only the soldiers, but 
their families as well. Additionally, Army civilians shoulder a 
majority of the Generating Force mission, and 30,000 civilians have 
deployed into harm's way. Now we will transition to a smaller force, 
while continuing to remain vigilant of new threats and prepare for new 
capabilities and requirements.
    To maintain an All-Volunteer Force of the highest quality soldiers 
and achieve our end-strength goal, the Army must responsibly balance 
force shaping across accessions, retention, promotions, voluntary and 
involuntary separations, and natural losses. We should assist our 
soldiers and civilians who will transition from their military and 
civil service careers to employment in the private sector.
    One of the challenges we face is the nondeployable population. The 
disability system is not effective and we must continue to work on an 
efficient solution between the Services, DOD, and the Veterans 
Administration to streamline the disability system and improve 
coordination for health care, compensation, and benefits. The Army also 
continues to focus on assisting our soldiers and family members 
struggling with depression, substance abuse, and other Health of the 
Force issues.
    With the continued support of the American people and Congress, we 
remain committed to the readiness, health and well being of our 
soldiers, civilians, and family members. As part of this effort the 
Army is also focused on wisely managing our resources in the health 
care arena. The Department of Defense (DOD) has also put forward a set 
of 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, DOD continues to provide resources that improve the 
overall health system for our soldiers and their families.
    The American soldier is the centerpiece of everything we do in the 
Army. Our efforts must remain focused on the preservation of our most 
precious resource, our people.
                         drawdown/end strength
    In keeping with the National Defense Strategy, the Army is building 
our future force to meet the Nation's requirements. The Army is 
reducing its Active component end strength to 490,000 soldiers by 
fiscal year 2017. Based on Total Army Analysis of future requirements, 
the force structure effective in fiscal year 2017 requires an 
additional decrease of 24,000 enlisted soldiers and 5,000 officers 
beyond our current rate of attrition over this same period. The Army 
continues to reduce the additional temporary end strength increase 
(TESI) of 22,000 soldiers, approved in 2009 by the Secretary of 
Defense, and is on target to be at an Active component end strength of 
552,100 by the end of fiscal year 2013. In fiscal year 2014, the Army 
will begin to take further steps to significantly shape the force 
toward the 490,000 fiscal year 2017 goal.
    Our projected drawdown ramp allows for funding 490,000 of end 
strength in the base budget starting in fiscal year 2014 and beyond, 
with all other end strength supported by Overseas Contingency 
Operations (OCO) funding. This ramp allows for a steady enlisted 
accession mission of 57,000 and an Active Competitive Category officer 
mission of 4,300. Our strength projections incorporate additional 
soldier inventory, Temporary Endstrength Army Medical (TEAM), to 
mitigate impact of the Disability Evaluation System (DES) nondeployable 
soldiers. This TEAM end strength is assumed in fiscal year 2013 and 
fiscal year 2014 and fully eliminated by end of fiscal year 2015.
    In order to achieve expected end strength reductions, the Army 
expects to use various types of separation authorities across all 
elements of the force (officer, enlisted, and civilian). In order to 
maintain America's Army as an All-Volunteer Force of the highest 
quality, we are planning to execute the upcoming force reductions in a 
responsible and targeted fashion while maintaining a ready force. Our 
soldiers have performed superbly over the last 10 years of war and have 
displayed the values, character and competence that made us successful. 
We value their service and sacrifices, and will use precision, care, 
and compassion in achieving the end strength goal without jeopardizing 
combat operations. Under current loss rates, the Army will not be able 
to reach its end strength goal over the fiscal year 2013-2017 period. 
We are making use of reduced accession levels, promotion selectivity 
and tightened retention standards to help shape our force naturally. 
Through these processes, we expect to lose combat seasoned soldiers and 
leaders, but our focus will be on retaining the best individuals in the 
right grades and skills.
    The National Defense Authorization Act (NDAA) for Fiscal Year 2012 
provides several incentive authorities that will help the Army 
encourage soldiers to separate over the drawdown period, along with the 
flexibility to apply them to meet specific grade and skill needs. We 
are developing cost data for potential use of Voluntary Separation Pay 
(VSP), Temporary Early Retirement Authority (TERA), and Voluntary 
Retirment Incentive (VRI) pay, but will need to realign or request 
reprogramming of funds to support execution of these now existing 
authorities. Unfortunately, there is no single force shaping method 
among the choices of accessions, retention and separations, that will 
achieve the Army's end strength goals, and there will be good soldiers 
who we will not be able to retain. As soldiers depart our active duty 
formations, the Army is committed to assisting them and their families 
as they transition to the Army Reserve, National Guard, or civilian 
life.
    To maintain an All-Volunteer Force of the highest quality soldiers 
and achieve our end strength, the Army must responsibly balance force 
shaping across accessions, retention, promotions, voluntary 
separations, involuntary separations, and natural losses.
      


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                     transition assistance strategy
    Our Nation entrusts its best and brightest to the Army to support 
the All-Volunteer force. Therefore, the Army has a responsibility to 
help our transitioning personnel prepare for post-Army life by 
providing the training and tools to enable their success. We must help 
them use their Army training, education and experience to successfully 
return to civilian life and to become gainfully employed. Support 
through this transition process demonstrates the Army's commitment to 
its soldiers and their families beyond their years of service.
    Some of the more than 130,000 soldiers who transition from the Army 
annually have difficulty finding employment. As of January 2012, 21 
percent of our Gulf War II Veterans between the ages of 20 and 24 are 
unemployed while the national unemployment average for the same age 
group is 14 percent. Since 2001, the Army's annual unemployment 
compensation costs have increased from $90 million to $574.5 million in 
fiscal year 2011. As the Army executes force shaping in the 2014-2017 
timeframe, the number of personnel requiring transition training and 
counseling is expected to increase.
    Consequently, the Army is transforming the way we transition 
soldiers in order to give them the greatest opportunity for success 
after their military service. On August 29, 2011, the Army published a 
new Transition Policy, which encompasses transitions throughout the 
entire lifecycle of Service (e.g. permanent change of station, 
component change, promotion, schooling, deployment, demobilization and 
separation/retirement). In particular, this policy establishes 
Transition as a commander's program; ensures every soldier begins 
mandatory transition counseling and planning no later than 12 months 
before separating or demobilizing; mandates building a tailored plan 
for an individual's needs which will have measurable outcomes; and 
expands virtual services for career and education counseling before, 
during, and after deployment. On December 29, 2011, the Army published 
an Execution Order focused on transition policy actions which will have 
an immediate and positive impact on soldiers preparing to separate from 
Active Duty, demobilizing Reserve component soldiers, and their 
families.
    The Army supports the White House Employment Initiative and the 
DOD/Department of Veterans Affairs (VA) Veterans Employment Initiative 
Task Force to develop reforms to ensure all transitioning 
servicemembers maximize their career readiness prior to separation in 
line with the newly enacted Veterans Opportunity to Work to Hire Heroes 
Act of 2011. With the Army's new proactive approach to transition, we 
are connecting soldiers and veterans with career private industry 
employment opportunities. The Army is working with the DOD/VA Task 
Force to help identify the best information technology application and 
functional capability to support this employment initiative.
            civilian reductions and human capital management
    The Army is reducing civilian on-board strength, where necessary 
and appropriate, in order to meet funded targets. This reduction will 
draw down civilian on-board strength in order to hold to fiscal year 
2010 civilian funding levels. Headquarters, Department of the Army 
Staff and all Army commands and agencies have conducted exhaustive 
reviews of programs and functions in order to identify specific 
functions, activities, and workload for elimination and/or reduction.
    On February 2, 2011, the Department of the Army suspended civilian 
employment offers for Operation and Maintenance, Army (OMA)-funded 
positions, with exceptions for positions related to medical, law 
enforcement, safety, health, welfare, and contingency operations. Other 
exceptions to fill vacancies were approved at the Department of the 
Army headquarters level. The suspension was lifted on April 29, 2011, 
and commands and agencies were directed to manage civilian and 
contracted workload within their targeted fiscal constraints.
    The Secretary of the Army issued implementation guidance to Army 
commands on July 11, 2011, informing them of their funded civilian 
authorization levels and an implementation order was issued on August 
3, 2011. The $834 million reduction in OMA funding is associated with 
8,741 reductions in direct hire civilian authorizations. Commands and 
agencies will take immediate action to reduce civilian on-board 
strength as rapidly as possible, but no later than the end of fiscal 
year 2012. Our reshaping efforts are already assisting commanders and 
directors with reshaping efforts.
    The Assistant Secretary of the Army (Manpower and Reserve Affairs) 
and the Assistant Secretary of the Army (Financial Management and 
Comptroller) have established business processes and reporting 
mechanisms to effectively align requirements, authorizations, on-board 
strength and associated funding execution for the civilian workforce. 
Commands and agencies report monthly on the status of their civilian 
workforce reduction plans, the number of civilian reductions effected 
each month, the total number of reductions to date and the amount of 
OMA funding expended on civilian payroll. In accordance with statutory 
restrictions and the Secretary of the Army's instructions, service 
contracts will not be initiated in lieu of reduced civilian manpower, 
nor will existing contracts be modified to accommodate work formerly 
performed by civilian employees.
    To the maximum extent possible, the Army is relying on voluntary 
departures and attrition to achieve the personnel reductions. Reshaping 
tools to effect voluntary departures include Voluntary Early Retirement 
Authority (VERA) and Voluntary Separation Incentive Pay (VSIP). Other 
non-voluntary reshaping tools short of Reduction In Force (RIF) may 
include release of temporary employees, separation of Highly Qualified 
Experts (HQE), separation of re-employed annuitants, management-
directed reassignments and furloughs. If these measures do not achieve 
the required civilian personnel levels, then a RIF may be considered.
    Several commands are releasing temporary employees, re-employed 
annuitants and HQEs. Many have also instituted internal hiring freezes, 
with recruitment outside of the command requiring higher headquarters 
approval. Commands have offered VERA to employees willing to retire 
and/or VSIP to those willing to separate from the Federal Government. 
If further reductions are necessary, a RIF will be the last resort. As 
conditions change with regard to the size of the workforce, marginal 
adjustments will be made to these planned reductions at installations 
where such adjustments are warranted.
      


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            recruiting and retention (officer and enlisted)
    Our soldiers are the Army's most important resource, and our 
ability to meet the challenges of the current and future operational 
environment depends on our ability to sustain the All-Volunteer Force. 
Even as we drawdown the Army, we must continue to bring high quality 
men and women into the force to grow our future leaders. We must also 
ensure that the Army retains the most talented soldiers with the skills 
necessary to meet our future needs.
    Despite the challenges of an ongoing conflict, the active Army and 
the Army Reserve once again exceeded their enlisted recruiting and 
retention missions in fiscal year 2011. The Army National Guard 
intentionally under accessed in fiscal year 2011 to avoid exceeding 
their congressionally mandated end strength limits. The active Army 
accessed the highest percentage of high school diploma graduates since 
fiscal year 1992--increasing from 94.7 percent in fiscal year 2009 to 
98.7 percent in fiscal year 2011. The Army met its skill-set needs, 
achieving over 99 percent Military Occupational Specialty (MOS) 
precision. The Army's percentage of new enlisted soldiers with a high 
school diploma was well above historic rates for all three components. 
In addition, recruits scoring (50-99 percent) exceeded the DOD standard 
of 60 percent, while recruits who scored in the lower range (30 and 
below) on the Armed Forces Qualification Test decreased by 30 percent 
(from 281 to 199). Ineligibility waivers granted for enlistment and 
appointments declined by 4.45 percent from fiscal year 2010 to fiscal 
year 2011 as a result of being more selective and the improved 
recruiting environment. We are currently on track to achieve our fiscal 
year 2012 mission and expect to recruit half of the fiscal year 2013 
annual mission into the entry pool by the end of fiscal year 2012.
    In fiscal year 2011, Combined Active Army (AC) and Army Reserve 
Component (RC) enlistment and reenlistment incentives (bonuses and 
education), totaled slightly over $1.39 billion. Entering fiscal year 
2012, the combined Active and Reserve components will spend slightly 
over $1.19 billion (AC recruiting; $406 million), AC retention ($231 
million), Army National Guard recruiting and retention ($455 million), 
USAR recruiting and retention ($274 million). A large part of the 
fiscal year 2012 incentives budget is a result of obligations for 
enlistment bonuses occurring from fiscal years 2007-2010. As a result 
of lower recruiting missions and the favorable recruiting environment, 
average Regular Army recruiting bonuses dropped from over $13,000 in 
fiscal year 2009 to $2,500 in fiscal year 2012. Enlistment and 
reenlistment bonuses are only used to incentivize longer-term 
enlistments in a small percentage of critical skills. These incentives 
ensure the success of the total Army recruiting and retention missions 
and shape the force to meet specific grade and skill requirements. The 
amount budgeted for contractual payments is anticipated to decrease 
until at least fiscal year 2015.
      


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    Over the years through research, the Army has improved personnel 
assessment measures to more fully assess an individual's potential to 
serve and predict a soldier's success in job performance, attitudes, 
and career intentions. One valuable measure is the Tailored Adaptive 
Personality Assessment System (TAPAS). TAPAS was developed to enhance 
the selection of soldiers with Tier 1 credentials by screening out low 
motivated, high attrition risk applicants. To date, more than 320,000 
Army and 96,000 Air Force applicants have tested on TAPAS. The Navy 
also started testing their applicants in late fiscal year 2011. 
Preliminary results in operational testing indicate that soldiers who 
pass the TAPAS screen have better retention and training outcomes than 
soldiers in the same Test Score Category who fail the TAPAS screen.
    Recruiting success is expected to continue in fiscal year 2012; 
however, the Army and the Nation still face challenges such as rising 
obesity rates and decreasing high school graduation rates as we recruit 
the All-Volunteer Force. As the pool of qualified 17-24 year old 
Americans continues to decline due to growing rates of obesity and 
decreasing rates of high school graduation, it will become more 
important for parents, teachers and business leaders to support a 
youth's decision to join the Army. In today's environment fewer than 
one in four 17-24 year-olds are eligible to serve in the Army. More 
than 20 percent of high school students fail to graduate and 1 in 5 
youths, 12-19 years old, are currently overweight, compared to 1 in 20 
in the 1960s. This trend is projected to grow to 1 in 4 by 2015.
    The Army must retain the flexibility to offer incentives to attract 
and retain talent. The continued funding of these programs by Congress 
is absolutely critical to the Army. These incentives assist in shaping 
the force for both quality and specific talent required.
    The Army continues to retain soldiers at unprecedented levels, 
while engaged in the longest period of conflict for our All-Volunteer 
Force. The Army has surpassed its retention goal, every year since 
2002. Soldiers reenlist for three top reasons: current command climate, 
job satisfaction, and the quality of life in the Service. Additionally, 
retention rates within the last 24 months have been slightly higher 
than anticipated.
    In fiscal year 2011, the Active Army reenlisted 43,626 soldiers 
towards an annual mission of no less than 40,000 and no more than 
45,000. Soldiers extending to complete deployments with their units 
represented an additional 7,346 extended contracts. The Army Reserve 
reenlisted 12,934 soldiers, exceeding their annual goals by 11 percent. 
The Army National Guard accomplished their mission as well by achieving 
116 percent of their assigned mission, reenlisting 39,750 soldiers.
    During fiscal year 2011 and into fiscal year 2012, retention 
bonuses were carefully monitored and adjusted to ensure that the Army 
met its retention goals while remaining fiscally responsible. As we 
posture for future reductions in the size of our force, the Army is 
using lessons learned from past reductions to ensure that today's 
decisions maintain the viability of tomorrow's All-Volunteer Force. 
Retention policies will emphasize retention of soldiers with high 
potential coupled with appropriate force alignment and structure.
    The Army's programs to recruit and retain both officers and 
enlisted soldiers with critical skills have been effective. For 
enlisted soldiers, the Enlistment Bonus, the Selective Reenlistment 
Bonus, Critical Skills Retention Bonus, and the Student Loan Repayment 
Program are proven tools that remain effective for filling critical 
skills.
                               diversity
    The diversity of our Army is a continuous source of strength as we 
recruit soldiers and Army civilians from an increasingly diverse 
America. We must take full advantage of opportunities to bring new 
ideas and expanded capabilities to the mission by reaching out to 
communities and building relationships that will support the Army's 
human resource requirements. To this end, we have developed and 
implemented our first strategy for conducting outreach activities on an 
Army-wide basis. In this first year of execution, 9 commands are 
responsible for coordinating 25 outreach events for the Total Army. The 
Army staff will coordinate an additional 10 events for a total of 35 
during 2012. Additional organizations and events will be added to the 
strategy in the future.
    Our ability to be inclusive of the Nation's diverse citizenry while 
sustaining a high performance Army requires the engagement of senior 
leaders and continuous diversity education throughout the Force. The 
Army Diversity Roadmap, published in December 2010, outlines a unique 
approach to an enterprise-wide diversity initiative over the coming 
years and will guide our actions in the areas of leadership, people, 
structure and resources, training and education, and inclusive work 
environments. Within the Roadmap, we are implementing an intra-Army 
council of senior leaders to advise the Secretary and provide a forum 
for collaboration and sharing ideas in connection with implementation 
of the Army Diversity Roadmap and execution of related initiatives. In 
addition, the Council will facilitate delivering the diversity and 
inclusion message throughout the Army.
    Our initial diversity training and education efforts have focused 
on practitioners who support our commanders and other leaders. We have 
completed initial training for 560 Military Equal Opportunity (MEO) and 
Equal Employment Opportunity professionals, and followed up with 
materials to support unit-level instruction. Over the past 2 years, 300 
general officers and civilian senior executives have completed a 
diversity education program. In this program Senior executives are 
presented with Army demographics and participate in experiential 
exercises that facilitate awareness and perspective.
    We will continue to invest in diversity education and inclusive 
leadership by seamlessly integrating the training for senior leaders 
into their initial leader development programs. Ultimately, we will 
also reach every soldier and Army civilian through the Army's 
institutional professional development system.
    We must position the Army to recruit, develop and retain the most 
talented people our Nation has to offer. Critical to our global mission 
is an understanding of the cultures, languages and social norms of the 
people in locations where we deploy as well as in our own ranks. This 
diversity initiative is integral to the Army's long-term vision for 
human capital and our understanding of the human dimension of 
leadership and global engagements.
                     operationalizing the reserves
    The wartime experiences of the past decade validate the need to 
institutionalize the policies, procedures and legal authorities 
conducive to achieving the most efficient utilization of the Total 
Force through maintaining the Army's Reserve components as an 
``operational force.'' Additionally, recent DOD strategic guidance 
advocates maintaining key capabilities within the Total Force by 
shifting certain capabilities to the Reserve components where they can 
be maintained at a high readiness level at lower overall cost. This 
strategy requires we continue to regularly employ National Guard and 
Reserve Forces in support of our national strategy.
    To support an Operational Reserve, the Army included resources for 
the National Guard and Army Reserve within the fiscal year 2013 base 
budget, including additional resources for collective training, full-
time manning and medical/dental readiness. This required investment in 
readiness ultimately allows the Army to manage our Reserve components 
as an operational force.
    Towards that end, the NDAA for Fiscal Year 2012 provided the 
authority for Service Secretaries to place limited numbers of their 
Reserve component units on active duty as an operational force for 
certain preplanned missions in support of the combatant commands where 
the costs associated with such usage are contained in that year's 
Defense budget. Additionally, the Secretary of the Army promulgated the 
Army's Deployment Period Policy which established a common, 9-month 
period of deployment for General Purpose Forces at division-level and 
below. The policy also mandates common processes and procedures for 
validating pre-deployment readiness across the Total Force with a view 
towards integrating Active and Reserve Forces at the tactical level 
consistent with the Secretary of Defense's policies for utilization of 
the Total Force.
    The Army National Guard and Army Reserve provide 51 percent of the 
Army's military end-strength for around 16 percent of the base budget. 
Transforming the Army National Guard and Army Reserve into an 
operational force provides not only ready access to 1 million trained 
soldiers, but also an historic opportunity for our Nation to achieve 
the most cost-effective use of its Army.
                      nondeployable campaign plan
    As a result of more than a decade of war, the Army has experienced 
a dramatic increase in the number of soldiers who are unable to deploy. 
During the 4-year period from 2007 through 2011, the nondeployable rate 
for Brigade Combat Teams (BCTs) increased by nearly 60 percent, from 
10 percent in fiscal year 2007 to greater than 16 percent in fiscal 
year 2011. The corresponding decrease in the overall deployable rate 
has required us to over-man deploying units so that BCTs deploy with 
the required combat strength. This has directly impacted the Army's 
ability to properly man the generating force. As a result, the Army 
developed a comprehensive nondeployable campaign plan to analyze the 
three categories representing the highest percentage of nondeployable 
soldiers: Medical, Separations [Expiration Term of Service/
retirements], and Legal Processing.
    With the support of this Congress, we made significant strides this 
past year in the administrative categories; driving the overall rate 
down to 14 percent. Legislation passed in 2011 authorizing 365-day 
early separation will enable the Army to increase the readiness of our 
deploying units as we backfill those separating with deployable 
soldiers. Soldiers with medical conditions remain a challenge, 
comprising nearly half of our nondeployable population. This population 
will continue to grow as we draw down, decreasing the overall 
population while retaining these non-deployable soldiers as they 
undergo medical evaluation. Our soldiers continue to be the cornerstone 
of our combat formations and as we draw down the force, we remain 
committed to providing top quality service to our soldiers and their 
families. Therefore, we have focused our efforts to reduce the number 
of medically nondeployable soldiers by creating a Disability Evaluation 
System (DES) Task Force that will represent both medical non-deployable 
and DES initiatives. Through the collaboration of this multi-faceted 
Task Force, we can continue to man an expeditionary Army with soldiers 
who are deployable, while preserving the All-Volunteer Force.
                 the army disability evaluation system
    The DES has made improvement over the last 4 years, as legislative 
changes and the new Army Disability Evaluation System (DES) have made 
the system less adversarial; provided greater consistency between 
Military and VA ratings; and reduced the time it takes to start 
receiving VA benefits after separation. However, we are committed to 
improving the complex process.
    The current process takes almost 400 days to complete. Even if the 
Army were meeting DOD's goal of 295 days, 10 months is simply too long 
for our soldiers and their families to wait while their future hangs in 
the balance. Currently the Army has more than 19,000 soldiers tied up 
in this process of disability adjudication; the equivalent of 5 Brigade 
Combat Teams sitting on the bench, not available or deployable, who 
must be replaced from other elements to meet operational and tactical 
requirements. As a result of the lengthy processing times, the DES 
continues to have a significant impact on Army readiness. More than 95 
percent of these soldiers depart from the Army once through the 
process.
    The Army is committed to doing everything it can to improve the 
current process. Our Senior Leadership meets monthly with our partners 
in the Department of Veterans Affairs to focus on the execution of the 
Army DES down to the installation level, identify performance issues, 
and share best practices in order to streamline the process. More 
recently the Army completed a Senior Leader assessment of the execution 
of the Army DES at installations across the Army. This assessment 
identified specific actions required to enhance and standardize 
performance across the Army. Combined, these actions and standards will 
ensure our soldiers receive the needed support in a timely manner; 
provide the leadership at all levels visibility in order to adjust 
resourcing and assess efficiency; and help us improve Army Readiness by 
moving soldiers through the Army DES more expeditiously.
    We are working with DOD leadership, the other Services, and our 
partners in the Department of Veterans Affairs on improving the system 
and look forward to collaborating with Congress on this issue.
                    quality of life/family programs
    The strength of our Nation is our Army. The strength of our Army is 
our soldiers. The strength of our soldiers is our Families. Because of 
the tremendous sacrifices soldiers and families make every day, the 
Army is resolute in sustaining the important programs that enhance 
their strength, readiness, and resilience.
    The Army Family Covenant institutionalized the Army's commitment to 
provide soldiers and their families with a quality of life commensurate 
with their level of service to the Nation. Army Senior Leadership 
signed the first Family Covenant in October 2007 and reaffirmed its 
tenets in October 2011. The Covenant represents our commitment to 
provide programs and services to soldiers, both single and married, and 
their families, regardless of component or geographic location. The 
Covenant recognizes the strength and commitment of soldiers and their 
families and establishes a lasting partnership with Army families to 
enhance their strength, readiness, and resilience.
    We are committed to improving soldier and family readiness by 
continuing to build resiliency through strengthened soldier and family 
programs that are simple and easier to access; maintaining 
accessibility and quality of health care; sustaining high-quality 
housing for soldiers and families; maintaining excellence in school 
support, youth services, and child care; promoting education and 
employment opportunities for family members; sustaining recreation, 
travel, and quality of life opportunities for single soldiers; and 
joining forces with communities to inspire support for soldiers and 
families.
      


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                 army military equal opportunity policy
    The Army is the leader in MEO policy and practice. Commanders at 
all levels are responsible for sustaining positive MEO climates within 
their organizations, thus enhancing Army Readiness. To remain relevant 
within the ever-changing environment in which we operate, the Army is 
revising its MEO policy by integrating and institutionalizing equal 
opportunity goals, objectives and training practices. This effort will 
strengthen the foundation of the Army's Human Capital Strategy. Since 
fiscal year 2009, the Army has invested $3.2 million to include $0.8 
million in fiscal year 2011, and expects to invest another $2.1 million 
in fiscal year 2012 for MEO personnel services support, database and 
survey systems, outreach support, and training for implementation.
                           women in the army
    On January 13, 1994, the Secretary of Defense issued the Direct 
Ground Combat Definition and Assignment Rule. The rule remains in 
effect today and prohibits the assignment of women to units below the 
brigade level whose primary mission is to engage in direct combat on 
the ground.
    The Army's current assignment policy (Army Regulation 600-13, 27 
Mar 92) allows women to serve in any officer or enlisted specialty or 
position except in those specialties, positions, or units (battalion 
size or smaller) which are assigned a routine mission to engage in 
direct combat, or which collocate routinely with units assigned a 
direct combat mission.
    On March 2, 2010, in the context of a changing operational 
environment, with emerging requirements and missions, the Army 
initiated a routine cyclic review of its assignment policy for female 
soldiers. The purpose of the review was to assess the current Army 
policy alignment with DOD policy. The Army completed the cyclic review 
in March 2011 and submitted the results and recommendations to Army 
Senior Leadership for decision. Prior to making that decision, the NDAA 
for Fiscal Year 2011, section 535, directed the Secretary of Defense, 
in coordination with the Services, to review laws, policies, and 
regulations that restrict female servicemembers an opportunity to excel 
in the Armed Forces.
    The DOD review was completed in late January 2012 and released 
February 9, 2012. The Army concurred with the other Services in the 
revision of the Direct Ground Combat Assignment Rule that eliminates 
gender-based assignment restrictions to units and positions that are 
required to physically colocate and remain with direct ground combat 
units that are closed to women and to further align Army assignment 
policy with that of DOD. In doing so, the Army opened approximately 
13,139 positions for the assignment of women. Additionally, we opened 
six MOS: three in Field Artillery and the remaining three closed 
specialties in the Logistics career field. We also requested and were 
granted a DOD exception to the Direct Ground Combat Assignment Rule 
that will authorize the Army to assign females to direct ground combat 
units below the brigade level. This limited exception allows assignment 
of female soldiers in select open specialties to serve in the battalion 
headquarters of select direct ground combat units. Each of these 
activities will take effect in late spring 2012.
    Women in the Army have and continue to serve this Nation with honor 
and distinction in the roles, positions, units, and specialties in 
which they are allowed to serve. They have proven their ability to 
serve in expanded roles throughout the Army both on and off the 
battlefield. This review marks the beginning of a careful and 
deliberate effort to apply lessons learned by commanders over more than 
a decade of persistent conflict. The Army will continue to review 
positions and requirements to ensure that all soldiers are provided 
opportunities to reach their full potential and that we accomplish our 
missions with the most capable and qualified soldiers.
   sexual harassment/assault response and prevention program (sharp)
    The Army's goal is to eliminate sexual assault and sexual 
harassment through cultural change, thereby, creating a professional 
climate where every member of the Army family (soldiers, civilians, 
family members, and contractors) trusts their leaders to treat them 
with dignity and respect.
    The Army SHARP Program reinforces the Army's commitment to reducing 
incidents of sexual violence while promoting sensitive care and 
confidential reporting for victims of sexual assault, and 
accountability for those who commit these crimes.
    The Army continues to implement a comprehensive ``I. A.M. 
(Intervene, Act, and Motivate) Strong'' Sexual Harassment/Assault 
Prevention Strategy and Campaign.
    The campaign is based on the same strategic framework and guiding 
principles used to execute a successful military initiative--Prevent, 
Shape and Win. The Army's goal is to ``Prevent'' sexual assault and 
harassment before it occurs; ``Shape'' an Army culture that promotes 
dignity and respect; and ``Win'' an environment that improves 
prevention, investigation, and prosecution while reducing the stigma of 
reporting.
    The program consists of a comprehensive policy that centers on 
awareness and prevention; training and education; victim advocacy; and 
response, reporting, accountability and program assessment.
    The Secretary of the Army and the Chief of Staff of the Army are 
strong advocates for the implementation of the SHARP Program. They 
consider SHARP an integral part of the ``Profession of Arms'' in 
developing individual character and supporting the Warrior Ethos.
    In 2008 the Army launched a comprehensive sexual assault prevention 
strategy, which incorporates the ethical principles of the ``Profession 
of Arms'' and requires leaders to establish a positive command climate 
that clearly communicates sexual assault's negative impact on the force 
and family members. The strategy further encourages soldiers to engage 
in peer-to-peer intervention, and not tolerate behavior that could lead 
to sexual assault.

          This strategy consists of four integrated, cyclical phases 
        that are designed to achieve true cultural change as we work to 
        be the Nation's leader in sexual harassment and sexual assault 
        prevention:
          Phase I (Committed Army Leadership) provides training on best 
        practices and allows commands the opportunity to develop 
        prevention plans to support the Army strategy.
          Phase II (Army-wide Conviction) includes educating soldiers 
        to understand their moral responsibility to intervene and stop 
        sexual assault and harassment.
          Phase III, which launched April 2011, is dedicated to 
        ``Achieving Cultural Change'' and fosters an environment free 
        from sexual harassment and sexual assault
          Phase IV, the final phase is ``Sustainment, Refinement and 
        Sharing.'' This phase will be implemented beginning April 2013. 
        Here, the prevention program will continue to grow while 
        motivating national partners--governmental and nongovernmental 
        organizations--to support our efforts in changing generally 
        accepted negative social behaviors.

    The goal will be the reduction of sexual assault through primary 
prevention by creating an environment where people are not afraid to 
intervene as soon as conditions exist that could lead to sexual 
misconduct if left unchecked.
    The Army's campaign commitment includes integrating sexual 
harassment and sexual assault prevention efforts; executing the SHARP 
transformation plan; providing policies; training and education support 
to commands; and establishing prevention partnerships.
    The SHARP Program transition is occurring throughout the Army. 
Building on previous training, SHARP Mobile Training Teams (MTTs) have 
trained approximately 7,900 of 17,000 command-selected program 
personnel on a prevention-focused 80-Hour Program Certification Course. 
The course was approved by the National Organization for Victim 
Assistance in December 2011 and credentialed under the National 
Advocacy Credentialing Program.
    The Army applied $40 million from fiscal year 2009-fiscal year 2011 
to increase investigative and prosecutorial capabilities by hiring 12 
highly qualified experts in the field of prosecution and investigations 
and 23 additional special investigators. The Judge Advocate General 
designated 16 special victim prosecutors and 5 Trial Counsel Assistance 
Program attorneys. Additionally, there are plans to add another seven 
Special Victim Prosecutors in fiscal year 2012.
    The U.S. Army Military Police School Special Victims Unit Course, 
Fort Leonard Wood, MO, has been selected as the DOD school house. In 
essence, the Army will serve as the DOD executive agent for sexual 
assault investigator training and the U.S. Army Military Police School 
will serve as the proponent for sexual assault investigations training 
for DOD.
    The Army's school house employs a unique advanced interview 
technique in its Special Victims Unit (SVU) Training Course. This 
technique is called the Forensic Experiential Trauma Interview, or 
FETI, which was developed by the Army SVU lead instructor. This new 
interview technique combines the best of child forensic interview 
techniques along with the principles of critical incident stress 
debriefings and new neurobiology research to obtain not just the who, 
what, why, when, where, and how of the incident, but also the three 
dimensional experiential aspect of the crime. This process solicits and 
documents critical forensic physiological evidence. Based on feedback 
from the field this new technique has already shown to be substantially 
more effective in obtaining information and substantially more 
beneficial evidence which enhances our ability to prosecute sexual 
assault cases. The FETI technique is also being trained by our Army 
trainers to Federal, State, and local civilian agencies and has been 
embraced as a promising best practice.
    The SVU course is not only taught by USAMPS and USACIDC experts, 
but is also augmented by other nationally recognized experts as well as 
legal instructors from the Army Trial Counsel Assistance Program. 
Agents from DOD Inspector General, Naval Criminal Investigative 
Service, and Air Force Office of Special Investigations have already 
begun training at the SVU course. Army prosecutors will also begin 
attending the SVU course in April of this year to foster additional 
synergy and understanding between our CID Special Agents and 
prosecutors. We have developed a plan to include prosecutors from other 
DOD Services beginning in fiscal year 2013.
    Additionally, the Army is continuing in its efforts to ensure 
attorneys in the Judge Advocate community are receiving the most up-to-
date training so they are properly equipped to investigate/prosecute 
sexual assault cases. Judge Advocates who are selected to serve as 
Special Victims Prosecutors based on their skill and experience in the 
courtroom, are required to attend a 2-week Career Prosecutors Course at 
the National District Attorneys Association in South Carolina; a 1-week 
Essential Strategies for Sexual Assault Prosecutions; and 2-weeks of 
on-the-job-training with a designated civilian district attorney's 
office, special victims in various other locations.
    The Army is currently providing $3.5 million to support Judge 
Advocate prosecution and defense capability improvements, to include 
policy development, case management, training and education. DOD is 
supporting the Army's investigation/prosecution training efforts with 
an additional $1.3 million in funding.
    Based on recent congressional, Office of the Secretary of Defense, 
and Army directives, the Army is revising its policy and program 
requirements to effectively expand the program to additional 
beneficiaries such as family members 18 years of age or older, DOD 
civilians serving overseas and Deployed DOD contractors deployed into 
combat zones, while finalizing a plan to meet the NDAA for Fiscal Year 
2012 requirements. Concurrently, the Army is revising its comprehensive 
training and education program that began in fiscal year 2004 and 
remains flexible to meet new legislative and military direction.
    The Army is working with DOD leadership to ensure the manpower and 
funding required to address the programmatic changes stipulated in the 
NDAA are adequately addressed.
      


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        health promotion, risk reduction and suicide prevention
    The Army continues to take aggressive actions to promote health, 
identify and reduce risky behaviors, and prevent suicides. Utilizing a 
holistic approach, increased emphasis has been placed on developing and 
implementing targeted training programs as well as funding for support 
programs that impact the entire Army Family.
    The key elements of the Army's approach are: ensuring that all 
soldiers have prompt access to quality behavioral health care; 
increased screening and documentation of mild traumatic brain injuries; 
and improved leader awareness of high-risk behavior. As conclusions are 
derived from ongoing studies, such as the Army Study to Assess Risk and 
Resilience in Servicemembers (Army STARRS), the largest BH 
epidemiological study that the Armed Forces has ever undertaken, 
appropriate leadership decisions will follow to capitalize on the 
outcomes. The Army has increased screening efforts to improve diagnosis 
and treatment for soldiers through the Post-Deployment Health 
Assessments, standardized screening protocols for those exposed to 
concussive events and implemented the ``Pain Management Task Force'' to 
appropriately manage the use of pain medications and adopt best 
practices Army-wide.
    The dramatic increases in suicides experienced from 2006 to 2010 
leveled off in calendar year 2011 and were down slightly from their 
record year in 2010. It is important to note, however, that suicides by 
soldiers on Active Duty increased while those by soldiers not on Active 
Duty decreased. There were 165 suicides by Active-Duty soldiers during 
2011, an increase from 159 suicides in 2010. However, a significant 
decrease was observed for Not-on-Active Duty members of the Army 
Reserve and National Guard, with 115 suicides during 2011 compared to 
146 in 2010. This represents a decrease of 25 suicides over the 2010 
report.
    The Army released the Army 2020 Generating Health and Discipline in 
the Force Ahead of the Strategic Reset Report 2012. Referred to as the 
Army Gold Book, the report is an update to the Army Health Promotion, 
Risk Reduction, Suicide Prevention Report, 2010. It summarizes the 
progress made in enhancing the health, discipline and readiness of the 
Force and it represents the next phase in the Army's ongoing campaign 
to counter the stress associated with more than a decade of war. The 
Gold Book is designed to educate leaders, illuminate critical issues 
that still must be addressed, and provide guidance to those grappling 
with these issues on a day-to-day basis. It candidly addresses the 
challenges that leaders, soldiers and families currently face, while 
providing a thorough assessment of what the Army has learned with 
respect to physical and behavioral health conditions, disciplinary 
problems, and gaps in Army policy and policy implementation. The Army 
is committed to ensuring the entire Army Family has access to the 
training and resources necessary.
      


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                      army substance abuse program
    More than a decade of war has created symptoms of stress for our 
soldiers, including an increase in alcohol and drug abuse. The Army 
Substance Abuse Program (ASAP) is a commander's program that uses 
prevention, education, deterrence, detection, and rehabilitation, to 
reduce and eliminate alcohol and drug abuse. It is based on the 
expectations of readiness and personal responsibility.
    In March 2010, the Army conducted a counselor requirements analysis 
based on each installation's average daily client census with a ratio 
of 1 counselor for 30 patients. Patient caseload was as high as 60 
patients per counselor at some installations. The 1:30 ratio is an 
accepted ratio based on literature and counselor input. Applying this 
ratio yielded a requirement of 563 counselors assuming a 20 percent 
growth in number of patients.
    An Army priority in this area includes the hiring of more 
counselors. There is a finite pool of qualified substance abuse 
counselors nationwide and the Army is competing for this scarce talent 
with private industry, the Veteran's Administration and State and local 
governments. As of January 1, 2012, the Army has hired 500 of the 563 
counselors needed. The Army is increasing the use of recruiting, 
relocation, and student loan reimbursement incentives to attract more 
qualified candidates, and is developing a ASAP Counselor Internship 
Program which will allow students with Masters degrees to work in a 
supervised internship for up to 2 years as they attain their licenses 
and substance abuse counselor certifications.
    The Confidential Alcohol Treatment and Education Program (CATEP), 
began in July 2009 and offers confidential alcohol treatment to 
qualified soldiers. For these soldiers, the chain of command is not 
informed of the soldiers enrollment as was previously customary. This 
pilot program was initially offered at Fort Lewis, Fort Richardson, and 
Schofield Barracks. An initial assessment was conducted in March 2010, 
and the Secretary of the Army directed that the pilot be expanded to 
include Forts Carson, Riley, and Leonard Wood.
    The initial assessment showed moderate success in attracting 
soldiers and placed more career NCOs and younger officers into 
treatment. Soldiers who participated in CATEP were very positive about 
the opportunity to take care of their issues without commander 
knowledge and were more motivated as patients. Some soldiers informed 
their commanders about their enrollment and these commanders had a high 
acceptance of the program. The program was assessed again during July 
2011. The results showed that many soldiers with an alcohol abuse or 
dependency diagnosis had walked away from treatment when asked to 
change their behaviors. After careful consideration, the VCSA directed 
implementation of several improvements to the pilot and consideration 
of the use of a contract for soldiers interested in CATEP, with the 
proviso that non-compliance with treatment would result in mandatory 
placement in the Command ASAP. The pilot will be assessed again in 
April and May 2012, after which the Secretary will decide whether to 
expand the CATEP to the remainder of the Army. To date 1,129 soldiers 
sought CATEP treatment and 784 were/are enrolled.
      


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                        congressional assistance
    As the Army prepares for reductions in the force, we will need 
congressional support to drawdown accurately and efficiently while 
maintaining readiness. The Army continues to work with the various 
parties to improve the physical disability system, so that our 
servicemembers receive the transition they deserve. The continued 
support of Congress for competitive military benefits and compensation, 
along with incentives and bonuses for soldiers, their families, and for 
the civilian workforce is critical in helping the All-Volunteer Army 
contine to recruit, retain, and support the highest caliber of 
individuals.
                               conclusion
    We have invested a tremendous amount of resources and deliberate 
planning to preserve the All-Volunteer Force. People are the Army, and 
our enduring priority is to preserve the high quality, All-Volunteer 
Force--the essential element of our strength.
    While we transform to a smaller Army, we remain dedicated to 
improving readiness, and building resilience in our soldiers, 
civilians, and their families. The Army will not sacrifice readiness as 
it draws down. We must draw down wisely to preserve the health of the 
force or prevent breaking faith with the brave men and women who serve 
our Nation. The Army has gained the trust of the American public more 
now than at any other time in recent history, while fulfilling our 
responsibilities toward those who serve.
    The well-being of our force, regardless of its size, is absolutely 
dependent upon your tremendous support. The Army is proud of the high 
caliber men and women whose willingness to serve, is a credit to this 
great nation. To conclude, I wish to thank all of you for your 
continued support, which has been vital in sustaining our All-Volunteer 
Army through an unprecedented period of continuous combat operations 
and will continue to be vital to ensure the future of our Army.
    Chairman Webb, and members of the subcommittee, I thank you again 
for your generous and unwavering support of our outstanding soldiers, 
civilian professionals, and their families.

    Senator Webb. Secretary Garcia, welcome.

 STATEMENT OF HON. JUAN M. GARCIA III, ASSISTANT SECRETARY OF 
THE NAVY FOR MANPOWER AND RESERVE AFFAIRS; ACCOMPANIED BY VADM 
SCOTT R. VAN BUSKIRK, USN, CHIEF OF NAVAL PERSONNEL, U.S. NAVY; 
AND LT.GEN. ROBERT E. MILSTEAD, JR., USMC, ASSISTANT COMMANDANT 
      FOR MANPOWER AND RESERVE AFFAIRS, U.S. MARINE CORPS

    Mr. Garcia. Thank you, Senator. I also will be short.
    Chairman Webb, Senator Graham, and distinguished members of 
the subcommittee, thank you for the opportunity to speak about 
the sailors, marines, and civilians who comprise the Department 
of the Navy.
    There have been many successful changes in the Department 
of the Navy since I testified before you last spring. We have 
23 female officers assigned to submarines, with more being 
assigned in the very near future.
    Last year I spoke of new Navy Reserve Officers Training 
Corp (ROTC) units at Arizona State University and Rutgers. This 
year I am pleased to report that we are expanding our ROTC 
presence at Harvard, Yale, and Columbia as part of our goal to 
make naval service a viable option for the young men and women 
from all regions and all segments of society.
    In addition to ensuring our manpower and personnel policies 
meet our country's security requirements, it is my honor and 
privilege to represent and advocate for the more than 800,000 
sailors, marines, and civilian employees. We are always 
prepared to respond to the needs of our Nation.
    Both sea services will strive to meet their operational 
requirements with as an efficient a force as possible. For the 
Navy, this means continuing to move sailors from shore support 
functions to sea duty to enhance operational readiness. Such a 
shift not only means fewer sailors will be available for 
important work ashore, but also that sailors will, on average, 
spend more time at sea away from their families. For the Marine 
Corps, the reduction of nearly 20,000 in end strength coincides 
with the planned withdrawal from Afghanistan.
    Our highest priority remains the care and recovery of our 
wounded, ill, and injured servicemembers. The Department of the 
Navy is leading the way in innovative, therapeutic treatments 
of our wounded warriors. At the National Intrepid Center of 
Excellence, the Department of the Navy is pioneering research 
into diagnosis and treatment of traumatic brain injury and 
PTSD, but more work remains in this area.
    I wish to thank the subcommittee members for your 
continuous and unwavering commitment to support the Navy and 
Marine Corps and the brave men and women who as sailors and 
marines serve bravely in Afghanistan, spend months at sea apart 
from their families, combat pirates in the Indian Ocean, board 
drug runners in the Caribbean, guard embassies throughout the 
world, conduct humanitarian missions whenever and wherever 
needed, and perform countless other missions, often under 
unimaginably demanding conditions and circumstances. Thank you.
    Senator Webb. Thank you, Secretary Garcia.
    [The prepared statement of Secretary Garcia follows:]
               Prepared Statement by Hon. Juan M. Garcia
    Chairman Webb, Senator Graham, and distinguished members of the 
subcommittee, thank you for the opportunity to speak about the 
Department of the Navy's personnel programs and about the sailors, 
marines, and civilians who comprise the Department of the Navy.
    There have been many successful changes in the Department of the 
Navy since I testified before you last spring. By the end of March we 
will have 23 to 25 female officers assigned to submarines, with more 
being assigned in the very near future. The repeal of ``Don't Ask, 
Don't Tell'' is fully implemented across the force with no significant 
problems or incidents. National Naval Medical Center, Bethesda, has 
transformed into the new joint Walter Reed National Military Medical 
Center. Navy personnel comprise 27 percent of the hospital's staff.
    In addition to ensuring our manpower and personnel policies meet 
our country's security requirements, it is my honor and privilege to 
represent and advocate for the more than 800,000 sailors, marines, and 
civilian employees who are always prepared to respond to whatever our 
Nation demands.
    Vice Admiral Van Buskirk and Lieutenant General Milstead will 
address their respective Service's personnel plans in detail, but I 
would like to touch on some common challenges the Department of the 
Navy faces as a whole.
    Recently, the Secretary of the Navy unveiled the 21st Century 
Sailor and Marine Initiative, which is designed to place an increased 
focus on the resiliency and fitness of our servicemembers. 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 provide individuals with the services and training 
needed to meet those standards. The 21st Century Sailor and Marine 
Initiative consists of five ``pillars'': readiness, safety, physical 
fitness, inclusion and 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 use, 
and treat and track alcohol abuse. We will also develop new means to 
deter Spice use, reduce suicides and increase our family and personal 
preparedness programs. This includes zero tolerance for sexual assault. 
We are continually working to improve the reporting, investigation and 
disposition of sexual assault cases, ensuring that commanders, 
investigators, and prosecutors receive sufficient training and 
appropriate resources.
    We will also increase our efforts to ensure the safest and most 
secure force in the Department's history, including a reinvigoration of 
our efforts to encourage the safe use of motor vehicles and 
motorcycles.
    Physical fitness is an important central pillar that resonates 
throughout the 21st Century Sailor and Marine Initiative. 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'', which ensures that healthy food 
items will be available at every meal.
    The Department of the Navy will be inclusive and consist of a force 
that reflects the Nation it defends in a manner consistent with 
military efficiency and effectiveness as it serves its primary function 
of defending the Nation. The Department will also reduce restrictions 
to military assignments for personnel to the greatest extent possible 
consistent with our mission and military requirements.
    The final pillar, continuum of service, will provide the most 
robust transition support in the Department's history. Individuals 
selected for either separation or retirement will be afforded 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.
    The budget process requires a careful balancing of resources and 
assessment of risk. Within in the President's fiscal year 2013 budget 
and the Future Years Defense Plan are the results of several other 
difficult decisions and tradeoffs. The final product meets mission 
requirements while providing appropriate compensation and benefits for 
our Active Duty, Reserves, civilian employees, and military retirees.
    Both sea services will strive to meet their operational 
requirements with as efficient a force as possible. For the Navy this 
means continuing to move sailors from shore support functions to sea 
duty to enhance operational readiness. Such a shift not only means 
fewer sailors will be available for important work ashore, but also 
that sailors will, on average, spend more time at sea away from their 
families. For the marines, the reduction of nearly 20,000 end-strength 
coincides with the planned withdrawal from Afghanistan.
    Our highest priority remains the care and the recovery of our 
wounded, ill, and injured servicemembers. The Department of the Navy is 
leading the way in innovative therapeutic treatments of our Wounded 
Warriors. At the National Intrepid Center of Excellence the Department 
of the Navy is pioneering research into diagnosis and treatment of 
Traumatic Brain Injury and Post-Traumatic Stress Disorder, but more 
work remains in this area.
    There are other initiatives that deserve mention. We continue to 
emphasize civilian hiring of veterans and of wounded warriors in 
particular, through both competitive and non-competitive hiring 
authorities. Similarly, the Department is continuing our participation 
in the Military Spouse Employment Partnership both as a resource for 
our members' spouses and as an employer.
    Last year I spoke of new Navy Reserve Officers' Training Corps 
(ROTC) units at Arizona State University and Rutgers. This year I am 
pleased to report that we are expanding our ROTC presence to Harvard, 
Yale, and Columbia as part of our goal to make naval service a viable 
option for young men and women from all regions and all segments of 
society.
    As many of you are aware, the Navy has recently closed a number of 
Junior ROTC programs at units that failed to meet the statutorily 
required participation numbers. To minimize the effects of these 
closings, I authorized the creation of National Navy Defense Cadet 
Corps (NNDCC) units at a number of these schools. The NNDCC program is 
virtually identical to Navy Junior ROTC, except there is only a 50 
student minimum enrollment requirement and the schools must provide the 
majority of the funding.
    We continue to search for innovative ways to improve the efficiency 
and capability of our forces as well as the quality of life of our 
members and their families. Modernization of the military retirement 
system could provide greater fairness and equity to servicemembers 
with, perhaps, some savings to the defense budget.
    We wish to thank the committee members for your continuous and 
unwavering commitment to support the Navy and Marine Corps and the 
brave men and women who, as sailors and marines, serve bravely in 
Afghanistan, spend months at sea apart from their families, combat 
pirates in the Indian Ocean, thwart drug runners in the Caribbean, 
guard embassies throughout the world, conduct humanitarian missions 
whenever and wherever needed, and perform countless other missions, 
often under unimaginably demanding conditions and circumstances.
    The following service specific information is provided for the 
committee. We look forward to your questions.
      


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    Senator Webb. Admiral Van Buskirk and General Milstead, 
your full statements will be entered into the record at this 
time. We will also get back to you during questioning.
    [The prepared statements of Admiral Van Buskirk and General 
Milstead follow:]
          Prepared Statement by VADM Scott R. Van Buskirk, USN
                            i. introduction
    Chairman Webb, Ranking Member Graham, and distinguished members of 
the Senate Armed Services Committee, thank you for the opportunity to 
review Navy's fiscal year 2013 manpower, personnel, training, and 
education budget request. I am honored to be here to represent the 
outstanding men and women of the U.S. Navy, and their families, in this 
my inaugural appearance before the committee as the 56th Chief of Naval 
Personnel.
    In developing our budget request, we recognized that our Nation is 
at an historic inflection point, that we are shaping a Navy that will 
be more agile, flexible, ready and technologically advanced. As we 
continue our presence in the Middle East, maintain our commitments in 
Europe, add emphasis and focus in the Asia-Pacific region, Navy has 
continued to prove itself in providing a truly adaptive force 
capability and capacity, at sea, on land and in the air. While Navy's 
operations in Iraq and Afghanistan have been both sea and land based, 
the shift in focus toward the Asia-Pacific region will likely increase 
demands upon Navy's maritime role, even as the Nation works to address 
the national security imperative of deficit reduction through a lower 
level of defense spending.
    As we move into this new era, Navy is well positioned to recruit, 
develop, retain, and provide the American people the best and most 
capable maritime fighting force in history. Navy has worked to become a 
``Top 50'' organization, an employer of choice, providing world-class 
benefits and opportunities. Moreover, as an All-Volunteer Force, we 
must adapt to changing economic times, while continuing to implement 
force management policies focused on incentivizing, encouraging and 
rewarding high performance. We will continue to strive for a Navy that 
attracts and retains top-performing sailors who possess the critical 
skills necessary for our mission. Further, we are making hard choices 
on sailor retention as Navy continues to transition, but we are 
committed to doing so in a fair, transparent and compassionate manner 
using performance as our benchmark.
    Our fiscal year 2013 budget request enables us to continue to meet 
the operational demands of the Fleet and the Joint Force while 
optimizing personnel readiness. As we look to the future, Navy is 
mindful that:

         The All-Volunteer Force is the foundation of our Navy 
        and vital to the security of our Nation.
         Navy life involves unique challenges and stresses as a 
        global, full spectrum sea service.
         War related deployments since September 11 have placed 
        extraordinary demands on many sailors and their families.

    We believe our request appropriately balances risk in supporting 
the readiness requirements of the Fleet and Joint Force, changing 
strategic mission focus, and essential programs that provide for the 
care of our sailors and their families.
                  ii. a ready and capable global navy
    Shortly after assuming office as the Nation's 30th Chief of Naval 
Operations (CNO) last September, Admiral Greenert issued his inaugural 
guidance to the Fleet, the CNO's Sailing Directions. Coupled with our 
Navy Total Force Strategy for the 21st Century, it charts a course for 
Navy to deter aggression, and, when necessary, decisively win our 
Nation's wars. We will employ global reach and persistent presence 
through forward-stationed and rotational Forces to protect our Nation 
against direct attack, assure Joint Operational Access, and retain 
global freedom of action. With our global partners, we will protect the 
maritime freedom that is the basis for global prosperity. We will 
foster and sustain cooperative relationships with our allies and 
international partners as we enhance global security in a constantly 
changing environment.

          Informed by the Sailing Directions and our Navy Total Force 
        Strategy for the 21st Century, we have crafted our focus areas 
        . . .

    Warfighting First: We will manage military personnel strength to 
deliver an affordable, sustainable and resilient force that meets 
mission needs. We will deliver a Force that is operationally ready--
assignable and deployable. To remain operationally effective, we will 
deliver a career-continuum of technical training and advanced 
education.
    Operate Forward: We will deliver ``fit'' and balance to the Fleet--
not only the right number of sailors, but also the right skills and 
experience for the job. We must also anticipate fleet and combatant 
commander priorities to meet operational needs and provide the regional 
skills required for theater security and cooperation of our Joint and 
coalition partners.
    Be Ready: We will attract, recruit, and retain a high-quality Force 
through recruiting and outreach efforts--we must be competitive for the 
best talent in the Nation. Most importantly, we will continue to care 
for sailors and their families . . . the foundation upon which our Navy 
is built.
                           iii. end strength
    Our fiscal year 2013 Navy budget request appropriately balances 
risk, preserves capabilities to meet current fleet and joint 
requirements, fosters growth in emerging mission areas, and provides 
vital support to sailors and Navy families. The request supports active 
end strength of 322,700, and selected Reserve end strength of 62,500. 
These levels will allow us to meet Fleet and the Joint Force 
operational demands while optimizing personnel readiness as articulated 
in the recently released Sustaining U.S. Global Leadership: Priorities 
for 21st Century Defense. The President's $28.9 billion request for 
Active Navy Manpower, Personnel, Training and Education seeks $27.1 
billion in Military Personnel, Navy (MPN) appropriations and $1.8 
billion in related Operation and Maintenance, Navy (O&MN). The Reserve 
request includes $1.9 billion for Reserve Personnel, Navy (RPN) and 
$24.7 million in related Operation and Maintenance, Navy Reserve 
(O&MNR).
    In fiscal year 2013, there is no OCO funding requested for Active 
component end strength in support of non-core Individual Augmentee (IA) 
mission. Following an assessment of the Reserve component's funding, 
and ability to cover previous Active component-sourced non-core IA 
requirements, 5,900 man-years of OCO funding was requested to support 
4,500 Reserve IA billets throughout the fiscal year. We will continue 
to fill IA requirements, when possible, with Reserve component 
personnel funded through OCO appropriations.
    As we work to stabilize Navy end strength with emphasis on 
achieving warfighting wholeness, we continue to shift billets from 
shore duty to sea duty while preserving nearly 600 critical shore 
billets in sea-centric ratings, including regional maintenance centers, 
afloat training groups, Fleet electronic warfare training and Ballistic 
Missile Defense AEGIS billets. We expect last year's sea/shore-flow 
requirements changes to result in reduced at-sea gaps this year and in 
fiscal year 2013. We continue to apply Sea Duty Incentive Pay to 
encourage and reward sailors for extended or repeat sea duty service to 
help further mitigate our gaps at sea.
    Navy will continue to size, shape, and stabilize the Force while 
carefully monitoring personnel and Fleet readiness. As required, we 
will apply, evaluate and adjust existing and new force-shaping tools 
designed to retain the right skills, pay grade, and experience-mix 
necessary to provide mission-ready Naval Forces, as required.
    iv. force management: achieving balance, maximizing investments
    We must always remember that the men and women of the All-Volunteer 
Force in our Navy have remained versatile, adaptable and committed to 
the Nation during a time of unprecedented, sustained combat operations, 
and at tremendous personal sacrifice. As we take the necessary steps to 
properly size and shape the Navy to meet current and emerging 
requirements, we must be vigilant to ensure the readiness of the All-
Volunteer Force, while maintaining trust with those who serve in our 
Navy.
    We expect to finish fiscal year 2012 below end strength controls, 
largely due to effective force management policies within the enlisted 
force. At the same time, we are over-executing our officer strength. To 
remedy this imbalance, we plan to stabilize enlisted strength while 
gradually reducing officer strength. Our strategy focuses on 
rebalancing the Force to achieve the right mix of officers and enlisted 
personnel by increasing enlisted accessions over time, reducing officer 
accessions in a controlled manner through judicious application of 
force management tools to address officer overages in specific skills. 
We will achieve proper force balance while respecting the sacrifices of 
sailors and their families by using voluntary measures to the extent 
possible before resorting to involuntary actions. Through careful 
combination of both, we will meet dynamic force management challenges 
and maximize investments in our people.
    Our use of force management tools will be continuously evaluated as 
end strength and force structure is reduced. We will keep a watchful 
eye on indicators of shifting behavior and on economic trends and act 
quickly to preserve our ability to attract and retain the highest-
quality sailors while achieving and then maintaining the right balance 
of seniority, skills, performance, and experience to deliver optimum 
military personnel readiness to the Fleet.
    Perform-to-Serve (PTS) remains our primary, and most effective, 
enlisted force-balancing tool, allowing us to manage enlisted 
continuation behavior by rating. Based on performance ranking, PTS 
identifies sailors at career decision points, up to 14 years of 
service, who are best qualified for in-rate reenlistment, conversion 
from overmanned to undermanned specialties, or separation from the 
Navy. In fiscal year 2011, we converted 1,052 sailors, narrowing 
critical manning gaps, while 6,765 sailors identified by PTS separated 
at their End of Active Obligated Service. We plan to separate another 
6,650 sailors through PTS in fiscal year 2012, and fewer in fiscal year 
2013. PTS has significantly improved enlisted manning balance 
permitting us to offer in-rate reenlistment to significantly more 
sailors while returning advancement opportunity to historic norms.
    To further assist in rebalancing the Force and relieve pressure on 
sailors in a PTS reenlistment window, Enlisted Retention Boards (ERB) 
were implemented as an additional force management tool. The ERB was 
necessary to ensure we could reduce inventory within overmanned ratings 
in cases in which converting sailors to undermanned ratings was not a 
viable option. Unlike PTS, the ERB looked at all eligible sailors in 31 
overmanned ratings, not just the ones in a PTS window. This past 
summer, ERB examined the records of approximately 16,000 sailors in pay 
grades E4-E8, with at least 7 and less than 15 years of service, who 
are serving in overmanned ratings, and identified 2,947 for separation 
in fiscal year 2012. Approximately 300 of these sailors, who will have 
at least 15 years of service by September 1, 2012, are being offered 
the opportunity to apply for early retirement under Temporary Early 
Retirement Authority (TERA) enacted in the National Defense 
Authorization Act for Fiscal Year 2012. We do not intend to use ERB 
authority in fiscal year 2013.
    We have used, and continue to use, a host of other tools to 
contribute to ongoing force management efforts for both officer and 
enlisted sailors, including:

         High-Year Tenure separations in select pay grades and 
        years of service. We separated 912 sailors in fiscal year 2011, 
        and plan an additional 909 in fiscal year 2012, and slightly 
        more in fiscal year 2013, through recent changes to High Year 
        Tenure policy.
         Early Transition. In fiscal year 2011, we allowed 
        1,541 sailors to separate up to 24 months before the end of 
        their enlistments, and anticipate authorizing a similar number 
        of separations in fiscal year 2012, but fewer in fiscal year 
        2013.
         Annual performance-based continuation boards. We 
        reduced the number of active duty sailors in pay grades E7-E9 
        with over 20 years of service by 187 and expect an additional 
        50 losses in fiscal year 2012 and fiscal year 2013.
         One-year time-in-grade (TIG) retirement waivers for 
        select senior enlisted and officers. We executed 37 officer TIG 
        waivers in fiscal year 2011 and expect approximately 45 for 
        fiscal year 2012 and fiscal year 2013.
         Monthly probationary officer continuation and 
        redesignation boards. These boards authorize release or 
        redesignation of probationary officers (with <6 years 
        commissioned service). We separated 242 officers in fiscal year 
        2011 and anticipate separating 270 in fiscal year 2012.
         Permitting voluntary retirement of officers with prior 
        enlisted service after 8, vice 10, years commissioned service. 
        Enacted in the NDAA for Fiscal Year 2011, we expect to 
        authorize approximately 60 retirements in fiscal year 2012 and 
        fiscal year 2013.
         Selective Early Retirement (SER). SER Boards selected 
        124 unrestricted line captains and commanders for early 
        retirement in fiscal year 2012. In fiscal year 2013, we may 
        select approximately 40 Restricted Line and Staff Corps 
        officers for early retirement.
         Voluntary Retirement Incentive (VRI). An authority 
        that allows Navy to precisely target specific commanders (O-5) 
        and captains (O-6) with between 20-29 years of service in 
        certain specialties and warfare areas to separate and retire 
        voluntarily.
         Temporary Early Retirement Authority (TERA). In fiscal 
        year 2012, we are offering early retirement to approximately 
        300 sailors as an alternative to early separation required by 
        Enlisted Retention Boards. We are evaluating options for 
        further targeted use of TERA in fiscal year 2013.

    Despite significant progress, additional force management actions 
are necessary to maintain mandated end strength and officer levels with 
the right mix of skills and experience due to high retention and low 
attrition. For example, we will soon implement two new policies to 
facilitate further enlisted force management:

         In fiscal year 2012 and fiscal year 2013, we will 
        apply Initial Training Separation Authority to separate fewer 
        than 500 sailors per year who do not satisfactorily complete 
        their training pipeline, but for whom no suitable vacancy 
        exists.
         We will adjust High Year Tenure thresholds to separate 
        fewer than 1,000 sailors in pay grades E2-E3 in fiscal year 
        2013.

    We are contemplating whether additional authorities may be 
necessary to enhance our ability to properly shape and balance the 
Force. A range of broad, flexible, options to properly size and shape 
the Force remains vital to Navy military personnel readiness. We 
appreciate Congress enacting flexible authorities that provide 
voluntary means to effectively manage the Force in a way that preserves 
a positive tone across the Navy.
                      v. sailor and family support
    Our fiscal year 2013 budget request of $131.7 million for sailor 
and family care coupled with the items in the Secretary of Defense and 
Defense Health Care budgets sustains or enhances our comprehensive 
continuum of care. The health care proposals in the President's budget 
are consistent with our efforts in identifying processes that are more 
efficient, incentivizing positive health behaviors, promoting overall 
wellness and keeping our sailors fit and ready to deploy on a moment's 
notice. This budget keeps faith with those who serve and those who have 
served, and responsibly meets the demands dictated by the Federal 
budget crisis. With continued congressional support, Navy is committed 
to retaining funding levels necessary to address the medical, physical, 
psychological, and family readiness needs of sailors and their 
families. I hope you will agree, and support our efforts.
Comprehensive Continuum of Care
    Through a comprehensive continuum of care, we place the highest 
priority on the medical, physical, psychological, spiritual and family 
readiness needs of sailors and families. Navy's Operational Stress 
Control Program, Navy Reserve Psychological Health Outreach Program, 
Warrior Transition Program, Returning Warrior Workshop, Navy Safe 
Harbor, and our Medical Home Port Program are critical continuum of 
care elements.

         The Operational Stress Control (OSC) program is our 
        proactive approach to address the personal readiness of our 
        sailors and their families. OSC is comprised of training, 
        assessment, policy, and tools to support and build sailor, 
        family, and unit resilience. It enables leaders to foster a 
        climate in which sailors use available resources to stay fit 
        and ready without stigma. OSC, with complementary and 
        integrated support from the Navy Chaplain Corps, provides 
        assistance for stress reactions before they become stress 
        problems. A 2011 Behavioral Health Quick Poll found most 
        sailors reported using positive methods to cope with stress.
         The Navy Reserve Psychological Health Outreach program 
        improves the psychological health and resiliency of Reserve 
        Component (RC) sailors and families. Teams of psychological 
        health outreach coordinators and outreach team members, located 
        at the five regional Reserve commands, provide psychological 
        health assessments, education, and referrals to mental health 
        specialists.
         The Warrior Transition program provides Individual 
        Augmentees the opportunity to decompress and transition to life 
        back home. Through small group discussions, chaplains and 
        medical personnel prepare sailors to resume family and social 
        obligations, return to civilian places of employment, and 
        reintegrate into the community.
         Returning Warrior Workshops help remove stigma that 
        may prevent sailors from seeking support during demobilization 
        and reintegration.
         Navy Safe Harbor supports the non-medical needs of 
        wounded, ill, and injured sailors, coast guardsmen, and their 
        families. This network of recovery care coordinators and non-
        medical care managers, at 18 locations across the country, 
        provides individually tailored assistance to 748 enrolled 
        sailors, 43 enrolled coast guardsmen, and an additional 777 
        sailors considered assist cases. The fiscal year 2013 budget 
        request supports our enduring goal to provide the highest 
        quality care to our wounded, ill, and injured.
         Medical Home Port program is a team-based primary care 
        model focused on optimizing relationships between patients, 
        primary care providers and other health care professionals to 
        enhance health and readiness. Beginning this year, mental 
        health providers will be embedded within Medical Home Ports 
        alongside the rest of the care team, and will facilitate 
        regular assessment and early behavioral intervention for 
        sailors and families. This will enable treatment in settings in 
        which patients feel most comfortable and will reduce stigma 
        associated with seeking care. Early detection and intervention 
        in the primary care setting reduces the demand for time-
        intensive intervention in behavioral health specialty clinics. 
        The presence of behavioral health within the Medical Home Port 
        promotes increased comfort among primary care providers in 
        treatment of behavioral health issues within their scope of 
        practice in collaboration with the embedded specialists.
Behavioral Health
    The Navy Behavioral Health program goal is to develop an 
organizational climate that encourages psychologically healthy, 
resilient and mission-effective sailors. It provides Navy-wide 
resources for suicide awareness and prevention, intervention skills, 
and risk mitigation procedures. We track and analyze data on suicide-
related behaviors and deaths to identify trends and develop additional 
policy, training and outreach to prevent suicide risk. A 2011 
Behavioral Health Quick Poll reflects positive trends in the percentage 
of sailors attending Suicide Prevention Training and who recognize 
proactive suicide-prevention efforts occurring at their commands.
Suicide Prevention: All Hands, All of the Time
    Every Navy suicide represents a tragedy that affects command 
cohesiveness and the loss of a valued shipmate; a loss the Navy is 
determined not to accept. Our comprehensive strategy to combat suicide 
incorporates four pillars: Education and awareness; Operational Stress 
Control; Intervention; and Post-intervention support; a leadership-led 
effort with a foundation built on a comprehensive array of education 
and outreach.
    Navy's suicide prevention approach builds combined sailor, family, 
and command resilience with a goal of changing behavior through 
personal resilience; peer to peer support; leadership intervention 
throughout the chain of command; enhancing family support; and 
fostering a command climate where help-seeking behaviors, when 
required, are expected in order to restore personal readiness.
    We have implemented a year-round strategic communication plan 
focused on Navy's ``Ask-Care-Treat'' model, or ACT, which emphasizes 
the value of peer-to-peer support. Additionally, targeted suicide 
assessment training is provided for primary care providers at large 
Medical Treatment Facilities as another viable means to identify at-
risk sailors.
    The Suicide Prevention Coordinator network is growing with the 
addition of webinar training that has trained more than 500 new suicide 
prevention coordinators in 18 webinars since December 2011 and 
additional webinar training is planned for members of the Public 
Affairs community. We are also continuing to make progress in 
implementing recommendations of the DOD Task Force on Prevention of 
Suicides Among Members of the Armed Forces. Moreover, in fiscal year 
2013, we will provide targeted chaplain training, guidance and tools 
for leaders, to facilitate successful reintegration of sailors into 
their units following behavioral health or other medical treatment. We 
will improve integration of suicide prevention into the broader array 
of resilience and prevention efforts to provide a coherent approach to 
comprehensive wellness, resilience and prevention.
Sexual Assault: Not in my Navy
    There is no place for sexual assault in the U.S. Navy. We are 
committed to eliminating sexual assault completely; to ensuring 
compassionate support for sexual assault victims; to investigating all 
cases thoroughly; and to holding perpetrators accountable within the 
full extent of the law. Since 2005, we have worked to build a robust 
Sexual Assault Prevention and Response (SAPR) program, and we are 
already engaged in a number of new initiatives to combat sexual 
assault. These collectively are critical investments in both individual 
sailors and in Force readiness. In addition to other direct measures, 
we will use a proven process of tiered training for sexual assault 
prevention and response and provide Navy's SAPR-Leadership training to 
all E-7 and above leaders and every sailor through SAPR-Fleet training. 
This process served us well in the repeal of Don't Ask Don't Tell and 
we anticipate this will resonate in our campaign to eliminate sexual 
assault from our Navy.
    Our immediate goal is to measurably reduce the frequency of sexual 
assaults involving sailors. Our first and perhaps most important tool 
has been a strong, consistent, top-down leadership message of 
intolerance for sexual assault. We are pleased to already be seeing 
Department-level leadership forums translating into special workshops 
and other sessions conducted by regional commanders and commanding 
officers. Our second core strategy involves updated training tools for 
Navy-wide use. We have already worked with civilian experts to review 
relevant content in a broad range of Navy training curricula spanning 
the full continuum of leadership development. We are developing special 
new video programs for all sailors to emphasize the criticality of 
sexual assault issues, and the responsibly of every sailor to actively 
intervene in protecting shipmates in vulnerable situations. In 
addition, we have undertaken special initiatives focused on those most 
at risk--our youngest sailors just out of recruit training. Our 
``Bystander Intervention'' program uses locally trained instructors in 
small-group sessions to educate and mentor sailors at ``A-Schools'' 
Navy-wide. At TSC Great Lakes, we have combined this effort with a 
number of simultaneous other initiatives--and we have developed a 
process of periodic anonymous surveys to assess our impact. After a 
year of progressive effort, it is still too early to speak of 
definitive outcomes, but the initial signs are encouraging. In 2011, 
over 67,000 sailors participated in an anonymous, web-based sexual 
assault survey conducted by the Navy Secretariat. We plan to repeat 
that process every 2-3 years worldwide to help us understand issues and 
trends in the underlying incidence of sexual assault. If it is 
necessary along the way, we will use our best accumulated data and 
insight to adjust course in combating sexual assault. Civilian experts, 
including researchers at the Centers for Disease Control, tell us this 
kind of approach is cutting-edge and breaking new ground. However, that 
is not all we are doing.
    In just the past 2 years, we have conducted site visits and special 
training at Navy sites worldwide. We have talked to stakeholders 
including senior commanders, SAPR program mangers, sailor focus groups, 
and even individual sexual assault victims. We have brought Sexual 
Assault Response Coordinators and installation commanders together from 
across the Navy for programs civilian experts on sexual assault 
prevention summits. We have given special training to NCIS agents and 
JAG lawyers on the unique aspects of sexual assault cases. NCIS 
recently hired new criminal investigators with extensive civilian 
backgrounds in sexual assault cases for every major Navy (and Marine 
Corps) installation. We are working on tool kits for commanding 
officers to help them make the right decisions in complex cases.
    In summary, there is no place for sexual assault in the U.S. Navy. 
We take the challenge seriously, we are engaged on numerous fronts, and 
we are committed to a sustained effort.
                             vi. recruiting
    Navy has worked hard to achieve strong recruiting success over the 
past 4 years by projecting the Navy as an employer of choice and 
attracting the Nation's very best men and women for America's Navy. Our 
brand, ``America's Navy--A global force for good'', captures the 
diversity of our Navy missions while also appealing to our target 
recruiting market. In fiscal year 2011 and through fiscal year 2012 to 
date, Navy's ``total force'' recruiting achieved accession recruiting 
goals for officers in the Active component (AC) and enlisted recruiting 
goals in both the Active and Reserve components (RC). Additionally, we 
attained the best quality future sailors in history with 98.7 percent 
of accessions entering as high school diploma graduates (HSDG) and 88.2 
percent of accessions scoring in the upper 50th percentile on the Armed 
Services Vocational Aptitude Battery (ASVAB).
    Adapting to the current challenges of the recruiting environment 
and in anticipation of an improving economy, Navy recruiting is 
investing in the future with improvement of its Information Technology 
(IT) systems and streamlining its processes as part of its innovative 
Recruiting Force 2020 strategy. This strategy will provide an agile, 
mobile and highly responsive capable recruiting force.
    Looking ahead, we will continue to aggressively attack specific 
recruiting areas, particularly in the healthcare profession where all 
military services have had difficulty in attaining specialized medical 
professionals. An additional challenge is RC General Medical Officer 
recruiting where we achieved nearly 80 percent of our fiscal year 2011 
goal primarily due to the high retention of active duty officers in the 
unrestricted line communities. We continue to work closely with the 
Office Chief of Naval Reserve (OCNR) and BUMED on several aggressive 
initiatives to address both challenges as we keep Medical and RC 
General Medical Officer recruiting as our top officer recruiting 
priorities.
    The fiscal year 2013 budget requests $276.0 million for recruiting 
programs including accession incentives, advertising, and support for 
our Active and Reserve recruiters. This represents a reduction of $34.1 
million from fiscal year 2012 mainly due to adjustments in marketing 
and advertising. Our budget request ensures that the recruiting force 
remains appropriately sized and resourced for success.
    Accession bonuses remain critical to meeting our goals for 
recruiting health professionals, nuclear operators, and special 
warfare/special operations personnel. We maintained bonus levels for 
nuclear officers and health professionals, and continue to offer 
enlisted accession bonuses to special warfare/special operations and 
other critical ratings to meet increased demand. A favorable recruiting 
environment has enabled us to reduce the number of ratings eligible for 
an accession bonus from 67 in 2008 to 6 in 2012. The fiscal year 2013 
active budget request for bonuses, special pays, and incentives, 
represents a $22.1 million reduction from fiscal year 2012.
    An integral component of achieving our force management goals 
include competing for the best talent in our Nation's colleges and 
universities. Our Naval Reserve Officers Training Corps (NROTC) program 
has 61 units located at 75 host institutions with 87 cross-town 
institution agreements. While the NROTC program has more than 
sufficient capacity for our current requirements, Navy recognizes the 
value of engagement and presence on the campuses of America's elite 
colleges and universities and appreciates the high quality educational 
experience provided to future military leaders at these institutions. 
The highest quality applicants ever for our NROTC program in fiscal 
year 2011 further reflected Navy's recruiting success.
    To broaden outreach efforts and generate recruiting leads, and to 
offset reductions in paid media advertising, we are expanding our use 
of social media and other technologies. Navy Recruiting Command has 
over 100,000 active followers across 19 prominent social media sites, 
including 15 Facebook communities of interest. However, face-to-face 
contact with recruits in the field remains the cornerstone of our 
sustained success in attracting high quality, diverse individuals.
                             vii. retention
    We continue to closely monitor retention behavior across the Force 
and project we will meet our fiscal year 2012 overall officer and 
enlisted retention goals. While we have been able to make selected 
reductions in retention bonuses, sailor retention behavior indicates we 
must continue to apply bonus programs to critical skill areas that are 
less responsive to changes in the economic environment and which 
require significant investments in training and education.
Enlisted Retention
    Despite a decade at war, Navy continues to experience high levels 
of retention among enlisted personnel across the force, due in large 
part to Navy's efforts to provide a quality lifework experience, 
increases in basic pay and housing allowances, and contributing 
economic conditions. Additionally, we experienced higher retention 
among female servicemembers, especially within critical technical and 
warfighting skilled areas. fiscal year 2011 aggregate enlisted 
retention was 63.9 percent, which is elevated relative to historical 
norms, even though we utilized several force management tools to 
suppress reenlistments.

------------------------------------------------------------------------
                                                    Fiscal Year 2011
                                                       Achievement
             Active Navy Retention             -------------------------
                                                 Reenlisted    Expected
                                                 (Percent)    (Percent)
------------------------------------------------------------------------
Zone A (0-6 yrs)..............................        66.0         59.0
Zone B (6-10 yrs).............................        67.0         66.0
Zone C (10-14 yrs)............................        72.7         72.0
------------------------------------------------------------------------

    Our new and existing policies encourage longer-term career behavior 
as sailors commit sooner to stay for longer periods. While affording 
increased predictability of future personnel readiness, higher 
retention also contributes to increased competition for reenlistment.
    This past year, 14,544 sailors were discharged before the end of 
their contracts, slightly above the projected attrition of 14,300; we 
project similar attrition in fiscal year 2012. Misconduct-related 
discharges this year are within 1 percent of misconduct discharges in 
fiscal year 2011. Reserve enlisted attrition rates continue to trend 
lower than the historical average, evidence of the high quality Force 
we have recruited.
    Demand in civilian industry for highly trained nuclear-qualified 
sailors challenges our ability to meet nuclear retention goals. We are 
committed to retaining sailors with critical skills in high demand in 
the civilian sector, as well as sailors in specialties that continue to 
experience high operational tempo in support of OCO, such as special 
warfare/special operations and independent duty corpsmen. Selective 
Reenlistment Bonus (SRB) remains the most important tool in our efforts 
to retain these highly-skilled sailors.
    By our close monitoring of retention behavior, we apply adjustments 
to SRB levels on a semi-annual basis, or as required. We have adjusted 
SRB levels five times in the past 18 months, reducing the number of 
eligible skill areas by 26 percent compared to fiscal year 2011. In 
fiscal year 2012, 33 of 84 ratings will receive SRB; the pool of 
eligible sailors is 2.3 percent of our Active Enlisted Force, 
representing a 60 percent reduction compared to fiscal year 2011. Our 
SRB plan targets high-demand skill sets unaffected by slowing or down 
economy, to include special warfare/special operations, information 
technology, medical, cryptology, and nuclear ratings. The fiscal year 
2013 budget request includes $107.3 million for new SRB contracts for 
Active Duty sailors, a slight reduction from fiscal year 2012. The 
fiscal year 2013 SRB budget for selected Reserve sailors is 13 percent 
less than fiscal year 2012, a reduction achieved by realignment of 
resources within the Navy Reserve Comprehensive Bonus Strategy to 
target the most critical specialties.
Officer Retention
    Active and Reserve officer retention rates remain high due, in 
large part, to targeted incentive pays, improved mentoring, flexible 
career options, and increased emphasis on lifework integration 
initiatives and current economic conditions. Retention of female 
unrestricted line (URL) officers beyond initial minimum service 
requirement (MSR) has increased in the last 4 years in both the surface 
warfare community (19 percent for Year Group 2001 to 33 percent for 
Year Group 2004) and aviation community (14 percent for Year Group 1998 
to 27 percent for Year Group 2001).\1\ Initiatives to improve retention 
of Selected Reserve (SELRES) officer communities by 2014 include 
targeted officer affiliation and retention bonuses, increased accession 
goals, and Continuum of Service programs.
---------------------------------------------------------------------------
    \1\ Because Minimum Service Requirement (MSR) is different for 
Surface Warfare (5 years) and Aviation (7 years), 2 comparable year 
groups (i.e., includes women who are past their initial service 
obligation) were examined to more accurately capture overall URL female 
retention. YGs 98 and 01 which both had only 7 year MSRs for prop/helo 
and 8 years for jets (10 U.S.C. 653).
---------------------------------------------------------------------------
    Although the overall loss rate for junior officers increased 
slightly from fiscal year 2009 to fiscal year 2010, economic conditions 
have contributed to surface and submarine communities meeting retention 
goals for the third consecutive year. With signs of an improving 
economy, we are closely watching junior officer retention since 
retention through the operational department head tour is a critical 
metric for monitoring the health of these communities.
    After a decade of war, we are seeing signs of increased operational 
stress on Naval Special Warfare (SEAL), Special Warfare Combatant-Craft 
Crewmen (SWCC), Combat Support and Combat Service Support personnel; 
increased operational tempo, decreased dwell time, and deployment 
unpredictability have contributed to a decrease in junior officer 
retention, particularly at the lieutenant commander (O-4) level. 
Mentorship and increased access to family support programs and 
operational stress control resources are primary tools to mitigate the 
effects of stress on these officers and their families. The fiscal year 
2013 budget request includes $7.6 million for targeted incentive pays 
to retain these critical officers.
    We have experienced slight improvement in medical community 
retention, largely due to competitive incentives and bonuses. Select 
subspecialties; including dentistry, psychiatry, clinical psychology, 
clinical social work, physician assistants, general surgery, preventive 
medicine, family medicine, mental health nurse practitioner, 
perioperative, and nurse anesthetists, continue to require attention. 
The fiscal year 2013 budget request includes $76.4 million for special 
and incentive pays to retain these critical medical professionals.
Retention and Compensation Going Forward
    The Budget Control Act of 2011 mandates reductions in Federal 
spending at levels that require every area of the budget to be 
scrutinized for efficiencies to produce cost savings. With the current 
budget situation, the Navy believes that every area of the budget, to 
include personnel costs, should be examined for efficiencies that could 
lead to cost savings. However, before any changes are made, complete 
understanding of the impact those changes might have on the 
servicemember and the Navy should be understood. The current 
compensation system, to include incentive pay, retirement and other 
benefits, is a major factor in retention for servicemembers. Any 
changes to this compensation package must be examined to ensure that 
Navy retention requirements are met.
    We routinely review special and incentive pay and bonus programs, 
adjusting bonus levels and eligibility in response to manning levels, 
in addition to reducing enlisted accession bonuses, Assignment 
Incentive Pay (AIP) and SRB. Over the past year, we have reduced 
officer bonuses in the aviation, and intelligence communities. 
Additionally, we restructured the Submarine Support Incentive Pay 
program to efficiently address shortfalls at specific career points and 
reduced total program costs by over 58 percent since fiscal year 2009. 
We will continue monitoring retention rates in fiscal year 2012 to 
determine the need for further adjustments for select officer 
communities.
    The current military compensation system, including retired pay and 
other monetary and non-monetary benefits, is a major factor in the 
success and quality of the All Volunteer Force. Navy strongly supports 
protecting the retirement benefits of those who currently serve by 
grandfathering their benefits; Navy is working closely with the Office 
of the Secretary of Defense (OSD) and other Services on this effort. 
Any changes to compensation, especially the retirement system, must be 
fair to the sailor and suitably reward the individual and their family 
for their service. As we examine the personnel budget, we must 
carefully consider, before imposing any cuts, the potential impact on 
sailors and Navy military personnel readiness.
                     viii. learning and development
    Education and training are strategic investments that enable our 
highly-skilled force to meet the demands of CNO's Sailing Directions 
and the Navy Total Force Strategy for the 21st Century. In response to 
the demands of our increasingly diverse and technologically complex 
world, we have increased our focus on Science, Technology, Engineering 
and Math (STEM) in our accessions and education programs. The $1.5 
billion fiscal year 2013 education and training budget invests in 
innovative training technologies and increases our investment in 
simulators, curricula, and instructors targeted at critical mission 
areas.
Accessions Training and Education
    We continue to invest in the Navy's ROTC program as an essential 
contributor to a diverse work force and diversity of thought and, in 
concert with appropriately-sized U.S. Naval Academy and Officer 
Training Command accessions, we have the officer accessions capacity we 
need to meet USN and USMC requirements. New investments in cyber 
education at USNA will ensure our flagship institution produces 
officers with the technical education and core competencies necessary 
to excel in this area as 21st century warriors.
    We have no plans to close Navy ROTC units, and in fact have 
recently restored the historic Navy ROTC presence at Harvard, Yale, and 
Columbia, and have opened host units at Arizona State University and 
Rutgers. Although the Navy's Junior ROTC program has included closures, 
they have occurred in accordance with Federal guidelines, and the bulk 
of the affected units have substituted Navy National Defense Cadet 
Corps (NNDCC) units in their stead. We are evaluating re-opening some 
JROTC units previously closed under Federal guidelines, but which have 
restored student enrollment above the statutory minimum enrollment 
threshold. Recruit Training Command (RTC) is appropriately sized to 
support current enlisted accession requirements and prepared to meet 
the increases associated with economic changes.
Technical Training and Skills Development
    The Navy continues to adjust staffing and student throughput of our 
accessions pipeline schools in response to the changing size, missions, 
and make-up of the Force. We have initiatives in progress to optimize 
the efficiency and responsiveness of the supply chain that takes a 
sailor from ``the street to the fleet''. For 2013 we made critical 
targeted investments in our technical training schoolhouses focused on 
improving readiness in key mission capabilities areas including 
Integrated Air & Missile Defense; Anti-Submarine & Surface Warfare; 
Command, Control, Communications, Computers, Combat Systems, and 
Intelligence; and Ballistic Missile Defense.
    The fiscal year 2013 budget request supports additional investments 
in simulators, trainers, and new technologies that allow us to deliver 
sailors to their commands with the skills needed to perform their 
missions faster and at reduced cost. Coupled with training aboard 
ships, simulators increase training opportunities and effectiveness 
across the Fleet while minimizing stress on equipment, operating costs 
and risk to our sailors. Examples of our fiscal year 2013 simulator 
investments include the Integrated Air & Missile Defense Advanced 
Warfare Trainer for our Ballistic Missile Defense platforms and the 
Aegis Ashore Team Trainer for shore based Ballistic Missile Defense. 
The Littoral Combat Ship (LCS) training program is based on the Virtual 
Ship Centric Training Strategy, which uses virtual simulators in the 
ashore LCS Training Facility to cover the full breadth and depth of 
ship operations and maintenance training.
    We continue to invest in the development and application of 
innovative training technologies that offer tremendous potential to 
provide our sailors the best technical training in less time with 
improved understanding and retention. The field of intelligent tutoring 
is a focus area for the Future Naval Capabilities Capable Manpower 
science and technology program, and our enlisted cyber-warriors are 
currently participating in a very promising Digital Tutor pilot course 
that combines classroom, instructor led training with advanced 
computer-based one-on-one tutoring to increase a student's motivation 
and problem solving skills.
Joint and Professional Military Education
    In the past year, the Navy has held education summits to examine 
the role of joint education, professional education and technical 
education in the career paths of our unrestricted line, restricted line 
and staff officer communities. The results of these summits, combined 
with a thorough review of the education requirements coded to all Navy 
officer billets, are informing an ongoing review of the Navy's 
education strategy. A review of Naval Post Graduate School (NPS) 
curricula is underway to examine ways to reduce time required to 
complete in-residence degrees, which, in conjunction with expanded 
distance learning opportunities, will better align with our officer 
career tracks and allow greater flexibility in meeting the Navy's 
Joint, and professional education requirements. In the past year, we 
have also begun new masters degree programs at the NPS for cyber 
operations and for energy management.
    A progressive continuum of professional military education, 
including degree opportunities, also exists for enlisted personnel. 
Junior enlisted pursue professional military education through distance 
learning hosted by the Naval War College, while senior enlisted 
personnel are afforded the opportunity to attend the Senior Enlisted 
Academy (SEA), which graduated 505 senior enlisted sailors from its 6-
week resident course in fiscal year 2011.
Voluntary Education
    The Navy's on-line Virtual Education Center (VEC) website and 
counseling service has proven very successful in providing centralized 
management of Tuition Assistance (TA) requests, sailors' academic 
transcripts and virtual counseling. The VEC has enabled the Navy to 
reduce operating costs by downsizing or eliminating local Navy College 
Offices at some bases while also reducing paperwork and processing time 
and increasing accessibility to educational opportunities for our 
sailors.
    Navy continues to maximize education opportunities through programs 
specifically tailored to meet the needs of our sailors and their 
families. The Navy College Program for Afloat College Education 
(NCPACE) makes college courses available to sailors assigned to ships 
and submarines deployed around the world. The Navy College Program 
Distance Learning Partners (NCPDLP) program offers both associate and 
bachelor degree programs through partnerships with accredited civilian 
institutions. These institutions provide maximum credit for military 
training and experience for every Navy rating and combine those credits 
with courses they offer to meet degree requirements. Sailors may use 
Tuition Assistance to offset their education costs in both NCPACE and 
NCPDLP.
    The Tuition Assistance (TA) program is the primary means for Navy 
personnel to pursue their off-duty education goals. The TA program 
management controls we implemented in 2010 require sailors to have a 
plan with clear educational goals to emphasize both professional 
development and academic success. These controls have helped us remain 
within our established funding limitations while providing a more 
equitable opportunity to use the program. Our management controls have 
improved academic success as evidenced by the reduction in the non-
completion rate of TA-funded courses from 16 percent in fiscal year 
2009 to 7.5 percent in fiscal year 2011.
Credentialing
    The demand for credentialing examinations continues to be very 
high, indicating the significant value sailors place on gaining 
professional recognition for their training and experience. In fiscal 
year 2011, we funded 19,762 certification exams, a 43 percent increase 
over fiscal year 2010. The Navy Credentialing Opportunities Online 
(COOL) website experienced 497,002 visits, a 65 percent increase over 
fiscal year 2010, and 30,460,627 hits, an 11 percent increase. Sailors 
in all 83 ratings have applied for funding, and 94.2 percent of those 
completing voluntary certification examinations via Navy COOL funding 
passed, far exceeding the national average pass rate of 75-85 percent, 
and represents a positive return on investment. In 2011, Navy COOL and 
Navy's Credentialing Program was awarded ``Best Workforce Development 
Program`` by Human Capital Management Defense, and the Navy COOL 
program was recognized through the Training Top 125 Award for the 
second consecutive year.
    In 2012, work has already begun to implement several improvement 
recommendations from the President's Employment Initiatives DOD/VA 
Veterans Employment Task Force and to develop Navy COOL pages to 
display credentialing opportunities for Navy's 198,000+ civilian 
employees. In addition, we will waive the time-in-service prerequisites 
to make COOL available to all sailors affected by the ERB to help 
posture them for success as they transition to the civilian workforce.
Navy Language, Regional Expertise, and Culture (LREC)
    Cultural, historical, and linguistic expertise remains essential to 
fostering strong relationships with global partners and to enhance our 
ability to execute missions in multinational environments. Over the 
past year, LREC efforts paid dividends in every geographic area of 
operations, including support for Operation Tomodachi in the Far East, 
Operation Odyssey Dawn in the Mediterranean, and Operation Continuing 
Promise in Latin America. Navy's LREC program in fiscal year 2011 
provided language and cultural training and products to over 67,000 
sailors and officers, 49 flag officers and 46 senior leaders heading to 
overseas assignments.
    We recently expanded the Navy Reserve Language Culture and Pilot 
Program to include all selected Reserve personnel. In fiscal year 2012, 
we are increasing opportunities for overseas study, language and 
cultural immersion, as well as professional exchanges with foreign 
navies for U.S. Naval Academy midshipmen. We are also pursuing full 
implementation of in-country language immersion training for Foreign 
Area Officers (FAOs), and transitioning the Personnel Exchange Program 
(PEP) to redefine long-standing agreements with traditional allies and 
partners, while realigning towards nations in regions of increasing 
strategic importance. In anticipation of the shift in focus outlined in 
Secretary Panetta's Sustaining U.S. Global Leadership: Priorities for 
21st Century Defense, LREC product development emphasis is 
transitioning from Central Command (CENTCOM) to the Asia-Pacific 
region, Indian Ocean perimeter, and West Africa.
    This past year we participated in Maritime Security Cooperation 
activities and supported the Joint Force in Afghanistan and Pakistan 
with enhanced language and cultural capabilities through the 
Afghanistan-Pakistan (AFPAK) Hands Program. We also provided timely, 
tailored language, and Afghanistan/Pakistan training and culture 
products to 3,695 Navy Individual Augmentees (IAs) and to sailors 
assigned to units deploying to the CENTCOM Area of Responsibility.
                      ix. building for the future
    As we navigate through a period of change, Navy must take action 
now to posture itself for success in the future. Evolving missions, 
shifting workforce demographics, and increased competition for skills 
will require new and innovative approaches to attracting, recruiting, 
and retaining the Nation's best talent. Mission success starts and ends 
with a highly skilled, highly capable workforce. To build an effective 
future force, we remain focused on developing and sustaining a diverse 
workforce, providing our sailors with opportunities for greater work-
life balance, and promoting open, frequent communication with families.
Diversity Initiatives
    Diversity is a Navy strategic imperative. By 2020, demographic 
projections indicate that minorities will comprise nearly 40 percent of 
the Navy's recruitable market, with minority representation continuing 
to increase over time. Navy's ability to access and retain the talents 
of varied sectors in our society has a direct impact on mission success 
at home and abroad.
    We recognize the value of diverse ideas, perspectives, and 
experiences to remaining competitive in an increasingly global 
environment; our Navy draws strength and innovation from this 
diversity. Navy continues to effectively execute our accession strategy 
of ``moving the needles,'' maintaining a high number of diverse 
applicants and enrollments in both NROTC and U.S. Naval Academy class 
of 2015. In recognition of our efforts, Navy received the 2011 
Diversity MBA Magazine's Best Places for Diverse Managers to Work, 
ranking number 26 on the list of the top 50 organizations for Diversity 
Leadership, and the only government organization included on the list 
of Fortune 500 companies. Additionally, the Association of Diversity 
Councils recognized the Navy's Strategic Diversity Working Group (SDWG) 
as the nation's number one diversity council for 2011.
Expanding Opportunities for Women
    Gender diversity remains an important focus area for Navy, 23 
percent of our enlisted accessions were women in fiscal year 2010 and 
fiscal year 2011, and we are on-track to bring in a similar number of 
women in fiscal year 2012. We are exploring ways to further increase 
the number of women in the Navy in the future. With few exceptions in 
which the combat exclusion applies, the vast majority of billets (93 
percent) are available to women, including ship, aviation squadron, 
afloat staff, naval construction force units and most recently, 
specific submarine platform billets.
    In fiscal year 2011, Navy began the integration of female officers 
into the submarine force. Five of the eight crews being integrated 
during the first round are successfully integrated and the remaining 
three will be by the end of March 2012. Our second round will include 
one additional SSGN and SSBN (i.e., four additional crews); women are 
currently in the training pipeline for integration in November 2012. We 
will continue to integrate women on submarines in a brisk yet 
responsible manner, while leveraging the insights from the studies and 
the lessons learned from initial integration efforts.
Life-Work Integration
    In an All-Volunteer Force, life-work integration and flexible 
career options are key to attracting, recruiting, and retaining the 
talent of a new generation just entering the workplace. With 75 percent 
of Fortune 500 companies reporting a chronic ``talent shortage'' among 
mid-level employers, Navy continues to address the imperative to retain 
talent and provide a work environment that is personally and 
professionally rewarding. Navy's ability to recruit and retain the 
talents of varied demographics has a direct impact on mission success. 
We are actively creating programs to enhance personal and professional 
development while providing life-work balance.
    Sailors and their families continue to benefit from comprehensive 
parental support programs including paternity and adoption leave, 
extended operational deferment for new mothers, and expanded childcare. 
We continue to support life-work integration while meeting mission 
requirements through initiatives such as Career Intermission, telework, 
and other flexible work options.
Communication with Navy Families
    Navy recognizes that social networking and the Internet can greatly 
facilitate communication efforts with sailors and their families. We 
continue to promote open, frequent communication with our sailors and 
their families and encourage development of social networking accounts, 
mobile applications, public websites, and publishing newsletters to 
sailors and their families via email.
    The Navy Recruiting Command ``Navy for Moms'' website received a 
2011 Workforce Management Magazine Optimas Award for ``Service.'' 
Through this award-winning website, families of current sailors can 
share information with families of future sailors and answer many 
questions about Navy life. Since its establishment in March 2008, more 
than 36,000 members have used the website to discuss issues with others 
who share common concerns. ``Military OneSource'' provides information 
on many topics, including parenting and childcare, educational 
services, financial information and counseling, civilian legal advice, 
crisis support, and relocation information. This free, 24/7 information 
and referral service offers practical solutions, background information 
and advice via the telephone, email, or the web to all Active Duty and 
Reserve sailors, and their families.
    Social media venues such as Facebook have quickly become a primary 
and effective means of communicating with a wide audience, including 
family members. Additionally, in cooperation with Navy's Chief of 
Information's social media team, we are able to connect to a much 
broader audience by taking advantage of the U.S. Navy official Facebook 
page, which currently has more than 400,000 fans.
Recognized for Results
    Our efforts have culminated in Navy's recognition as a Top 50 
organization. Top 50 organizations encourage innovation and focus on 
performance, while taking care of their people through programs and 
policies that support a culture of trust, respect, and collaboration. 
In October 2011, Navy received several awards for Business Excellence 
in Workplace Flexibility from the Alfred P. Sloan Foundation. These 
awards recognize initiatives introduced at six different organizations 
across the Navy that promote flexible work options while still 
achieving business goals. For the third year in a row, Navy received 
the prestigious Workforce Management Magazine's Optimas Award. This 
marked the first time in the award's 21-year history an organization 
has won 3 consecutive years.
    Navy continues to earn recognition for its high quality training 
and development programs. In the 3 years since Navy began participating 
in the American Society for Training and Development (ASTD) awards 
program, no other organization has won more awards for ``Excellence in 
Practice.'' Most recently, Navy was honored with an ASTD BEST Award, 
ranking third out of 32 best training organizations from a prestigious 
list of recipients from 6 nations. For the second year, Training 
Magazine recognized Navy as one of the premier training organizations 
in the country, ranking seventh out of 125 organizations recognized. We 
remain committed to seeking out best practices across industry and 
benchmarking our programs against the best in the Nation.
                             x. conclusion
    The President's fiscal year 2013 budget request supports critical 
programs that will ensure Navy's continued success in delivering the 
personal component of CNO's Sailing Directions, the Navy Total Force 
Strategy for the 21st Century, and key capabilities in support of 
Sustaining U.S. Global Leadership: Priorities for 21st Century Defense. 
I look forward to working with you as we continue to shape the Navy to 
meet current and emerging requirements, while confronting the 
challenges that lie ahead. On behalf of the men and women of the U.S. 
Navy, and their families, I extend our sincere appreciation for your 
leadership, commitment and unwavering support. Thank you.
                                 ______
                                 
      Prepared Statement by Lt. Gen. Robert E. Milstead, Jr., USMC
    Chairman Webb, Ranking Member Graham, and distinguished members of 
the subcommittee, it is my privilege to appear before you today to 
provide an overview on Marine Corps personnel.
                            i. your marines
    The Marine Corps is our Nation's expeditionary force in readiness. 
We are ready to respond to today's crisis--with today's force--TODAY! 
Currently, approximately 27,000 marines are forward-deployed in 
operations supporting our Nation's defense. Our individual marines are 
the Corps' most sacred resource, and the quality of our force has never 
been better.
                            ii. end strength
    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 fiscal environment and the lessons learned from 10 years of 
combat. The new strategy includes a reduction in our Active component 
end strength from 202,100 to 182,100 by the end of fiscal year 2016, 
while maintaining our Reserve component at 39,600 marines. Although 
reshaping the Marine Corps to a force of approximately 182,100 marines 
entails some risk relative to current and anticipated capacity 
requirements, we believe that it is manageable. Your new Corps will 
have fewer infantry battalions, fixed wing, aviation squadrons, and 
general support combat logistics battalions than we had prior to 
September 11. However, it adds cyber warfare capability, special 
operators, wartime enablers and higher unit manning levels--all lessons 
gleaned from recent combat operations.
    Our intent will be to conduct our drawdown in a measured way 
beginning in fiscal year 2013. Our plan is to reduce our end strength 
by approximately 5,000 marines per year and will be accomplished by 
some accession cuts, natural attrition, and voluntary separation and 
retirement authorities. The drawdown cannot be accomplished by 
accession cuts alone--that is a lesson learned from the last drawdown 
in the 1990s. In addition, we have no plan to conduct a reduction-in-
force (RIF) of our marines; they will be allowed to complete their 
current period of service. Our all-volunteer system is built upon a 
reasonable opportunity for retention and advancement; 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.
    Our overarching goal must be to keep faith with our marines and 
their families.
                       iii. marine corps reserve
    Our Reserve component continues to make essential contributions to 
Total Force efforts in Overseas Contingency Operations. In 2011, we 
continued to refocus our recruiting and retention efforts on meeting 
our Reserve component authorized end strength. These efforts included 
increases to the non-prior service recruiting mission, lowering rates 
of attrition, and discreet targeting of those marines eligible to 
receive an incentive. As a result, we achieved over 99.8 percent--
39,527--of authorized end strength in fiscal year 2011 (not including 
reservists who served on active duty at least 3 of the prior 4 years).
    Our incentives budget is $5.4 million in fiscal year 2012, and we 
project an end strength of 39,249, approximately 1 percent below our 
authorized level. For fiscal year 2012 and beyond, we have refined the 
use of incentives to strengthen manning in specialties and grades where 
we remain critically short. In particular, the recruitment of company 
grade officers and aviators remains most challenging. Targeted 
incentives and transition assistance outreach programs help us to 
attract junior officers who are leaving the Active component. While 
transitioning officers from the Active component provide the majority 
of our company grade officer leadership, we have had considerable 
success commissioning officers directly into the Reserve. The Reserve 
Officer Commissioning Program, which includes Officer Candidate Course-
Reserve (OCC-R)--has produced a total of 431 lieutenants for the Marine 
Corps since its creation in 2006 and has increased company grade 
officer fills from 21 to 46 percent. More importantly, it enables the 
Marine Corps Reserve to place officers in critical small unit 
leadership positions at the platoon and company level.
    To complement outreach efforts and the use of incentives, and to 
address the challenges of geographic constraints, we offer occupational 
specialty retraining. The Prior Service Military Occupational Specialty 
Retraining Program is crucial in our efforts to join enlisted marines 
to units that are located in areas of the country where it is 
geographically challenging to recruit. This training has helped us to 
build positive trends with respect to recruiting and retention and are 
integral to our future success.
    This year we increased efforts to fully staff Reserve aviation 
squadrons. To achieve this goal, we developed a number of Reserve 
aviation manpower initiatives designed to encourage transitioning 
Active component aviators to affiliate with Reserve units. Since there 
are a limited number of Reserve squadrons, the use of travel 
reimbursement, incentives, and aviator retraining programs are critical 
to achieving our staffing goals. Altogether, these programs, combined 
with our prior service recruiting efforts, should provide for at least 
90 percent manning of critical combat arms and company grade officer 
billets by the end of fiscal year 2014, with Reserve squadrons reaching 
this mark 1 year later.
                             iv. recruiting
    The Marine Corps is unique in that all recruiting efforts (officer, 
enlisted, regular, Reserve, and prior-service) fall under the direction 
of the Marine Corps Recruiting Command. Operationally, this provides us 
with tremendous flexibility and unity of command, allowing us to meet 
accession requirements.
    To meet future challenges in the recruiting environment, it is 
imperative that we maintain our high standards both for our recruiters 
and those who volunteer to serve in our Corps. Recruiting quality youth 
ultimately translates into higher performance, reduced attrition, 
increased retention, and improved readiness for the operating forces. 
Our actions, commitment, and investments today in recruiting ensure a 
high state of readiness in our Corps tomorrow.
    In fiscal year 2011, we achieved over 100 percent of our enlisted 
and officer recruiting goals for both the Active and Reserve 
components. On the enlisted side, we accessed over 99 percent Tier 1 
high school diploma graduates and over 74 percent in the upper Mental 
Groups of I-IIIAs, both exceeding Department of Defense quality 
standards. Our fiscal year 2012 Mission for enlisted marines is 28,500 
regulars (Active component) and 5,450 reservists. In fiscal year 2012, 
we expect to meet our annual recruiting mission to include all quality 
goals. Additionally, we expect to have a strong population of qualified 
individuals ready to ship to recruit training as we enter fiscal year 
2013. The fiscal year 2013 mission forecast is 28,500 regulars and 
5,800 reservists.
    The Marine Corps seeks to reflect the diversity of the Nation and 
be representative of those we serve. Diversity remains a strategic 
issue that raises our total capability by leveraging the strengths and 
talents of all marines. In fiscal year 2011, a tremendous amount of 
effort and resources was placed into communicating the Marine Corps 
diversity message through community outreach, recruit marketing, 
training and education. This enduring challenge requires the Corps to 
strategically evaluate our current efforts in order to drive toward 
improved capabilities.
    Our officer accessions mission for fiscal year 2012 is 1,450 Active 
Duty and 125 Reserve officers. Historically, the Active component has 
been the exclusive source of lieutenants and captains for the Reserves. 
As previously noted, filling company grade officer billets for our 
Selected Marine Corps Reserve units is traditionally our greatest 
challenge, but the success from the OCC-R program is proving to help in 
remedying this shortfall.
    Our recruiting command is taking a hard look at its advertising 
budget. It is imperative that we maintain the momentum within a 
competitive media environment and still provide the basic awareness 
level when reaching out to an increasing number of critical audiences 
(prospects and their influencers, officer candidates, and multicultural 
audiences) to include our diversity outreach. It is important that we 
acknowledge that today's successes are dividends from the investments 
made in recruiting and advertising 4 to 5 years ago.
    Our greatest asset is the individual marine and recruiting remains 
the lifeblood to the Corps and our bedrock to ``Make Marines, Win 
Battles, and Return Quality Citizens.'' We thank you for the generous 
support you have provided to us and look forward to working with you to 
ensure continued success in the future.
                              v. retention
    In fiscal year 2011, the Marine Corps achieved both its accession 
and retention missions and completed the year with a 201,497 Active 
component end strength (including 340 reservists who served on active 
duty at least 3 of the prior 4 years). For fiscal year 2012, we will 
continue to assess all recruiting and retention missions, enabling the 
Marine Corps to successfully meet our mission requirements and poise 
the force for the impending drawdown.
    Even with our successes in recruiting, retention, and overall end 
strength, the Marine Corps must continue to shape our force to meet 
continuing mission requirements and fill critical military occupational 
specialties (MOSs) with the most qualified marines. Incentive pays 
remain critical to this effort, allowing the Marine Corps to fill hard 
to recruit positions, such as crypto linguists and reconnaissance. 
Enlistment bonuses also allow us to ship new recruits at critical times 
to balance recruit loads at the depots and meet school seat 
requirements. It is important to note that only 8 percent of new Marine 
Corps recruits receive an enlistment bonus; the Marine Corps budget for 
enlistment bonuses has decreased from $75 million in fiscal year 2008 
to $14.7 million in fiscal year 2012.
    Selective Reenlistment Bonuses (SRBs) similarly allow us to shape 
our career force. SRBs target critical MOSs and allow us to laterally 
move marines to these MOSs. There are currently 6 of 205 occupational 
specialties where the on-hand number of marines is less than 80 percent 
of what is required. Our SRB funding has decreased from $468 million in 
fiscal year 2009 to $108.6 million in fiscal year 2012.
                      vi. women in service review
    As directed by the National Defense Authorization Act for Fiscal 
Year 2011, the Marine Corps, alongside the other Services, conducted a 
review of the laws, policies and regulations regarding the service of 
female members. The findings were delivered to Congress in February 
2012. The Marine Corps requested an exception to policy that would 
allow for the assignment of Active component female company grade 
officers and staff noncommissioned officers (E-6 and E-7) into select 
Ground Combat Element (GCE) units (Artillery, Tanks, Assault Amphibian, 
Low Altitude Air Defense, Combat Engineer and Combat Assault) down to 
the battalion level, in military occupational specialties (MOSs) 
already open to female marines. This will open 97 officer billets and 
274 staff noncommissioned officer billets for assignment of female 
marines during 2012.
    Concurrent with the exception to policy, the Marine Corps will 
conduct responsible research to generate data that can be used to make 
informed decisions and potentially develop appropriate gender neutral 
tests to screen males and females prior to assignment to the GCE. We 
must ensure that all marines assigned to the GCE have the required 
physical aptitude. This research will include a force survey and a 
research study that will assess the potential impact on recruiting, MOS 
classification, entry level training, and promotions in order to inform 
future assignment decisions. We will report back to the Secretary of 
Defense with an initial assessment in November 2012.
    The Marine Corps is committed to utilizing the skills and abilities 
of our marines to achieve the highest levels of unit readiness and 
focus on mission accomplishment. We are proud of the contributions that 
women make across the Marine Corps and want to ensure female marines 
continue to have opportunities to be successful.
                             vii. diversity
    The Marine Corps is committed to attracting, mentoring and 
retaining the most talented men and women who bring a diversity of 
background, culture and skill in service to our Nation. In both 
representation and assignment of marines, diversity remains a strategic 
issue. Our 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. This is an effort 
facilitated through our standing Diversity Review Board and a Diversity 
Executive Steering Committee chartered to establish the foundations for 
diversity success in the Total Force. In addition, since 2010, we have 
conducted leadership seminars that introduce diverse college 
undergraduates to Marine leadership traits and leadership opportunities 
in the Marine Corps; we are actively seeking new communities within 
which to continue this effort.
    The Marine Corps has established minority officer recruiting and 
mentoring as the highest priority in our recruiting efforts. Because we 
acknowledge the accession and retention of minority officers has been a 
challenge for our Corps, we are committed to taking steps to further 
facilitate the mentoring and career development of all our officers 
with emphasis on our minority officers in order to encourage the 
retention of our best officers no matter their background.
    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.
          viii. taking care of marines, sailors, and families
    Marine families are America's families and a model for the Nation. 
The Marine Corps will continue to take care of its marines and families 
through enhanced family readiness and family care programs. Marine 
communities are a team, and our programs promote increased 
socialization and community connection through official unit 
communication, readiness preparation and information, and referral 
opportunities. These programs seek to improve resiliency by training 
marines and families how to cope with the rigors of life in the Marine 
Corps, whether at home or deployed.
Family Readiness
    The Marine Corps has 380 Family Readiness Officers, who connect 
marines and families at the grassroots level to critical information 
and referrals and assist families during all phases of deployments. We 
recently completed an overhaul of our Marine Corps Family Team Building 
Training to ensure we are providing relevant, standardized and timely 
support and information to our families. In fiscal year 2011, we 
provided 5,869 Marine Corps Family Team Building training sessions.
    Family readiness also benefits from dependable yet innovative 
communication tools that help families effectively manage their lives 
in times of stress. eMarine, a secure website, delivers readiness 
information to marines and their families whether they are on active 
duty stationed at large installations or in the Reserves living in 
remote locations. It gives family members access to documents, photos 
and videos, discussion forums, and vital information about their 
marine's unit from anywhere in the world, 24/7.
    The Marine Corps conducted a full review during fiscal year 2011 of 
its Family Readiness programs to ensure they adequately support the 
mission and operational requirements of the Marine Corps. While our 
programs conform to the Commandant's guidance and congressional 
direction, we are developing program plans and supporting resource 
requirements to maintain capabilities at appropriate levels.
Family Care
    Family care programs support the care and development continuum of 
Marine Corps children from birth into their teens. Family care includes 
our school liaisons, who provide approximately 70 school districts with 
information about the needs of Marine Corps families and access to 
beneficial training and counseling services to support teachers and 
students. Marine parents are comforted by the support of a local 
education expert, who provides meaningful insight to new transfers and 
those with questions on local education policies.
    Child care services remain a high priority. In fiscal year 2011, we 
provided 15,927 child care spaces, which reflects an 18 percent 
increase in capacity from fiscal year 2010. The Marine Corps opened 
five new child development centers in fiscal year 2011 and plans to 
open eight more in fiscal year 2012. The Marine Corps has completed a 
Child Development Program and Facility Master Plan, which reviewed 
child care capabilities and costs across the Marine Corps. This plan 
will facilitate efforts to build multi-capable, adaptable services, 
reexamine structure, and ensure that our programs are prepared to 
deliver child care in an efficient manner. We will continue to 
standardize our processes in fiscal year 2012 and will work to enhance 
child care for marines and families serving on independent duty or at 
locations that are isolated from military bases and stations. We are 
also expanding our staffing model to include nurses at our Child 
Development Centers and behavioral health specialists at our 
installations across our family programs.
    Families enrolled in our Exceptional Family Member Program (EFMP) 
strongly endorse our focus on providing a continuum of care and the 
improvements made to their level of support. Two years of increasing 
enrollments and a reduction in issues experienced by families 
relocating to new duty stations demonstrate this approval. EFMP had 
only 4,500 enrolled family members in fiscal year 2008; it has over 
10,000 today. The Marine Corps continues to underwrite the cost of up 
to 40 hours of short-term respite care per month for enrolled families, 
providing more than 450,000 hours of respite care in fiscal year 2011. 
We continue to transform our program, which the Department of Defense 
(DOD) and our sister services continue to recognize as a premier 
program. Marine Corps policy ensures that the assignment and relocation 
process is sensitive to EFMP family needs and allows marines to remain 
competitive for promotion while maintaining a continuum of care for 
exceptional family members.
Personal and Professional Development
    We recognize and encourage all marines and their spouses to pursue 
and achieve their life goals while serving in the Marine Corps or 
beyond as veteran marines. Our Personal and Professional Development 
(P&PD) program supports marines and their spouses with their education, 
employment, financial fitness, and transition readiness goals. This 
program integrates the efforts of several formerly-disparate programs 
(education services, transition assistance, spouse employment support, 
personal financial management, relocation assistance, library programs 
and the Marine For Life network) to ensure we provide our marines and 
spouses holistic education and support.
    One of our most significant initiatives is to revise and improve 
our Transition Assistance Management Program (TAMP) to better meet the 
needs of our transitioning marines and their families. TAMP is being 
integrated and mapped into the lifecycle of a marine from recruitment, 
through separation or retirement, and beyond as veteran marines. The 
Marine Corps efforts will comply with the multi-agency initiative, led 
by OSD and VA, to help improve employment prospects of veterans, as 
well as with implementing the provisions of the recently enacted 
Veterans Opportunity to Work (VOW) Act.
    The integration of our Marine For Life program in the P&PD Program 
has improved our ability to work with the civilian community to find 
opportunities for our transitioning marines and their spouses. Marine 
For Life also provides an avenue for marine veterans to reach back for 
assistance or to volunteer their services to assist transitioning or 
veteran marines in their communities.
    Regarding spouse employment opportunities, we see that tying these 
programs more closely with formerly marine-focused programs, such as 
transition assistance and on-base education, creates significant 
synergy. Many of the same employers who seek marine veterans are also 
interested in employing marine spouses. We look forward to working with 
the Joining Forces Initiative, which seeks to streamline certification 
and licensure procedures for marine spouses. We also support parallel 
efforts to qualify marines for certifications based upon military 
training and experience.
    Our P&PD Program includes personal finance counseling efforts to 
help marines make responsible financial decisions. We have created a 
new personal financial management curriculum that covers 34 major 
topics including saving and investing, credit and debt management, and 
smart home buying, selling and renting. These efforts help ensure that 
we are not focusing solely on those in financial distress but also on 
preparing marines and their families to be financially stable and 
prepared.
    Bringing all of these programs together to offer an integrated set 
of personal and professional development services will enable marines 
and their families to be more effective, and more ready. At the same 
time, these services will help marines be better prepared to make the 
transition back to civilian life whether it be after a 4-year 
enlistment or a 30-year career.
Behavioral Health Integration
    The integration of our behavioral health programs seamlessly weaves 
our efforts in sexual assault, suicide, combat and operational stress, 
substance abuse and family advocacy/domestic violence into the larger 
support network of command structures and the health and human services 
across the Marine Corps. We focus on evidence-based practices to ensure 
we are providing effective support in these critical areas and utilize 
our Behavioral Health Information Network, which is a web-based 
clearinghouse, for the latest information on behavioral health. This 
integration further benefits from our Behavioral Health Advisory 
Committee, a committee chartered for the purposes of examining 
promising practices and making recommendations on our behavioral health 
programs. A universal prevention training module, which is in 
development, will reduce redundancy in our training efforts by 
integrating all behavioral health program information. This training 
will discuss common risk and protective factors across all behavioral 
health programs.
Sexual Assault Prevention and Response
    Our Sexual Assault Prevention and Response Program follows a 
holistic approach to prevention and response, utilizing a top-down 
leadership message of support and an emphasis on bystander 
intervention. Marines have an inherent responsibility to step up and 
step in to prevent sexual assault. Our priority is to reduce the number 
of incidents as well as reduce the number of unreported sexual assaults 
by utilizing a consistent and focused emphasis on command climate. The 
Marine Corps has revitalized our curriculum for noncommissioned 
officers to include a new video-based bystander training, entitled 
``Take a Stand,'' designed to reduce stigma by stimulating conversation 
and engaging marines with a more personalized message about sexual 
assault prevention.
    We are revitalizing our Command Team training module, updating our 
annual training and enhancing our training for all first responders. We 
have staffed our installations with subject matter experts, positioned 
to have the greatest impact on victims and victim care. In addition, 
24/7 Helplines are available at all major installations and Reserve 
headquarters to provide resources and advocacy for victims. These 
Helplines are answered by victim advocates who are trained to provide 
immediate services to victims of sexual assault.
    We continue our focus on accountability for those who violate the 
Uniform Code of Military Justice. The Marine Corps Trial Counsel 
Assistance Program (TCAP) trained 118 Judge Advocates in sexual assault 
investigation and prosecution best practices in fiscal year 2011. TCAP 
will continue this training in fiscal year 2012 and plans to train 
approximately 125 Judge Advocates and 75 enlisted paralegals. The DOD-
wide release of the Defense Sexual Assault Incident Reporting Database 
will enhance current case management capabilities.
Suicide Prevention
    In calendar year 2011, we lost 33 marines to suicide, and we 
preliminarily recorded 171 suicide attempts. While we have seen 2 
consecutive years of decreased suicides and evidence of change in 
marine attitudes toward behavioral health, we still have much work to 
do. Leaders prevent suicide by strengthening all marines and 
encouraging marines to engage helping services early, when problems are 
most manageable. We continually encourage marines to recognize, 
acknowledge and seek help for stress reactions, and we deploy evidence-
based prevention practices such as peer-to-peer suicide prevention 
training. The Marine Corps will work closely with the DOD Suicide 
Prevention Office to implement recommendations of its Joint Task Force 
on the Prevention of Suicide. Our award-winning ``Never Leave a Marine 
Behind'' suicide prevention program, which is peer-led and continually 
updated to reflect emerging evidence-based practices, is tailored to 
reflect the culture and values of the Marine Corps. We will continue to 
forge strong relationships with Federal agencies, academia, and private 
industry in order to further our understanding of suicide prevention.
Combat and Operational Stress Control
    Combat and Operational Stress Control (COSC) helps Marine leaders 
maintain their warfighting capabilities by addressing the negative 
impacts of stress. COSC enhances force preservation, readiness and the 
long-term health and well-being of marines and their families. Every 
battalion or equivalent unit across the Total Force will have an 
Operational Stress Control and Readiness (OSCAR) team by mid-2012. 
OSCAR teams are comprised of mentors (selected unit marines and 
leaders), extenders (unit medical and religious personnel), and mental 
health professionals, who provide a network of support. As of March 
2012, the Marine Corps had trained over 10,000 marines as OSCAR 
mentors, who help reduce stigma and act as sensors for the commander by 
noticing small changes in behavior and taking action early before 
stress becomes a medical issue. COSC is incorporating lessons learned 
into new courses in COSC fundamentals for all levels of enlisted 
professional military education.
    Our DSTRESS Line, which will have a global capacity by mid-2012, 
addresses the full spectrum of behavioral health needs, whether they 
are problems arising from the everyday stressors of life or a suicidal 
crisis. DSTRESS Line is a ``by Marine/for Marine'' counseling center 
for marines, attached Sailors, and families, who can call, chat online, 
or Skype with a veteran marine, Fleet Marine Force corpsman, or Marine 
Corps family member.
Substance Abuse
    Our Substance Abuse Program works to reduce substance abuse and 
dependency disorders that negatively affect the operational readiness 
and health of the force. The program's tenets are prevention, treatment 
and drug demand reduction. We are executing an Alcohol Abuse Prevention 
Campaign throughout the Marine Corps this year to reduce the negative 
impact that alcohol abuse and misuse has on the Marine Corps' readiness 
and health.
Marine Total Fitness
    In fiscal year 2012, we will also continue to develop our Marine 
Total Fitness concept to develop marines of exemplary physical, 
psychological, spiritual and social character. Marine Total Fitness, 
which will support the Department of the Navy's 21st Century Sailor and 
Marine Initiative will infuse resilience-based information and concepts 
into all aspects of a marine's training and readiness. A totally fit 
marine exhibits exemplary physical, mental, spiritual, and social 
character and is prepared to successfully operate in and respond to the 
rigors, demands, and stressors of both combat and garrison. The four 
pillars of Marine Total Fitness--physical, psychological, social, and 
spiritual--provide an avenue to deliver programs, initiatives and 
resources.
Casualty Assistance
    The Marine Corps Casualty Assistance Program is committed to 
ensuring that families of our fallen marines are treated with the 
utmost compassion, dignity, and honor. Always seeking to improve 
survivor assistance and demonstrating a record of quick, effective 
action, our Casualty Assistance Program is a 24-hour-per-day operation 
manned by marines and civilians trained in casualty reporting, 
notification and casualty-assistance procedures. Casualty Assistance 
Calls Officers assist the next-of-kin with burial arrangements, 
applications for benefits and entitlements, contact with benevolent and 
philanthropic organizations, and obtaining reports of investigation. 
Within days of the incident, families are connected to representatives 
from the Tragedy Assistance Program for Survivors, a nationally-
recognized provider of comfort and care to those who have suffered the 
loss of a military loved one. The Marine Corps reaches out to the next-
of-kin approximately 60 days after the loss to help resolve any 
remaining issues and to let the families know that they are still part 
of the Marine Corps family. We will remain steadfast in our support of 
our Marine Corps families who have paid so much in service to our 
Nation.
                   ix. semper fit & exchange services
    I want to thank Congress, especially this subcommittee, for your 
continued support for our Marine Corps Semper Fit and Exchange 
programs. In the National Defense Authorization Act for Fiscal Year 
2012, you and your colleagues included a provision which allows us to 
access credit for business operations through the Federal Financing 
Bank and thereby lock-in the best possible interest rates. Thank you 
for your hard work on that bill.
    The Commandant continues to stress that the Marine Corps will keep 
faith with our marines, our sailors, and our families. We repeat this 
theme in all that we do as we strive to deliver capability-based 
programs all the way down to the unit level.
Semper Fit & Recreation
    Our Semper Fit and Recreation programs support the readiness, 
resiliency, and retention goals of your Marine Corps. Our efforts are 
primarily focused on the areas of fitness, sports, health promotion, 
and recreation, as they are essential in maintaining a fit marine. We 
recently introduced High Intensity Tactical Training (HITT), a 
comprehensive strength and conditioning program geared towards 
optimizing physical performance and combat readiness. HITT is designed 
to reduce the likelihood of injury while in theater; initial feedback 
from marines is positive and Corps-wide rollout of the program, 
including use in Afghanistan, began in February and will be completed 
at all installations by June 2012.
    Social resilience is linked with unit cohesion and we are 
identifying unit-driven recreational activities to provide at Marine 
Corps installations. Operation Adrenaline Rush, currently offered at 
two installations, assists marines in reintegration by empowering small 
unit leaders, maintaining combat readiness, and reinforcing unit 
cohesion. The program offers opportunities for outdoor recreation 
activities such as whitewater rafting and deep sea fishing.
    Overall, Semper Fit makes every effort to deliver high quality 
programs and services to marines and their families. Our programs are 
vital to the continued success and development of your marines and your 
Corps.
Marine Corps Exchange and Temporary Lodging Facilities
    The Marine Corps Exchange (MCX) is inextricably linked to our 
mission of taking care of marines and their families and is an 
important part of the overall non-monetary benefits package. Our 
success is measured on the program's value and contributions to the 
readiness and retention of our marines, as well as our ability to 
provide unparalleled customer service, premier facilities, and valued 
goods and services at a savings. With MCX, unlike any other retail 
store, marines can rely upon a high quality product at a fair price and 
know that the proceeds are returned to their community, creating a 
stronger Marine Corps. Like other Marine Corps Community Services 
(MCCS) facility master planning efforts, MCX is executing branding 
strategies, and our aggressive re-investment into our main stores is 
near completion. We are also expanding the branding strategies to focus 
on our Marine Marts and Temporary Lodging Facilities. All Marine Corps 
design standards are focused on energy efficiency and sustainability.
Deployed Support
    Deployed support is one of the most important services we provide. 
Our Exchange, Recreation and Fitness, Communication, and MCCS Amenity 
Wi-Fi services not only boost and maintain morale, but also help to 
reduce mission-related stress.
    Exchange
    Ongoing missions in Afghanistan include the operation of two Direct 
Operation Exchanges Tactical at Camps Leatherneck and Dwyer, one 
Tactical Field Exchange at Camp Delaram II, one Imprest Fund Site at 
Forward Operating Base (FOB) Edinburgh, and numerous Warfighter Express 
Services Teams operating out of Camps Leatherneck, Dwyer, and FOB 
Edinburgh.
    Recreation and Fitness
    We assist in providing sports, recreational, and fitness equipment 
to units throughout Helmand Province. This transportable equipment 
includes sports/recreation cooler kits filled with sports gear and 
board games, electronic game kits, Theater-in-a-Box kits, and 
functional fitness equipment for use in austere environments. Reading 
materials, both electronic and paperback, are also available.
    Communication
    Morale Satellite services are available to forward operating bases, 
combat outposts, and other austere locations. We have delivered 13 
satellite communications systems to units in Afghanistan. Each system 
has 2 phones which each provide 6,000 free minutes per month and 5 
laptops that allow internet access, social networking, and chat/video 
capabilities to deployed marines. In 2011, we provided over a half-
million minutes of telephone air time. In addition, approximately 
23,683 marines were able to use the Morale Satellite services at 
several different FOBs, including over 2,100 telephone calls over the 
Thanksgiving and Christmas holidays.
    MotoMail, supported by Marine and Family Programs and first offered 
in December 2004, is another form of communications support which 
continues to serve marines and families. MotoMail allows friends and 
family members to submit letters and pictures online to deployed 
marines. A marine will receive their letter within 24 hours of 
submission. Since implementing this free service, over 4.1 million 
letters have been created and delivered.
    MCCS Amenity Wi-Fi Solution
    The Marine Corps Community Services Amenity Wireless Fidelity (Wi-
Fi) Solution program deploys Wi-Fi capability at no cost to marines and 
families. This morale and welfare initiative helps marines stay in 
contact while separated from their families. The Wi-Fi is conveniently 
located at temporary lodging facilities, exchange food courts, 
libraries, education centers, child and youth centers, clubs, and 
Wounded Warrior Program facilities. Since its inception, our Wi-Fi 
program has been popular with marines and their families. As of the 
first of this year, the program is available on 19 Marine Corps 
installations with 240 buildings receiving Wi-Fi coverage.
                      x. wounded warrior regiment
    The Marine Corps is grateful for this subcommittee's recognition of 
the service and sacrifices of wounded, ill, and injured (WII) marines 
and their families. Your marines continue to sustain wounds on the 
battlefield, including catastrophic injuries that present significant 
quality of life challenges. Marines also continue to be injured in 
training accidents, become ill, and experience other tragedies that 
require a wide range of interconnected non-medical care. Through our 
Wounded Warrior Regiment (WWR), we provide this care--from the point of 
injury or illness through return to duty or reintegration to civilian 
communities.
    Our WWR is a single command with a strategic reach that provides 
non-medical care to the total Marine force. The Regimental Headquarters 
in Quantico, VA, commands the operation of two Wounded Warrior 
Battalions (at Camp Lejeune, NC, and Camp Pendleton, CA) and multiple 
detachments in locations around the globe, including at major Military 
Treatment Facilities and Department of Veterans Affairs Polytrauma 
Centers. All WWR elements function as a cohesive team to allow for 
consistent, top-notch services for WII marines, their family members, 
and caregivers.
    The Marine Corps approach to wounded warrior care is to return 
recovering marines to their parent units as quickly as their medical 
conditions permit. Allowing marines to ``stay in the fight'' is what 
makes our care model unique and successful. When WII marines remain 
with their parent units, they are supported by their regular command 
structure with the full assistance of our WWR's comprehensive assets. 
WII marines with medically acute cases (typically when their recoveries 
are more complex and medical treatment or rehabilitation is expected to 
exceed 90 days) are joined to a WWR element where they are enrolled in 
programs to not only heal them medically, but also strengthen their 
mind, body, spirit, and family during recovery and rehabilitation.
    There is no one-size-fits-all approach to warrior care. Each case 
is unique based upon the marine's phase of recovery, their location and 
family situation. Care does not lend itself to a process, but rather, 
it is a relationship between the WWR and the WII marine. As leadership 
is an integral part of the healing process, our WWR assigns specially-
trained Marine Section Leaders to various locations where WII marines 
are joined to maintain good order and discipline and ensure that these 
WII marines are provided leadership, mentorship, and encouragement on a 
daily basis.
Assets and Capabilities
    Now in its fifth year of operation, our WWR continues to refine its 
programs and services. Many program improvements are based upon sound 
feedback from WII marines, their family members and caregivers. Our 
fundamental assets and capabilities are available to WII marines 
whether they are joined to the WWR or remain with their parent command.
    Recovery Care Coordinators (RCCs)
    We currently provide 49 RCCs to approximately 1,220 WII marines, 60 
percent of whom are joined to the WWR and 40 percent remain with their 
parent command. Our RCCs are located at 14 sites and serve as the WII 
marine's central point of contact to help them set and meet their 
recovery and transition goals. RCCs work in coordination with other 
members of the marine's recovery team (Marine leadership, medical case 
managers, non-medical case managers, and others) to ensure recovery and 
transition actions are fully coordinated. Recent improvements to the 
RCC program include standardizing Comprehensive Recovery Plans (CRPs), 
the WII marine's ``life map,'' by implementing a quality assurance 
program for consistent CRP development and documentation. We have also 
developed a robust training program that provides RCCs with the 
critical skills necessary to identify WII marines' needs, translate 
those needs into concrete goals, and then provide actionable steps to 
help the marine meet their goals. To facilitate a smooth transition 
process, the RCCs have instituted a practice whereby they hand-off 
cases of marines who leave the Marine Corps to other WWR assets for 
post-transition monitoring and to provide for any ongoing or residual 
care coordination requirements. Our RCCs coordinate with the Department 
of Veterans Affairs' Federal Recovery Coordinators (FRC) on cases where 
WII marines have been assigned an FRC to ensure a smooth transition to 
VA services.
    Warrior Athlete Reconditioning Program
    When a marine is wounded, ill, or injured, our WWR helps focus them 
on their abilities through the Warrior Athlete Reconditioning Program 
(WAR-P). WAR-P provides activities and opportunities for marines to 
train as athletes, to increase their strength so they can continue with 
military service or develop healthy habits for life outside of the 
Marine Corps. WAR-P, which is mandatory for marines joined to the WWR, 
does more than help WII marines maintain a healthy body; it counters 
declining self-perception, depression and stress that may be associated 
with their injury. Under WAR-P, WII marines have more than 20 
activities to choose from, including swimming, cycling, running, 
wheelchair basketball, and strength and conditioning.
    Sergeant Merlin German Wounded Warrior Call Center
    The Marine Corps continues to honor its commitment to keep faith 
with WII marines through our WWR's Call Center, a Department of Defense 
Best Practice, which renders resource and referral assistance to WII 
marines and Marine veterans. Our trained Call Center staff includes 
retired marines, other Marine veterans, and family members of marines 
augmented by a small staff of psychological health professionals. They 
not only receive calls on a 24/7 basis, but also conduct outreach 
efforts to check on the well-being of WII marines. Combat-wounded 
marines who remain with their parent units are contacted at prescribed 
intervals to determine if they have any needs or issues. If needs are 
identified, the marine is referred to a non-medical care manager for 
resolution. These calls can result in assignment to a Wounded Warrior 
Battalion or the assignment of a Recovery Care Coordinator, or both. 
This Call Center also serves as the WWR's hub for its new social media 
efforts, which includes Facebook, Twitter, and a new WWR App that can 
provide fact sheets, news updates, and other WWR-specific information.
    Strategic Communication
    Clear, consistent, and accurate information regarding services and 
eligibility must reliably reach WII marines, their family members, and 
caregivers. To address this need, the WWR continually disseminates 
information on its programs and services to various audiences, 
including Marine Corps leaders, to ensure the Marine Corps total force, 
including all wounded warriors and commanders are aware of the WWR's 
services.
    Community Reintegration
    As the vast majority of WII marines reintegrate to their 
communities, our WWR has taken steps to ensure they are highly 
competitive in a difficult job market. We provide specialized 
transition support through Transition Cells, located at WWR 
Headquarters and Wounded Warrior Battalions. Transition coordinators, 
both Marine Corps and civilian employees (including representatives 
from the Departments of Labor and Veterans Affairs), work closely with 
marines to reach their employment and education goals. Based on the WII 
marine's ultimate goals, the transition coordinators determine their 
needs, develop pathways, provide coaching and resources, and help 
network for employment and careers. For WII marines who are joined to 
the WWR, their transition to civilian life begins as soon as their 
medical conditions allow (typically at outpatient status). They must 
start an education program, participate in an internship, or return to 
work (ideally in a military occupational field commensurate with their 
established goals).
    Integrated Disability Evaluation System Support
    The Marine Corps supports the current Integrated Disability 
Evaluation System (IDES) process as it enables the recovering 
servicemember and family to continue to receive our support and 
transition smoothly to VA benefits from active duty status. While not a 
universal concern, some marines have expressed dissatisfaction with the 
IDES process due to the variance in their final DOD compensation 
package and their VA compensation based on the same VA disability 
rating determination. This is because DOD compensates for medical 
conditions that are determined to be military unfitting by the service 
Physical Evaluation Board (PEB), whereas VA compensates for all 
disabling medical conditions incurred or aggravated during a period of 
active duty. Although the Marine Corps does not own the IDES process, 
we own the marine and it is our responsibility to be their advocate. 
Over the past year, we have taken several actions to improve IDES 
performance. These actions include:

         providing Marine Corps leadership with detailed IDES 
        case processing information, resulting in their ability to work 
        closer with the Regional Medical Commanders on specific issues 
        impacting IDES performance;
         enhancing the PEB administrative staff and bolstering 
        manning to perform field-level counseling and case processing 
        assistance;
         providing Marine Corps disability evaluation attorneys 
        with a list of marines entering the IDES process for proactive 
        advocacy prior to the Medical Evaluation Board (MEB) referral; 
        and
         ensuring all marines referred into the IDES receive a 
        pocket-sized information pamphlet on the IDES process which 
        provides detailed information on the establishment of the DOD 
        and VA compensation based on the VA determined disability 
        rating. It also identifies all actors (PEBLOs, VA Military 
        Service Coordinators, DES Attorneys, and Independent Medical 
        Reviewers) in the IDES process and describes how the marine can 
        work with that actor to achieve a better outcome.

    These initiatives have reduced case backlogs and improved case 
processing timeliness in the MEB and improved customer satisfaction.
Program Assessment
    The WWR recognizes the importance of sound data to measure program 
effectiveness and inform changes in the way we serve WII marines and 
their families. Since the WWR was established in 2007, several surveys 
have been conducted. The most recent survey was administered to WII 
marines joined to or supported by the WWR and posed questions relating 
to our various care coordination assets: Section Leaders, Recovery Care 
Coordinators, the Wounded Warrior Call Center and Battalion Contact 
Cells, Family Readiness Staff, and District Injured Support 
Coordinators. Findings reveal that satisfaction levels have increased 
for marines injured prior to 2007 and are now consistent with WII 
marines injured post 2007. Much of this equalization can be attributed 
to the reach-back capability that the Call Center possesses, conducting 
outreach calls to offer assistance. There was also an increase in 
satisfaction levels in the following areas: WWR personnel; the level of 
information provided/ability to provide information; and ability to 
provide support to family members. One of the most important data 
points from the survey: 81 percent of respondents agreed or strongly 
agreed that WWR personnel do a good job of coordination with each other 
to make things easier.
    Our WWR has also been assessed by the Department of Defense Task 
Force on the Care, Management, and Transition of Recovering Wounded, 
Ill, and Injured Members of the Armed Services. We are pleased to point 
out that we were recognized for several best practices, including our 
Hope and Care Centers, customization and delivery of the Keeping It All 
Together Handbook to families at detachments, and our IDES Pocket Guide 
for Marines.
    WII marines and their family members and caregivers have sacrificed 
much and I can assure this subcommittee and Congress that we will fully 
honor their sacrifices by continuing to provide them quality care and 
support to posture them for success, whether they return to duty or 
transition back to civilian life.
                          xi. 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 in light of civilian labor budget reductions, we 
proactively conducted a full review of the civilian workforce in late 
2010. This measure resulted in a self-imposed hiring freeze from 
December 2010 to December 2011, but allowed time to prioritize 
requirements within affordable levels and align resources with 
capabilities. It also ensured the civilian labor force was shaped to 
support the mission of the Corps today and for the future. As a result 
of our efforts, the Marine Corps avoided drastic reductions of civilian 
personnel and was able to reduce from a planned level of 21,000 
personnel in direct funded Full-Time Equivalencies to 17,501.
    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, 
with some exceptions for critical workforce growth areas such as 
acquisition, intelligence (National Intelligence Professionals), 
information technology, security (Marine Corps Civilian Law Enforcement 
Personnel), and cyber.
    The civilian labor budget represents less than 5 percent of the 
Marine Corps' fiscal year 2012 budgetary submission, demonstrating that 
our ``best value'' for the defense dollar applies to our civilians as 
well as our marines.
                     xii. health care efficiencies
    The Marine Corps supports the reforms in military compensation 
programs included in the President's fiscal year 2013 budget. The 
President's budget acknowledges the reality that military pay, 
allowances, and health care costs cannot be ignored in our 
comprehensive effort to achieve savings. The compensation reforms are 
sensible. Modest pay raises continue--no reductions, no freezes. 
TRICARE care enrollment and deductibles fees increase for retirees, but 
they are comparatively moderate and tiered based on retirement income. 
Pharmacy co-pays trend toward market rates and encourage the use of 
generic drugs and mail-order delivery. In all cases, costs remain 
substantially less than those in the private sector.
                            xiii. conclusion
    To continue to be successful, we must always remember that our 
individual marines are our most precious asset, and we must continue to 
attract and retain the best and brightest into our ranks. Marines are 
proud of what they do. They are proud of the ``Eagle, Globe, and 
Anchor'' and what it represents to our country. With your support, a 
vibrant Marine Corps will continue to meet our Nation's call.
    Thank you for the opportunity to present this testimony.

    Senator Webb. Secretary Ginsberg, welcome.

 STATEMENT OF HON. DANIEL B. GINSBERG, ASSISTANT SECRETARY OF 
THE AIR FORCE FOR MANPOWER AND RESERVE AFFAIRS; ACCOMPANIED BY 
  LT. GEN. DARRELL D. JONES, USAF, DEPUTY CHIEF OF STAFF FOR 
        MANPOWER, PERSONNEL AND SERVICES, U.S. AIR FORCE

    Mr. Ginsberg. Thank you very much, Mr. Chairman.
    Chairman Webb, Ranking Member Graham, and members of the 
subcommittee, General Jones and I would like to thank you for 
the opportunity to testify today on behalf of more than 700,000 
airmen--Active, Guard and Reserve, and civilian, who make up 
the most capable aerospace and cyberspace force the world has 
ever known. We know that you and members of the subcommittee 
are keenly interested in the well-being and support of our 
airmen. We must start by thanking you all for everything that 
you have done to support them each and every day.
    In the past year, our Nation's airmen have performed 
magnificently, carrying out operations precipitated by Arab 
Spring, major natural disasters, Homeland defense missions, and 
ongoing overseas contingencies in Afghanistan and the 
conclusion of our Iraq operations.
    It is vital to visit our airmen firsthand and see their 
contributions and challenges they face every day, and we can 
assure you that from Japan to Florida, from Wyoming to 
Kandahar, your members of the U.S. Air Force are laying it on 
the line for the Nation every single day.
    It is due to the quality of our All-Volunteer Force that 
your Air Force can project focused military power to achieve 
strategic, operational, and tactical objectives globally in 
support of our national security interests.
    We have no higher priority than taking care of our airmen 
and ensuring that they have the resources and support that they 
and their families need to stay focused and ready to perform 
the demanding missions we assign to them.
    As this subcommittee already is well aware, the Air Force 
had to make very hard choices in this year's budget submission. 
We had to reconcile top-line reductions with our requirement to 
fulfill our global commitments and maintain acceptable levels 
of readiness while still sustaining key quality of life and 
core services for our people. Despite a difficult budget 
situation, the Air Force is committed to providing cost-
effective medical care services and programs to maintain a 
healthy and resilient force. We must support our people to meet 
the demands of high operational tempo and persistent conflict. 
Developing and caring for our airmen will remain a key focus as 
we continue to become more efficient and develop smarter and 
more agile approaches to our achieving security objectives.
    Again, on behalf of Secretary Donley and General Schwartz 
and all of our airmen, we thank you for your commitment and 
support to our Air Force. We look forward to answering your 
questions.
    Senator Webb. Thank you very much, Secretary Ginsberg.
    General Jones, both of your full statements will be entered 
into the record at this time.
    [The joint prepared statement of Mr. Ginsberg and General 
Jones follows:]
   Joint Prepared Statement by Hon. Daniel B. Ginsberg and Lt. Gen. 
                         Darrell D. Jones, USAF
    The airmen of our great Air Force serve the Nation with 
distinction. They have performed valiantly during more than 20 
continuous years of combat operations dating back to Operation Desert 
Storm, while simultaneously supporting multiple broad-spectrum 
operations across the globe. Committed to meeting the requirements of 
the President's Defense Strategic Guidance, while confronting the 
realities of the current and future constrained fiscal environment 
facing our Nation, the Air Force remains committed to recruiting, 
developing and delivering to the battlefield innovative airmen who can 
smartly and skillfully meet any task or mission. Our commitment as the 
Air Force's Assistant Secretary for Manpower and Reserve Affairs and 
Deputy Chief of Staff for Manpower, Personnel and Services is to align 
the Air Force's greatest resource, our airmen, to support the national 
security strategy. We must do so with fiscal responsibility, making 
extremely difficult resource priority decisions while at the same time 
demonstrating that we fully support our airmen and their families. As 
we prioritize missions, it is critical we balance capabilities between 
our Active and Reserve components to maintain a robust national 
security posture in a dynamic global environment.
                         contingency operations
    Our airmen remain at the forefront of today's conflicts and 
contingency operations around the globe, serving proudly alongside our 
soldier, sailor, and marine counterparts. Today there are more than 
80,000 airmen either forward deployed or stationed abroad worldwide in 
our Nation's defense with an additional 134,000 airmen providing direct 
support to our joint warfighters from the continental United States on 
a daily basis. That means 43 percent of our Total Force is directly 
supporting combatant commander requirements every day. In late 2010, 
the Air Force began a transition to a 6-month baseline deployment 
length. This will increase at-home time for airmen between deployments 
and use pre-deployment training resources more efficiently. We are on 
track to complete this transition by October 2012. At the same time, 
Air Force 365-day deployment taskings have increased to 2,300, up from 
689 in 2005, and now represent 7 percent of the Air Force's total 
deployments.
                military and civilian personnel budgets
    The Air Force is committed to maintaining and sustaining the 
appropriate size and force mix to align with the new defense strategy, 
ensuring we meet mission requirements with acceptable personnel tempo 
and associated stress on the force. Detailed assessments of future 
conflict scenarios and deployment rotation requirements drove force 
structure adjustments resulting in the corresponding personnel 
reductions. 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 an 
Active Duty military end strength reduction from 332,800 to 328,900. 
Our Air Force Reserve (AFR) military end strength will decrease by 900 
(increase in 200 full-time; decrease in 1,100 part-time, including 700 
associated technician positions) to 70,500, and Air National Guard 
(ANG) military end strength will decrease by 5,100 (500 full-time; 
4,600 part-time, including 1,400 associated technician positions) to 
101,600. Approximately 80 percent of these reductions were driven by 
force structure changes.
    During the development of the fiscal year 2012 President's budget, 
the Secretary of Defense released efficiency guidance to improve the 
effectiveness and efficiency of business operations. As part of this 
guidance, the Department of Defense (DOD) civilian end strength funding 
was targeted at fiscal year 2010 levels. For the Air Force, this action 
effectively removed funding for 16,500 civilian positions that were 
planned growth between fiscal year 2010 and fiscal year 2012. To meet 
the DOD-directed civilian funded targets, the Air Force conducted an 
enterprise-wide review of efficiency initiatives, reducing overhead and 
eliminating redundancies, while protecting areas of strategic 
importance such as the nuclear enterprise, intelligence, reconnaissance 
and surveillance. The reductions ultimately resulted in the Air Force 
divesting 3,000 positions of planned civilian growth and approximately 
13,500 established positions, primarily from management and support 
staff areas.
    The fiscal year 2013 budget includes a total budget authority 
request of $34.2 billion for Active Duty, ANG and AFR military 
personnel. Included in this budget is a 1.7 percent military base pay 
increase, a 4.2 percent increase in the housing allowance and a 3.4 
percent increase in subsistence allowance. We also project an 11.4 
percent decrease in Overseas Contingency Operations (OCO) funds. In 
addition, the civilian personnel budget requested for fiscal year 2013 
is $12.4 billion for a programmed total force civilian strength of 
185,900, and includes a 0.5 percent pay raise following a 2-year pay 
freeze.
                          compensation reform
    We support the President's plan to establish a military retirement 
commission, undertaking a thorough review of the current retirement 
system and make recommendations to modernize that system with input 
from the Department We also support the recommendation that any changes 
be grandfathered. The costs for military pay, allowances and health 
care have risen significantly in the last decade. As part of a DOD-wide 
effort, we are participating in the development of multiple proposals 
to meet deficit reduction targets and slow cost growth. The adjustments 
to the TRICARE benefits included in the budget reflect the proper 
balance and the right priorities necessary to sustain the benefit over 
the long term. National health care costs continue to rise at rates 
above general inflation and DOD is not insulated from this growth as we 
purchase over 60 percent of our care from private sector. DOD 
beneficiaries' out-of-pocket costs with the proposed changes remain far 
below the cost-sharing percentage they experienced in 1995.
                       military force management
    The Air Force will continue to sustain excellence with a smaller, 
more agile and modernized force. We continue to realize record high 
retention and remain focused on tailored force management efforts as we 
continue to size and shape the force to meet congressionally mandated 
end strength. The Force Management Program is a targeted, multi-year 
program managing the force along the 30-year continuum of service, 
which leverages voluntary measures first, incentivized programs where 
needed, and implements involuntary measures as required to yield 
sustained support for combatant commanders across the globe.
    The fiscal year 2012 voluntary force management programs include 
active duty service commitment waivers; time-in-grade waivers; reduced 
enlistment contract waivers; 8 versus 10 commissioned years of service 
waivers for prior-service officer retirement, as granted in the 
National Defense Authorization Act (NDAA) for Fiscal Year 2011; 
voluntary separation pay; and Palace Chase transfers to the Air Reserve 
components. We plan to utilize the Temporary Early Retirement Authority 
granted in the NDAA for Fiscal Year 2012 by targeting a very limited 
and specific number of enlisted airmen in selected skills.
    The fiscal year 2012 officer involuntary force management program 
resulted in 610 losses through use of a force shaping board for 
probationary officers with less than 6 years Total Active Federal 
Commissioned Service (TAFCS), a reduction in force board for captains 
and majors, and lieutenant colonel and colonel selective early 
retirement boards. The fiscal year 2012 enlisted involuntary force 
management program currently only calls for date of separation 
rollbacks.
    In fiscal year 2013, the Air Force's voluntary programs are similar 
to those in fiscal year 2012 and the only involuntary action is a 
projected force shaping board for probationary officers with less than 
6 years TAFCS. Additionally, the Air Force will continue use of limited 
selective continuation and reduced promotion opportunities to captain 
(95 percent) and major (90 percent).
    While we must take proactive measures to manage the force to remain 
within end strength, the Air Force is also committed to ensuring an 
effective transition to civilian life for our airmen. We have increased 
our focus on improving Transition Assistance Programs and are actively 
participating with the White House Veterans Employment Initiative Task 
Force, in an effort to reduce veteran unemployment. We are committed to 
providing appropriate resources towards increased transition assistance 
and veteran employment efforts as we continue to collaborate with the 
Office of the Secretary of Defense (OSD), the Department of Veterans 
Affairs (VA), the Department of Labor, the Department of Education, and 
other government partners.
                       civilian force management
    The Air Force has initiated programs to achieve the necessary 
civilian force reductions while ensuring mission continuity to comply 
with the fiscal year 2010 funding levels as directed by DOD. The Air 
Force has implemented force management programs such as hiring 
controls, a 90-day hiring freeze, and two rounds of voluntary 
separation initiatives (Voluntary Early Retirement Authority (VERA) and 
the Voluntary Separation Incentive Pay (VSIP)). More than 2,900 
civilian employees have accepted VERA/VSIP incentives. A third round of 
voluntary separation initiatives are planned to begin 1 May and 
conclude on 31 August. During this time of reductions and reshaping the 
force, the Air Force's primary goal is to minimize the number of 
involuntary separations to the greatest extent possible.
          retention, recruitment, bonuses, and incentive pays
    The Air Force accesses, retains and grows motivated and uniquely 
qualified airmen to meet the security threats of today and the future. 
We must carefully tailor accessions to meet current needs, while also 
considering the future, as not bringing in enough new recruits can 
impact the force for 30 years to follow. Therefore, while our force 
management plan includes reducing some officer and enlisted accessions, 
those reductions are considered against future requirements. We project 
reducing enlisted accessions for fiscal year 2012 and fiscal year 2013 
by 1,030 and 1,232, respectively, and reducing officer accessions by 30 
in fiscal year 2012, but no planned reductions in fiscal year 2013.
    The Air Force seeks the highest quality recruits to fill our ranks 
as current airmen retire or separate through programmed attrition. To 
support these efforts, we have included $82 million in the budget for 
the Air Force Recruiting Service to support Total Force recruiting 
operations, and an additional $97 million for fiscal year 2013 
advertising, a slight reduction in the total recruiting budget from 
fiscal year 2012. In 2011, the Air Force experienced great recruiting 
success, meeting all enlisted and officer recruitment goals for the 
Active Duty and Reserve components. Just as notably, the quality of 
recruits entering the Air Force greatly increased. For our CAT I to 
IIIA recruits, the average score on the Armed Services Vocational 
Aptitude Battery increased from 90.5 percent in 2010 to 98.5 percent 
thus far in fiscal year 2012, and we anticipate continued overall 
recruiting success in fiscal year 2012 and fiscal year 2013. However, 
there are nine Air Force career fields, to include linguist, special 
operations, and explosive ordnance disposal specialties where critical 
shortages remain due to high operational demand, manning shortages, or 
lengthy training pipelines. We budgeted $14.5 million in Initial 
Enlistment Bonuses in fiscal year 2013 to attract airmen into these 
critical skill areas. Active duty, non-line officer recruiters met 99 
percent of their 2011 goal. We increased our efforts to recruit Fully 
Qualified Health Professionals (FQHP), meeting the goal of 25 FQHP 
officers in fiscal year 2011 while increasing our fiscal year 2012 goal 
to 55.
    The ANG met their fiscal year 2011 enlisted recruiting goal and are 
on track for fiscal year 2012. However, ANG officer recruitment fell 
short in fiscal year 2011 in both line officer and health professional 
areas. In response, the ANG is executing precision recruitment efforts 
in fiscal year 2012 towards officer candidates using a standardized 
processing system, focused lead generation, and a heightened 
advertising campaign to help meet officer recruiting goals by fiscal 
year 2013.
    The Air Force Reserve continues to attract and retain qualified 
prior service and nonprior service recruits. For the 11th straight 
year, the AFRC Recruiting Service has led DOD in meeting recruiting 
goals. The Air Force's ability to attract and retain trained Active 
component airmen into the AFR greatly reduces training costs, and 
enhances the repository of talent and expertise available to meet the 
Air Force's surge and steady state requirements.
    Retention remains at an all-time high in the Air Force as a whole, 
contributing to the need for multi-year force management programs to 
remain within authorized end strength. However, retention is still 
problematic for some skill sets and year groups, and we need investment 
to counter low accession year groups of the past and to retain critical 
warfighting skills for the future. Bonuses have proven the most 
effective, responsive, and measurable tool for retention to encourage 
airmen to remain in or retrain into career fields with high demand 
requirements. Training and replacement costs far exceed the amount 
invested in bonus programs, so the Air Force has allocated $420.4 
million in fiscal year 2013 for Special and Incentive bonus pay. The 
Air Force has portioned $232 million of this amount for Selective 
Reenlistment Bonuses (SRB) for 78 Air Force specialties, down from 89 
in fiscal year 2011. SRB investments have shown to improve retention up 
to 1 to 8 percent per SRB increment, depending on the enlistment zone, 
and have proven to be a critical tool in retaining our needed 
specialties for the future. Retention of senior noncommissioned 
officers (SNCO) in certain high-demand specialties such as combat 
control and pararescue is also challenging. critical skills retention 
bonuses (CSRB) remain a vital tool to target specific year groups 
within specialties experiencing low retention, manning shortfalls, and 
high operational demand. Therefore, the Air Force targeted $2.9 million 
in enlisted CSRB towards retaining these SNCOs beyond retirement 
eligibility. Additionally, we are investing $10 million in CSRB towards 
officer specialties with retention and manning problems including 
contracting, special tactics, combat rescue officers and health 
professionals.
                           airman development
    One of our primary initiatives in developing the force is an effort 
to better define, identify, and track institutional, occupational, and 
cross-functional competencies. During fiscal year 2013, we will 
continue to institutionalize a process allowing force development 
stakeholders at all levels to quantify and measure specific skills on 
both an individual and aggregate basis. Doing so will allow us to 
develop our Total Force airmen more deliberately by matching training, 
education, and experiential opportunities to real-world requirements. 
The Air Force is developing cross-cultural competence for all airmen, 
in order to prepare them to deliver the global vigilance, global reach 
and global power our Nation expects. To support this requirement, we 
will focus our efforts on: (1) building expertise in foreign language, 
regional, and cultural skills; (2) recognizing joint experience in an 
airman's career; and (3) ensuring our educational offerings address 
current and anticipated requirements for language and regional 
expertise.
                  support to airmen and their families
    Quality-of-life programs continue as one of our highest priorities. 
As our force changes, we must adapt our programs and services to ensure 
we meet the needs of today's airmen and families. Additionally, we must 
tailor our offerings based on the utilization of services and the 
availability of suitable alternatives.
    We recently completed the second generation of our Caring for 
People Survey. More than 100,000 Total Force airmen voiced their 
opinions in this online survey conducted from December 1, 2010 to 
January 3, 2011. The survey measured satisfaction with quality of life 
across the Air Force community, to include airmen, spouses, Air Force 
civilians, and retirees across multiple areas like medical care, 
housing and support for families. The respondents expressed 
satisfaction with housing, installation schools, military benefits, 
dining facilities, fitness centers, child development centers and youth 
programs. Information, Tickets and Travel, along with the Air Force 
Food Transformation Initiative were standouts, competing with 
comparable industry leaders in the travel and food service industries. 
Some areas of concern include a sense of Air Force community, financial 
issues, medical care for families and job satisfaction.
    We have a project team developing base prototypes, technological 
innovations and efficiencies to address concerns not just from the 
Caring for People Survey, but a variety of other surveys and focus 
groups as well. The team will provide installation commanders with 
tools to help them determine how to shape quality of life programs 
according to the needs of their local Air Force community. In that 
vein, another key focus area is strengthening partnerships within local 
communities to take advantage of the services they provide. In the end, 
we will consolidate or divest quality of life activities that are not 
financially viable or not well utilized in order to redirect resources 
to the places where they matter most to airmen, their families and the 
mission.
    Our successful Food Transformation Initiative (FTI) continues as a 
high priority through fiscal year 2012 and fiscal year 2013. A customer 
satisfaction rating of 75 at the 6 FTI installations, compared to 67 at 
other facilities, indicates we are on the right path as we work to 
improve the delivery of meal choices, food quality, speed of service, 
and the overall dining experience for our personnel. As another 
indicator of success in our first year, we served an additional 530,000 
customers and provided 133,000 more meals to our junior enlisted 
members at FTI installations as compared to the previous year. Based on 
the initial success of this program and with congressional support, we 
anticipate expanding FTI to seven additional installations in fiscal 
year 2013.
    It is important to recognize the contributions of non-pay programs 
in enhancing the quality of life for our airmen and their families. The 
Defense Commissary Agency operates as a nonprofit organization and can 
save a family of four an estimated $4,500 a year. Providing groceries 
and household items .at cost. saved patrons a total of $2.7 billion 
last fiscal year. Additionally, the Army Air Force Exchange Service 
(AAFES) provides merchandise and services to military members and their 
families at competitively low prices. The 3,100 facilities located in 
over 30 countries provided an average 24 percent savings to customers 
compared to comparable retail stores. Additionally, AAFES gives back to 
the military community through significant dividend contributions, 
which amounted to $90.6 million going back to the Air Force communities 
AAFES serves in fiscal year 2010. AAFES also offers employment benefits 
as 31 percent of employees are military family members.
    We continue to strengthen our Air Force community by meeting 
childcare needs through a robust construction effort to increase the 
number of available childcare spaces and reduce our shortfall by the 
end of fiscal year 2012. We are also adding 74 accessible childcare 
playgrounds and 26 community nature parks in support of Air Force 
families with special needs. The Air Force Expanded Child Care program 
assists airmen who need child care for unusual shifts, extended duty 
hours and drill weekends. Additionally, we funded our new respite 
childcare program for special needs children at seven bases and we will 
expand it to other locations throughout the upcoming year.
    We are also expanding our Exceptional Family Member Program (EFMP) 
to support more than 18,400 Air Force families with special needs 
members, a 10 percent increase since the end of fiscal year 2010. To do 
so, we placed 35 EFMP Family Coordinators at installations with the 
highest concentrations of families enrolled in the program. We are also 
adding 36 EFMP Medical Coordinators through fiscal year 2016 to support 
families needing specialized medical care and included $3 million 
starting in fiscal year 2013 to fund respite care and other EFMP 
related programs.
    The Air Force also recognizes the important role and sacrifices of 
our ANG and AFR airmen and their family members. While many of the same 
family support programs are offered to our Reserve components, we 
realize that ANG and AFR families have difficulty sometimes accessing 
those available resources. As a result, we have supported ANG and AFR 
unique programs such as the Home Community Care program, which provides 
fee-assisted, in-home quality childcare during scheduled drill 
weekends. Returning Home Childcare for deployed personnel is another 
ANG/AFR family program benefit, funding 16-hours of no-cost care per 
child following deployments of 30 days or more. Finally, a Defense 
Management Data Center survey administered to ANG/AFR families 
highlighted the high satisfaction with the congressionally-supported 
Yellow Ribbon Reintegration Program (YRRP), with 83 percent of 
respondents expressing high satisfaction with the YRRP events. 
Additionally, 77 percent said the information presented increased their 
confidence in their ability to find and utilize vital resources that 
would prepare them and their loved ones for continued military service.
                military health system (mhs) governance
    The Air Force fully supports the MHS Governance Task Force 
recommendations. They are important because they represent the intense 
and informed deliberation of both line and medical professionals who 
were seeking the best solutions to maintain exceptional care for our 
servicemembers while finding more effective and efficient ways to 
deliver that care.
    The Air Force believes implementation of the task force 
recommendations will ensure the sustainment of this high level of 
mission success. We agree that a more effective and efficient joint 
medical solution can be attained without the expense of establishing a 
unified medical command. The Services should--and will--continue 
integrating common medical platforms to reduce redundancy and lower 
costs. The task force recommendations will move us quickly to a 
construct that curtails expenses and achieves savings to the greatest 
extent possible while meeting our deeply important mission; providing 
quality health care to the military member and their families, while 
being good stewards of American taxpayer dollars.
                      airman and family resiliency
    A key factor in maintaining the health of our Air Force is to 
increase the resiliency of our airmen. Our efforts include a number of 
programs in the Comprehensive Airman Fitness (CAF) model designed on 
four pillars of resilience: Mental, Physical, Social and Spiritual. 
This program provides tools to help Total Force airmen and their 
families withstand, recover or grow in the face of stressors and 
changing demands. It is our goal to expand education and training of 
the CAF model to our accession and professional military education 
units first. Next, we will provide Master Resilience training Air 
Force-wide to individuals who provide face-to-face resilience skills 
training at the installation level. Further, the Leadership Pathway is 
a program incorporating basic resilience and life skills for airmen and 
family members in utilizing existing resources offered at the Airman 
and Family Readiness Center, Health and Wellness Center, Air Force 
clinics/hospitals and base chapels.
    The Deployment Transition Center (DTC) at Ramstein Air Base, 
Germany, was established to provide valuable decompression, 
reintegration and resilience training for returning servicemembers who 
were exposed to significant danger and stress in combat zones. Since 
calendar year 2010, over 3,000 airmen have completed the center's 2-day 
program and have reintegrated with their home units and families. The 
Air Force fiscal year 2012 budget includes $7 million for DTC 
operations, research, curriculum development, materials and 
intervention training.
                           suicide prevention
    Suicide prevention remains a top Air Force leadership priority. The 
Air Force uses an integrated public health approach to suicide 
prevention, emphasizing leadership involvement, a supportive Wingman 
culture, and access to evidence-based care provided by Air Force 
helping agencies. The Air Force Suicide Prevention Program is one of 
only 15 evidence-based programs listed by The Substance Abuse and 
Mental Health Services Administration. Recent suicide prevention 
initiatives include requiring face-to-face suicide prevention training 
for all frontline supervisors in the three career fields with the 
highest suicide rates in 2010. Since implementation in November 2010, 
the suicide rates in these career fields dropped significantly.
    Other initiatives include developing the Airman's Guide for 
Assisting Personnel in Distress, a new web-based resource to assist all 
airmen with strategies and resources for a variety of behavioral 
concerns. We are also sponsoring a RAND study on the use of social 
media and its impact on relationships and emotional wellbeing, as well 
as research by the University of Rochester on specific clusters of risk 
factors associated with suicide. The Air Force Community Action 
Information Board/Integrated Delivery System (CAIB/IDS) links leaders 
and helping professionals at every level of the Air Force organization 
and monitors all our suicide prevention initiatives for continuity and 
completeness. An audit of its effectiveness will provide guidance on 
enhancing the functioning of these organizations and provide areas of 
further improvement in our evidence-based program.
    Proper public messaging on suicide prevention is important. Public 
messages must avoid the impression that suicide is common, so the Air 
Force has revised memorial service and public affairs guidance shifting 
the focus toward the positive message of resilience, stressing the 
benefits of early help-seeking and effective Wingmanship.
    Finally, the Air Force is working closely with our sister Services 
to implement recommendations made by the Defense Health Board's Task 
Force on Suicide Prevention and to clarify roles and responsibilities 
within the Department regarding suicide prevention.
                 sexual assault prevention and response
    The Air Force strongly supports the Secretary of Defense's 
commitment, focus, and initiatives aimed at eradicating sexual assault. 
Eliminating sexual violence is everyone's responsibility. Leaders, 
commanders and supervisors set the tone and must model zero tolerance 
and behaviors supporting zero tolerance. The goal of our Air Force 
Sexual Assault Prevention and Response (SAPR) program is to prevent and 
respond to sexual assault through a balance of focused education, 
compassionate advocacy and accountability, promoting respect and 
dignity throughout the Air Force.
    Prevention of sexual assault continues to be a high priority. 
Career long education and training creates a foundation for prevention. 
This education begins with accessions, continues through all phases of 
professional military education, and is refreshed during annual 
training. In February, we released a wing commander guide, An 
Opportunity to Lead, containing five core elements to help commanders 
provide immediate impact. The guide addresses personal leadership, 
climate and environment, community leadership, victim response, and 
offender accountability. In addition, Bystander Intervention Training 
has been established as a requirement for all airmen, focusing on the 
importance of recognizing signs of inappropriate or unsafe situations 
and intervening appropriately.
    The NDAA for Fiscal Year 2012 contained significant mandates 
addressing sexual assault including a requirement for full time Sexual 
Assault Response Coordinators (SARCs) and victim advocates at brigade 
or equivalent level. The Air Force SAPR program has included full time 
SARCs at installation level since 2005, including the six primary U.S. 
Central Command area of responsibility AF locations. Air Force SARCs 
receive training that meets national advocacy credentialing standards. 
Victim advocates are military and Air Force civilian volunteers who 
receive comparable training. Currently, 3,159 fully trained volunteers 
are available to assist victims. The Air Force projected $31.8 million 
to execute the SAPR program in fiscal year 2013. The budget funds full-
time SARCs, 24 dedicated investigative agents specializing in sexual 
assault investigations, and operational program expenses for all first-
responder agencies and field level activities. To meet the new NDAA for 
Fiscal Year 2012 requirement for full time Sexual Assault victim 
advocates at brigade or equivalent level, the Air Force will need to 
add 89 new positions (60 DOD civilians and 18 officers from the Active 
Duty component, and 11 traditional Reserve officers from the Air 
Reserve component). The associated cost is $7.5 million in fiscal year 
2013, increasing to $8.4 million by fiscal year 2017.
    Prevention and response are critical elements of the SAPR program. 
Holding those who commit the crime of sexual assault accountable is 
equally important. The Air Force is committed to accountability through 
effective investigations, knowledgeable staff judge advocate advice, 
and strong commander and senior enlisted support. The Air Force has 24 
Air Force Office of Special Investigations investigators dedicated to 
sexual assault investigations and funds 10 DNA analyst salaries at the 
U.S. Army Criminal Investigations Laboratory to analyze Air Force 
sexual assault case evidence. Investigators and judge advocates 
participate in combined training and attend courses specifically 
addressing sexual assault crimes. The recent Air Force Judge Advocate 
General Keystone annual leader summit provided a 4-hour session for 
staff judge advocates facilitated by subject matter experts on 
investigation and evaluation of sexual assault cases. Executive Order 
MRE 514 provides victim advocate privilege against disclosure of 
certain communications by victims, SAPR victim advocates and family 
advocacy program victim advocates, and we feel certain this provision 
will encourage more victims to come forward and report sexual assaults 
and incidents of domestic violence.
    In March, the Air Force launched the Defense Sexual Assault 
Incident Database (DSAID). The Air Force has worked closely with OSD 
from concept development to DSAID system design, so we look forward to 
implementing this valuable tool for enhanced reporting to Congress and 
to our leaders and commanders and we appreciate Congress's continued 
support in addressing this crime.
                            wounded warriors
    The Air Force continues to strengthen its support for our wounded, 
ill and injured population through our Warrior and Survivor Care 
Division. Our wounded, ill and injured airmen deserve our very best and 
the Warrior and Survivor Care Division is committed to providing them 
individualized and focused non-clinical support. Through the Recovery 
Care Coordinator (RCC) program, we have strategically placed 33 non-
clinical care managers around the country and in Germany. This RCC 
network provides dedicated support and coverage from the moment Air 
Force Casualty reports that an airman is placed in a seriously or very 
seriously ill or injured status; serving as independent advocates for 
each airman and working to ease the burden of administrative and 
personal requirements as they navigate through their continuum of care.
    Our Family Liaison Officers (FLO) also provide an invaluable 
service to the families of our seriously or very seriously wounded, ill 
and injured airmen. The Air Force has taken the concept used to support 
families of the fallen and applied it to our wounded warrior families 
as well. The FLO coordinates all logistical support for family members 
to include arranging lodging, securing transportation, and seeing to 
the comfort and other arising needs of the family.
    While we provide excellent care for all our wounded, ill, and 
injured with RCCs and FLOs, the Air Force Wounded Warrior Program 
(AFW2) focuses exclusively on our combat wounded airmen. This program 
provides long-term, non-clinical care management for combat wounded who 
must meet a Medical Evaluation Board or Physical Evaluation Board to 
determine whether they are fit for duty. Focused, personal care from 
AFW2 allows our combat wounded airmen the opportunity to make informed 
decisions when their future career path changes due to their injuries.
                integrated disability evaluation system
    The Air Force has collaborated with OSD and the VA to simplify the 
Integrated Disability Evaluation System (IDES) process for 
servicemembers by increasing transparency and reducing processing time 
to improve the transition for servicemembers from DOD to VA. Overall, 
the IDES monthly progress report for February 2012 indicates Air Force 
Active component case processing is averaging 360 days, down from an 
average of 540 days in recent years.
    The Air Force Medical Evaluation Board (MEB) and Physical 
Evaluation Board (PEB) are working diligently to meet timeliness goals 
and ensure quality outcomes. We have directed considerable leadership 
attention and resources targeting improved MEB and PEB decision 
timeliness and are on target to meet review and decision guidelines by 
October 2012. These focused efforts will ensure our wounded, ill and 
injured personnel receive timely reviews and adjudications of their 
cases. Along with the Army and the Navy, the Air Force is working with 
the Wounded Warrior Care and Transition Policy Office to identify a 
methodology for accurately tracking each step associated with the 
transition phase.
    Another venue of disability appeals administered by the Air Force 
is the DOD Physical Disability Board of Review (PDBR). As the lead 
component operating this Wounded Warrior Board, the Air Force recently 
partnered with the VA in its outreach efforts to ensure every PDBR-
eligible veteran is made aware of their opportunity to have their 
service assigned disability ratings reviewed. The goal of this 
interdepartmental effort is to reach all 77,000 eligible veterans 
within the year.
                          operational reserve
    We appreciate the opportunity to also share information about the 
highest quality, most cost efficient Reserve component in history. As 
the new DOD strategy is implemented and planning occurs to conform with 
an increasingly austere budget environment, the Air Force Reserve and 
Air National Guard will continue to maximize the advantages of 
Associations. Associate units have proven themselves as a solid 
solution that exploits the strengths each component offers. They ensure 
that the experience and cost effectiveness of the Air Force Reserve and 
Air National Guard reach their full potential. This effort is critical 
to mission success in an environment wrought with fiscal challenges.
    Recently, Congress passed much-needed legislation allowing Service 
Secretaries to involuntarily mobilize up to 60,000 members of the 
Reserve component without a national emergency. The use of this 
authority still needs to be planned, programmed and budgeted before it 
can be implemented. The Air Force is working with OSD to develop the 
policies and procedures to offer the fastest, most enduring support to 
not only the combatant commanders around the world, but to all our 
members; balancing their time between service to our country, their 
families, and their employers.
    The Air Force Reserve and Air National Guard are currently 
sustaining combat operations in conjunction with our active duty 
colleagues on five continents--lengthy operations which have produced 
strains on our airmen and our equipment. We will continue to define the 
most efficient mix of Active, Air Force Reserve, and Air National Guard 
forces best suited to the strategy in terms of cost, operational 
requirements, surge or regeneration capability, and employment of Total 
Force assets. By ensuring optimal mix between the Regular Air Force, 
the Air Force Reserve, and the Air National Guard the Total Force will 
not only preserve previous investments in readiness, capability, and 
capacity, but also protect the operational expertise of the force for 
future use while ensuring a rapidly expandable, trained and ready 
military.
            military personnel appropriation (mpa) man-days
    The MPA man-day resource enables the Air Force to leverage Air 
Reserve Component capabilities supporting military missions beyond the 
Active component's level of capability. In late 2009, a decision was 
made to implement a requirements-based MPA man-day process as part of 
the Air Force Corporate Structure (AFCS) fiscal year 2012 Program 
Objective Memorandum (POM) development process. Since the fiscal year 
2012 POM build, Air Force Major Commands have worked closely with the 
combatant commanders to identify requirements. Once submitted, 
requirements are staffed, verified and vetted through the AFCS based on 
priorities established in the Annual Planning and Programming Guidance. 
Additional criteria such as mission impact, critical skills, active 
duty manning and level of support are also weighted to finalize the 
prioritization. The Air Force is committed to continuing this 
transparent process, which is designed to ensure appropriate deployment 
of Reserve Component forces, enabling the Total Force to properly 
respond to combatant command requirements.
        integration of air force component personnel management
    We are committed to fully integrating personnel management 
policies, organizations, systems and processes across the Air Force 
enterprise, with the outcome of providing more effective and improved 
service to our airmen, reducing barriers to continuum of service, and 
increasing emphasis on unified Total Force decisionmaking. This is not 
only the right thing to do for our Air Force; it will drive greater 
operational efficiencies and allow transfer of resources from tail to 
tooth.
    Since the Secretary of the Air Force directed the integration of 
the three Air Force Component Personnel Management Systems into one, 
personnel from across the Air Force headquarters have been working to 
facilitate the integration and standardization of human resource 
management with Total Force directives and instructions. As of this 
date, analysis is underway on more than two dozen human resource 
activities, with the high-level policy analysis phase on track for 
completion in May 2012. We are looking closely at existing policy 
guidance to standardize or consolidate management across components 
wherever practical and where allowed by law. This effort has a targeted 
implementation work plan of calendar year 2012, with follow-on actions 
through the Future Years Defense Plan (FYDP).
                               diversity
    Diversity remains a top priority of Air Force senior leadership. 
The Air Force recognizes that a diverse force is a military necessity, 
and we continue on a strategic path to attract, recruit, develop and 
retain a diverse and inclusive workforce of highly qualified 
individuals who reflect the rich tapestry of the Nation we serve. In 
October 2011, a Declaration on Diversity signed by the Secretary of the 
Air Force, Chief of Staff of the Air Force and Chief Master Sergeant of 
the Air Force was distributed across the Air Force to highlight the 
importance of diversity to the mission. Additionally, we increased 
senior leader involvement in the Air Force Diversity Committee by 
adding the Major Command Vice Commanders, who provide invaluable 
insight on best practices throughout their respective commands. We are 
well on the way to institutionalizing our Strategic Diversity Roadmap, 
A Journey to Excellence throughout the Total Force.
    Results from our 2011 Internal Communication Assessment Group 
Diversity survey indicated 75 percent of airmen agreed it is important 
for the Air Force to attract, recruit, develop, and retain a qualified, 
diverse workforce as a way to maintain our edge as a superior military 
organization. Furthermore, 88 percent of airmen surveyed believe the 
Air Force is doing a good or excellent job creating diversity within 
the Total Force.
    Focus on Air Force outreach programs remains central to attracting 
and recruiting diverse talent. To that end, in partnership with OSD's 
Office of Diversity Management and Equal Opportunity, the Air Force 
plans, coordinates and oversees national-level diversity outreach 
programs supporting our diversity goals and objectives. Further, to 
maximize resources, we utilize a Total Force perspective to determine 
which events and opportunities provide the best return on investment. 
We have 80 outreach events planned for 2012, including the Black 
Engineer of the Year Awards, Joint Women's Leadership Symposium and the 
Hispanic Engineer National Achievements Award Corporation Conference. 
We continue to place emphasis on education, health, and mentoring in 
the Science, Technology, Engineering, and Mathematics disciplines 
through our community engagements, and feedback from community 
influencers has proven very positive thus far.
    Finally, the Air Force supports the Military Leadership Diversity 
Commission recommendations and is poised to support Executive Order 
13583, Establishing a Coordinated Government-wide Initiative to Promote 
Diversity and Inclusion in the Federal Workforce. Upon OPM's release of 
the government-wide Diversity and Inclusion Strategic Plan, we will 
work with OSD to develop a plan of action and milestones to support the 
President's goal of using the talents of all segments of society by 
enhancing our ability to recruit, hire, promote, and retain a more 
diverse workforce and creating a culture that encourages collaboration, 
flexibility, and fairness to enable individuals to participate to their 
full potential.
                         u.s. air force academy
    The U.S. Air Force Academy (USAFA) continues to provide an 
exceptional environment for educating, training and inspiring men and 
women to become outstanding officers, motivated to lead the U.S. Air 
Force in service to our Nation in a challenging global environment. 
Senior Air Force leadership continues to energetically engage in the 
Academy's oversight, ensuring cadet train, study and live in a safe and 
productive environment. We continue our close working relationship with 
the USAFA Board of Visitors (BOV), enjoying frequent interactions with 
Ambassador Susan Schwab, USAFA BOV Chair, who is keeping the BOV 
vitalized and actively engaged in providing external Academy oversight.
    In the past year, USAFA cadets received numerous accolades for 
their undergraduate work, including one Rhodes scholar and two Marshall 
scholars, recognition by U.S. News & World Report as having the #2 
Aerospace/Aeronautical/Astronautical Program in the Nation and #1 
undergraduate-only institution in research funding-over $70 million, 
and being ranked by Forbes #10 of 610 of America's Best Colleges. In 
addition to outstanding academics, the cadets have also excelled in 
athletics, being #2 of 120 NCAA Division I football programs in 
academic progress rates, #1 of 9 academically in the Mountain West 
Conference, and for the second consecutive year, the Academy's football 
team will visit the White House to receive the Commander in Chief's 
Trophy from the President. The President will also give this year's 
commencement address at the Academy.
    Respect for human dignity is at the core of the USAFA environment. 
USAFA is a leader in developing programs for the prevention of and 
responding to incidents of sexual assault and sexual harassment, gender 
relations issues, and religious tolerance. The Academy is currently 
conducting Religious Respect Training, which involves cadets, faculty 
and staff, using training scenarios designed to spur critical thinking 
on religious tolerance and actions. While the Academy had an uneventful 
``Don't-Ask/Don't-Tell'' transition, it is unfortunately in the midst 
of investigating several cases of alleged sexual assault and illegal 
drug use.
    USAFA is working hard to preserve an outstanding training and 
educational environment in a fiscally challenging environment. As part 
of the AF response to the requirements of the Secretary of Defense's 
August 2010 Efficiency Memorandum, USAFA is reducing its civilian 
workforce by 67 positions (4 percent of its current workforce). The 
Academy is currently in the process of selecting members for the Class 
of 2016 while focusing efforts to ensure the size of that class 
supports the 1 Oct 2012 cadet wing end strength target of 4,000.
                               conclusion
    The hallmark of the U.S. Air Force's success has always been, and 
will remain, our people. Nearly 2 decades of sustained combat, 
humanitarian, and stability operations have imposed extraordinary 
demands on our forces. Yet our airmen continue to contribute 
significant capabilities to the joint team and do so with the integrity 
and excellence familiar to the global community. We will continue to 
size and shape the force through all necessary means while retaining an 
intrinsic value that attracts and keeps the highest quality airmen. We 
are a smaller force, but a ready force. By sustaining accessions for 
the long-term and balancing the total force to meet operational 
requirements, your U.S. Air Force, with its joint partners, provides 
unmatched capabilities across the spectrum of operations.

    Senator Webb. Thank you very much, Secretary Ginsberg,
    I am going to ask three questions, and then I am going to 
move along to whichever other Senators on the subcommittee wish 
to ask questions.
    First, Secretary Ginsberg, let me ask for your 
clarification on something. When I was in the Pentagon, the way 
the budget process worked was, first, the Services got together 
with their different components. They got the budget 
submissions. They argued against a top line. They figured out 
their budget. Then the different Services presented their 
budgets to OSD, and I sat on the Defense Resources Board (DRB) 
for 4 years. The DRB would examine the Service budgets. They 
would challenge different components of it. You came up with a 
DOD budget signed off by the Deputy Secretary of Defense and 
eventually by the Secretary. That was then brought to the 
Office of Management and Budget (OMB). OMB scrubbed it. Then 
you had a DOD budget, and it came over here to Congress. Once 
it came over to Congress, DOD as a whole was expected to 
support that budget.
    Is that the way things work?
    Mr. Ginsberg. Yes, sir. I think that is fundamentally the 
basic outline of the way it works today. We develop our budgets 
through what we call the corporate process. What that really 
does is bring together every component of the Air Force, every 
office that has equity in the budget, and we develop a program 
that is, of course, meeting the strategic guidance the 
President lays out then within the fiscal realities and we 
submit it to OSD. The other Services have a chance to look at 
it. We develop a program and then we submit it up through OMB.
    Senator Webb. It is a corporate process?
    Mr. Ginsberg. Yes, sir.
    Senator Webb. For instance, a little more than 20 years 
ago, there was an Air Force Chief of Staff named Larry Welch 
who I had served with in the Pentagon and who was widely 
expected to become Chairman of the Joint Chiefs of Staff. He 
went over to the House side and had a discussion with Les Aspin 
about a tradeoff at that time between Minuteman and Midgetman 
missile programs, how much money would go into one or the 
other. He made a statement that he would personally support--in 
his opinion, he could personally support something that had not 
been in the budget. By the time he got back to the Pentagon, he 
was reprimanded by the Secretary of Defense.
    There was an article in the New York Times yesterday about 
the Air National Guard lobbying the Hill against budget cuts 
that were in a scrubbed budget. Are you aware of that effort?
    Mr. Ginsberg. No, sir. I read that article. I do not know 
specifically what that was referring to. No, sir.
    Senator Webb. It said for 2 months the Air National Guard, 
with the help of Governors from every State, has been battling 
the Active Duty Air Force over proposed budget cuts. I can hear 
Senator Graham wanting to get to the mic here. [Laughter.]
    What do you think about that?
    Mr. Ginsberg. Sir, I do not know exactly what that is 
referring to again. So, of course, there you have the adjutants 
general of the States who are the chief military advisors in 
the State role to their Governors. When they are the adjutants 
general, they are----
    Senator Webb. What if they are over here in uniform?
    Mr. Ginsberg. What is that?
    Senator Webb. What if they are over here in uniform?
    Mr. Ginsberg. It depends on what business they are carrying 
out, sir.
    Senator Webb. If they are carrying out this particular 
business mentioned in this particular article.
    General Jones, do you have a thought on that?
    Mr. Ginsberg. I cannot comment on a specific hypothetical. 
Sir, I do not know exactly again specifically the specific 
situation.
    Senator Webb. General Jones, do you have a comment on that?
    General Jones. Senator, I am familiar with the article you 
are speaking of. When we prepared the budget, it was a budget 
that was designed to look at the new strategy, a balanced 
approach, and that is certainly what the Chief and the 
Secretary feel like they need to bring forward that balances 
the requirement for the Guard, the Reserve, and the Active Duty 
to coexist to support each other in a role that allows us to 
use each to their strengths. I feel like that is the proposal 
that was laid out by the Chief. Obviously, some people have 
opinions of the proposals and the details of it. But I really 
feel like the budget was something that was put together. The 
proposals were vetted. They were discussed, and it was a 
collaborative effort or a cooperative effort. Not every 
decision was agreed upon 100 percent, but when you have to make 
decisions, they will not all be agreed upon.
    Senator Webb. We may end up coming back to that or someone 
may end up coming back to that.
    General Milstead, you and I had a discussion about this. 
This is the front page of the Marine Corps Times this week. 
Grunt training for women starting now, infantry school 
admissions, new combat tests, et cetera. The Internet is abuzz 
with this decision. There are a lot of people wondering what 
the inception of it was, what the plan is. I think this is an 
opportunity maybe for you to explain how this decision took 
place, how you project this moving into the future as well.
    General Milstead. Yes, sir. It is important to put that 
story and the story that was in the New York Times as well in 
context. It is also important to make sure that folks 
understand what it is and, more importantly, what it is not.
    Assignment policy for women has not changed. We are not 
training women to be infantry officers. We do not have that 
authority. That authority resides with Congress.
    What we are doing is deliberate research. If I may, the 
National Defense Authorization Act (NDAA) for Fiscal Year 2011 
directed OSD and the Services to review the policies and the 
laws and the regulations that pertain to women in the Service 
and to report back. They stood up a working group with members 
from all the Services and they reported back in February. That 
report included a request from Congress to conduct an exception 
to policy and what we call a pilot program. It also asked for 
the authorities. It stated that they were removing the 
collocation restriction, and then the Secretary further 
directed----
    Senator Webb. Just for clarification, what was that 
request? What was the nature of that request when you said the 
report included a request for a pilot program? All Military 
Occupational Specialists (MOS)?
    General Milstead. Thank you, a request to take open MOSs 
and to establish them at a lower level. For instance, in the 
Marine Corps, we did not have women below the division level in 
certain MOSs. So it was a request for an exception to policy to 
take a woman in an MOS that she is already authorized to serve 
in and put her down to the battalion level. We intend to do 
that as part of the research.
    The Secretary further tasked the Commandant and the other 
Service Chiefs to come back to him in 6 months and give him 
their personal recommendation. So what we are doing is we are 
doing a measured, responsible, and deliberate research, a 
comprehensive plan, so that the Commandant, when he does give 
his recommendation to Secretary Panetta, it will be based on an 
analyses. It will be based on quantitative information and on 
research, and it will be an informed recommendation.
    Senator Webb. To clarify the record, because there are a 
lot of people who are following this, what I understand that 
you are saying is that this is pursuant to a request by the 
Secretary of Defense. The opening up of infantry schools, et 
cetera, is pursuant to a request by the Secretary of Defense 
for the Commandant to give him a report in 6 months on 
feasibility.
    General Milstead. That decision was ours. We felt that we 
could take volunteers--and they are volunteers. They have to be 
volunteers under the protocols--take women officers when they 
come out of the basic school, women volunteers, subsequent to 
the MOS that they will be going to, to attend the Infantry 
Officer Course (IOC), not to become infantry officers, but to 
see how they do and to capture data which will be given to the 
Commandant which will allow him to make an informed 
recommendation to the Secretary how we proceed.
    Senator Webb. We need to understand the origins of this 
experiment. That is why I am trying to get it clear for the 
record. The NDAA gave a broad recommendation, as I understand 
what you are saying. Then the Secretary of Defense gave a 
further request that within 6 months certain recommendations 
from the Services come to the Secretary of Defense?
    General Milstead. That is correct.
    Senator Webb. This is pursuant to that request?
    General Milstead. The decision being within our own wire. 
It is the Marine Corps. He did not tell us to open IOC. The 
Commandant--we came to him with a research plan and said we 
want to push people down to the battalion level, assess that. 
We want to take some women. We want to put them into IOC, see 
how that comes up. We want to come up with common gender-
neutral standards. We want to do a test based on physical 
fitness for both men and women to see what the level playing 
field is. It is all to come to the Commandant and allow him to 
make an informed recommendation to the Secretary of Defense on 
the way he thinks that we should proceed.
    Senator Webb. So when a male officer finishes IOC, is he 
automatically entitled to one of two MOSs? Right?
    General Milstead. Yes, sir. That is correct.
    Senator Webb. So, if a female officer finishes IOC?
    General Milstead. If a female volunteer attends IOC, it is 
not for the purpose of getting the 03, 02, or 02, 03 MOS. She 
will not receive that MOS.
    Senator Webb. But if she successfully concludes----
    General Milstead. Even if she successfully completes. This 
is not to make female infantry officers.
    Senator Webb. You are going to get a lot of comment on 
that.
    General Milstead. Yes, sir.
    Senator Webb. Secretary Lamont, very quickly, because I 
wanted to ask a question of each of your Service 
representatives. Eight years ago this week, I spoke at the Army 
Infantry School on a lessons-learned package that they had 
talking about my experiences in Vietnam. That night, we had a 
reception at the commanding general's house, and they informed 
us that Pat Tillman had been killed. I think, first of all, it 
is a little sad that we are not remembering what this 
individual did for the respect of the military, leaving 
millions of dollars behind and voluntarily enlisting and going 
over and serving.
    But what happened after that, the way that his death 
wrongly characterized, apparently even when the Army knew it 
was a friendly fire incident, and the existence of private 
communication inside the general officer corps warning the Army 
that this was a friendly fire incident--even his family did not 
know it--was a really tragic circumstance for the family, and I 
think a stain on the Army's reputation.
    We then had an incident at Wanat where certain commanding 
officers were held accountable by a U.S. Central Command 
(CENTCOM) investigation and then their accountability was 
removed by the Department of the Army subsequently.
    We just had an incident not too long ago with a soldier who 
apparently was shot by his own platoon leader accidentally 
during a night engagement but was left on the battlefield when 
others were evacuated, and there does not seem to have been a 
lot of accountability.
    Maybe, General Bostick, you would like to comment on it, 
either or both of you. What is the Army doing in terms of 
reinforcing the notions of the accountability of senior 
leadership?
    Mr. Lamont. I am certainly aware of the situation with that 
captain, as I recall. Actually, I think he may have been a 1st 
lieutenant at the time. As I understand it, it was at night. 
They did not have awareness of where the fallen victim was 
until later. I do know he was reprimanded. Unfortunately, I 
also understand he was subsequently promoted. But I do recall 
that there was a significant review, and, in fact, the 
Secretary, as recently as 3 weeks ago, I think, met with the 
father of the young victim.
    General Bostick. First, our heart goes out to all of the 
loved ones that have lost soldiers on the battlefield.
    We realize that in our Army and the way we fight, we place 
huge responsibilities on the shoulders of young sergeants and 
lieutenants and captains. They have to make on-the-spot 
decisions that sometimes are life-threatening-type decisions. 
We count on them to do that every day.
    We also count on leaders to train them and to be 
accountable for their behaviors. When things go wrong--and they 
always will in war--then we expect to thoroughly investigate 
each one of these incidents. That is what happened in each of 
these.
    I can tell you in the case of Wanat, my wife taught that 
young man when he was in elementary school. So for us, it had 
special meaning, and I know the parents very well. I know Hondo 
Campbell, who was asked to review the situation by the senior 
leadership of the Army, took in the new evidence that came on 
board, and he made his decisions, and the Secretary of the Army 
stood by those decisions.
    But I think in each one of these cases, our responsibility 
is to make sure that if an investigation is due, it is 
thorough, it is proper, and that we report back to the families 
and we provide the care and compassion that they need to get 
through it.
    Senator Webb. Thank you.
    Senator Graham.
    Senator Graham. Thank you, Mr. Chairman.
    Secretary Lamont, you mentioned efforts to deal with sexual 
harassment and sexual assaults in the Army and the military, in 
general. Is there anything this subcommittee can do or tools we 
can provide or money we can appropriate or recommend to be 
appropriated that we are not doing?
    Mr. Lamont. I would hesitate ever to say you do not need to 
give us any more money. But on the whole----
    Senator Graham. You do not have to give a definitive answer 
today.
    Mr. Lamont. Right, and I appreciate the opportunity to do 
that.
    I think we are making every effort, frankly, to create the 
kind of professional climate that gives to every soldier the 
dignity and respect that he or she deserves. I do not know that 
it is a money question. Although under the new NDAA 
requirements that we shall have sexual assault counselors and 
victim advocates at the brigade level, we understand that our 
numbers would suggest roughly 980 personnel. The fact that we 
are under a civilian cap now at OSD will in itself create some 
problems because we will have to have a mix of both civilian 
and military to meet those requirements. I think right now that 
is the only thing that I would suggest that we would need from 
this committee.
    Senator Graham. Can I ask the same question of the Navy and 
the Air Force?
    Mr. Garcia. Senator, I would say that we believe we have 
the resources and the commitment and the emphasis on the issue, 
that we do not need any extra tools. You asked this question. 
At the end of our ``sexual assault awareness month'' where 
every unit in the Department of the Navy has just had four 
separate stand-downs over the course of this month to emphasize 
the priority that our leadership has in ending this scourge of 
sexual assault and harassment across the force.
    I am certain you are familiar with the Secrtary of 
Defense's new guidance on convening special courts martial at 
the 06 level.
    Prior to this across the Navy, we have trained our Naval 
Criminal Investigation Service personnel to be dedicated field 
experts in capturing and sustaining and protecting evidence in 
crime scenes. Our Judge Advocates General and our Staff Judge 
Advocates are trained in the most effective prosecution 
strategies where appropriate, expedited transfer for members 
who request it within 72 hours. That is all on the response 
side.
    If I could take one more second to speak to the prevention 
side. Every new sailor or marine in our department right now, 
when they go to their A school, their first training school, 
will receive bystander training, bystander intervention 
training. Every leader, enlisted leader and officer leader, 
will be trained in ensuring their command environment 
eliminates the stigma for an individual, preventing an 
individual from being willing to report such an incident.
    You may have followed--I guess it has been about 3 weeks 
now. Our Secretary, our Commandant, our Chief of Naval 
Operations rolled out our new 21st Century Sailor and Marine 
Initiative, and a key cornerstone of that, the readiness piece, 
includes an effort to end sexual assault and acknowledge the 
undeniable correlation, the link between irresponsible alcohol 
use--close to 50 percent of our sexual assaults involve it in 
some way or another, and that is why we are introducing the use 
of breathalyzers that I suspect you are familiar with.
    So I think we have the tools to combat this.
    Mr. Ginsberg. Senator, there is absolutely no place in the 
Air Force for sexual assault. This is really everyone's 
responsibility. It is a command responsibility. It is every 
airman's responsibility to not just go after those who 
perpetrate this action but also to create a climate that 
reduces the likelihood of this occurring. We are not just 
following up the direction, of course, that of Secretary 
Panetta who has, as Secretary Garcia laid out, mentioned later 
a whole series of actions from elevating the level for a 
disposition of case to the 06 level, but we are also taking a 
number of steps on our own, including putting $2.4 million for 
additional Office of Special Investigations investigators.
    As Secretary Lamont mentioned, though, there is going to be 
an additional resource requirement with the additional full-
time victim advocates, and we are going to address that in the 
fiscal year 2014 budget.
    Senator Graham. I think the committee would appreciate in 
writing anything that you need from us, Uniform Code of 
Military Justice changes, regulatory changes, funding 
requirements, new positions, so that we can say in Congress we 
have done everything within our power to help you do a job that 
needs to be done and, quite frankly, has to be dealt with more 
seriously. So if you could do that in the next week or 2, we 
would appreciate it.
    Senator Webb brought up the conflict between the Reserve 
component and Active Duty component in the Air Force. I just 
want to say I have not been visited by anybody from the Air 
Guard to tell me what to do or not do about the proposed force 
structure. I have decided that on my own, right or wrong, that 
5,000 out of the Air Guard and Air Reserve and less than 1,000 
out of the Active-Duty Force is probably not the right mix. 
Some of the airframes that we will be retiring--I am not so 
sure that is wise. In a down-sized world, you have to have the 
right mix of Active Duty, Air Reserve, and Air Guard personnel.
    The Council of Governors entity--what is the latest on 
that?
    Mr. Ginsberg. Sir, I think you have received----
    Senator Graham. Yes, I think we got it yesterday.
    Mr. Ginsberg.--some correspondence, but their proposal from 
Secretary Panetta is basically to put back 24 C-130 and about 
2,200----
    Senator Graham. Right.
    Mr. Ginsberg. Sir, if I could just talk about that. 
Obviously, we talked about hard choices in my opening 
statement. This is, of course, one of the many hard decisions 
that the Air Force had to make. We had a new Strategic Guidance 
that came from the President that talked about being more 
flexible, agile, told the Air Force that we were going to have 
a very high operational tempo over the long term.
    At the same time, we had the BCA, $487 billion off the DOD 
top line over 10 years. For the Air Force, that meant about $54 
billion over a 5-year period over our FYDP.
    So in order to meet the strategy and to be responsive with 
the limited resources, we had to feed in overseas presence. We 
had to maintain rotational demand and make sure that the 
operational tempo was manageable across not just the Guard and 
Reserve and Active. So we were really concerned about balancing 
the budgets on the backs of our people.
    Senator Graham. I got you. I met with General Breedlove and 
Secretary Donley and had a real good discussion about what went 
into the decisionmaking process.
    The question for me and I think Members of Congress is $487 
billion, given the threats we face--is that too much? I think 
certainly we need to do north of $400 billion, but when it 
comes to the Air Force, the Reserve component got hit pretty 
hard.
    This Council of Governors negotiation, I think, is an 
appropriate thing for you to be doing because they are affected 
by the decisions. Hopefully, we can find some compromise that 
people will feel comfortable that we have the right mix 
particularly in the Air Force. I do not think it is really a 
concern in the other Services.
    But my final question is as we go forward in a down-sized 
environment of having to reduce the military, the Army by 
80,000, what should the Nation know about future conflicts in 
terms of how we meet future land engagements? Hopefully we do 
not have another Iraq, Afghanistan war anytime soon, but the 
possibility of a large land force being deployed is not unheard 
of or impossible to imagine in the future.
    General Odierno told the Appropriations Committee that if 
we had another Iraq-like conflict where you had a large number 
of forces deployed over a fairly significant period of time, 
that with the reduction of Active-Duty Forces of 80,000, that 
50 percent of that combat power and support power, personnel, 
would have to come from the Reserves and the Guard. Does that 
surprise you, Secretary Lamont?
    Mr. Lamont. Not greatly. Clearly we are going to be in need 
of a significant operational Reserve. To the extent that we 
have the trained and ready forces to support a smaller Active 
component, it is absolutely essential.
    Senator Graham. The only reason I mentioned that is, I 
think, that probably is true, and that does mean the Air Guard 
and the Air Reserve who do the fighting and the refueling and 
the transport--we have to look at the Guard and Reserve anew. 
If our Active Duty component is going to be reduced to the 
point, at least on the Army side and probably to the Air Force 
side too, where the next major engagement will be one out of 
two people will be a Guard member or a reservist for a very 
long period of time, we will have to come to grips with that as 
a Nation. Is that where we want to go? If we want to go, we 
will have to plan for it because I do not think anyone has ever 
planned for that before.
    Mr. Lamont. I think we have to be very careful because as 
we reduce the Active component of the Army, we may very well 
find it necessary to shift further capabilities into the Guard 
and Reserve. If we are going to do that, then we better make 
sure they are trained and ready to go. So as we get into the 
budget process, we have to ensure from our standpoint that we 
have sufficient funds for not only full-time support to assist 
the Guard and Reserve, but to also have the training monies. We 
are very good right now on the equipping level, but we are a 
little concerned that we have sufficient and adequate funding 
to train them at the readiness level that we know we will need 
to do.
    Senator Graham. Thank you. Mr. Chairman.
    Senator Webb. Thank you, Senator Graham.
    Just as an aside on your very important question, when I 
was responsible for the Guard and Reserve programs in the 1980s 
before this current evolution that we see in Iraq and 
Afghanistan, the way that the total force was designed at that 
time was approximately half of the combat support and about 
two-thirds of the combat service support, as I recall, in the 
Army was in the Guard and Reserve. They wanted to keep the 
immediate deployers, the combat units, fully manned up to, I 
think, 18 divisions at the time. We are probably going to end 
up with a similar formula as we draw down.
    General Bostick, what was the Army's Active Duty strength 
on September 11? Do you recall? The point being, just to get to 
it, is that the number you are going down to now is slightly 
above where it was on September 11. Is that not correct?
    General Bostick. Yes, Senator. It was about 482,000-
483,000. We are going to come down to 490,000.
    Senator Webb. Are you comfortable with that number? Is the 
Army comfortable with that number?
    General Bostick. I think, Senator, given the strategy that 
has been laid out, we are comfortable given the assumptions 
that we can make. We are never very good in the assumptions 
that we make about the future, but given the assumptions that 
we have made, given the strategy that we have outlined, we are 
comfortable that if we stay on the ramp that we are on in terms 
of drawing down the Army end strength, that we can do this in a 
reasonable way and take care of soldiers and families as we 
come down and still meet the missions that we have been asked 
to do.
    Senator Webb. Thank you.
    Senator Ayotte.
    Senator Ayotte. Thank you, Mr. Chairman.
    General Bostick, if I can just follow up on the end 
strength reductions on a couple of different fronts. First of 
all, with the 72,000 in end strength reductions in the Army, 
how much--call it what you want, how much latitude did you 
build in there? How much contingency did you build in there? 
Where are we in terms of being on the edge of a position where 
we could put ourselves in a place where we would hollow out our 
force? As we think about 72,000, how much did we build in there 
that we may have made a mistake in terms of future 
contingencies that we are asked to respond to?
    General Bostick. From an operational standpoint, Senator, I 
would say again, given the strategy that has been outlined from 
the President, we look at that strategy, develop a force 
structure, and then our job is to man that force structure. So 
based on the strategy and the assumptions that go into that 
strategy, if we can stay on the ramp that the Secretary and the 
Chief have asked us to stay on through the end of 2017, there 
will be risks there but we believe we have mitigated the risk 
as best we can.
    Where we can get hollow is in a number of areas. A lot of 
folks think about hollowness of a force in terms of people. But 
the Chief and the Secretary have said that they need a balanced 
force, and we are not going to retain force structure to hurt 
ourselves in readiness, and readiness could be in training 
readiness, it could be in the quality of life for our soldiers 
and families, it could be in modernization. So currently the 
biggest portion of our budget, 45-46 percent of our budget, is 
in personnel and it is in manning. So we have put the risk in 
other areas beyond personnel.
    Senator Ayotte. What are our current dwell times and where 
would the end strength reductions--where will we be with dwell 
times? Also, can you tell me what the dwell times are in 
particular for the military occupational specialties?
    If what you have told us thinking about we have an 
unanticipated contingency because, as you have noted, we have 
been particularly bad at predicting our next conflict, where 
does that bring us in terms of needing to reverse the Army's 
end strength reductions?
    I know that is a series of questions, but if you can help 
me where we are with dwell times, where does this bring us with 
the end strength reductions. It is one of the concerns I have 
about the readiness of our forces.
    General Bostick. The dwell times--and it is a difficult 
question to answer simply because dwell is an individual 
metric. If you add it all up, when I testified last year, the 
dwell was about 1 to 1.5. Today it is about 1 to 2. But there 
are MOSs like our aviators, our infantry, and those low-density 
MOSs that have much lower dwell times. It varies on grade. So 
if you are a young junior enlisted, then your OPTEMPO and your 
dwell is lower than a senior officer or a senior non-
commissioned officer (NCO). But if you add it up across the 
Army, it has been a long time that it has taken a reach of 1 to 
2 dwell, but we are there now except for some of the key MOSs 
that I talked about later.
    We are very concerned on end strength as we come down. If 
we come out of Afghanistan as planned in 2014, that is when the 
majority of--our bigger end strength reductions will happen in 
2014 and beyond. So the temporary end strength increase of 
22,000 that Congress and the Secretary of Defense have 
authorized us to have is helping us meet the demands of our 
deployers. So we have no issues with meeting our deployer 
strengths at their late arrival dates, have had no issues with 
ensuring that they are able to have end strength in addition to 
compensate for their disability evaluation system, the soldiers 
that are involved in that. So from an end strength perspective 
and the glide path that we are on, I feel fairly comfortable as 
long as we are able to maintain the Overseas Contingency 
Operations (OCO) dollars. Everything above 490,000 is not in 
our base. It is an OCO. So that is something that we have to 
fight for each year.
    In terms of your last point on reversibility, we have asked 
Congress for the ability to increase the affiliation bonus from 
Active component to Reserve component from $10,000 to $20,000, 
and we think that will allow us to put more of our NCOs and 
officers that are leaving the Active Force into the Reserves. 
What the Chief and the Secretary have asked us to do is put 
some of our young captains and senior NCOs in drill sergeant 
status and recruiting, more of them in those positions and more 
on the platform in our institutional Army, if you will, so that 
if we had to grow the Army quickly, the part that we cannot 
grow is our mid-grade officers, our mid-grade NCOs. So if we 
have them in some of our school locations where we have pulled 
them out or converted it to civilian positions, we would have 
some flexibility to grow the Army.
    Senator Ayotte. How many are going to receive involuntary 
termination in terms of officers and NCOs with the drawdown, 
the 72,000 drawdown?
    General Bostick. I do not have a specific number on that. 
We have asked Congress for the authorities to have involuntary 
separations. There will be some officers and there will be some 
very good NCOs that will want to stay in the Army and will 
probably not.
    What the Secretary of the Army and the Chief have said is 
that is our last resort. They want to do this without 
involuntary separations. Also on the voluntary separations like 
we had in the 1990s, we open it up to everyone, and a lot of 
our very best folks would leave.
    We think we can manage it, but there will be some 
especially in the 2014-2015 timeframe that on this ramp will 
have to leave by other than natural causes.
    Senator Ayotte. General, I would really very much 
appreciate if you could get us an estimate of how many 
involuntary terminations there will be both in the commissioned 
and then the NCOs.
    Also, I think it is really important for people to 
understand, as I understand it, that some of those people that 
are going to get involuntary terminations have done multiple 
tours for us in these conflicts that we have been fighting.
    Mr. Lamont. Could I just very quickly address a couple of 
your issues? You have mentioned the dwell time, but I want to 
let you know, we are moving our deployment cycle down to a 9-
month cycle. So we hope that will help reduce some of our 
stress on the force and maybe even eventually, as we reduce in 
Afghanistan, our dwell time will then rise.
    As you say on the hollowing out of the force and our 
concern with our assumptions, the problem is the enemy always 
gets a vote. We never know what the enemy is going to do. We do 
not know what contingencies are going to arise, and we must be 
extremely careful in how we plan for reversibility and 
expandability as necessary.
    Just on some of the numbers, I hate to throw out numbers, 
but I have seen numbers that will approach in the enlisted 
category perhaps as high as the mid-20s, 23,000, 24,000, and on 
the officer contingent--again, these are very rough numbers and 
all based gain on assumptions and attrition rates, but officers 
may go up to 4.5 to maybe 5,000.
    Senator Ayotte. That is a very significant number for many 
who have done multiple tours for us. So I think the American 
people need to understand that in terms of some of the choices 
that we are making.
    I very much appreciate all of your being here. I have some 
follow-up questions that I will probably submit for the record 
on other issues. Thank you.
    Senator Webb. Thank you, Senator Ayotte.
    Senator Blumenthal.
    Senator Blumenthal. Thank you, Mr. Chairman.
    Thank you all for your excellent work in a time of great 
challenge, and thanks to all the men and women who serve under 
you.
    I have some questions that really relate to the 
responsibilities that will be increasingly important placed on 
our Reserve and National Guard and in particular on the 
transition assistance that we give them as they come, many of 
them, off Active Duty to go into the Reserve, which has been a 
focus of mine, and also on the employment opportunities once 
they return to civilian life.
    I am troubled by reports--and you may want to comment on 
them--that there are instances of discrimination. I do not know 
how to put it any more politely, but discrimination against 
reservists or National Guard because of the possibility that 
they may be deployed and therefore unavailable in their 
workplaces, number one.
    Number two, whatever transition assistance we can give them 
while they are in the military but also afterward when they are 
in civilian life, a Transition Assistance Program (TAP) type of 
assistance. I know that many of the Services--I am most 
familiar probably with the Marine Corps and what it is doing to 
expand the TAP.
    I would ask you to comment on those areas of transition 
assistance and employment opportunity when our Reserves and 
National Guard come off Active Duty and also the kinds of help 
we are giving to our veteran services.
    Secretary Ginsberg?
    Mr. Ginsberg. Senator, thank you. There are a couple issues 
there that you really raised that are very critical for our Air 
Force and our future. There is a very key readiness concern 
there that if our Guard and Reserve airmen do not feel like 
they have the support of their employers, they are not going to 
be raising their hands to volunteer for the missions, whether a 
pop-up contingency or some type of steady state action. So we 
need to make sure, in addition to the family support and the 
direct support we provide them, that we have the backing of 
their employers. So this is absolutely vital for our Air Force, 
and what we have been trying to do is communicate across the 
force to the families, to the employer partners that we are 
going to really need our Guard and Reserve over the long term.
    Of course, if an airman does have a problem, we encourage 
them to file a real complaint, obviously, to be investigated by 
the Department of Labor. So very vital there.
    But the other issue there, sir, is the one you mentioned 
about the transition support, and that is a realm where the 
President has made it a very top priority. We are going to be 
working to make TAP available to our Guard and Reserve in a way 
that really has not been available to them over the long term. 
So any Guard and Reserve member who goes on a deployment over 
180 days is going to be eligible for a full range of transition 
programs, counseling, resource databases. That is all going to 
be put at their fingertips. But we are moving out on that and 
it is a key concern to us.
    Senator Blumenthal. Thank you.
    Secretary Garcia?
    Mr. Garcia. Senator, thank you for your question.
    We too have heard anecdotally accounts of our reservists 
having difficulty in employment and coming back to returning 
employers. We have run each case to ground.
    But I think I would have to point out as well the other 
side of that coin, that on the Navy side alone, we have 
mobilized 67,000 reservists for year-long mobilizations over 
the course of this war. The Navy reservist model is a little 
bit different. They tend to follow their Active Duty service. 
They tend to be a little bit older demographic. The 
overwhelming evidence is that supporters, especially against 
the backdrop of a struggling economy, with these Navy personnel 
have accommodated in many cases voluntarily paying the 
differential between their mobilized salary and that which they 
have made in their civilian capacity, and it is real 
patriotism.
    Our Marine Reserve model is a little bit different. Those 
cases that have run up against the regulations and the law, and 
those cases--we have run each one to ground.
    Secretary Ginsberg mentioned the work we are doing with our 
counterparts at Labor, OMB, and the Department of Veterans 
Affairs (VA) in fleshing out the details of the Veterans 
Opportunity to Work to Hire Heros Act of 2011, known as the 
``VOW to Hire Heroes Act.''
    But above and beyond that, the TAP reform that both 
Services are doing, initiatives like the American Corporate 
Partners, where heads of a stunning number of companies across 
America have reached out to serve as mentors for our separating 
personnel as they go through TAP. Within the Department of the 
Navy, every separating member, to keep them on the team to the 
maximum extent possible--for example, at Naval Sea Systems 
Command which is our largest civilian hiring entity, we set a 
goal of hiring 365 departing members last year, one a day, and 
we have hired 500. We have set a goal for 300 this year.
    So the transition process is receiving full priority.
    Senator Blumenthal. I do not mean to disparage employers in 
general. I think that the instances of alleged discrimination 
or non-hiring are a small minority, but as Secretary Ginsberg 
said, they create disincentives that may have a ripple effect 
or ramifications beyond that. I agree with you. My impression 
is the vast majority of employers want to do the right thing.
    I am very interested, I know Senator Graham has asked about 
sexual assault, and I commend the Secretary of Defense and all 
of you who have taken a really increasingly hard line on that 
issue. But I want to ask about an unrelated issue--and I would 
like to follow up in questions because I want to give my 
colleagues a chance to ask some questions and that is, suicide 
prevention. How are we doing? Any progress to report? Any 
comments for us?
    Mr. Garcia. I had the opportunity to respond to Senator 
Graham's question earlier. General, do you want to start this 
one off?
    General Milstead. Of course, one is too many, and nobody is 
dancing in the end zone, but we are doing better. If you look 
at the numbers, calendar year 2009 was the dark year for us. We 
were at 52. The next year we came down to 37, and this past 
year we were at 33. So the glide slope is right, but again, 
until you get a zero--and so far this year we are at 12, a 
little bit ahead of where we were last year, but I am not sure 
what that means.
    We continue to work this. In the Marine Corps, we have 
given this to our NCOs. We continue with our training. Now we 
have a training program for our junior marines, for our NCOs, 
and then for our young officers and staff NCOs, our platoon 
sergeants and our platoon commanders. But the NCOs--those are 
the guys that have their fingerprints all over the guys and 
gals, where we see this, the young ranks.
    So we are optimistically hopeful, but this is something 
that we will continue to work at until we have zero. As you are 
well aware, Senator, this is a national problem. It is just not 
within the military. But it has the Commandant's attention. It 
has all the Services' attention.
    Admiral Van Buskirk. Senator, I would like to add we are 
also putting more resources towards it, and just recently we 
have added--we have operational stress training teams out in 
the fleet concentration areas that can be out there among our 
sailors, our men and women, out there so they can help train 
our leadership to identify the signs of increased stress with 
our servicemembers and then additionally be a resource that 
they can actually go on board the ships to help counsel our 
people as well.
    24/7 hotlines as well that we are manning to ensure we have 
the people available to counsel at any time a person has some 
indication that they may have some problems.
    So I think adding that and adding additional leadership 
focus to this is critical. But certainly we do not like the 
trends we are seeing across the Services and we want to 
continue to combat and put the resources against it, sir.
    Senator Blumenthal. Thank you.
    Mr. Garcia. If I could just punctuate that point, Senator. 
I think in some part what makes this such an agonizing problem, 
each of us reviews the operations reports each morning from the 
night before, and to try to discern a pattern in these cases is 
so difficult. Across the Department of the Navy, we will 
typically see about five and a half suicide events per day, 
that is, ideation, attempts, or in the worst case, the act. It 
is not rare to have days, five and a half more incidents, where 
the members involved have never deployed. It is difficult to 
make the correlation, the formal link, between the operational 
tempo and the deployment piece.
    It took me a while to get to this point. What I take some 
comfort in is that an ideation event, if it does not culminate 
in an attempt, or, God forbid, the actual act, I want to 
believe is a sign that we are making progress in that a sailor 
or marine knows the resources to go to. His shipmates, his 
fellow marines, are recognizing the telltale signs and are 
reaching out and getting information to the right people.
    Senator Blumenthal. Thank you, all. I really appreciate 
your excellent answers. Thank you.
    Thank you, Mr. Chairman.
    Senator Webb. Thank you, Senator Blumenthal.
    Senator Vitter.
    Senator Vitter. Thank you, Mr. Chairman, and thanks to all 
of you for your service. In that vein, by the way, we just had 
Navy Week in New Orleans associated with commemoration of the 
War of 1812, and I got to meet a number of servicemembers. They 
happened to all be Navy. But I tell you what. We have a lot of 
problems and a lot of challenges, but it is not the young 
people in the military. So thanks for your leadership and 
thanks for them.
    I have some questions focused on some concerns I have with 
the cuts and proposals as it affects Louisiana. Let me put it 
in context. Look, these are very tough budget times. There are 
going to be a lot of decisions that are not popular to 
different States, and we all get that.
    I think what frustrates me and some other Members are two 
things.
    Number one, in a lot of these cases, we are not given and 
we do not see, even after digging, a clear metric and a clear 
justification and rationale.
    Number two, in a lot of these cases, I see jointness going 
out the window at a time when greater jointness, including 
greater efficiency, is more necessary than ever. In some of 
these decisions, I personally see the stovepipes hunkering down 
and sacrificing jointness and through it, greater efficiency.
    So that is the context of some of these concerns and 
questions.
    Specifically the Air Force--and I will ask you, Mr. 
Secretary--is recommending to cut out the 917th Fighter Group 
at Barksdale, the A-10s there. Now, when we looked into that, 
when we asked the folks on the ground in Louisiana, including 
the Army folks at Fort Polk who they help train, those folks on 
the ground said that about 70 percent of all of the joint Air 
Force/Army training at Joint Readiness Training Center (JRTC) 
at Fort Polk use that 917th Fighter Group during the Green Flag 
East exercises. So there was tremendous appreciation of that 
participation in that joint training.
    When we asked the Air Force--I just got a letter from the 
Secretary, and his response was that the same 197th group has 
only fulfilled its requirement, meaning that training, once 
over the last 3 fiscal years.
    Now, this is not a 10 percent difference of opinion. This 
is different planets, and so it is very concerning to me when 
you get wildly different statistics and numbers behind a 
decision. How am I to reconcile those wildly different 
statistics?
    Mr. Ginsberg. Senator, I certainly will reconcile the 
numbers for you. We will go back and validate and we will 
certainly get back to you on that.
    I will say a couple of things. One is on the decision to 
retire the A-10s, that was based on our force planners' 
assessment of what the future demand was going to look like, 
what was the range of scenarios that the Department of the Air 
Force would have to support the joint war fight in and what was 
the overall capacity of aircraft that were needed for that. A 
decision was made to take down more A-10s than F-16s because 
the F-16 is a multi-role aircraft versus the A-10 which is more 
single purpose. So that was the decision to take down--that was 
the approach to take down the capacity.
    In terms of where the specific units were in the 
distribution among the Guard and Reserve, it was similar to 
what I talked about. The thought was similar to what I 
mentioned before, that in order to maintain the overseas 
presence and to maintain an acceptable level of operational 
tempo across our force, to do more of those reductions in the 
National Guard and Reserve. So that was the overall thought 
process there.
    Sir, I would just like to highlight that. If there is a 
unit at JRTC that is in the box, ready to go deploy, whether it 
is the 917th or an A-10 unit from Moody Air Force Base in 
Georgia, that is a valid requirement, and in the same way that 
the Air Force plugs in with its Service counterparts down 
range, it will do so here in order to make sure that our 
comrades are ready to go and that we can train like we fight 
every day. So that is something we will be working through.
    But, sir, I do want to make sure we are providing you all 
the information that you need.
    Senator Vitter. Certainly, I would like that follow-up and 
reconciliation.
    More broadly we have asked for specific savings numbers and 
analysis for that, as well as Louisiana National Guard 259th 
Air Traffic Control Squadron from DOD. The only thing we have 
gotten are conclusory statements or the decision or a letter 
with a paragraph explanation. We have constantly, many times 
over, asked for a specific cost savings assessment. If you can 
get that to us more broadly.
    [The information referred to follows:]

    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 five 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.
    Before I explain how we determined where to take the A-10 
reductions out of the Air Force Reserve, I'd like to clarify the 
discrepancies you noted in the A-10 taskings for the 917th Fighter 
Group and their support of the Joint Readiness Training Center (JRTC) 
at Fort Polk. The Air Force has formally tasked the 917th Fighter Group 
one time through the Air Combat Command Consolidated Planning Schedule. 
However, due to their proximity to Fort Polk, the 917th Fighter Group 
routinely accepts ad-hoc requests from the JRTC for close air support 
training outside of Air Combat Command Consolidated Planning Schedule.
    The Air Force Reserve reduction of 21 A-10 aircraft required a 
decision between two unit-equipped bases, Barksdale and Whiteman AFB. 
The Air Force Reserve employed four realignment strategy principles 
that influenced the selection of specific locations for aircraft 
reductions. It first ensured aircraft reductions would not negatively 
impact operational support to the combatant commands. Second, it 
considered if force structure movements would create any new Air Force 
bills. Third, it attempted to minimize risk by optimizing crew ratios 
to exploit expected increase in mission capability rates. The final 
principle considered locations that continued to have an Air Force 
mission due to the presence of another Air Force component. In 
addition, although not stated as one of the four guiding principles, 
our sphere of influence also factored in and allowed for maximum 
reversibility at minimum cost.
    The decision between Barksdale and Whiteman Air Force Base (AFB) 
Reserve A-10 units was difficult, as both units are tenant 
organizations on Active Air Force installations, have excellent 
recruiting capabilities, sound track records of performance, and 
provide support to joint warfighting and training. Ultimately, the Air 
Force Reserve determined that the B-52 classic association at Barksdale 
AFB would be best positioned to absorb some of the adverse impact of 
closing the A-10 squadron at Barksdale. Conversely, the A-10 unit at 
Whiteman AFB is a stand-alone tenant unit. Closing the Whiteman unit 
would make it difficult to absorb the personnel. The Air Force will 
continue to provide support to joint warfighters at the JRTC through 
the Air Combat Command Consolidated Planning Schedule system.
    By divesting the A-10 squadron at Barksdale AFB, the Air Force 
expects to save approximately $336 million over the Future Years 
Defense Program. The savings account for operations and maintenance 
personnel, flying hours, aircraft modifications such as wing 
replacements, and depot sustainment funding.
    The decision to divest the 259th Air Traffic Control Squadron 
(ATCS) was based on the lack of an Air National Guard flying mission 
assigned to the Alexandria International Airport. The cost savings to 
the Air Force will include cost avoidance for the purchase of a next 
generation deployable radar and deployable instrument landing system as 
well as non-flying and depot level repair cost savings that exceed 
$500,000 per year. Additionally, the manpower saved by divesting the 
ATCS allowed the Air National Guard to realign the corresponding end 
strength towards bolstering readiness in areas such as aircraft 
maintenance, intelligence, surveillance, and reconnaissance, and 
domestic operations.

    Senator Vitter. On the 917th, if it is true that they have 
participated in a big number, a majority--folks on the ground 
say 7 percent of that training at Fort Polk--what will be the 
replacement for that type of training?
    General Jones. Senator, I think it is important that when 
they talk about what will be the replacement, not that they ask 
for what type, what specific aircraft, but what capability. 
That is where we were stuck with the tough decision to have to 
eliminate single capability aircraft to go with multi-role 
aircraft so we could bring in something that could do more than 
just one thing. So what we would be providing them is a multi-
role aircraft that could perform the same function the A-10 was 
performing.
    Sir, if I could just go back and comment on one thing you 
said earlier about jointness, the question of Services 
hunkering down and trying to back away from jointness--I really 
do not agree with that. I would have to tell you that having 
served in the U.S. European Command  when  I  was  a  younger  
officer,  having  been  the  J-1 at CENTCOM during much of the 
conflict when General Abizaid was the commander, we are all so 
bought into jointness that it would be impossible for us as a 
department to walk away from how we fight now. We fight as a 
joint, integrated team. Our leadership teams are integrated. 
Our relationships across the Services have been solidified, and 
that is the only way we will be going to war in the future.
    Senator Vitter. Okay. To follow up on that thought, 
regarding this A-10 decision, let me ask your Army colleagues 
when in the process was the Army consulted regarding the impact 
of this A-10 decision? How early or late and who was consulted 
about that on the Army side?
    Mr. Lamont. I frankly cannot respond to that. I will have 
to take that for the record and find out. I assume it would be 
within our G-3 staff, our training and operational concerns.
    General Bostick. Senator, we will go back and find out, but 
I would agree with my Air Force colleague. We will never walk 
away from jointness, and any opportunity that we have to train 
is going to be a good opportunity for the country. So just like 
we cannot walk away from the Reserve component, we cannot walk 
away from jointness and the combined nature of how we fight is 
the only way that we can do this.
    Senator Vitter. If you would follow up because I think it 
would be an interesting test of this debate to see when in time 
and at what level the Army was actively in a meaningful way 
consulted on this decision.
    Mr. Lamont. We will find out.
    Senator Vitter. Okay. I will look for that follow-up, and I 
appreciate it.
    [The information referred to follows:]

    The Air Force did not consult with the Army regarding moving the A-
10 mission out of Barksdale. The Air Force made difficult choices to 
closely align with the new Department of Defense strategy. In doing so, 
it favored aircraft with multi-role capabilities versus those focused 
on niche missions. The Air Force Reserve was faced with a fair share 
reduction of A-10 fleet and had to make a decision between two unit-
equipped bases, Barksdale and Whiteman Air Force Base (AFB), to reduce 
21 A-10s. Both units are tenant organizations on Active Air Force 
installations, have excellent recruiting capabilities, sound track 
records of performance, and provide support to joint warfighting and 
training. The Air Force Reserve determined that the B-52 classic 
association at Barksdale AFB would be best positioned to absorb some of 
the adverse impact of closing the A-10 squadron at Barksdale. 
Conversely, the A-10 unit is a stand-alone tenant unit on Whiteman AFB. 
Closing the unit would make it difficult to absorb the personnel.

    Mr. Ginsberg. Senator, could I just say that during the 
development of our budgets, each Service's plan is vetted 
through the other Services, and of course through our Office of 
Secretary of Defense overseers. So there are smaller forums and 
larger forums. We have our programmers, plans, and programs. We 
call them the ``eights.'' They regularly review the budget 
submissions towards the tail end, once each Service is 
developed, and then our budgets go through something they call 
the Defense Management Action Group, and that is where the 
Services can look before it is submitted to Congress, before it 
goes to OMB. Every Service gets to peer into what each other 
Service is doing. Also, there are lots of communications back 
and forth where we highlight some of the big issues that are 
going to be coming forward in the year ahead.
    Senator Vitter. Secretary Ginsberg, again on the Air Force 
side, Global Strike Command is a relatively new command at 
Barksdale.
    Senator Webb. Senator Vitter, I am going to have to 
interrupt you because we are on a 7-minute clock, and a vote 
has been called. I know Senator Brown wants to ask a question. 
You could submit that question for the record as can anyone 
else on the subcommittee before close of business tomorrow 
night.
    Senator Vitter. I will submit that for the record. Thank 
you, Mr. Chairman.
    Senator Webb. Senator Brown.
    Senator Brown. Thank you. I will be brief. Thank you.
    How much time do we have before the vote?
    Senator Webb. The vote has been called.
    Senator Brown. I will be done long before then. Thank you.
    General Milstead, first of all, I am encouraged to hear 
that General Amos is opening up some slots for the training of 
women at Marine Corps Infantry School right down the road in 
Quantico. I want to commend him for that.
    I read a quote from General Gray who said every marine is 
first and foremost a rifleman. All other conditions are 
secondary. I agree with that also. I am a strong proponent of 
women in combat, providing they fit the qualifications.
    Where do you think the perception comes from that somehow 
female servicemembers could, ``compromise the mission''? Have 
you heard that? Do you think it is relevant? Do you think it is 
something that is being handled appropriately?
    General Milstead. Sir, again, I do not believe the Senator 
was in here when I first responded to Senator Webb's response 
that this is research so that the Commandant can make an 
informed recommendation to the Secretary.
    But we have approximately a little over 13,000 women 
marines. I have been in combat twice with them. They are in 
combat. That is a misunderstanding of a lot of people. Our 
women are in combat. I am a Cobra pilot. We have women Cobra 
pilots. But we are talking a difference between closed and open 
MOSs. Our women marines, just like our women sailors and our 
women soldiers and our women airmen, make a great contribution 
and have made a great contribution, and we have no inclination 
at all in turning our back on that.
    Senator Brown. It means a lot. I appreciate the effort and 
I will convey that to General Amos.
    I know that Senator Graham and I and others are deeply 
concerned about the Air Force, and I think the Army has struck 
a good balance between Guard and Reserves and regular Army. The 
Air Force--I have to tell you I am not quite happy with the way 
things are shaking out. I feel that the Guard and Reserves are 
getting the short end of the stick. A lot of the input that has 
been given, I feel, has fallen on deaf ears.
    I am deeply concerned about the fact that the Air Force has 
taken all the toys and is holding them and then really having a 
difficult time sharing and especially because I feel we get a 
very good value for the dollar in the Guard and Reserves 
especially in Massachusetts. Some of the units are at 70-80 
percent mission-capable and yet we are going to take away 
that--destroy some of those teams and shift and adjust. It is 
deeply, deeply concerning to me. So if we were to make these 
irreversible cuts to the Guard based on disputable facts or 
flawed assumptions, could that be reversed? Could those actions 
be reversed, do you think?
    Mr. Ginsberg. Senator, we really have struck a balance, 
given again the strategic demands----
    Senator Brown. You have been given guidance from Secretary 
Panetta, but then you have gone and done it how you felt it was 
appropriate. Is that a fair statement?
    Mr. Ginsberg. Yes, sir.
    Senator Brown. The Army has done the same thing, but they 
have a different model.
    Mr. Ginsberg. Sir, we just looked at what the demands were 
going to look like over the future, what were the war plans 
that we would have to fulfill, what are the rotational 
requirements, and then we had to, again, balance those 
considerations with the fact that there was a very significant 
change in our resourcing over the fiscal year plan.
    Senator Brown. Yes, but you are going to get a better value 
for your dollar with the Guard and Reserves. You know that the 
OSD Reserve Affairs report basically said the method of 
calculating the baseline costs and capabilities of the Guard 
and Reserves--without having the appropriate information, is it 
possible the Service Chiefs are assuming key data that would 
show how to preserve the greatest amount of military capability 
at the lowest cost or not?
    Mr. Ginsberg. Sir, there has been a lot of discussion about 
the costs, of course. If there is a way to do a mission more 
cheaply and to get it done, we are going to do that, sir. The 
challenge has been when you are using the Guard and Reserve in 
a very high operational intensity, that some of the cost 
benefits become more ambiguous.
    Senator Brown. But if you shift some of the Active 
components to some of the Reserve bases like has been done in 
the past, you are going to get that good value for the dollar 
and also stretching out the mission.
    Mr. Ginsberg. We foresee a very intense deployment schedule 
for the Guard, Reserve, and the entire force, and like I said, 
as you are using them more intensely, again the cost 
differences among the various components become more ambiguous.
    In the meantime, sir, we also have to be, of course, 
concerned about what is the demand that is placed on the force 
and what is the stress level that we put on everybody. We are 
concerned that if we get these balances wrong, that a member of 
the Guard or Reserve is going to have to deploy at an intensity 
that will just be unacceptable to them, and our airmen are 
going to walk with their feet not just on the regular Air Force 
side but across our entire force.
    Senator Brown. I do not know if I agree with that 
assumption. I have been in 32 years. I have met with all the 
Guard and Reserve air components in Massachusetts and 
throughout, and I will tell you what, this conversation is not 
over. If it is not going to be addressed by you guys keeping 
and staying at the table, we will handle it in committee and we 
will do it for you. I do not know how else to say it. We will 
make sure we play a very active role.
    Unfortunately, we do have to go vote, but I do have a 
question or two for the record I will submit.
    Thank you, Mr. Chairman.
    Senator Webb. Thank you, Senator Brown.
    Again, all members of the subcommittee will have until the 
close of business tomorrow to submit any further questions for 
the record.
    I thank all of you for your testimony and for your 
continued service to our country.
    This hearing is adjourned.
    [Questions for the record with answers supplied follow:]
              Questions Submitted by Senator Kelly Ayotte
                integrated disability evaluation system
    1. Senator Ayotte. Secretary Lamont and General Bostick, while 
speaking at the Warrior Care and Transition Program Training Conference 
in Orlando, Florida, in 2011, the former Vice Chief of Staff for the 
Army, General Chiarelli, said that the current Army Disability 
Evaluation System (DES) is ``complex, disjointed, hard to understand, 
and it takes too long to complete.'' How long does it take for the 
average soldier to complete the DES process?
    Secretary Lamont and General Bostick. Active component soldiers who 
completed the Integrated Disability Evaluation System (IDES) in April 
2012 averaged 396 days from referral through notification of the 
Department of Veterans Affairs (VA) benefits decision, Reserve 
component soldiers averaged 401 days.


    2. Senator Ayotte. Secretary Lamont and General Bostick, what is 
the Department of Defense's (DOD) goal for completing the DES process?
    Secretary Lamont and General Bostick. The goal for completing the 
IDES is 295 days for Active component soldiers and 305 days for Reserve 
component soldiers, measured from date of referral to the IDES through 
notification of the VA benefits decision.

    3. Senator Ayotte. Secretary Lamont and General Bostick, how long 
does this process take and why is it taking so long?
    Secretary Lamont and General Bostick. Active component soldiers who 
completed the process in April 2012 averaged 396 days and Reserve 
component soldiers averaged 401 days. The Army is enduring the effects 
of 10 years of war and lacks sufficient capacity to efficiently process 
the increasing number of soldiers now in the IDES.

    4. Senator Ayotte. Secretary Lamont and General Bostick, how many 
soldiers are currently enrolled in the Army's DES?
    Secretary Lamont and General Bostick. As of April 23, 2102, there 
were more than 24,000 soldiers enrolled in the DES, including over 
18,800 who are enrolled in the IDES and over 5,100 who are enrolled in 
the legacy DES.

    5. Senator Ayotte. Secretary Lamont and General Bostick, would it 
be correct to say that as these soldiers progress through the 400-day 
process, they are obviously nondeployable and count toward the Army's 
overall end strength?
    Secretary Lamont and General Bostick. Yes, these soldiers are 
nondeployable and do count against the overall Army end strength. The 
purpose of the DES is to maintain a fit and ready force. Soldiers going 
through that process are being evaluated to see if they are fit enough 
to continue to serve in the Army. Approximately 5 percent of those who 
begin the process are deemed fit and continue to serve. The remainder 
are evaluated for disability ratings and are separated.

    6. Senator Ayotte. Secretary Lamont and General Bostick, what can 
we do to fix this?
    Secretary Lamont and General Bostick. The Army is aggressively 
working to improve performance of the DES. We are currently 
implementing a number of initiatives designed to improve the 
performance, including: adding over 1,100 in staffing; publishing 
guidance to standardize the process across the Army; enhancing our 
training; and establishing procedures that will enhance the sharing of 
information with the VA. However, the Army believes we need to 
fundamentally change the DES; and remain convinced statutory reform is 
the only way we can achieve a sustainable system worthy of the 
sacrifices of our volunteer force in this era of persistent conflict.
    The Army is looking at several different options to improve the 
DES--one of which would be a process where DOD determines a disabled 
servicemember's fitness for duty, and if found unfit, provide a 
lifetime annuity based on the member's rank and years of service. The 
VA would then establish compensation for service-connected injuries, 
disease, or wounds. We believe this type of system would achieve an 
average disability process outcome in less than 90 days: improved 
readiness; reduced complexity; decreased impact on limited medical 
resources; and less adversarial.

    7. Senator Ayotte. Secretary Lamont and General Bostick, is part of 
the problem the dual DOD/VA adjudication systems?
    Secretary Lamont and General Bostick. The IDES was designed to 
eliminate the duplicative elements of the separate disability processes 
previously operated by VA and the military. It employs a model that 
features a streamlined exam process using VA protocols and a single 
disability rating to be issued by VA. One of the principal goals of the 
new system was to ease servicemembers' transition to veteran status so 
they can quickly access VA benefits to reduce the risk of financial 
hardship. From this perspective IDES was successful.
    IDES allowed for a move toward a single process with a single 
examination and a single source for all disability ratings. However, 
soldiers continue to receive two ratings. The Services can only 
compensate for military unfitting (fit for duty) service-connected 
conditions, while the VA compensates for all service-connected 
conditions. This duality creates confusion, and the belief the Services 
are not being loyal to or fair with servicemembers; it is also wasteful 
and time consuming.
    We need to move to a system where the Services determine a disabled 
servicemember's fitness for duty, and if found unfit, provides benefits 
based on the member's rank and years of service and let VA establish 
compensation for disabling service-connected conditions. We believe 
this type of system would achieve an average disability process outcome 
in less than 90 days, improve readiness, while decreasing the impact 
the system currently has on our limited medical resources. It would be 
a less adversarial system.

    8. Senator Ayotte. Secretary Lamont and General Bostick, could 
these two systems be combined into one in order to streamline the 
process, help our troops, and save taxpayers' money?
    Secretary Lamont and General Bostick. The Army believes there is a 
need to clarify the objectives of each respective system. The current 
DES is over 60 years old and was designed for a draft-based military, 
in an industrial/agricultural economy. Its focus on disability and 
compensation reduces incentives or creates conflicting incentives to 
participate in rehabilitation or to return to work and is not adequate 
for the needs of today's professional all volunteer military.
    The Army believes the system requires reform. We recommend a 
simpler process where DOD determines a disabled servicemember's fitness 
for duty, and provides benefits based on the member's rank and years of 
service. VA continues to determine disability benefits as it does now 
using one of its predischarge programs. We believe this type of system 
would achieve an average disability process outcome in less than 90 
days and ensure that VA benefits were available to soldiers immediately 
after separation.

                               dwell time
    9. Senator Ayotte. General Bostick, what is the impact on readiness 
when there is insufficient time at home between deployments?
    General Bostick. Over the past 11 years, the Army has successfully 
satisfied the high demand for conventional ground forces throughout two 
conflicts. The Army works hard at ensuring that our deploying units are 
adequately manned and ready to meet operational demands. The price of 
meeting the increase in the operational demand has significantly 
stressed our military personnel and their families. To fully 
reconstitute our units, soldiers and their families must be given the 
time and resources they need to reintegrate and reverse the effects of 
the sustained operational tempo. A study completed in 2009 confirmed 
what we already intuitively knew: soldiers require more than 2 years to 
fully recover, both mentally and physically, from the rigors of combat 
deployment. The Army's goal is to achieve and maintain a dwell time of 
at least 2 months at home for every month deployed for the Active 
component soldier and 4 months at home for every month mobilized for 
the Reserve component soldier.
    The withdrawal of forces from Iraq will assist the Army with 
restoring its operational depth and returning strategic flexibility in 
our formations and among our leaders. In the second quarter of fiscal 
year 2012, the median Active component Army individual boots-on-the-
ground (BOG):dwell reached the goal ratio of 1:2. The ongoing drawdown 
of forces in Afghanistan will continue to improve the BOG:dwell ratio 
of the force, and as dwell times increase, the Army will be able to 
focus on sustaining the rotation rates of 1:2 as envisioned. This will 
ensure the force's long-term health, and will, once again, allow the 
necessary time to train units to perform missions across the full 
spectrum of operations.

    10. Senator Ayotte. General Bostick, what impact does insufficient 
dwell time have on families?
    General Bostick. Most families focus on the quality of the dwell 
time rather than the length. But it does take time to adjust and become 
reacquainted with what it's like to be together again. Soldiers' 
reintegration with their families is an individual process. It is 
important for soldiers to spend quality time with their families in the 
reset period following deployment. With less dwell time, returning 
members may not have enough time to reconnect with their families and 
fit back into the home routine before they have to deploy again. 
Children worry about the next deployment, which impacts their ability 
to get to know their parent again. To help families with this process, 
the Army is educating family members about reintegration, helping them 
recognize changes in family structure and functioning, and the 
importance of establishing expectations before the soldier returns.

    11. Senator Ayotte. General Bostick, what impact does insufficient 
dwell time have on the Army's ability to train for full spectrum 
operations, including major combat operations?
    General Bostick. The amount of dwell time required for a 
redeploying unit to progressively build readiness for a broad range of 
military operations (including major combat operations) depends on 
complexity of the unit's design, functions, interaction with external 
organizations, and degree the unit will be employed in harm's way or 
employ deadly force. Whether or not dwell time is sufficient depends on 
a number of factors, primarily how quickly the Army is able to reset 
the unit with personnel and equipment and how much training resources 
and venues are available to support the unit's progressive training 
strategy. If dwell time proves insufficient for the unit to fully 
prepare before expected to be available for contingency operations, 
then the Army must accept either more training time or risk before 
deploying the unit, as allowed by exigencies of the situation.
    Risk associated with insufficient dwell time is somewhat mitigated 
by developing unit leaders throughout their career in professional 
military education and through participation in Army training venues 
like Combat Training Centers; by providing training support 
capabilities that allow unit components to sharpen skills using 
virtual/constructive/gaming venues through iterative execution of 
increasingly complex tasks, conditions, and enabler integration--
complexity which is simply infeasible to create for live training at 
the unit's home station due to constraints on maneuver space, airspace, 
joint/interagency/multinational availability; by training on 
fundamentals first and progressively building the proficiency of 
individuals, crews, sections, small units, then larger formations; and 
by integrating adaptability into training, which enables a 
professionally disciplined force to apply their mastery of fundamentals 
to any assigned mission and adapt to circumstances. Units deploying 
with insufficient dwell may not have had opportunity to perform as a 
large formation, to fully integrate external enablers required of 
unified operations, or to practice against the full arrange of threats 
presented by contemporary operating environments.

    12. Senator Ayotte. General Bostick, what are the Army's current 
goals for dwell time between deployments for the Active and Reserve 
components?
    General Bostick. Because individuals follow a variety of deployment 
patterns, we measure dwell as a ratio of time spent deployed (boots-on-
the-ground (BOG)) to time spent not deployed (dwell). Our near-term 
goals are for Active component soldiers to have 2 months of dwell for 
every 1 month deployed (a 1:2 BOG:dwell ratio) and for Reserve 
component soldiers to have 4 months of dwell for every month deployed 
(1:4 ratio).

    13. Senator Ayotte. General Bostick, what military occupational 
specialties and types of units are receiving the least time at home 
between deployments?
    General Bostick. Because individuals and units follow a variety of 
deployment patterns, we measure dwell as a ratio of time spent deployed 
BOG to time spent not deployed following the deployment (dwell). In 
terms of this ratio, aviation units and aviation-related specialties 
have been the most taxed. This is especially true among junior enlisted 
soldiers and warrant officers, who have seen slightly more than 3 
months of dwell for every 2 months deployed. Other units such as civil 
affairs, intelligence, military police, psychological operations, 
engineers, and special forces have also been heavily taxed and remain 
just above the mandated 1:1 BOG:dwell ratio for units. However, the 
soldiers in these units tend to have better median individual BOG:dwell 
ratios than aviation soldiers, suggesting a wider variety of assignment 
opportunities or partial-unit deployments.

    14. Senator Ayotte. General Bostick, what are the current dwell 
times for individuals with these specialties and for these types of 
units?
    General Bostick. Because individuals and units follow a variety of 
deployment patterns, we measure dwell as a ratio of time spent deployed 
BOG to time spent not deployed following the deployment (dwell). As 
previously stated, aviation units and aviation-related specialties have 
been the most taxed. This is especially true among junior enlisted 
soldiers and warrant officers, who have seen slightly more than 3 
months of dwell for every 2 months deployed, a 1:1.5 ratio. This ratio 
is highly correlated with the unit ratios, as these soldiers do not 
have many assignment opportunities outside of these units. More senior 
noncommissioned officers and commissioned officers have been 
experiencing ratios better than 1:1.8, largely because they have more 
assignment opportunities.

    15. Senator Ayotte. General Bostick, do you believe the Army should 
be reducing its end strength before achieving its dwell time goals?
    General Bostick. For the last several years, the Active Army has 
enjoyed the benefits of a temporary end strength increase that was as 
much as 22,000 soldiers above its 547,000 permanent end strength. 
Because of this increase, the Active component was able to achieve its 
median 1:2 individual BOG:dwell goal in second quarter of fiscal year 
2012. With the expected decrease in demand for deployed forces, we do 
not anticipate that the median individual BOG:dwell will worsen.

    16. Senator Ayotte. General Bostick, if future unanticipated 
contingency operations emerge and the Army's dwell time predictions 
turn out to be too optimistic, at what point would you recommend 
pausing or reversing the Army's end strength reductions?
    General Bostick. Once the Army is no longer able to sustain the 1:2 
BOG:dwell ratio assigned to it in the Guidance for Employment of the 
Force, the senior Army leadership would need to assess the risk to the 
force and recommend to the Secretary of Defense that he pause or 
reverse the end strength reductions.

                         traumatic brain injury
    17. Senator Ayotte. Secretary Lamont, Secretary Garcia, Secretary 
Ginsberg, General Bostick, Admiral Van Buskirk, General Milstead, and 
General Jones, can you give me a sense as to how many of your 
servicemembers have suffered from a traumatic brain injury (TBI)?
    Secretary Lamont and General Bostick. Since 2000, there have been 
233,425 DOD servicemembers including 134,938 U.S. Army soldiers 
diagnosed with TBI.
    Secretary Garcia and Admiral Van Buskirk. From 2000 through 2011, 
Navy has had 32,379 TBI cases among Active and Reserve sailors while 
Marine Corps has had 33,989 such cases among Active and Reserve 
marines. In 2011 alone, Navy had 2,825 instances of TBI while Marine 
Corps had 4,747. Mild TBI accounts for approximately 77 percent of TBI 
cases documented across the Services since 2000, and 84 percent of all 
TBIs occur in garrison.
    Secretary Ginsberg and General Jones. The Air Force accounts for 14 
percent of the total TBI cases in the military, with 32,119 cases from 
2000 through 2011 (deployed and nondeployed, all severity). There are 
approximately 2,500-3,500 total cases per year, with the majority not 
being associated with deployment. According to the Medical Surveillance 
Monthly Report, there were 242 cases of deployment-associated TBI in 
airmen in calendar year 2010 (0.56 percent of Air Force deployments). 
Of the total cases, 81.8 percent were mild, defined by the duration of 
alteration of consciousness, loss of consciousness, or post-traumatic 
amnesia at the time of injury. As reported in the civilian TBI 
literature, 85-90 percent of those who sustain mild TBI recover fully 
within 3 months, often sooner. Early identification, education, rest, 
and symptom management facilitate recovery. Those who sustain recurrent 
concussions and/or have co-morbid conditions such as Post-Traumatic 
Stress Disorder (PTSD) may take longer to recover.
    General Milstead. The official TBI data for DOD is reported through 
the Defense and Veterans Brain Injury Center (DVBIC). Current DVBIC 
data indicate 233,425 total TBI cases throughout DOD from 2000 through 
2011. In that same time period, the Navy has had 32,379 TBI cases 
within Active and Reserve components, while the Marine Corps, Active 
and Reserve components, has had 33,989 such cases. In 2011, the Navy 
had a total of 2,825 TBIs while the Marine Corps had 4,747. Mild TBI 
accounts for approximately 77 percent of TBI cases documented across 
the Services since 2000, and 84 percent of all TBIs occur in garrison.

    18. Senator Ayotte. Secretary Lamont, Secretary Garcia, Secretary 
Ginsberg, General Bostick, Admiral Van Buskirk, General Milstead, and 
General Jones, what is your Service doing to address this problem and 
care for our servicemembers who have sustained a TBI?
    Secretary Lamont and General Bostick. The Army has instituted a 
comprehensive program to better detect, diagnose, treat, and track TBI. 
This program contains four essential elements: (1) baseline 
neurocognitive testing of all deploying soldiers; (2) a comprehensive 
in-theater policy for assessing and treating soldiers exposed to 
potentially concussive events, who may have been exposed to a traumatic 
event; (3) establishment of an expansive garrison clinical care program 
to meet the medical and rehabilitation needs of patients with all 
severities of TBI; and (4) an aggressive research program looking at 
ways to better diagnose and treat TBI.
    Army policy directs that all soldiers who have been exposed to 
possible concussive events are screened for TBI and are given mandatory 
recovery time. The Army has improved provider education and training 
with regard to screening, evaluation, and management of concussion in 
both the deployed setting and the garrison environment. Research is 
being conducted to find possible biomarkers of TBI, to improve accurate 
and timely diagnosis of TBI, and to increase the treatment options for 
individuals with a positive diagnosis of TBI.
    Secretary Garcia, Admiral Van Buskirk, and General Milstead. TBI 
care on the battlefield has improved significantly since the beginning 
of Operations Enduring Freedom and Iraqi Freedom. Most improvements 
have targeted early screening and diagnosis followed by definitive 
treatment. In 2010, the Deputy Secretary of Defense issued Directive-
type Memorandum 09-033, ``Policy Guidance for Management of Concussion/
Mild Traumatic Brain Injury in the Deployed Setting,'' which has 
resulted in improved diagnosis and treatment of battlefield concussion.
    For Navy and Marine Corps, the primary treatment site for concussed 
servicemembers has been the Concussion Care Restoration Center (CRCC) 
at Camp Leatherneck in Afghanistan. Since its opening in 2010, the CRCC 
has treated over 964 servicemembers, resulting in a greater than 98 
percent return-to-duty (RTD) rate and an average of 10.3 days of duty 
lost from point-of-injury to symptom-free RTD. There is also a 
Concussion Specialty Care Center (CSCC) at the North Atlantic Treaty 
Organization (NATO) Role III Hospital in Kandahar, with a neurologist 
on staff.
    Upon return from deployment, enhanced screening methods for TBI and 
mental health conditions are being piloted at several Navy and Marine 
Corps sites. These efforts include additional screening and follow-up 
for any servicemember noted to have sustained a concussion in theater. 
Efforts are underway to increase use of the National Intrepid Center of 
Excellence (NICoE) across DOD, and development of NICoE satellite 
sites, to provide state-of-the-art evaluation and treatment for 
patients who do not improve with routine clinical care.
    Secretary Ginsberg and General Jones. Of the total TBI cases from 
2000 to 2011, 81.8 percent were mild, defined by the duration of 
alteration of consciousness, loss of consciousness, or post-traumatic 
amnesia at the time of injury. As reported in the civilian TBI 
literature, 85-90 percent of those who sustain mild TBI recover fully 
within 3 months, or often sooner. Early identification, education, 
rest, and symptom management facilitate recovery. Those who sustain 
recurrent concussions, and/or have co-morbid conditions such as PTSD 
may take longer to recover.
    As outlined in the 2009 Department of Veterans Affairs/Department 
of Defense Clinical Practice Guideline (CPG) for Management of 
concussion/mild TBI, most of the initial management of mild TBI can be 
accomplished by primary care in the patient-centered medical home, with 
referral to specialty services when needed. In addition to the CPGs, 
providers also have tools produced by the Defense Centers of Excellence 
for Psychological Health and TBI, such as the Pocket Guide for 
Management of TBI and the Co-Occurring Disorders Toolkit. The Air Force 
has one stand-alone multidisciplinary TBI clinic at Joint Base 
Elmendorf-Richardson. This TBI clinic stood up in 2008 and was started 
to support the local Army units who account for over 90 percent of the 
patients treated. Additional efforts to standardize mild TBI care are 
in place for higher risk units in the Air Force, such as explosive 
ordnance disposal. One example is a provider-to-provider video 
teleconsult pilot project that brings together primary care providers 
with a TBI team of experts using video teleconference capability to 
allow exchange of knowledge and de-identified case discussion.
    A theater system of TBI care has evolved since the release of 
Directive Type Memorandum (DTM) 09-033: ``Management of Concussion of 
mild TBI in the Deployed Setting.'' Leadership's responsibility to 
identify and report servicemembers involved in mandatory events (within 
50M of blast, direct blow to head, and motor vehicle crash) ensures 
early identification of TBI. Medics and providers standardize care by 
using clinical algorithms for evaluation and management of mild TBI, 
including mandatory rest periods. Located throughout Afghanistan, 11 
concussions care centers, which are overseen by the theater neurology 
consultant, allow servicemembers sufficient time to rest and recover, 
resulting in an over 95 percent return to duty rate. Clinical history 
and examination, together with post-injury neurocognitve testing in 
theater, aids in return to duty decisionmaking.

    19. Senator Ayotte. Secretary Lamont, Secretary Garcia, Secretary 
Ginsberg, General Bostick, Admiral Van Buskirk, General Milstead, and 
General Jones, do you have all of the resources and authorities you 
need to care for our servicemembers with TBI?
    Secretary Lamont and General Bostick. While resources are adequate 
for current efforts, continued congressional support of the Army's TBI 
clinical and research efforts will ensure improved screening and 
delivery of care.
    Secretary Garcia, Admiral Van Buskirk, and General Milstead. Caring 
for sailors and marines who have sustained a TBI remains a top 
priority. While we are making progress, we recognize that there is much 
work ahead of us to determine the acute and long-term impacts of TBI on 
our servicemembers. Our strategy must be both collaborative and 
inclusive, by actively partnering with the other Services, our Centers 
of Excellence, the VA, and leading academic medical and research 
centers, to make the best care available to warriors afflicted with 
TBI.
    We are grateful to you and your colleagues for your outstanding 
support of our efforts in improving the care of our sailors and marines 
and their families. We believe we have both the resources and 
authorities required for the diagnosis, treatment, and recovery of our 
servicemembers who have sustained a TBI. While we are resourced well, 
we should continue our vigilance in the area of TBI policies that 
support tracking and surveillance efforts. We need to ensure sailors 
and marines receive the optimal care at all points in the continuum 
from point of injury to reintegration.
    Secretary Ginsberg and General Jones. At this time, the Air Force 
has sufficient resources and authority to provide care for airmen who 
sustain TBI. In addition to the steps taken to identify and care for 
airmen with TBI, the Air Force has support from our sister Services, 
the Defense Centers of Excellence for Psychological Health and TBI, the 
Defense and Veterans Brain Injury Center, and the NICoE.
                                 ______
                                 

    [The prepared statement of the Reserve Officers Association 
follows:]

                               APPENDIX A

      


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

      
    [Whereupon, at 2:20 p.m., the subcommittee adjourned.]


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

                              ----------                              


                        THURSDAY, JUNE 21, 2012

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

    DEPARTMENT OF DEFENSE PROGRAMS AND POLICIES TO SUPPORT MILITARY 
                      FAMILIES WITH SPECIAL NEEDS

    The subcommittee met, pursuant to notice, at 2:35 p.m. in 
room SD-106, Dirksen Senate Office Building, Senator Jim Webb 
(chairman of the subcommittee) presiding.
    Committee members present: Senators Webb, Begich, 
Gillibrand, and Blumenthal.
    Committee staff member present: Leah C. Brewer, nominations 
and hearings clerk.
    Majority staff members present: Jonathan D. Clark, counsel; 
Gabriella E. Fahrer, counsel; and Gerald J. Leeling, counsel.
    Minority staff member present: Diana G. Tabler, 
professional staff member.
    Staff assistants present: Jennifer R. Knowles and Brian F. 
Sebold.
    Committee members' assistants present: Brian Burton, 
assistant to Senator Lieberman; Lindsay Kavanaugh, assistant to 
Senator Begich; Elana Broitman, assistant to Senator 
Gillibrand; Ethan Saxon, assistant to Senator Blumenthal; and 
Lenwood Landrum, assistant to Senator Sessions.

        OPENING STATEMENT OF SENATOR JIM WEBB, CHAIRMAN

    Senator Webb. The subcommittee will come to order. The 
subcommittee meets today to receive testimony on the Department 
of Defense (DOD) programs and policies to support military 
families with special needs in review of the National Defense 
Authorization Act (NDAA) for Fiscal Year 2013 and the Future 
Years Defense Program.
    At the outset, let me say a few things. First, I know that 
this is a hearing that was supposed to have been held 
yesterday. Some of you have been required to stay over a day in 
order to testify. I want you to know I appreciate that, and I 
think everybody here is aware of what we have been doing on the 
Senate floor for the past 3 days. We had the Farm Bill up and 
we entertained more than 70 amendments in 3 days.
    Having spent 4 years as a committee counsel on the House 
side, I can tell you it is a lot different on the Senate side 
in terms of how we address amendments because each of these 
amendments is debated. There is a time for a vote, and each 
senator has to personally present themselves when they vote. It 
is a very timeconsuming process, and I think there is actually 
a pretty good bipartisan feeling right now that we were able to 
get through such a complex piece of legislation, nearly a $1 
trillion piece of legislation during that time period.
    But I do apologize for not having been able to have held 
this hearing yesterday. We thought about trying it, but quite 
frankly, we would have been in and out of here constantly, and 
I do not think it would have been the best use of the time of 
the people who have come here to testify.
    I would also like to acknowledge Senator Gillibrand, who 
is, I have heard, on her way, for having expressed an interest 
in a couple of these issues, which resulted in Senator Levin 
and Senator McCain suggesting that we hold a hearing on these 
issues. So this is what we are doing. This was during the 
recent markup of the Defense Authorization bill. She requested 
that some specific special needs programs be examined in an 
open subcommittee hearing. We are doing that today and very 
pleased to be doing that today.
    We are fortunate to have with us today a diverse panel. Our 
witnesses are Dr. Karen S. Guice, Principal Deputy Assistant 
Secretary of Defense for Health Affairs, and Principal Deputy 
Director of TRICARE Management Activity; Dr. Rebecca L. 
Posante, Deputy Director of DOD's Office of Community Support 
for Military Families with Special Needs; Dr. Vera F. Tait, 
Associate Executive Director, and Director of the Department of 
Community and Specialty Pediatrics of the American Academy of 
Pediatrics; Mr. Jeremy L. Hilton, a military spouse, a veteran, 
and a military family advocate, as well as the 2012 Armed 
Forces Insurance Military Spouse of the Year as voted by his 
fellow military peers in Military Spouse Magazine; Dr. 
Geraldine Dawson, Chief Science Officer of Autism Speaks, and 
Professor of Psychiatry at the University of North Carolina at 
Chapel Hill; and Mr. John O'Brien, Director of Healthcare and 
Insurance for the U.S. Office of Personnel Management (OPM).
    This panel represents a variety of interests and 
viewpoints: the Federal Government, clinicians, the military 
family community, non-profit organizations, and academia. We 
look forward to hearing from each of you today.
    I have said in many previous hearings that ensuring that 
our uniformed personnel and their families receive first-rate 
healthcare is one of the critical elements in what I view as 
the military's moral contract with those who volunteer to serve 
our Nation. I say that as someone who grew up in the military, 
who had the honor of serving as a marine rifle platoon and 
company commander during Vietnam, whose son served as a marine 
infantryman in Iraq, whose brother served, and both my sisters 
married military professionals. I care deeply about this, as I 
am sure everybody on this panel does also.
    Families play a significant role in maintaining our 
volunteer force, and this is true now more than ever. Our 
servicemembers must know that their families are receiving 
timely and professional medical care, especially when they are 
so frequently deployed. This can be even more imperative in 
cases where military family members have special needs.
    We are mindful that the term ``special needs'' is very 
broad. For some families, ``special needs'' may mean obtaining 
necessary care and treatment for complex medical issues. For 
others, it means gaining access to resources necessary to 
accomplish goals set out in a child's individual education 
program at school. For many, it can mean a combination of 
medical treatment, educational services, and systems of support 
for caregivers.
    Given the unique challenges inherent to military life, 
including frequent relocations to new homes and schools, and 
having a new team of medical providers with each permanent 
change of station (PCS), not to mention deployments, it is no 
wonder that DOD felt it necessary to establish the Exceptional 
Family Member Program (EFMP). This program provides support to 
our military families with special medical and educational 
needs through identification and enrollment, assignment 
coordination, and family support. Currently, more than 120,000 
servicemembers are enrolled in this program.
    Beyond support through EFMP, DOD reports that in fiscal 
year 2011, more than 10,000 beneficiaries were enrolled in the 
Extended Care Health Option (ECHO) program, which supplements 
basic TRICARE coverage. This program provides eligible Active 
Duty families with up to $36,000 a year to help cover the costs 
of services and supplies necessary for qualifying medical and 
physical conditions.
    Data for the ECHO program provides us with a sense of the 
scope of conditions that some military families face today. For 
example, DOD tells us that more than 6,000 dependents have been 
diagnosed with autism. More than 1,000 have infantile cerebral 
palsy. Another 2,700 have disorders including epilepsy, hearing 
loss, digestive disorders, spina bifida, or muscular dystrophy. 
These are just the major categories of medical conditions 
military families with special needs must address.
    Today, we aim to increase our awareness of the challenges 
facing our military special needs families. Some examples: we 
recently heard of the need for better outreach to military 
families with special needs, some of whom may be unaware of 
resources that are available to them, continued effort to 
provide more uniform support through EFMP from installation to 
installation, and assisting our servicemembers and their 
families to navigate the various medical and educational 
services available from State to State.
    We have also been informed that OPM recently determined 
that applied behavior analysis (ABA) therapy for autism 
spectrum disorders is considered medical therapy for purposes 
of offering it to beneficiaries under the Federal Employees 
Health Benefits (FEHB) program. DOD has been offering ABA 
therapy for several years, but not under its basic TRICARE 
program as it has determined that ABA is an educational 
intervention and not a medical therapy. We are interested in 
hearing the thoughts of today's witnesses about this 
distinction.
    We appreciate the breadth of knowledge the panel before us 
today possesses. I hope that our witnesses can help us to 
identify the key issues and concerns facing military families 
with special needs, the steps DOD has taken to address those 
concerns, and where DOD and Congress can do a better job.
    We look forward to your testimony. I encourage all of you 
to express your views candidly, to tell us what is working and 
what is not, and to raise any concerns and issues you may want 
to bring to this subcommittee's attention.
    I would also point out at this time that we have received 
written statements from the National Military Family 
Association and the National Council on Disability. These 
statements will be included in the record at the end of the 
testimony of the witnesses that we have today.
    [See Annexes A and B]
    Senator Webb. We will now hear brief opening statements 
from each of our witnesses. I would like to say to each of our 
witnesses that your full prepared statements will be entered 
into the record in their entirety at the end of your opening 
statements. I would ask that you look to keeping your opening 
statements to about 5 minutes.
    We have six witnesses, so that is going to take us probably 
a little more than a half hour to do that.
    Please proceed. Dr. Guice, welcome.

  STATEMENT OF DR. KAREN S. GUICE, PRINCIPAL DEPUTY ASSISTANT 
 SECRETARY OF DEFENSE FOR HEALTH AFFAIRS AND PRINCIPAL DEPUTY 
             DIRECTOR, TRICARE MANAGEMENT ACTIVITY

    Dr. Guice. Mr. Chairman, members of the subcommittee, as 
you can tell, I have laryngitis. I would like to beg your 
indulgence in letting me talk a little over the 5 minutes, if I 
have to.
    Thank you for the invitation to discuss the military health 
system----
    Senator Webb. Very convenient, Dr. Guice, that you would 
have laryngitis when we have called you to this hearing. 
[Laughter.]
    You are getting a lot of empathy right now, so if you want 
to make your statement briefer, that is fine. We can do it any 
way possible to accommodate you.
    Dr. Guice. Thank you. Military service brings unique 
challenges to anyone who wears the uniform. Those 
servicemembers who have special needs children have additional 
challenges.
    DOD is proud of the programs and services we offer to these 
families in conjunction with other support services provided by 
State and local governments and the private sector. Dr. Rebecca 
L. Posante will talk about those services provided by the 
Office of Community Support for Military Families with Special 
Needs. I will briefly touch on the health benefits and 
supplemental services we provide through our basic medical plan 
and the ECHO program.
    DOD offers a comprehensive and uniform medical benefit for 
military beneficiaries delivered worldwide through our military 
treatment facilities or purchased care. For our beneficiaries, 
these medical benefits include access to a variety of 
providers, including specialists, inpatient and outpatient 
care, as well as prescription medication.
    In addition to the basic health plan, the military health 
system offers the ECHO program. This program provides 
additional beneficiaries not otherwise available under the 
basic health plan to eligible Active Duty servicemembers with 
special needs. By ensuring our Active members have access to 
these services, we support military retention and readiness for 
DOD.
    One example of the services covered under the ECHO program 
is ABA treatment for patients with autism spectrum disorders 
(ASD). Since 2001, DOD has covered ABA services for qualifying 
members. Because many of our Active Duty families found it 
difficult to access certified ABA providers under the 
traditional ECHO program's criteria, we implemented a 
demonstration project in 2008, to determine if we could expand 
the availability of providers.
    Under the demonstration program, we cover ABA services when 
provided by tutors who are under the direct supervision of 
certified ABA therapists. This demonstration project has 
succeeded in expanding access to services, and participation in 
the demonstration project has grown by average of 3 to 5 
percent per month per year. We are now in the process of 
converting the demonstration project into a permanent part of 
the ECHO program.
    Military families also asked us to help sustain continuity 
of care and service during reassignments and relocations. We 
work closely with our TRICARE regional offices and TRICARE 
contractors to ensure that there is a smooth transition for 
families with children who have special needs when they 
relocate.
    I understand that one of the primary purposes of this 
hearing is to address medical coverage decisions by OPM for the 
FEHB Plan and TRICARE relative to ABA for patients with ASD. In 
2010, DOD conducted an assessment to determine if ABA qualified 
as medically necessary and appropriate under existing TRICARE 
law and regulation. Through robust analysis, peer review 
literature, and independent technical analyses, ABA was 
determined to be an educational intervention, and as such, did 
not meet the criteria for coverage under the basic medical 
program.
    Our determination is consistent with the 2011 Agency for 
Healthcare Research and Quality's Comparative Effectiveness 
Review, Therapies for Children with Autism Spectrum Disorders. 
In this review, the investigators found the literature to be 
highly variable in quality, limited in those specific areas, 
and inconclusive. They identified the need for more research to 
determine which children benefit from a particular intervention 
or combination of interventions.
    In the same report, the investigators clearly separated 
education and behavioral interventions for medical 
interventions. They did not consider ABA to be a medical 
intervention, which is consistent with DOD's 2010 review. 
However, we also understand that OPM has recently reviewed 
evidence that they believe now meets their threshold for 
determining ABA as a covered medical service. We have formally 
requested that OPM provide us this evidence so we can evaluate 
it against our coverage criteria.
    Medical care evolves over time, and we continuously 
evaluate new medical interventions or treatments for 
effectiveness and safety prior to a coverage determination. Our 
coverage determinations are strictly governed by statute and 
regulations, and require an extensive assessment of reliable 
medical evidence. Our determinations are also based on what is 
medically or psychologically necessary to diagnose and treat 
disease or injury.
    DOD is committed to providing comprehensive services for 
military families who have children with special needs. By 
providing robust medical care for our Active Duty members and 
their families, along with supplemental services to further 
support those with special needs, we contribute to a stronger 
warfighter.
    I am proud to be here with you today to represent the 
military health system and our exceptional health providers who 
provide exceptional service to exceptional people. I look 
forward to answering your questions.
    [The joint prepared statement of Dr. Guice and Dr. Posante 
follows:]
   Joint Prepared Statement by Dr. Karen S. Guice and Dr. Rebecca L. 
                                Posante
    Mr. Chairman, members of the subcommittee, it is a privilege for 
both of us to appear before you today, and we appreciate the 
opportunity to testify on our efforts to support military families that 
include a member with special medical or educational needs.
    The Department of Defense is proud of the programs and services we 
provide to military families with special needs. We have been providing 
specialized services to families for decades. In response to the 
landmark legislation for military families with special needs (Sec. 563 
of the National Defense Authorization Act, Pub. L. No. 111-84), the 
Secretary of Defense established the Office of Community Support for 
Military Families with Special Needs (OSN) in October 2010. This office 
is leading efforts to streamline processes that can be improved, to 
develop policies that guide the provision of support by the military 
departments, and to generally help families identify, understand and 
navigate the systems they will encounter. This office is closely linked 
with our colleagues in the Office of the Assistant Secretary of Defense 
(Health Affairs) and the TRICARE Management Activity (TMA) within the 
Office of the Under Secretary of Defense (Personnel & Readiness).
    Support to military families with special needs is an especially 
important task for the Department. Military families with special needs 
are first military families. They have the same challenges any other 
military family may encounter in the face of periodic moves, 
deployments, and separation from family. Further, they face additional 
challenges, navigating often complex systems to obtain the services and 
benefits their families need to help their loved one function to their 
maximum potential. Each time a military family moves the process starts 
over, and they face questions such as: Who provides early intervention 
services in this State? Am I going to the local school system, public 
health or a regional board to get help? What do they call their 
programs here? Is there a waiting list for Medicaid, or perhaps, how 
long is the waiting list? Where do I sign up for the women, infants, 
and children program, and will they accept the certification from my 
current state? What will we do when we can no longer take our non-
verbal child to the dentist who has finally achieved his trust? Will 
there be anyone at the new location who will understand what we need? 
What school district can best meet the needs of my child?
    We recognize that these military families need assistance with 
these questions, and we have worked to make this process less 
challenging wherever possible.
       the current state of the exceptional family member program
    For over 30 years, the Military Services have administered the 
Exceptional Family Member Program (EFMP), which identifies family 
members who have special medical or educational needs, documents their 
needs and ensures they are considered when the servicemember is being 
considered for the next assignment. Since the NDAA for Fiscal Year 
2010, the EFMP has been expanded to include a requirement for family 
support and to extend the coordination of assignments based on the 
family member's special needs to permanent change of station (PCS) 
moves within the United States as well as overseas.
    Currently, over 400 EFMP family support personnel serve military 
families with special needs. All installations have either a full- or 
part-time staff person, or (in smaller locations) a point of contact 
for military families with special needs. Installations with greater 
numbers of families with special needs may have multiple EFMP family 
support personnel. All providers have been trained in their roles, the 
agencies with which they will work, and the requirements of supporting 
military families with special needs.
    The OSN developed an EFMP Family Support Reference Guide and 
disseminated it to all EFMP family support providers (to include 
Reserve and Guard Components) as a guide to providing family support 
and networking with community support systems. Through a Memorandum of 
Understanding with the U.S. Department of Agriculture (USDA), the OSN 
partnered with Cornell University and the University of Kansas to 
conduct a benchmark study identifying the concerns of military families 
with special needs, the support they require, and the systems that have 
been effective in providing services. The research team conducted focus 
groups with military families from all branches of Service and with 
civilian populations. This study will generate recommendations for the 
military in refining our support programs including staffing models, 
metrics, evaluation standards, and a family satisfaction scale.
    The OSN is working closely with the Military Services to 
standardize the EFMP across Services. Military families want 
consistency, and we are improving their ability to navigate internal 
processes more easily by having standard forms, terms, and procedures. 
The OSN embarked on a multi-year project to analyze current systems 
(medical, personnel and family support) that make up the EFMP 
(identification/enrollment, assignment coordination and family support) 
to even more closely integrate service delivery. We have concluded the 
first year of the functional analysis. Over the longer term, we will 
create an integrated, longitudinal electronic record that works across 
all military departments. This system will prevent families from 
reinventing paperwork with every PCS, allow the medical command to 
alert the personnel command about availability of medical services, and 
regardless of Service affiliation the family will receive a warm 
handoff to the receiving location. This is a detailed, iterative 
process involving multiple data and case management systems. The end 
result, however, will offer an important enhancement to the families we 
serve.
                   listening to our military families
    In the last 2 years, we have held two EFMP family panels 
representing military families of all ranks, Service affiliation, 
Active Duty and Reserve components, and ages and disabilities of the 
family member with special needs. We have conducted three studies on 
access to special education in the public schools, access to Medicaid, 
and a benchmark study on what makes a support system work. The lack of 
State and local data identifying military-connected families who use 
public sector programs, including special education, remains a gap.
    We have also consulted with non-governmental agencies on their 
knowledge of the relevant issues regarding special needs families, and 
participated in several of the Military Family Caucus sessions. These 
Caucus sessions pertained to special needs, and military family members 
who advocate for families with special needs were invited to discuss 
issues in our office. We have read the National Council on Disability's 
report, How to Improve Access to Health Care, Special Education, and 
Long-Term Support and Services for Family Members with Disabilities, 
and met with the researchers who developed the report. The same issues 
for our families emerge in each forum: access to special education, 
access to Medicaid, transition problems with access to TRICARE when 
families change locations, and a request for inclusion of applied 
behavior analysis as a medical benefit within TRICARE rather than 
through the Extended Care Health Option.
    We have focused on providing the information military families with 
special needs members need, particularly during critical transition 
moments; we work to educate them about what is available to them and 
assist them with obtaining resources and benefits within the scope of 
the law. Our efforts have been directed at identifying the problems 
families encounter, addressing those we have the authority to address 
(such as consistency across the military departments) and collaborating 
with the agencies/programs responsible for services not within our 
control.
                         educating our families
    While the Department does not have authority over programs in other 
governmental agencies or programs administered by the States, we have 
the responsibility to educate our families on how to identify resources 
available to any American citizen and obtain benefits. We can provide 
information about special education and the Individuals with 
Disabilities Education Act (IDEA) and all its requirements and 
protections. Many military family children benefit from special 
education and the families must know how these systems work. Our 
military families need and benefit from programs such as Medicaid, 
Supplemental Security Income, and early intervention, too.
    The OSN has created a wealth of information for military families 
available on line at the MilitaryOneSource.mil website or by calling 
Military OneSource. These include written guides for families whose 
children have disabilities and a new guide for families where there is 
an adult family member with special needs. Both guides will be 
accompanied by a facilitator's manual, which can be used by EFMP staff 
(or families) to conduct training sessions on special education, early 
intervention, TRICARE, and much more. We conduct monthly webinars 
utilizing the talents of leaders in our field on such subjects as care 
giving, assistive technology, guardianship and estate planning, and 
advocacy. We have produced a series of podcasts available on smart 
phones and a mobile website that allows families to access EFMP 
providers, EFMP enrollment forms, and all of our online content. 
Several e-learning modules have been developed to increase parents' 
knowledge about special education and how to collaborate with school 
personnel, about the EFMP and about other Federal and State programs.
    We are in the process of revising the content and presentation on 
the Military OneSource website and anticipate completion of this 
revision by September 1. From one landing page families with special 
needs will be able to learn about military and community programs, 
access an EFMP provider, sign up for a webinar or view archived 
webinars, request materials, or make an appointment for a specialty 
consultation with a Military OneSource consultant who is a professional 
in special needs.
   supporting dod programs to serve family members with special needs
    OSN has created an internal coalition of Defense organizations to 
address issues of access for our military families with special needs. 
Through effective collaboration with the military departments, the EFMP 
and Morale, Welfare and Recreation, we have built over 200 accessible 
playgrounds for children with disabilities and installed pool lifts in 
all military swimming pools. We have developed online tools for 
families who are moving with a special needs family member to help them 
plan their move. For the past 2 years in cooperation with the military 
children and youth programs, we have funded ongoing training and 
support to enable those programs to integrate children and youth with 
disabilities. The OSN purchased and distributed books and electronic 
subscriptions to all military departments' installation libraries and 
family centers to create an EFMP library. The set of references is 
intended to assist professionals and family members in accessing 
materials on disability-related topics. In addition, special education 
law resources were provided to military department legal offices and 
selected medical offices. We work closely with the DOD Education 
Activity to ensure the 9,700 children with special needs attending a 
DOD schools receive appropriate special education services.
                      access to special education
    Military families are concerned about access to special education 
services. Obtaining comparable services from one assignment to the next 
is the most consistently reported obstacle for military families and 
often reflects differences in eligibility and services between States. 
For example, the American Association for Employment in Education 
(AAEE) has reported shortages of special education teachers, speech-
language pathologists, school psychologists, vision and hearing 
specialists, school nurses, physical therapists and occupational 
therapists, with many regions of the country reporting considerable 
shortages for several years in a row (AAEE, 1996-2010). There are wide 
disparities in school nurse staffing ratios; some exceed 1: 4,000. Only 
75 percent of schools have a full or part time nurse; 25 percent have 
no registered nurse. Seventeen percent of schools with more than 750 
students have no registered nurse on duty (National Association of 
School Nurses (NASN)). Forty-eight States and the District of Columbia 
identified special education teaching and/or at least one of the 
related service provider categories as an official ``shortage area'' 
for the 2011-2012 school year (Teacher Shortage Areas Nationwide 
Listing, U.S. Department of Education, Office of Postsecondary 
Education, March 2011). Given well-documented fiscal pressures on State 
budgets, it is likely that discrepancies in which resources are 
available between school districts and among States will persist.
    To address family member information needs in this area, OSN has 
initiated multiple efforts including establishing a resource 
clearinghouse to help families with relocation; identifying and 
promulgating effective support practices among service branches; and 
sponsoring research studies on evidenced-based educational practices. 
OSN developed an online Education Directory to inform families of 
points of contact, resources, and procedures in public school districts 
in the States with the highest number of military assignments. The 
project continues and by the end of fiscal year 2014, we will publish a 
directory that includes all 50 States and the District of Columbia.
    Through the USDA MOU previously mentioned, we are partnering with 
Ohio State University and Pennsylvania State University to collect more 
detailed data about the extent and types of issues impacting families 
as they attempt to access comparable special education services in 
their new duty station. This project will support the identification of 
special education issues for which parents and family support providers 
need additional training and assist in determining if a formal military 
complaint documentation system should be explored in collaboration with 
the U.S. Department of Education.
access to medical services--tricare, extended health care option (echo) 
                              and medicaid
    In managing health and health benefit issues, we first ensure we 
are faithfully following public law regarding what is a covered medical 
benefit. We also seek to align our initiatives to the Military Health 
System (MHS) strategic plan, the Quadruple Aim, which is comprised of 
four interrelated missions--Assure Readiness; Improve Population 
Health; Enhance the Patient Experience of Care; and Responsibly Manage 
the Cost of Care. We consider ``family readiness'' as an essential 
element of our Readiness strategy.
    The MHS has long been a leader in offering benefits and services to 
military families with special needs. We have directed considerable 
effort in formulating policy for coverage of effective therapies under 
the TRICARE Basic Program and the Extended Care Health Option (ECHO) 
program.
TRICARE Basic Program
    The TRICARE Basic Program--whether TRICARE Prime, TRICARE Extra, or 
TRICARE Standard--offers a comprehensive health benefit that covers any 
medically or psychologically necessary care for special needs 
beneficiaries, to include physician visits, immunizations, 
psychological testing and medical interventions such as speech therapy, 
physical therapy and occupational therapy. TRICARE offers exceptionally 
comprehensive coverage with very low out of pocket costs to our 
beneficiaries. For active duty families enrolled in TRICARE Prime, the 
out of pocket costs are almost non-existent, and families are further 
protected by a $1,000 out of pocket catastrophic cap, after which DOD 
pays 100 percent of allowable costs. By law, the TRICARE Basic Program 
may not cover non-medical services such as Applied Behavior Analysis 
(ABA).
Extended Care Health Option
    The ECHO program, established under Title 10 U.S.C. Code 1079, 
provides additional benefits not otherwise available under the TRICARE 
Basic Program to certain eligible active duty family members with 
special needs. As established by law (National Defense Authorization 
Act for Fiscal Year 2009, Public Law 110-417), the government will 
cover up to $36,000 per beneficiary per year in ECHO benefits.
    As we noted at the beginning of our testimony, similar to other 
military families, our active duty families with special needs members 
must move frequently from one location to another. To ensure continuity 
of care for ECHO participants when they move, our TRICARE contractors 
have established case management hand-off processes so that the 
receiving contractor will be prepared to maintain for a family the set 
of ECHO services it had been receiving before moving. Because of the 
complexity and diversity of the services required to effectively 
address the special needs of many participants in ECHO, TRICARE 
requires its regional managed care support contractors to provide case 
management services to ECHO participants. Applied case management 
ensures access to a comprehensive, coordinated set of required 
treatments and services.
    Each of the three TRICARE contractors is required to deliver a 
uniform TRICARE benefit. Consequently, a family can expect to receive 
the same ECHO services upon arrival at the new duty station. However, 
families may notice some differences in the administration of these 
services by our regional contractors. The Department does permit some 
variation in administrative practices in order to permit the use of 
contractor best practices. In the unlikely event a family should be 
denied coverage under either TRICARE Basic or ECHO it had been 
receiving in another TRICARE region, there is a well-designed appeal 
process beneficiaries may use, and the contractors are required to 
assist them in understanding and exercising their appeal rights.
    Examples of benefits not available through the TRICARE Basic 
Program, but available through ECHO include: assistive services, 
expanded in-home medical services, institutional care when a 
residential environment is required, and other services that the 
Director of TMA determines are capable of reducing the disabling 
effects of a qualifying condition. These ``qualifying conditions'' 
include Autism Spectrum Disorders (ASD). At the end of fiscal year 
2011, DOD had over 10,000 TRICARE beneficiaries registered in the ECHO 
program.
    The Department has worked to ensure our special needs families with 
ASD have access to the most widely-accepted educational intervention, 
known as ABA. Since 2001, the Department of Defense has covered ABA 
services for eligible active duty family members under the ECHO program 
(and its predecessor, the Program for Persons with Disabilities). 
Originally, we covered ABA services only if provided by a Board 
Certified Behavior Analyst (BCBA). We found there were not enough of 
them available to satisfy the demand from Active Duty family members 
for services. So, in 2008 we constructed a demonstration to increase 
access to ABA services by permitting tutors, under the supervision of 
BCBAs, to provide the services. Even today, ECHO enrollees with an ASD 
who want ABA services but who do not want to participate in the 
demonstration may obtain the services directly from a BCBA, if 
available from that source.
    This demonstration has succeeded in expanding access to services--
and we continue to witness increased participation by ABA supervisors, 
tutors and TRICARE beneficiaries. As of March 31, 2012, there were 
3,783 beneficiaries enrolled in the demonstration--a number that has 
grown by 3-5 percent annually, on average, since the program was first 
introduced in 2008. Just as importantly, a recent DOD survey of 
military parents of dependent children with autism reported that the 
improved access to ABA services contributed to improved military family 
readiness and retention.
    The Department is now moving beyond a demonstration program and 
seeking to embed the supervisor-tutor model of ABA provision as a 
permanent element of the ECHO program. We published a proposed rule in 
the Federal Register on December 29, 2011, to establish coverage of 
this ABA provision under ECHO for eligible beneficiaries with ASD. Upon 
final implementation of this rule, we intend to categorize ABA as an 
``Other Service'' under the ECHO statute and permanently adopt a more 
robust ABA services delivery and reimbursement methodology.
    While we are pleased that we have been able to broaden access to 
these services, we do recognize that some families experience 
additional out-of-pocket costs when needed services exceed the 
government's statutory limit of $36,000. Based on our own claims data 
from 2011, 207 beneficiaries using the ECHO program had expenditures 
above $35,000 per year. Another 489 beneficiaries had expenditures 
between $30,000 and $35,000. Thus, in 2012, we estimate that 
approximately 86 percent of TRICARE beneficiaries with an ASD diagnosis 
and using the ECHO program have had 100 percent of their expenses 
covered within the $36,000 government maximum.
    Several Members of Congress have inquired about the feasibility of 
categorizing ABA services as a medical benefit covered under the 
TRICARE Basic Program. The Department conducted a thorough technical 
assessment of ABA in 2010 to determine whether ABA met the requirements 
for inclusion as a TRICARE covered service.
    Our technical assessment looked at the following: Does the reliable 
evidence, as that standard is defined in law and regulations for 
TRICARE Basic Program coverage determinations, support a conclusion 
that ABA is medically or psychologically necessary and that it is 
appropriate medical care for Autism Spectrum Disorders (ASD)? (2) Does 
the reliable evidence support a conclusion that ABA is proven as 
medically or psychologically necessary and that it is appropriate 
medical care for ASD in accordance with the requirements of 32 Code of 
Federal Regulations Sec. 199.4. Can ABA be covered as a TRICARE benefit 
under Chapter 55 of Title 10, U.S.C. if it is concluded that ABA is not 
medically or psychologically necessary and that it is not appropriate 
medical care for ASD, or that it is not proven as medically or 
psychologically necessary or that it is not appropriate medical care 
for ASD?
    We found that ABA is an ``educational intervention'' and does not 
meet the TRICARE definition of medically or psychologically necessary 
care. The majority of the reliable evidence characterizes ABA as not 
being a medical treatment, as that standard is defined in law and 
regulations for TRICARE Basic Program coverage determinations, but 
instead as involving non-medical, behavioral intervention services.
    Consequently, the Director, TRICARE Management Activity has 
concluded that ABA is not medically or psychologically necessary or 
appropriate medical care within the meaning of the law and regulations 
governing coverage of medical benefits under the TRICARE Basic Program. 
However, the assessment indicates that TRICARE has authority to pay for 
ABA to reduce the disabling effects of ASD for ECHO-registered 
dependents with an ASD diagnosis, and this assessment helped guide our 
decision to make ABA services a permanent part of the ECHO program. The 
assessment and Director's conclusion serve as the administrative record 
of the agency's decision and is reflected in the proposed rule. The 
TMA's Medical Benefit & Reimbursement Branch reviews information about 
Medicare's and other payers' coverage, regular medical technology 
updates available through a subscription to Hayes, Inc. reports (a 
medical technology assessment firm), data/evidence submitted by 
beneficiaries and providers on appeal, evolving practice information 
from the Office of the Chief Medical Officer, and TRICARE Managed Care 
Support Contractors' evolving practice reports. TMA decides on the 
basis of these information sources whether it is warranted to conduct a 
formal review to determine if a medical technology can be confirmed by 
the hierarchy of evidence specified in 32 CFR 199.2 to be considered 
medically safe and efficacious.
    Medicaid. Some military families with special needs beneficiaries 
also qualify for Medicaid. There are select services that TRICARE does 
not cover that are available through this Federal-State medical 
program. Example of items and services that TRICARE (and most civilian 
health insurance) does not cover includes long-term care, custodial 
care (assistance with daily living), adult day services, or expendable 
items such as diapers.
    Because Medicaid is State-administered, military families that 
include member(s) with special needs face difficulties each time they 
move and they are required to reapply for Medicaid eligibility. In some 
cases, this includes placement on waiting lists. Because of the 
frequency of military rotations, some families do not move off the 
waiting list before they once again relocate.
    The Department has contracted with West Virginia University to 
study the problems military families face with accessing Medicaid. 
Preliminary findings of the West Virginia study indicate that families 
and EFMP providers need more training on how to access Medicaid. The 
final report from this study will be available in fall 2012.
    The DOD State Liaison Office held an open meeting recently to 
discuss adopting this as one of the issues to address with States much 
as they have addressed the transition of school-aged children. We will 
provide an update on the outcome of this recommendation in the near 
future.
    The Department recognizes the enormous challenges that military 
families with special needs beneficiaries experience, and we have 
aggressively sought to meet their needs with targeted programs and 
services. As we stated earlier--family readiness is a military 
readiness issue. We have made tremendous progress over the past several 
years, consistent with the law that Congress has established.
    In the case of military children with special needs, we have 
crafted programs that have only been enhanced and improved over the 
last 10 years--in the areas of education, special education, community 
wide information and education. In the medical arena, we have 
successfully expanded programs that allow for the delivery of services 
beyond the traditional medical services authorized under TRICARE. We 
have continuously worked to expand both service delivery and reduce 
their out of pocket expanses. Congress has also expanded the 
government's maximum cost-share for the ECHO program from $2,500 
monthly maximum to $36,000 annually.
    We are committed to maintaining our passion for excellence and 
service to these very special families. We are proud of what we have 
accomplished to date, and we are optimistic about our ability to 
continue to meet family member needs for the long-term.
    Again, we thank you for inviting us to be here today, and we look 
forward to your questions.

    Senator Webb. Thank you very much, Dr. Guice.
    Dr. Posante, welcome.

STATEMENT OF DR. REBECCA L. POSANTE, DEPUTY DIRECTOR, OFFICE OF 
  COMMUNITY SUPPORT FOR MILITARY FAMILIES WITH SPECIAL NEEDS, 
                     DEPARTMENT OF DEFENSE

    Dr. Posante. Thank you, Senator Webb, for inviting me to 
testify today. Supporting individuals and families with special 
needs has been a passion of mine for over 30 years. I really 
appreciate the attention being paid to this topic today.
    When I brief the NDAA for Fiscal Year 2010 to military 
audiences, I always refer to it as landmark legislation. It 
established the Office of Community Support for Military 
Families with Special Needs, for which it has been my pleasure 
to serve as the Deputy Director for nearly 2 years. It served 
as a catalyst for our efforts to streamline processes that can 
be improved, to raise issues that need to be raised, to develop 
policies that guide the provision of support by the military 
departments, and to generally help families identify, 
understand, and navigate the systems they will encounter.
    Military families with special needs are military families 
first. They face the same challenges that other military 
families face due to periodic moves, deployments, and 
separation from their extended families. But in addition, our 
families with special needs face the challenge of navigating 
often complex, stovepiped, and confusing educational, medical, 
and community support systems. Our families have children with 
intellectual, physical, communication, and emotional 
disabilities. In about a third of our families, it is the adult 
member that has a special need.
    The good news is that there are a myriad of systems, 
military, State, and local community systems, available to 
support them. The bad news is there are a myriad of systems. 
Our office has been charged with bringing order to this chaos 
and helping our families access the support they need.
    Currently, over 400 family support personnel serve military 
families with special needs. All of our installations, 
depending on their sizes, have a full or part-time staff person 
or, in some very small locations, a point of contact for 
military families with special needs. Over the last 2 years, 
all of our providers have been trained on their roles, on the 
agencies with which they should be working, and on the 
requirements of supporting military families with special 
needs.
    Communicating with our families is important. Educating 
them on programs, benefits, and resources is crucial. Working 
jointly with the military departments, we have provided a 
wealth of information to military families with special needs, 
including materials available online and through Military 
OneSource.
    My written testimony outlines our ongoing work in greater 
detail, where we are succeeding, and where we have more work to 
do. Thank you so much for your support.
    Senator Webb. Thank you, Dr. Posante. Again, I would remind 
the witnesses that your full written statements will be entered 
into the record at the end of your opening statements. Also, 
just for the subcommittee, that the hearing record will remain 
open until close of business tomorrow in case there are written 
questions that anyone would like to present to you.
    Senator Webb. Dr. Tait, welcome.

 STATEMENT OF DR. VERA F. TAIT, ASSOCIATE EXECUTIVE DIRECTOR, 
  DEPARTMENT OF COMMUNITY AND SPECIALTY PEDIATRICS, AMERICAN 
                     ACADEMY OF PEDIATRICS

    Dr. Tait. Thank you. Chairman Webb and members of the 
subcommittee, thank you for holding today's hearing on such an 
important topic: military families who have children with 
special healthcare needs. I am Dr. Vera Fan Tait, and I 
represent the American Academy of Pediatrics (AAP), a 
professional organization of more than 60,000 primary care 
pediatricians and pediatric sub-specialists. I am honored to 
join this panel, which includes such extraordinary advocates 
and experts.
    I am a pediatric neurologist and an Associate Executive 
Director at the AAP. Prior to joining the AAP, I was in 
practice for more than 25 years with my major areas of 
expertise including children and youth with special healthcare 
needs, traumatic brain injury, neurodevelopmental disabilities, 
and neurologic rehabilitation. Caring for our Nation's military 
families and their children has always been of paramount 
importance for AAP. I am proud to say that one of the oldest 
sections in our academy is the section on uniform services.
    The impacts of long or multiple deployments on all military 
families can be significant. For families with children who 
have neurodevelopmental disabilities or disorders, these 
impacts are often significantly exacerbated. The AAP believes 
that the optimal health and well-being of all infants, 
children, adolescents, and young adults, including those in 
military families, is best achieved with access to appropriate 
and comprehensive health insurance benefits. These benefits 
must be available through public health insurance plans, like 
Medicaid, the Children's Health Insurance Program (CHIP), and 
TRICARE, as well as the private health insurance plans.
    AAP policy recommends that minimum health benefits for 
infants, children, and youth should provide all medically 
necessary care within the medical home. We believe that medical 
and other services must be delivered and coordinated, as you 
said, Senator Webb, in a comprehensive patient- and family-
centered medical home, which is the quality setting where 
physicians who are known to the family and to the child have 
developed a partnership of mutual responsibility and mutual 
trust.
    The health insurance plan that most military families use 
is TRICARE, and services, as we have heard, covered by TRICARE 
provided by pediatricians who are Active Duty military, but 
also community pediatricians and pediatric sub-specialists, who 
provide care near military facilities. Military families often 
face challenges navigating the TRICARE program, many times 
struggling to find the appropriate pediatric providers or have 
certain pediatric services covered.
    One area of particular concern among military families, and 
the reason we are here today, is to look at children with 
special healthcare needs and the coverage of services for 
children with neurologic disorders, especially the ASD. 
Unfortunately, there is often no simple solution for families 
whose children must receive care often from numerous providers. 
A coordinated approach to intervention and treatment among the 
medical home, the educational institutions, and the family is 
really critical for success.
    One demonstrated effective treatment for autism is ABA. The 
symptoms associated with autism are directly addressed by ABA 
methods, which have proven effective in addressing the core 
symptoms of autism, as well as helping children develop skills 
and improve and enhance functioning in other areas that affect 
health and well-being.
    The effectiveness of ABA-based interventions and autism has 
been well-documented through a long history of research. 
Children who receive early intensive treatment have been shown 
to make substantial gains in cognition, language, academic 
performance, and adaptive behavior, as well as social behavior. 
Their outcomes have been significantly better than those of 
children who have no access to these interventions. Though more 
research and ongoing research is needed, ABA has both long-term 
empirical and research data to demonstrate its effectiveness in 
helping children who are diagnosed with ASD.
    The AAP has endorsed the use of ABA treatments when 
determined appropriate by physicians within a medical home in 
close consultation with families.
    Thank you for allowing me to testify before the 
subcommittee today. We must do all that we can to support our 
military families, but especially those who have the added 
challenge of raising children with special healthcare needs. 
Thank you, and I look forward to the questions.
    [The prepared statement of Dr. Tait follows:]
            Prepared Statement by Dr. Vera F. Tait MD, FAAP
    Chairman Webb and Ranking Member Graham, thank you for holding 
today's hearing on such an important topic--the programs and policies 
that the Department of Defense has in place to support military 
families with children with special needs. My name is Vera Fan Tait, 
MD, FAAP, and I am representing the American Academy of Pediatrics 
(AAP), a nonprofit professional organization of more than 60,000 
primary care pediatricians, pediatric medical subspecialists, and 
pediatric surgical specialists dedicated to the health, safety, and 
well-being of infants, children, adolescents, and young adults.
    I am a pediatr--ic neurologist and am an Associate Executive 
Director at AAP, as well as the Director of AAP's Department of 
Community and Specialty Pediatrics. In addition to my role with the 
American Academy of Pediatrics, I am also a member of the Child 
Neurology Society and the Association of Maternal and Child Health 
Programs. Prior to joining the AAP, I was in practice for more than 25 
years and my major areas of expertise include children and youth with 
special health care needs, traumatic brain injury, neurodevelopmental 
disabilities, and neurological rehabilitation. It was my privilege to 
care for families with children with autism spectrum disorders and 
other neurodevelopmental disabilities.
    I have personally experienced the struggle that many pediatricians 
face every day when trying to access needed medical, educational and 
other services for children with special health care needs. Finding 
needed services can be difficult even when they are adequately covered 
by health insurance. It is only more difficult when a primary care 
pediatrician or subspecialist can locate care only to find it is not 
covered by a family's insurance.
    Caring for our Nation's military families and their children has 
always been of paramount importance for the Academy. I am proud to say 
that one of the oldest sections we have at the Academy is the Section 
on Uniformed Services. Created in 1959, the AAP's Section on Uniformed 
Services has helped direct the Academy's leadership on the health and 
well-being of our Nation's military children and adolescents. The 
Section is comprised of over 900 members who are active duty or retired 
military, as well as civilian pediatricians who serve military 
beneficiaries. The section works closely with the pediatric consultants 
to the surgeon general of each branch of the military.
    An example of one of the Section's most recent accomplishments is 
the development of the Military Youth Deployment Support Video Program, 
which is designed to help children and adolescents cope with the 
deployment of one, or sometimes even both, of their parents or 
guardians to other countries around the world. The video was initially 
designed by the Section on Uniformed Services and was subsequently 
utilized by the U.S. Army Medical Command. So far more than 20,000 
copies of the program have been distributed worldwide to military 
families, various military youth serving professional agencies, and 
primary care offices.
    The health and well-being of children in America's military 
families ranks as one of the top priorities of the Academy, and that is 
why I am honored to represent AAP here today. The impacts of long or 
multiple deployments on all military families can be significant and 
for families with children with autism spectrum disorders, 
neurodevelopmental disorders or other disabilities, these impacts are 
often significantly exacerbated.
    The American Academy of Pediatrics believes that the optimal health 
and well-being of all infants, children, adolescents and young adults 
through 26 years of age-including those in military families-is best 
achieved with access to appropriate and comprehensive health care 
insurance benefits. These benefits must be available through public 
insurance plans like Medicaid, the Children's Health Insurance Program 
and TRICARE, as well as private health insurance plans.
    AAP policy recommends that minimum health benefits for all infants, 
children, and youth should provide all medically necessary care, and 
include such services as:

         preventive care
         hospitalization
         ambulatory patient services
         emergency medical services
         maternity and newborn care, and
         mental health and substance abuse disorder services.

    Also included in the set of benefits should be:

         behavioral health
         rehabilitative and habilitative services and devices
         laboratory services
         chronic disease management, and
         oral, hearing and vision care.

    In short, all children must have a medical home. AAP believes that 
medical and other services should be delivered and coordinated in a 
comprehensive, patient and family-centered, physician-led medical 
home--the quality setting for primary care delivered or directed by 
well-trained physicians who are known to the child and family, who have 
developed a partnership of mutual responsibility and trust with them, 
and who provide accessible, continuous, coordinated, and comprehensive 
care.
    The health insurance plan that most military families use is 
TRICARE. Services covered by TRICARE are provided by pediatricians who 
are active duty military but also community pediatricians and pediatric 
subspecialists who provide care near military bases and other military 
facilities. AAP members providing care to children and families covered 
by TRICARE face unique challenges compared to other public and private 
programs and plans. For example, one of the challenges that military 
families with children face is that the TRICARE program is largely 
based on Medicare, a health system designed to provide coverage for 
senior adults. Because of this program alignment, military families 
often face challenges navigating the TRICARE program, many times 
struggling to find appropriate pediatric providers or have certain 
pediatric services covered.This is especially true for parents of 
children with special health care needs. AAP has worked closely with 
TRICARE programs to ensure needed services are available from routine 
immunizations to highly specialized and acute pediatric care.
    One area of particular concern among military parents of children 
with special needs is the coverage of services for children with autism 
spectrum disorders or other neurological disorders. Recently released 
data from the Centers for Disease Control and Prevention confirms that 
the prevalence of children with autism spectrum disorder (ASD) is 
growing, as is the need for effective services to help children with 
ASD maximize their potential.
    Autism spectrum disorders, similar to other neurodevelopmental 
disabilities, are generally not ``curable,'' and complex care is 
required for the child along with services for the family. 
Unfortunately, there is often no simple solution for families and 
effective, family-centered care will include numerous providers. A 
coordinated approach to intervention and treatment among the medical 
home, educational institutions and the family is critical for success.
    Optimizing medical care and therapy can have a positive impact on 
the habilitative\1\ progress and quality of life for the child. 
Medically necessary treatments ameliorate or manage symptoms, improve 
functioning, and/or prevent deterioration. Thus, in addition to routine 
preventive care and treatment of acute illnesses, children with ASD 
also require management of sleep problems, obsessive behaviors, hygiene 
and self-care skills, eating a healthy diet, and limiting self-
injurious behaviors.
---------------------------------------------------------------------------
    \1\ ``Habilitative or rehabilitative care'' means professional, 
counseling, and guidance services and treatment programs that are 
necessary to develop, maintain, and restore, to the maximum extent 
practicable, the functioning of an individual.
---------------------------------------------------------------------------
    Effective medical care and treatment may also allow a child with 
ASD to benefit more optimally from therapeutic interventions. 
Therapeutic interventions, including behavioral strategies and 
habilitative therapies, are the cornerstones of care for ASD. These 
interventions address communication, social skills, daily-living 
skills, play and leisure skills, academic achievement, and behavior.
    An example of a demonstrated, effective treatment for ASD is 
Applied Behavior Analysis (ABA). ABA uses behavioral health principles 
to increase and maintain positive adaptive behavior and reduce negative 
behaviors or narrow the conditions under which they occur. ABA can 
teach new skills, and generalize them to new environments or 
situations. ABA focuses on the measurement and objective evaluation of 
observed behavior in the home, school, and community.
    ASD is a medical/neurodevelopmental condition with behavioral 
symptoms that are directly addressed by applied behavior analysis 
methods. ABA has proved effective in addressing the core symptoms of 
autism as well as developing skills and improving and enhancing 
functioning in numerous areas that affect the health and well-being of 
people with ASD.
    The effectiveness of ABA-based interventions in ASD has been well 
documented through a long history of research in university and 
community settings.\2\ Children who receive early intensive behavioral 
treatment have been shown to make substantial gains in cognition, 
language, academic performance, and adaptive behavior as well as some 
measures of social behavior, and their outcomes have been significantly 
better than those of children in control groups.
---------------------------------------------------------------------------
    \2\ ``Management of Children With Autism Spectrum Disorders,'' 
Scott M. Myers and Chris Plauche Johnson, Pediatrics 2007; 120; 1162; 
originally published online October 29, 2007; DOI: 10.1542/peds.2007-
2362
---------------------------------------------------------------------------
    Late last year, TRICARE proposed to extend coverage under the 
Extended Care Health Option for Applied Behavior Analysis interventions 
for Active Duty servicemembers who have family members with autism 
spectrum disorders. AAP commented on the proposed rule and commended 
the Department of Defense for undertaking the important task of 
proposing measures to make it easier for Active Duty servicemembers 
with children with ASD to better access needed health care services for 
their children.
    In short, though more research is needed, ABA has both long-term 
empirical and research data to demonstrate its effectiveness in helping 
children who are diagnosed with ASD, and AAP has endorsed the use of 
ABA treatments when determined appropriate by physicians within a 
medical home, in close consultation with families. ABA remains an 
active subject of research and we encourage the Department of Defense 
to maintain flexibility in the provision of ABA services as new data 
may emerge.
    Beyond just ABA services, one way to make it easier for military 
parents with special needs children would be to examine how TRICARE 
currently works for its beneficiaries. The Academy supports legislation 
introduced in the House-the TRICARE for Kids Act,\3\ which could begin 
the process of making TRICARE work better for all parents, but 
especially those with children with ASD or other special health care 
needs.
---------------------------------------------------------------------------
    \3\ The TRICARE for Kids Act was subsequently included as an 
amendment to the House's National Defense Authorization Act for Fiscal 
Year 2013.
---------------------------------------------------------------------------
    TRICARE for Kids would require TRICARE to establish a working group 
of relevant stakeholders to review TRICARE policies and practices and 
develop a plan to ensure that TRICARE meets the pediatric-specific 
needs of military families, including those children with chronic and 
special health care needs. We believe this is an excellent 
collaborative model to ensure that TRICARE polices work for all 
children in military families.
    Thank you for allowing me to testify before the subcommittee today. 
As I said earlier, caring for our Nation's military families and their 
children has always been of paramount importance for the American 
Academy of Pediatrics. We must do all that we can to support our 
military families, especially those who have the added challenge of 
raising children with special health care needs.
    I look forward to your questions.

    Senator Webb. Thank you very much, Dr. Tait.
    Mr. Hilton, welcome.

 STATEMENT OF MR. JEREMY L. HILTON, MILITARY SPOUSE, VETERAN, 
                  AND MILITARY FAMILY ADVOCATE

    Mr. Hilton. Mr. Chairman and distinguished subcommittee 
members, thank you for allowing me to discuss our military 
families impacted by disabilities.
    I am a Navy veteran. My wife is Active Duty Air Force. When 
our daughter, Kate, was born in 2002 with significant 
disabilities, I resigned my commission to take care of her. 
This year I was honored as Military Spouse of the Year by my 
peers in Military Spouse Magazine. It is an amazing privilege 
to be able to represent a million-plus military spouses and 
their families.
    A recent National Council on Disability Military Families 
study concluded, ``Far reaching systemic changes are needed in 
our Nation's health, education, and long-term service systems 
to address the significant barriers faced by exceptional family 
members.'' This hearing is a critical step in addressing and 
acting on these extraordinarily important issues to our 
military families.
    Caring for a child with a disability can be exceptionally 
expensive and remarkably stressful. We have higher medical 
bills, therapy bills, home modification and equipment bills, 
and other large expenses. Many families will need Medicaid 
waiver assistance for their children, but State Medicaid waiver 
wait-lists are very long, lasting for years. Every time a 
military family moves, they go to the bottom of the next 
State's wait-list. They rarely reach the top before moving 
again. Those that do lose their Medicaid when the military 
moves them.
    There are a variety of ways in which this problem could be 
rectified, including a military Medicaid waiver, an interstate 
compact addressing Medicaid portability, allowing 
servicemembers to maintain wait-list eligibility based on their 
home of record, or extending the ECHO benefit into retirement. 
In the end, we ask that our children are not penalized for the 
service their mother or father renders to the Nation.
    The extended care health option was created to bridge the 
needs of families unable to access the State Medicaid waiver 
programs. But experience shows it fails to come close to 
replacing Medicaid waiver benefits. We are grateful for this 
benefit, but we would like to see it updated and made more 
flexible so it better fulfills its purpose.
    We support the Senate report language directing DOD to 
explore more flexible ECHO options. We respectfully ask that 
EFMP families are included on any working groups considering 
this and other issues that impact our families.
    While we look forward to enhanced functionality and 
flexibility of the ECHO program, the treatment of autism for 
our military children is one area that I do not believe 
requires further study. It requires action. TRICARE currently 
segregates ABA, the standard of care, and the treatment of 
autism into ECHO as a non-medical educational service. 
TRICARE's classification of ABA as nonmedical allows TRICARE to 
limit care to dependents of Active Duty servicemembers, and 
places a financial cap on treatment services which fall far 
below recommended standards. There is no other disease, 
disability, or chronic health condition which is treated 
similarly as autism and its segregation of treatment outside 
the basic TRICARE benefit.
    Because the ECHO benefit is only available for dependents 
of Active servicemembers, dependents of our retirees are not 
able to access ABA treatments under TRICARE. Prior to the 
hearing, we supplied 80-plus stories to the subcommittee. Many 
are heartbreaking, but inspiring at the same time. I am going 
to read from a letter written by Lance Corporal Hardy Mills, 
U.S. Marine Corps, Retired.
    ``In 2004 while serving with the 1st Marine Expeditionary 
Force in Fallujah, Iraq, I was wounded severely by a rocket 
propelled grenade. Because of my injuries, I retired medically 
from the Marine Corps in 2006 with full disability benefits. I 
am blessed with a supportive wife, and we have two beautiful 
children.
    Our son, Shane, has autism. As a retired Marine and 
disabled veteran, my family depends on the military healthcare 
system, TRICARE, for coverage of medical services and 
interventions. Unfortunately because of my retired status, 
Shane's medically recommended autism treatment, ABA, is not 
covered by TRICARE. My family faces out-of-pocket costs of 
$4,600 a month associated with this vital service because of 
current TRICARE policy deficits. We have sold our home to 
provide Shane the care he requires, but we are running out of 
funding and ask for your intervention.''
    The other letters are no less important and show the 
struggles our military families have gone through to be able to 
provide therapy to their children. In the end, many of these 
families are still coming up significantly short, particularly 
those with younger children and our retirees.
    You will hear Dr. Tait and Dr. Dawson testify on the 
scientific evidence that proves ABA is effective. Many other 
reputable organizations and members of the medical community 
have endorsed ABA therapy as the standard of care for autism. I 
sincerely hope that the Senate Armed Services Committee will 
take this into consideration and support an amendment to the 
2013 NDAA to help our military kids impacted by autism.
    These military families are remarkable Americans who endure 
exceptionally trying circumstances in addition to their service 
in an already stressful military lifestyle. I would encourage 
you to take a moment and get to know each of them. As I am 
certain you realize after reading these stories, we have much 
work left to do in order to provide the appropriate level of 
medical care, services, and support these military families 
deserve.
    I would like to personally thank the subcommittee members 
and the professional staff for their leadership in providing 
much-needed oversight to these issues. Thank you to this 
subcommittee for not forgetting our military families. I look 
forward to your questions.
    [The prepared statement of Mr. Hilton follows:]
               Prepared Statement by Mr. Jeremy L. Hilton
    Mr. Chairman, Senator Graham, and distinguished members of the 
subcommittee, thank you for the opportunity to discuss the issues 
facing our military families impacted by disabilities and your 
consideration of actions and initiatives that I submit need to be 
accomplished to ensure our Nation honors its obligations to our 
military families. By doing so, I believe we enhance the readiness of 
our All-Volunteer Force and improve the lives of our military children.
                              introduction
    I am a 1995 U.S. Air Force Academy graduate that cross-commissioned 
into the Navy and served 8 years in the submarine force. In 2002, while 
on shore duty at the Washington Navy Yard, our daughter, Kate, was born 
with a number of significant disabilities. Seven months later, I 
resigned my commission and have been taking care of our children ever 
since. Since Kate's birth we have moved six times, five of those within 
a 5-year timeframe due to deployments, training, and military Permanent 
Changes of Station (PCS). Kate has undergone nine surgeries and 
received thousands of hours oftherapy, provided by our family and 
outside therapists. Our primary goal is to ensure she lives life to her 
fullest and is educated and lives in the community to the greatest 
degree possible. My wife remains Active Duty Air Force, and we are 
currently stationed at Andrews AFB where she is the commander of an 
AFOSI squadron. We have a 1-year-old son, Jackson.
    In May 2012, I had the distinct honor of being selected as the 
Military Spouse of the Year, based on my advocacy for military 
families. I started as an advocate for our daughter. That advocacy 
expanded within the Air Force, then the Department of Defense (DOD), 
and then to the larger disability population. I quickly discovered 
there are so many unruet needs in the disability world. Our families 
are overwhelmed. There is little to no time to be advocates because 
many families are simply surviving. We don't have the defense industry 
or unions to ensure our programs receive the funding they require. We 
have a very small group of volunteer parents that do their best to 
raise these tough issues when they happen to be stationed in the DC 
Metro area. What I have learned from being part of this process is that 
our families do have a voice, but many times it is very quiet, at least 
relative to the normal buzz in DC. However, what we lack in volume, we 
make up for with passion. In the short amount of time we've had since 
the hearing was announced, these amazing families have provided me the 
most astonishing and personal insights into their lives and the hope 
they have for their children. I hope the Committee finds their stories 
instructive (see attachments after written testimony).
    This committee plays an integral role in both legislation and 
oversight on the issues that enable our families to support our 
servicemembers while they protect our country. Your support continues 
to be instrumental in making needed changes to the DOD infrastructure, 
policy, and procedures which will allow our special needs military 
families to deal with the significant stresses associated with service; 
PCS, multiple deployments, and the high operational tempo that has 
marked these past 10 years of war.
    There are a number of areas that I will be discussing today: 
Medicaid Waivers, the Extended Care Health Option (ECHO), TRICARE, 
Autism, Education, the Exceptional Family Member Program (EFMP), 
Survivor Benefits, and Legal Issnes. Each of these programs and issues 
has a substantial impact on the health and wellbeing of our military 
families with disabilities and it is critical that the Committee 
understand what areas require improvement.
    Many of these areas were considered in a recent National Council on 
Disability (NCD) study on Marine Corps EFMP families (transmittal 
letter included as Attachment A). In the preamble to the study, the NCD 
Chairman, Jonathan Young stated:

          ``However, many of the changes necessary to improve the 
        supports available to military families with [Exceptional 
        Family Members] are beyond the control of the Marine Corps and 
        may require statutory and regulatory changes to meet these 
        needs.
          NCD has concluded that far-reaching systemic changes are 
        needed in our Nation's health, education, and long-term service 
        systems to address the significant barriers faced by EFMs. NCD 
        thus seeks support from Congress, the military, and the 
        administration to build the critical Federal partnerships 
        necessary to effect systemic change and ensure that the men and 
        women serving our country can do so knowing their family 
        members with disabilities will have the supports and services 
        they need.''

    This hearing is the first step in addressing these extraordinarily 
important issues to our military families.
                            medicaid waivers
    Caring for a child with a disability can be exceptionally expensive 
and remarkably stressful. We have higher medical bills, therapy bills, 
home modification, equipment and supply bills, and other large 
expenses. Many, if not most, families impacted by disabilities will 
come to rely on public assistance programs in some fashion for our 
children who are disabled. The majority of such programs relate to 
State-run Medicaid waiver programs which provide short and long term 
benefits that TRICARE does not. Examples of such supports include 
incontinence supplies, respite, employment supports, housing, and more 
flexible medical coverage. Most of the Medicaid waiver programs run by 
the States have significant waiting lists for citizens to access these 
benefits because the need is simply much greater than the available 
benefits. It is not uncommon for a family to place a 1-year-old on the 
State Medicaid waiver waitlist with the hope the child will receive 
benefits by the time they are a teenager or an adult, depending on the 
type of waiver and the State in which they reside. For our highly 
mobile military families, that means our children constantly remain at 
the bottom of any given State's waitlist. If by chance they get off the 
waitlist and receive services in one State, they will lose their 
eligibility once they PCS, and they will find themselves back on the 
bottom of the next State's waitlist. Upon retirement after a career of 
service, our children, yet again, find themselves on the bottom of 
waitlist at their new and final home.
    There are a variety of ways in which this problem could be 
rectified, including a military Medicaid waiver, an Interstate Compact 
addressing Medicaid portability, allowing servicemembers to maintain 
list-eligibility based on their home of record, or extending the ECHO 
benefit into retirement. Given the cross-committee jurisdictional 
nature of this issue, Medicaid reform may seem like a bridge too far, 
but it is one that will have a significant impact on our families.
    Parent advocates are currently working with a variety of partners 
on finding a fix that addresses the problem. The DOD has funded a grant 
for West Virginia University to study this issue and we expect findings 
this summer. We would ask that this committee remain engaged on this 
issue moving forward to ensure State Medicaid services for our military 
children are provided for equally in comparison to their civilian 
counterparts.
                  extended care health option program
    The ECHO, created in 2005, was originally designed to bridge the 
needs of families due to the inability to access State-run Medicaid 
programs. Our experience has been that it does not replicate those 
benefits because of the lack of flexibility in the ECHO program. 
Military families strongly support the Senate report language that 
directs the DOD:

          ``to assess participation in the ECHO program by eligible 
        dependents with special needs, and to explore options to 
        provide more flexible benefits.'' [sec. 703]

    Our families are grateful for the ECHO benefit. However, it is time 
to reassess its effectiveness to meet the requirements for which it was 
created. As one is considering the benefits typical families might 
need, it is imperative that DOD consider best practices as applied by 
the States. Please understand that while these studies are taking 
place, children may be very well going without necessary items or 
therapy. We would hope for an aggressive timeline for dissemination and 
prompt action on the basis of the results from the study.
    There are two helpful resources when considering both Medicaid and 
ECHO issues:

         United Cerebral Palsy's annual ``Case for Inclusion'' 
        which ranks the 50 States and DC on its Medicaid waiver 
        programs: http://www.ucp.org/the-case-for-inclusion/2011/
         Medicaid's Web based resources: http://
        www.medicaid.gov/Medicaid-CHIP-Program-Information/By-Topics/
        Waivers/Waivers.html?filterBy=1915%28c%29#waivers

    One striking item included in the Medicaid website highlights that 
there are 423 different Medicaid waiver programs and demonstration 
projects throughout all 50 States and the District of Columbia. There 
must be a way we can find to serve the military family appropriately.
                                tricare
    As most parents are quite aware, children are not simply little 
adults. It is why the children's hospital model exists, to provide for 
a child's unique health care needs. This is why TRICARE, being based on 
Medicare, sometimes doesn't provide the best possible care for our 
military children, particularly those who have special health care 
needs. It is also why military families support the TRICARE for Kids 
Amendment (Attachment B) included in the National Defense Authorization 
Act (NDAA) for Fiscal Year 2013 recently passed by the House. This bi-
partisan amendment was co-sponsored by Representative Steve Stivers (R-
OH15), Representative Susan Davis (D-CA53), and Representative Bobby 
Schilling (R-IL17) and has been endorsed by the Military Officers 
Association of America (MOAA), the National Association of Children's 
Hospitals (NACH), the National Military Family Association (NMFA), and 
the March of Dimes.
    From a recent endorsement letter by the March of Dimes (Attachment 
C), they noted:

         ``Unfortunately, because TRICARE utilizes a 
        reimbursement structure based on Medicare, it often adopts 
        policies and practices from Medicare that do not address the 
        unique health care needs of children. Moreover, despite the 
        best efforts of the Department of Defense, military families 
        with children with special health care needs and chronic 
        conditions often have difficulty accessing resources and 
        services from local or regionally specialized providers. This 
        problem is further exacerbated by the mobility of military 
        families, who must repeatedly locate and obtain specialized 
        health care service in unfamiliar geographic regions as their 
        assignments change or they are deployed.
         The TRlCARE for Kids Act seeks to better shape the 
        policies and practices of TRICARE to meet the needs of 
        children, including those with special health care needs or 
        chronic illnesses.''

    Our hope is to ensure that the final NDAA includes the Tricare for 
Kids amendment, section 723 in the House bill, and that the conference 
committee report will mirror the Section 703 report language provided 
by the Senate, thus providing a specific panel to address children's 
health needs, and adding ECHO to DOD's ongoing evaluation and reporting 
of cost, access, and quality.
                                 autism
    While we look forward to enhanced functionality of the TRICARE 
program, the treatment of autism for our military children is one area 
that I do not believe requires further study; it requires action.
    TRICARE currently segregates Applied Behavioral Analysis (ABA), the 
standard of care in the treatment of autism, into ECHO, which is an 
entirely separate arm of TRICARE, as a ``non-medical educational'' 
service. TRICARE's classification of ABA as ``non-medical'' allows 
TRICARE to limit care to dependents of Active Duty servicemembers and 
places a financial cap on treatment services which falls far below 
recommended standards. There is no other disease, disability or chronic 
health condition which is treated similarly as autism in its 
segregation of treatment outside the basic TRICARE benefit. Families 
are forced to make the difficult decision of paying thousands of 
dollars out of pocket to address these deficits or forgo medically 
recommended care. Because the ECHO benefit is only available for 
dependents of active-duty servicemembers, dependents of our retirees 
(including Wounded Warriors retired due to injuries sustained in 
combat) are not able to access ABA treatments under TRICARE and Guard/
Reserve families receive intermittent care.
    Contrary to DOD's stated position, in April of this year, the U.S. 
Office of Personnel Management (OPM) concluded that ABA treatment for 
autism is a ``medical therapy.'' In a letter dated 19 April 2012 
(Attachment D), OPM stated [bottom of page 5]

         ``The OPM Benefit Review Panel recently evalnated the 
        status of Applied Behavior Analysis (ABA) for children with 
        autism. Previously, ABA was considered to be an educational 
        intervention and not covered under the FEHB Program. The Panel 
        conclnded that there is now sufficient evidence to categorize 
        ABA as medical therapy.''

    The previous findings are instructive as well as they point to what 
level of evidence was required to overcome OPM's original objection. In 
a 2006 letter to Representative Christopher Smith (R-NJ4) (Attachment 
E), the Director of OPM, Linda Springer, stated

         ``It is OPM's most sincere hope that one day 
        randomized trials will demonstrate ABA to be an effective 
        course of treatment for autism and no longer be considered 
        investigational. OPM has great empathy for the families 
        affected by this tragic disorder, and regret our decision could 
        not be more favorable''.

    Coverage of ABA care in the civilian sector also exceeds that of 
TRICARE. Currently, 30 States have laws requiring private insurers to 
cover autism-related therapies, including ABA, as a medically necessary 
service. TRICARE's position that ABA therapy is ``non-medical'' is now 
contrary to the Federal Government and laws in 30 States.
    We now stand at a point where, without action by Congress, we will 
soon see Federal workers provided medically prescribed autism therapy 
for their children while military families receive either an inferior 
level of care or, as in the case of the retired veteran's child, 
receive no care. Our families simply cannot imagine that Congress would 
find that appropriate.
    With strong bipartisan leadership, the House's 2013 version of the 
NDAA includes important language clarifying that military dependents 
with autism, regardless of duty status, have access to medically 
necessary behavioral health treatments including ABA through the 
TRICARE basic program. Our military families ask that you work to 
ensure comparable language is included with the Senate version of the 
NDAA.
                               education
    Special education as a career is truly a calling and the vast 
majority of teachers who instruct our children are competent 
professionals whose greatest desire is to see our children succeed. 
However, with the pace, length, and number of deployments over the past 
10 years, as well as the normal structure of the military lifestyle, 
military families whose children require special education have 
struggled to receive a free appropriate public education.
    According to the Military Child Education Coalition, the average 
military child will transfer schools 6 to 9 times between grades K to 
12. For the special needs military family, the frequent moves present 
additional challenges: reestablishment of medical care, educational 
services, and necessary therapies each time they move to a new 
location. For many of our families, this means the primary caretaker 
parent will devote countless hours ensuring their child's needs are 
met. In the event the spouse is employed outside the home, or in the 
case of a dual active duty couple, there is little time to digest the 
changing special education laws and regulations required to ensure a 
child receives a free, appropriate public education. In many 
situations, military families either go into debt to hire advocates or 
lawyers to ensure their child is receiving an appropriate education or 
they go without and watch their child regress in an inappropriate 
placement without proper supports.
    In the event that a school district does not provide appropriate 
services for a military child, the family must weigh the following 
before attempting to hold a school district accountable under the 
Individuals with Disabilities Education Act (IDEA):

    1.  Legal fees, many lawyers no longer will take a case on 
contingency
    2.  Expert witness fees (not reimbursable even if you win your 
case)
    3.  Length of time left in the current assignment
    4.  Family and life considerations (financial and medical stress, 
spouse deployed, wounded, or otherwise unavailable).

    Military families have little control over where they will be 
stationed, sometimes as part of a normal base reassignment, and 
sometimes when a spouse and child(ren) have to live close to family 
when a member deploys for a year or more.
    Some school districts take advantage of military families, 
calculating how long they will likely spend at a current base, and the 
families' emotional, physical, and financial abilities to utilize their 
procedural safeguards under IDEA.
    The average due process case to hold a school district accountable 
lasts a number of years, making IDEA's procedural safeguards 
essentially meaningless for the large maj ority of military families, 
particularly when confronted with an aggressive, cost-cutting school 
administration. Most school districts have law firms retained from 
taxpayer funds with unlimited time to run out the clock against a 
military family. Military families have few resources to hire lawyers 
or retain experts to ensure our children receive an appropriate 
education.
    Included in the 2011 NDAA was a directive to DOD to consider these 
issues for study (sec 583). The DOD's response was that the evidence 
was anecdotal therefore they could not make any conclusions without 
appropriate data. This lack of data has been a consistent issue for all 
military connected children as evidenced by the DOD report as well as 
two GAO reports sparming over the last 5 years (GAO study entitled 
``Military Personnel: Medical, Family Support, and Educational Services 
Are Available for Exceptional Family members'' (2007) and GAO study 
entitled ``Education of Military Dependent Students, Better Information 
Needed to Assess Student Performance'' (2011)). Over the last 5 years, 
we could have been collecting data to take action, but for some reason, 
we haven't. It seems clear to me that a data element is needed to 
identify our military connected students so we can access and evaluate 
their needs.
    In August 2011, four Service representatives wrote a letter to the 
Assistant Secretary for Special Education and Rehabilitative Services, 
Ms. Alexa Posny, for clarification and guidance on issues specifically 
related to military families (Attachment F). To date, no response has 
been provided. While many of the educational challenges facing our 
military connected special needs students involve cross jurisdictional 
issues, we desperately need this committee's strong leadership to 
ensure our children our appropriately take care of.
    Finally, the new Post-September 11 or Bill offers a terrific option 
to transfer educational benefits to dependents; expanding these 
benefits to cover more options beyond traditional degree-granting 
education would be a welcome improvement for our special needs 
dependents.
                   exceptional family member program
    DOD support for families with special needs has been a work in 
progress for many years. The 2010 NDAA included the creation of the 
Office of Special Needs (OSN) within the Military Community and Family 
Policy Office. The next year's NDAA provided for the creation of the 
Military Exceptional Family Member Panel, which includes military 
family members and adults impacted by disability. The goal of the panel 
is to provide specific real world input to the OSN on issues facing our 
families. Each of these has been a forward step in improving our family 
member's ability to access a life that any parent would want for their 
child. We thank the committee for taking legislative action to improve 
DOD support for military families with special needs. However, the 
proof is in the implementation of these directives.
    The specific mandate provided to the OSN included ``The development 
and implementation of a comprehensive policy on support for military 
families with special needs''. Two years later, this hasn't been 
completed. Without appropriate policy to review, it is not clear where 
we stand with many of the other mandates assigned to the OSN.
    Our families ask that appropriate oversight be provided to ensure 
that the Office of Special Needs has the funding and personnel to carry 
out its mandates and then ensure that they are completed in a 
reasonable amount of time.
    To consider best practices within DOD, one need look no further 
than the Marine Corps, which is universally lauded as providing the 
best care for its exceptional family members. Attached you will find a 
recent brief provided by the head of the USMC Family Programs branch, 
Rhonda LaPorte, which provides an immediate overview of the current EFM 
Program as well as future direction. (Attachment G). We believe the 
other Services should follow the lead of the Marine Corps as they 
review their EFMP programs.
                           survivor benefits
    Today, servicemembers with permanently disabled children face an 
unfortunate dilemma. Under current law, the servicemember can only 
direct survivor benefits to that child, and not a trust of any sort. 
Because the Survivor Benefits Plan (SBP) annuity cannot be placed into 
a special needs trust this survivor benefit ironically will make the 
beneficiary ineligible to receive the Medicaid waiver which allows many 
individuals with a disability to survive. One example of a consequence 
includes a disabled adult being removed from a group home or other 
long-term care facility provided by Medicaid because the SBP amount 
exceeds State income thresholds for Medicaid waiver programs and 
disqualifies the individual from that program. Please see Attachment H 
for a more detailed analysis of this issue by a lawyer who specializes 
in special needs trusts.
    Civilian families are able to create special needs trusts for their 
pennanently disabled children that preserve their access to Medicaid 
while providing them additional supports that enable them to live in 
their communities. We believe that members of the military should have 
the assurance that their surviving family members with disabilities 
will have the same opportunities after they are gone.
    The Disabled Military Child Protection Act, H.R. 4329, was 
introduced in this Congress to correct this disparity. Unfortunately, 
because of a very modest cost and lack of a means to pay for it, the 
measure was not included in the House version of the NDAA. We request 
the Committee to file an amendment to be added to the Senate NDAA in 
order to resolve this issue.
                              legal issues
    There are a whole host of issues our military families face when 
trying to access the legal system. For military families with special 
needs, these primarily include issues related to guardianship, wills, 
trusts, and special education. Each one of these issues create 
significant out of pocket expenses above and beyond that of a typical 
military family. The issues are not ones that the on-base JAG officers 
are qualified to provide counsel on, and most JAG officers do not have 
the connections required to even provide a referral.
    Our families are encouraged by the Senate language regarding its 
support for the American Bar Association's Military Pro Bono Project. 
We would encourage the Secretary of Defense and the DOD's General 
Counsel to consider the unique issues of our military families impacted 
by special needs as they are investigating the report request by the 
Senate (detailed in Senate Report 112-173).
                           disability issues
    There are a variety of issues which impact the disability community 
as a whole, including our active duty military families, our veterans 
and retirees, and particularly our Wounded Warrior community. The 
Senate will soon consider the Convention on the Rights of Persons with 
Disabilities. The Senate Health, Education, Labor, and Pensions 
Committee will hold a hearing on restraint and seclusion in our publics 
chools on June 30. While the Senate Armed Services Committee does not 
specifically play a role in these issues, please appreciate the fact 
that these issues are ones that our families care about and your 
support in ensuring these issues are resolved significantly impacts our 
military community.
                               conclusion
         ``Disability is a natural part of the human experience 
        and in no way diminishes the right of individuals to 
        participate in or contribute to society.''

    These are the congressional findings from the IDEA, the Federal law 
that ensures children with disabilities are provided a public 
education. If the concept that having a disability is a natural part of 
our world is foreign to you, you are not alone. But like so many things 
in our world, your perception can change in a millisecond. For some of 
us, this will happen in a split second, whether that is an IED 
explosion or from the doctor telling you something is wrong with your 
baby. For others, it will be the shocking realization of the road you 
are about to travel as you deal with your MS, cancer, or Alzheimers. 
Smart disability policy is the right thing to do, both for our military 
families and for its positive impacts on our force's readiness. Short-
term thinking and budgeting will in fact have significant long term 
cost, whether we are talking about the rehabilitation of a young airmen 
with traumatic brain injury or a child with cerebral palsy or autism. 
Our entire society as a whole has made significant strides in the last 
four decades in supporting people with disabilities. The strides our 
society as a whole has made have been mirrored in many of the programs 
within the Department of Defense and the VA. However, there continue to 
be significant stovepipes within DOD, the VA, Tricare, the individual 
services as well as individual States as opposed to an appropriate 
sharing of best practices and implementing changes needed. What we need 
is leadership at all levels of the chain of command, within Congress, 
and within our local communities to make change reality.
    I've attached a number of stories of individual military families 
immediately after this written testimony. [See Attachment I]. These are 
amazing Americans, who endure exceptionally trying circumstances and 
somehow find ways to serve their nation and many times try to help 
others. I would encourage you to take a moment and get to know each of 
them. If you look ``hero'' up in the dictionary, you'd see the faces of 
these moms, dads, and their children.
    We don't pretend to think that there are any easy tasks in front of 
us as a nation. How we deal with these tough issues will define us as a 
Nation. Our families appreciate the opportunity and leadership 
demonstrated by holding this hearing. Thank you to this committee for 
not forgetting our military families.
      


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    Senator Webb. Thank you very much, Mr. Hilton.
    Dr. Dawson, welcome.

   STATEMENT OF DR. GERALDINE DAWSON, CHIEF SCIENCE OFFICER, 
AUTISM SPEAKS, AND PROFESSOR OF PSYCHIATRY, UNIVERSITY OF NORTH 
                    CAROLINA AT CHAPEL HILL

    Dr. Dawson. Good afternoon, Chairman Webb, and members of 
the subcommittee. I am Dr. Geraldine Dawson. I am the Chief 
Science Officer at Autism Speaks, and I serve as Professor of 
Psychiatry at the University of North Carolina at Chapel Hill. 
Prior to joining Autism Speaks, I directed the University of 
Washington Autism Treatment and Research Center for close to 
two decades.
    Autism Speaks is the world's leading autism science and 
advocacy organization. We are dedicated to funding research 
into the causes, prevention, treatments, and cure of autism, 
and to increasing awareness and advocating for individuals with 
autism and their families.
    I am honored to appear before the Senate Armed Services 
Subcommittee on Personnel, and to participate in this hearing 
on issues facing military families who have dependents with 
special needs.
    Like their counterparts in civilian life, many military 
families face challenges in providing proper treatment for 
their child with autism. I am here today to talk about those 
challenges and how the military healthcare system can lessen 
their effect on families.
    But first some information about autism. Autism is a 
development disorder that affects a person's ability to form 
social relationships and communicate with others. People with 
autism also exhibit repetitive behaviors, some of which can 
interfere with their ability to learn and function. Autism is 
caused by a combination of genetic and environmental risk 
factors.
    But autism is no longer considered a rare condition. It 
affects 1 in 88 children in the United States, 1 in 54 boys. 
This year, more children will be diagnosed with an ASD than 
AIDS, diabetes, and cancer combined. The prevalence of autism 
has risen dramatically over the last several decades. In fact, 
statistics show a tenfold increase in the past 40 years. Many 
in the autism community use the word ``epidemic'' when 
describing autism.
    Fortunately, there are effective treatments for autism that 
can change a person's course and outcome. Numerous controlled 
clinical trials have shown that early intensive behavioral 
treatment significantly increases IQ, language abilities, daily 
living skills, while reducing the symptoms of autism.
    In fact, a 2010 randomized control trial, funded by the 
National Institutes of Health and published in the prestigious 
Journal of Pediatrics, found that 50 percent of children with 
autism who received early intensive behavioral treatment for 2 
years had a 15-point increase in IQ. One-third of the children 
showed an increase in IQ of greater than 30 points. This means 
that early treatment changed these children's life 
trajectories, setting them on a course that increases their 
chance of living productive and satisfying lives.
    These children will likely attend a regular classroom, 
develop spoken language, and make friendships. This is not only 
good for these individuals, it results in significant cost-
savings, as fewer services will be needed in the long-run, and 
these individuals now can become more productive members of our 
society.
    Behavioral health treatments that are based on ABA have 
become widely accepted among healthcare professionals as an 
effective treatment for autism. These treatments are provided 
by highly-trained licensed and certified professionals. Early-
in-life treatment involves working one-on-one with a child 
typically for 25 to 40 hours per week.
    Thirty States now require coverage of ABA treatment as part 
of medical care. Employers, such as Microsoft and Home Depot, 
universities, such a Ohio State, Harvard, and Princeton, and 
healthcare facilities, such as the Mayo Clinic, do so as well.
    Earlier this year, OPM concluded that there is enough 
evidence to classify ABA as a medical therapy. In contrast to 
the benefits covering ABA treatment that now will be made 
available to the Federal civilian workforce, the healthcare 
program for uniform servicemembers and their families, TRICARE, 
provides only limited coverage for ABA treatment.
    TRICARE classifies ABA treatment as an educational 
intervention, and makes it available only through ECHO, and 
caps coverage at $36,000 a year.
    Furthermore, ABA treatment is restricted to dependents of 
Active Duty servicemembers. Dependents of retirees, including 
dependents of wounded warriors who were retired due to their 
injuries sustained in combat, are unable to access ABA 
treatment for their child with autism. Guard and Reserve 
families receive intermittent care as they move between Active 
and Reserve status.
    $36,000 a year pays for about 11 hours of ABA treatment per 
week. Many children with autism, particularly early in life, 
and some who face severe challenges, need more treatment hours 
in order to fully benefit from the treatment.
    Given all that our military families have shouldered for 
the past decade, they deserve better. On behalf of thousands of 
military families affected by autism, I strongly urge Congress 
to require TRICARE to provide behavior health treatment, 
including ABA, to military families regardless of duty status, 
and at the level of care prescribed.
    Thank you, Chairman Webb and members of the subcommittee, 
for this opportunity to speak about this important issue 
affecting military families. I look forward to your questions.
    [The prepared statement of Dr. Dawson follows:]
           Prepared Statement by Dr. Geraldine Dawson, Ph.D.
    Good afternoon, Chairman Webb, Ranking Member Graham, and members 
of the subcommittee. I am Dr. Geraldine Dawson, Chief Science Officer 
of Autism Speaks. I also serve as Professor of Psychiatry at the 
University of North Carolina at Chapel Hill.
    Autism Speaks was founded in February 2005 by Bob and Suzanne 
Wright, grandparents of a child with autism. Since then, Autism Speaks 
has grown into the world's largest autism science and advocacy 
organization, dedicated to funding research into the causes, 
prevention, treatments and cures for autism; increasing awareness of 
autism spectrum disorders; and advocating for the needs of individuals 
with autism and their families. We are proud of what we've been able to 
accomplish and look forward to continued success in the years ahead.
    I am honored to appear before the Senate Armed Services 
Subcommittee on Personnel at this hearing on issues facing military 
families with dependents who have special needs. Like their 
counterparts in civilian life, many military families face the 
challenge of providing proper treatment for a child on the autism 
spectrum. I am here to talk about those challenges and how the military 
health care system can lessen their effect on families.
                        the challenges of autism
    I will begin by providing an overview of autism. Autism is a 
developmental disorder that affects a person's ability to form social 
relationships and communicate with others. People with autism also 
exhibit repetitive behaviors, some of which can interfere with their 
ability to learn and function. Most scientists agree that autism is 
caused by a combination of genetic susceptibilities that interact with 
environmental risk factors.
    Autism is no longer considered a rare condition. It affects about 1 
in 88 children, including 1 in 54 boys. Let's compare autism's 
prevalence to that of some other conditions:

         Pediatric AIDS - 1 in 300;
         Type 1 diabetes - 1 in 400; and
         Childhood cancer - 1 in 2,000

    This year, more children will be diagnosed with an autism spectrum 
disorder than AIDS, diabetes, and cancer combined. The prevalence of 
autism has risen dramatically over the past several decades; in fact, 
statistics show a ten-fold increase in 40 years. Although broadening of 
the diagnostic criteria for autism and increased awareness account for 
some of this increase, experts estimate that approximately 50 percent 
of the increase remains unexplained. Many in the autism community use 
the word ``epidemic'' when describing autism.
    Based on metrics used by the World Health Organization, autism 
represents a significant public health challenge. It is a highly 
prevalent and chronic condition with an early onset and is associated 
with significant functional impairments and costs. Its burden is higher 
than childhood leukemia, cystic fibrosis, and type 1 diabetes--an 
estimated $137 billion per year.
    Of course, the impact of autism cannot be measured in dollars 
alone. Autism takes a significant toll on families. Compared to the 
families of children with special health care needs other than autism, 
the families of children with autism are more likely to:

         cut back or stop working;
         spend 11 or more hours per week providing care;
         pay more than $1,000 annually in out-of-pocket medical 
        expenses;
         experience financial problems; and
         avoid changing jobs in order to maintain health 
        insurance.

    According to a national survey, only one in five children with 
autism has adequate health insurance coverage, receives coordinated, 
ongoing, comprehensive care within a medical home, and had at least one 
preventive medical visit in the past 12 months.
    Military families with a child on the autism spectrum face the 
added burdens of stress associated with their service. Relocating to a 
new duty station can cause gaps in care with lifelong consequences. 
When one parent is deployed, the other may bear the full 
responsibilities of child care. When a parent returns from deployment, 
the family may have the additional challenge of combat-related mental 
or physical health problems.
                  screening, diagnosis, and treatment
    The care of a child with autism often begins with a sense by a 
family member or health care professional that the child's development 
is not typical. It is now possible to screen for autism at 12 months of 
age, and autism can be reliably diagnosed by 18 to 24 months of age. In 
2007, the American Academy of Pediatrics recommended that all children 
be screened for autism at 18 and 24 months of age and that appropriate 
referrals be made if autism is suspected. Yet, the average age of 
diagnosis in the United States remains close to 5 years. Children from 
ethnic minority backgrounds are at a particular disadvantage. Research 
shows that these families have to go to the doctor many more times 
before receiving a diagnosis, and the age of diagnosis is much older.
    Fortunately, there are effective treatments for autism that can 
change a person's course and outcome. Controlled clinical trials have 
shown that early intensive behavioral treatment significantly increases 
IQ, language abilities and daily living skills, while reducing the 
symptoms of autism. In fact, a 2010 randomized controlled trial funded 
by the NIH and published in Pediatrics reported that 50 percent of 
children with autism who received early treatment for 2 years had a 15 
point increase in IQ (1 standard deviation). One third of the children 
showed an increase in IQ of greater than 30 points (2 standard 
deviations). This means that treatment changed these children's life 
trajectories, setting them on a course that increased their chances of 
living productive and satisfying lives. This is not only good for the 
individual; it results in significant cost-savings for society as 
children and adults need fewer services and can become productive 
members of society.
    Among the many treatment methods available, behavioral treatments 
that use the methods of applied behavior analysis (ABA) have become 
widely accepted among health care professionals as an effective 
treatment for autism. Mental Health: A Report of the Surgeon General 
states, ``Thirty years of research demonstrated the efficacy of applied 
behavioral methods in reducing inappropriate behavior and in increasing 
communication, learning, and appropriate social behavior.'' Study after 
study has provided evidence for the efficacy of early intensive 
behavioral treatment based for improving outcomes of children with 
autism.
    Let me say a little more about ABA. Treatments based on behavior 
analysis use a scientifically validated approach to understanding 
behavior and how it is affected by the environment. Through decades of 
research, the field of behavior analysis has developed many techniques 
for increasing useful behaviors and reducing those that may cause harm 
or interfere with learning. These techniques bring about meaningful and 
positive changes in behavior. Success in an ABA program is measured by 
direct observation and data collection and analysis. Early behavioral 
treatment based on ABA is provided by highly trained licensed/certified 
professionals with expertise in ABA and involves one-on-one treatment 
with the child typically for 25-40 hours per week for at least 2 years. 
This early intensive investment in treatment results in significant 
cost savings in the long run, as many children with autism who receive 
such treatments can now carry on a normal conversation, enter a regular 
classroom, and form friendships with their peers.
        the growing trend towards comprehensive autism coverage
    Autism Speaks is committed to passing insurance legislation that 
provides access to behavioral health treatments for people with autism. 
Back in 2001, only the State of Indiana required insurance coverage of 
effective therapies like ABA. Now 30 States (representing over 70 
percent of the country's population) require coverage of ABA treatment 
as a medical care.
    Large employers like Microsoft and Home Depot provide coverage for 
autism therapies, as do universities such as Ohio State, Harvard, and 
Princeton and health care facilities like the Mayo Clinic.
    After conducting an internal review earlier this year, the U.S 
Office of Personnel Management (OPM) concluded there is enough evidence 
for OPM to classify ABA as a medical therapy. This means that Federal 
Employees Health Benefits Program (FEHBP) carriers may propose 2013 
benefit packages that offer behavioral treatments based on ABA. In 
communicating this decision to Autism Speaks, OPM stated, ``This 
decision reflects our perspective that families covered under the FEHBP 
should have access to medical treatment that is safe, effective for 
their individual diagnosis, supported by sound medical evidence, and 
delivered by appropriate providers.''
    In contrast to the benefits that will be made available to the 
Federal civilian workforce, TRICARE--the health care program for 
uniformed servicemembers and their families--currently provides only 
limited coverage for ABA treatment. TRICARE classifies ABA as an 
educational intervention and makes it available only through the 
Extended Care Health Option (ECHO), a supplement to the basic TRICARE 
program. ECHO benefits are cumulatively capped at $36,000 per year 
which may not adequately cover the early years when intensive treatment 
is needed. ECHO is restricted to dependents of active-duty 
servicemembers. Dependents of retirees--including dependents of wounded 
warriors retired due to injuries sustained in combat--are unable to 
access ABA treatment under TRICARE. Guard/Reserve families receive 
intermittent care as they move between active and non-active duty 
status.
    Families report that the ECHO $36,000 limit on care does not 
address the need for intensive ABA services. Using TRICARE billing 
rates, $36,000 pays for an average of 11 hours of ABA therapy per week, 
whereas the recommended number of hours is between 25 and 40. Many 
children with autism, especially those who are newly diagnosed or who 
face severe challenges, need this level of initial treatment. The out-
of-pocket costs associated with this additional medical care are 
unaffordable to the military family. Even the limited available benefit 
is difficult to access for some eligible families, who report 
significant enrollment delays and a lack of TRICARE authorized 
providers.
    Without access to needed services, many military families depend on 
State Medicaid waiver programs. A change in duty station, however, may 
move a family to the bottom of a long waiting list and force a stark 
choice: incur significant debt or do without treatment for their child.
    Given all our military families have shouldered for the last 
decade, they deserve better. The warfighter in Afghanistan should not 
have health care inferior to that of the civilian employee working 
within the Pentagon. We owe more than this to the families who are 
making tremendous sacrifices for our country.
    This is not a matter for further study. Action is needed to provide 
the quality of care our military families deserve and have earned. On 
behalf of the thousands of military families affected by autism, we ask 
that Congress require TRICARE to provide behavioral health treatment, 
including ABA, to military families regardless of duty status and 
without a dollar cap.
    Thank you, Chairman Webb, Ranking Member Graham, and members of the 
subcommittee, for your time, for your commitment, and for your 
leadership.

    Senator Webb. Thank you very much, Dr. Dawson.
    Mr. O'Brien, welcome.

   STATEMENT OF MR. JOHN O'BRIEN, DIRECTOR OF HEALTHCARE AND 
         INSURANCE, U.S. OFFICE OF PERSONNEL MANAGEMENT

    Mr. O'Brien. Chairman Webb, members of the subcommittee, 
thank you very much. Thank you for the opportunity to make a 
statement on behalf of the FEHB program administered by OPM. We 
appreciate the subcommittee's interest in our program and its 
support of families whose children have special needs, 
specifically those with ASD.
    We understand that the subcommittee seeks information on 
our recent reclassification of ABA as a medical therapy. In 
contrast to the single provider model of TRICARE, the FEHB 
program contracts with 91 separate insurance carriers to offer 
health plans to over 8 million Federal employees, annuitants, 
and families. All plans are required to provide basic services, 
and may propose and negotiate to offer a range of additional 
benefits. All FEHB plans are required to provide children with 
autism access to pediatric care, physical therapy, occupational 
therapy, speech therapy, mental health treatment, and 
medications.
    However, during the current 2012 contract year, the FEHB 
benefit--ABA is not an FEHB benefit because it is classified 
for the FEHB as an investigational or educational intervention, 
and, therefore, is subject to a blanket exclusion. That means 
that children of a Federal employee cannot access ABA services 
through their health insurance regardless of whether the plan 
they have selected would have normally considered such a 
treatment as medically necessary and provide it to its non-
Federal subscribers.
    Beginning in 2010, Members of Congress, families, and other 
stakeholders asked OPM to reexamine this blanket exclusion. The 
OPM Benefit Review Panel evaluated the status of ABA for 
children with autism. Previously, ABA was considered to be an 
educational intervention and not covered under the FEHB 
program. The Benefit Review Panel concluded that there is now 
sufficient evidence to categorize ABA as a medical therapy. 
Accordingly, plans may propose a benefit package that include 
ABA.
    The insurance marketplace in which the FEHB operates is 
changing rapidly with regard to ABA therapy. At present, 30 
States require some health insurance coverage of ABA. In a 
week, that number will be 31. Had I been before this 
subcommittee in June 2010, the number of States requiring ABA 
would have been 14. In June 2008, just 4 years ago, the number 
would have been two.
    OPM has made the decision to reclassify ABA as a medical 
therapy rather than as an educational service based on the 
evolving body of clinical research and the maturing provider 
infrastructure to deliver this modality under a medical model. 
This reclassification does not presume medical necessity, and 
does not specifically require FEHB plans to add ABA service to 
their basic benefits package. Rather, it allows plans to 
propose ABA as an additional benefit under conditions where 
medical necessity is satisfied and appropriate and qualified 
providers are available.
    Medical necessity criteria are evaluated by each health 
plan in FEHB, not by OPM. Plans assess whether a proposed 
treatment is safe, supported by sound medical evidence, 
effective for an individual, more effective than alternative 
treatments, and conforms to relevant standards of medical 
practice. Our decision only applies to the FEHB and not to 
TRICARE programs, and accordingly, was published as technical 
guidance to our carriers.
    The evidence is not yet sufficient to support an official 
OPM position requiring coverage by all FEHB carriers. In the 
interval, our administrative change will allow FEHB plans that 
choose to make ABA services available as the research and 
provider base matures. OPM will periodically re-review ABA as 
the research develops.
    We are grateful for the subcommittee's support of Federal 
employees and their families. Thank you for this opportunity. I 
am happy to answer any questions you may have.
    [The prepared statement of Mr. O'Brien follows:]
                 Prepared Statement by Mr. John O'Brien
    Chairman Webb, Ranking Member Graham, and members of the 
subcommittee, thank you for the opportunity to make a statement on 
behalf of the Federal Employees Health Benefit (FEHB) Program, 
administered by the U.S. Office of Personnel Management (OPM). We 
appreciate the subcommittee's interest in our program and its support 
of families whose children have special needs, specifically those with 
Autism Spectrum Disorders.
    We understand the subcommittee seeks information about our recent 
classification of Applied Behavior Analysis (ABA) as medical therapy. 
In contrast to the single provider model of TRICARE, the FEHB program 
contracts with 91 insurance carriers to offer health plans to over 8 
million Federal employees, annuitants, and families. All plans are 
required to provide basic services, and may negotiate to offer a range 
of additional benefits. All FEHB plans are required to provide children 
with autism access to pediatric care, physical therapy, occupational 
therapy, speech therapy, mental health treatment, and medications. 
However, in 2012, ABA is not an FEHB benefit because it is classified 
as an investigational or educational intervention. This means that the 
child of a Federal employee cannot access ABA through their health 
insurance regardless of whether the plan would normally consider such 
treatment medically necessary and provide it to its non-Federal 
subscribers.
    Beginning in 2010, Members of Congress, families, and other 
stakeholders asked OPM to re-examine this blanket exclusion. The OPM 
Benefit Review Panel evaluated the status of ABA for children with 
autism. Previously, ABA was considered to be an educational 
intervention and not covered under the FEHB Program. The Benefit Review 
Panel concluded that there is now sufficient evidence to categorize ABA 
as medical therapy. Accordingly, plans may propose benefit packages 
which include ABA.
    Over the last 2 years, the infrastructure to support the delivery 
of ABA has matured rapidly. Today 30 States require at least some 
health insurance coverage of ABA, and 14 have licensure procedures for 
ABA providers. ABA providers most frequently have a graduate degree in 
Psychology with additional training in ABA, leading to formal Board 
Certification in Behavior Analysis. States often exercise their 
supervision of certified or licensed providers through the same pathway 
which oversees other health care practitioners, such as a Board of 
Medicine or Psychological Examiners. It is also common practice to 
require a physician's or Psychologist's prescription before a health 
plan will approve ABA for a specific child.
    OPM made a decision to reclassify ABA as a medical therapy rather 
than an educational service based on the evolving body of clinical 
research and the maturing provider infrastructure to deliver this 
modality under a medical model. This reclassification does not presume 
medical necessity and does not specifically require FEHB plans to add 
ABA services to their basic benefits package. Rather, it allows 
families of Federal employees to receive the same treatment as families 
of non-Federal employees by allowing plans to propose ABA as an 
additional benefit, under conditions where medical necessity is 
satisfied and appropriate, qualified providers are available. Medical 
necessity criteria are evaluated by each health plan in FEHB, not by 
OPM. Plans assess whether a proposed treatment is safe, supported by 
sound medical evidence, effective for an individual, more effective 
than alternative treatments, and conforms to relevant standards of 
medical practice. Our decision applies only to FEHB, and not to TRICARE 
programs, and accordingly, was published as technical guidance to our 
carriers.
    The evidence is not yet sufficient to support an official OPM 
position requiring coverage by all FEHB carriers. In the interval, our 
administrative change will allow FEHB plans that chose to do so to make 
ABA services available as the research and provider base mature. OPM 
will periodically re-review ABA as the research develops. We are 
grateful for the subcommittee's support of Federal employees and their 
families.
    Thank you for this opportunity, I am happy to address any questions 
that you may have.

    Senator Webb. Thank you very much, Mr. O'Brien. Let me 
begin by thanking all of you for your extraordinary breadth of 
experience that has been reflected in your testimony today, 
both written and oral.
    Just as an immediate reaction, before we get into some of 
these more complex issues that are being addressed with respect 
to ABA therapy, I think that, Mr. Hilton and some of the 
others, you raised some very valid points about inconsistencies 
in the ability to get treatment, and the eligibility 
requirements when people move. I think that is something I am 
going to right now encourage staff to pursue further. These are 
things that could be handled administratively perhaps working 
with DOD on these sorts of issues.
    I remember what it was like to move around when I was a 
kid. I remember at one point I went to nine different schools 
in 5 years between the 5th and the 10th grade. We were in 
England, Missouri, Texas, Alabama, California, and Nebraska. I 
remember what it was like to be at the bottom of the pile in 
these types of things. We did not have Medicaid waiver programs 
when I was a kid. I do not think we had Medicaid when I was a 
kid. I do not remember any of it.
    But certainly there are issues that have been raised that 
could be dealt with in a more immediate sense just by working 
with DOD to see if we cannot iron out some of those matters 
that have been raised.
    As I mentioned in my opening statement, let me begin with 
this. There is a lot of debate with respect to the OPM 
determination that you, Mr. O'Brien, discussed. I would like to 
start by getting a better understanding of the factual nature, 
the specific nature of the treatments. Maybe the best place to 
start would be with Dr. Tait and Dr. Dawson. If you could help 
us understand the difference in current practices that are 
regarded as medical therapy in these cases as opposed to what 
have been educational interventions. Just in basic terms, what 
are the differences? Dr. Tait, maybe we will start with you.
    Dr. Tait. Thank you. When I am thinking about and when we 
are talking in terms of whether this is medical versus 
educational, unfortunately, when we are looking at any therapy, 
whether it is occupational therapy, physical therapy, speech, 
ABA, it has both educational and medical effects. I think maybe 
the best way that if I could give some examples of that.
    If you are looking at ABA, as I mentioned in the testimony, 
it certainly affects cognition or thinking. It affects 
language. It affects academics. That is the school piece of it. 
But if you look at children who have ASD, many of them have 
specific medical issues that have to be dealt with through a 
behavioral approach. Examples of that would be self-injury. 
Many of the children actually are involved in self-injurious 
behaviors.
    Another example would be eating. One of the things that we 
look at, some children at the extreme of ASD really have such 
very specific eating habits that unless you look at it 
behaviorally, they can be malnourished. That is the medical 
piece of it. They can have what we call Pica disorder, which is 
eating other objects that you should not be eating, and then 
you go to the doctors for that.
    Another piece of that is, behavior can be such a part of 
what we are talking about that they cannot get the basic needs 
they need, like going to a dentist, or getting the medical 
needs that they have addressed unless they are sedated.
    All of those are behavioral in one sense, Senator, but they 
are also educational. When I am thinking in terms of ABA, I 
think that it certainly is medically-based. It is also 
educationally-based.
    Senator Webb. Just for clarification here, in terms of 
programmatically what is now funded and what is considered 
educational intervention, what type of program is now funded 
that does not reach the ABA area? Programmatically, when we say 
there are certain practices that are acceptable, and at the 
same time we are saying that the ABA is educational 
intervention and, as a result, not funded, what are we treating 
and what are we not?
    Dr. Tait. The way that I look at this is if you look at 
therapies that are funded--maybe that is the best way to 
approach it. The therapies that we know that are funded are 
things like occupational therapy, physical therapy, speech 
language pathology. If you look at those therapies, they are 
very specific and individualized with respect to the children 
that need them.
    Those therapies are not as behaviorally-based where you set 
up a specific behavior program that has to be carried through 
at home, at school, by the family. You are looking at 
different, what we call, trials, where you look at behavior 
changes and trials. I think that is why when we are looking at 
this, you are saying it is educational because it is looking at 
the cognition, language, academic performance, and adaptive 
behavior. But all of that rolls into the medical piece of it 
too.
    Not all children need 40 hours of ABA per week that have 
autism, and that is why we were saying it has to be 
individualized. You look at the therapy that is appropriate.
    Senator Webb. Dr. Dawson?
    Dr. Dawson. One way to look at it has to do with who 
delivers the treatment and the scope of the treatment. When we 
think about an educational service, it is typically provided in 
an educational context by educators. When we think about ABA 
treatment, early intensive behavioral intervention, first of 
all, it is often prescribed by a physician. Second, it is 
delivered by either a licensed clinical psychologist or a board 
certified behavior analyst, not necessarily a special educator. 
Then, third, it requires many hours of intensive intervention 
that is not accommodated within an educational program. 
Educational programs simply do not offer either the level of 
expertise in this area or the number of hours and intensity. It 
really goes beyond the scope of a typical educational program 
that we might offer. Even a child with special needs would not 
be offered these kinds of services typically in an educational 
program. So it really goes beyond the scope of what we think of 
is education.
    The other thing to point out is that it has an impact on 
brain development. In fact, there is study in press right now 
that shows that it not only impacts things like IQ and language 
ability, but can change the pattern of brain activity in these 
children to normalize them over time. It is much more of a 
whole medical intervention than we think of as restricted 
specifically to an educational activity.
    Senator Webb. I want to finish this thought with Mr. 
Hilton. In your own experience with the program, what does it 
cover, and what does it need to be covered? How does the 
$36,000 annual cap fit into that?
    Mr. Hilton. Sir, I am just going to back up for a second 
and piggyback on something that the lady said and give you an 
example. A lot of these children, for whatever reason, are 
runners, meaning they run and run. Another thing, they like 
water for a reason I do not understand.
    We lost a little girl, a little Army girl, 7 years old in 
May, who had autism. She ran and they ended up finding her in a 
pond not far from the family. This is documented in a variety 
of different circumstances. So from our perspective, for a lot 
of our families, this is life or death. I do not think that 
qualifies educational. That qualifies as medical.
    To answer your specific question, what my friends and what 
I have seen is that particularly when you are talking about 
younger children, 2- to 5-year range, or the children who need 
much more intensive therapy, that $36,000 simply is not enough 
to cover their costs. I have a friend who is a Navy commander. 
I served with him a long time ago. He has a child with autism, 
and this is an 05 that you would think might be able to cover 
this therapy. He has had to take out a second mortgage on his 
house. That just gives you an example of what an 05 has to deal 
with. Imagine an E3 or E4. They are simply just going without 
the therapy.
    Senator Webb. Mr. O'Brien, we have been told that DOD has 
asked OPM to see the studies and the basis for OPM's decision. 
Is OPM going to share that study with DOD?
    Mr. O'Brien. Yes.
    Senator Webb. Good. Senator Begich.
    Senator Begich. Thank you very much, Mr. Chairman.
    First, Mr. Hilton, congratulations again on your award as 
Military Spouse of the Year. I know you corresponded off and on 
with my wife by e-mail. I thank you. We really appreciate your 
effort and your lead and your leadership today in representing 
families in a very succinct way. I will have some questions for 
you in a second, but I just wanted to acknowledge that I really 
appreciate your being here today.
    I am actually going to take the question that the chairman 
just asked. If the answer is yes, the question is obviously how 
long will it take you to review it? When will you do it? That, 
to me, is very simple.
    Dr. Guice. When we get the information, we will put it in 
our normal review process and evaluate it according to our 
requirements by statute and by regulation as to whether or not 
it serves as medical care according to our criteria.
    It may take us very little time, 6 months. It just depends 
on all the information that we get. We invite others to submit 
information as well if they have credible evidence, peer review 
publication of studies, that would help us, inform us about a 
better or a different coverage decision, we would be delighted 
to receive those as well, sir.
    Senator Begich. Can you do that administratively? In other 
words, once you review and if you determine you can move it to 
medical therapy, can you then do it?
    Dr. Guice. Yes, sir. If it is deemed to be appropriate 
according to our criteria, and statute and regulations that we 
evaluate evidence by, then it can be made a coverage decision.
    Senator Begich. Okay. Here is the question I have. I guess 
if I am able to do it right, because I am under one of your 
policies somewhere in the mix because I pay a bunch of money. I 
know that despite what people think, we actually have lots of 
premiums as senators. I think I had my co-payment premiums at 
$6,000 last year. So if I wanted to buy additional coverage for 
one of my policyholders or one of the folks I have under 
Federal insurance, that is covered as additional, I can get it, 
correct?
    Mr. O'Brien. Assuming the plan offers service.
    Senator Begich. Right.
    Mr. O'Brien. But it is not a required part of our basic 
benefit plan. We are offering plans the opportunity to propose 
this benefit. So this does not guarantee anyone would get this 
benefit.
    Senator Begich. I understand that. I understand, but it is 
now offered where several years ago we had a couple only that 
offered it, correct?
    Mr. O'Brien. Right. As of today for the 2012 contract year, 
there is no child in the FEHB program who is receiving ABA. It 
is under a blanket exclusion as we have identified it as an 
educational service. We have removed that blanket exclusion.
    Senator Begich. Because the evidence is telling you 
something, and it is worthwhile to ask the question for 
policyholders to consider, correct?
    Mr. O'Brien. In our benefit review panel, we went back 
there. We considered the evidence, and the evidence has said 
this is a promising therapy. There is also a wiggle around it. 
Additionally, we looked at the costs and we looked at what the 
evolution of the provider infrastructure and the insurance 
market.
    Senator Begich. Let me ask you. What have you done there, 
do you do that frequently?
    Mr. O'Brien. We have other services we are going to be 
doing in the future. This is a relatively new process we are 
doing.
    Senator Begich. That helps me because you have a standard. 
You are not just doing it for anything. You are reviewing it, 
and then you are moving it to the next stage. Then it could 
move to the next stage. Is that fair to say?
    Mr. O'Brien. Yes, that is fair to say.
    Senator Begich. Okay. Your process, once this information 
and other information may come in, you may have 6 months or so 
to review. Then at that point, you will determine if it fits 
your criteria. If not, you will identify what those gaps are. 
Is that fair to say?
    Dr. Guice. Yes, sir.
    Senator Begich. Okay. You will keep, I am assuming, the 
chairman, the subcommittee informed on that process?
    Dr. Guice. We will be happy to.
    Senator Begich. Great. Mr. Hilton, you brought up a lot of 
good questions. I am going to take one which the chairman 
mentioned that I want to follow up on, and that is the Medicaid 
waiver.
    It is interesting. We do not know what the Supreme Court is 
going to do in the next 4 or 5 days, but under that new 
program, we pay--when I say ``we,'' I mean the Federal 
Government--when it is all done and said, all new entrees into 
Medicaid at a certain level, we pay 90 percent to any State. So 
it seems logical to me that there should be probably a veteran 
or an Active Duty military Medicaid program because we are 
going to pay 90 percent of it anyway, that is portable.
    So you serve in one community, because the way it is going 
to work--I think this is the way it is going to work. Let us 
say you are in Alaska. You serve a year or 2. You get 
transferred. You go to another State. You are going to be a new 
member on their Medicaid roll. You are going to be a new entry. 
So, therefore, we are going to pick you up at 90 percent. So, 
do we not just figure this out now because within a 2- or 3-
year period, every military person who needs a service and a 
Medicaid waiver will be actually a new entry onto States' 
rolls, which we pay 90 percent of. So why not just cut through 
it all and create a Medicaid waiver program for military that 
will actually go into play anyway? Your thoughts on that?
    Mr. Hilton. Sir, I think I would be obviously supportive of 
that.
    Senator Begich. Yes, I thought that would be the case.
    Mr. Hilton. In my written testimony, I list the Medicaid 
waiver website. There are 423 different Medicaid waiver 
programs in the Federal Government at the various States. So 
you can see why we sometimes get confused as we move from State 
to State. However, as I note in my testimony, there has to be a 
way to figure out how to serve our military families.
    Senator Begich. Just sitting here listening to you and 
thinking about the law by the example I just gave, every 
military person who needs the Medicaid waiver will 
automatically become a Medicaid new entry in the State they go 
to. Those are people we are going to be covering 90 percent of 
under the new law. So why not just do it? That is just a 
thought that I wanted to share.
    I am giving it through the chairman and the staff, and 
maybe some thought there because I think you bring up, if I can 
in my last minute here, Mr. Hilton, what other things do you 
think we in the Federal Government can do? You mentioned a 
couple in your testimony, and I appreciate that--that we can do 
to better really serve families that have children with 
disabilities and special needs?
    Mr. Hilton. Sure. If I had to prioritize the variety of 
things I put in my written testimony--it was pretty lengthy--I 
would obviously put high on the top of the list the ABA issue. 
We have been admiring this problem----
    Senator Begich. To get it classified as a medical----
    Mr. Hilton. Yes, sir, as medically necessary. I will be 
honest with you. I hear medical therapy, but not medically 
necessary. I hear educational. I hear sea lawyer combined with 
insurance adjuster, to be honest. That is what our families 
hear, and that would be at the top of the priority list for me.
    Obviously, getting in place appropriate policy to 
standardize the EFMP process such that, exactly as the chairman 
said, as we move from base to base, it is consistent. From my 
perspective, disabilities do not care what uniform you wear, 
and it is one of those things where we all scratch our head and 
wonder why are we receiving different services.
    Senator Begich. Very good. Thank you very much. Thank you, 
Mr. Chairman.
    Senator Webb. Thank you, Senator Begich. Before I call on 
Senator Gillibrand, let me just say to her that I was talking 
well about her before she got here. She was really one of the 
principal motivating forces behind having this hearing. So we 
welcome her, and she is now recognized.
    Senator Gillibrand. Thank you, Mr. Chairman, and thank you 
so much for holding this hearing. Thank you to each of the 
witnesses. This is so helpful because this is not an issue that 
I think gets enough sunlight, enough discussion, and one that 
so urgently does for families that have children that are 
suffering. That is what I am really worried about.
    I am worried that this would take 6 months; 6 months is a 
long time. That could be a whole half year for a 1-year-old or 
a 2-year-old where those therapies are the difference between 
whether they will ever reach their God-given potential. I think 
that is too long.
    I am very concerned because the prevalence is so high. One 
in 54 boys today are being diagnosed with autism. The fact that 
these therapies actually work is the greatest hope that we 
have. We should not be denying them to any child, certainly not 
children of military families, certainly not children of 
wounded warriors or veterans. We have to do better, in my view.
    Now, I was very interested in both of the doctors' 
testimonies because what you described to me sounded very much 
like psychological therapies that are similar to what we do for 
post traumatic stress disorder (PTSD). So I want to go to our 
first witness, Dr. Guice. Could you tell us, when we look at 
PTSD, are those therapies covered as medically necessary?
    Dr. Guice. Those are covered as medically necessary, yes.
    Senator Gillibrand. What is the difference between the 
types of therapies, because as Dr. Dawson described, she 
described them being administered by psychologists, by people 
who have specific training for these needs, very similar to 
PTSD.
    Dr. Guice. The difference is when we looked at providing 
ABA back in 2010, the evidence at that point in time convinced 
us it was still considered a behavioral intervention, and as 
such could not be covered under our statutory and regulatory 
requirements for determining medical care that is medically and 
psychologically necessary to treat a disease or an illness.
    Senator Gillibrand. So, even as you just described it, that 
perfectly describes PTSD therapy, something that is 
behaviorally necessary that actually is an intervention that 
actually does help these men and women in life and death 
situations.
    Dr. Guice. The treatment actually treats the underlying 
condition of PTSD. It is designed to treat PTSD.
    Senator Gillibrand. Exactly. That sounds exactly what 
behavioral therapies for ABA are. So I feel that if you did 
reexamine it, where the literature is today, and since studies 
are being published every month that show that it is 
scientifically and medically necessary, that it actually 
affects the brain and the development of the brain, I think 
every criteria that you have been using for all these other 
diseases and disorders and treatments, it will match up 
perfectly just from the testimony I have heard today.
    My question is, how can we do this more quickly? Is there a 
way for us as the Senate Armed Services Committee, as we do 
this authorization legislation, to write something that allows 
you to do this immediately, and to have the resources put in 
place to understand the literature immediately, to be able to 
say this is a psychologist offering medical treatment so 
children can develop their brains, their behavior, their 
abilities properly?
    Dr. Guice. We have it separate. We have a very defined 
process through which we look at these potential coverage 
decisions, and we use that routinely and standardly. It is 
about getting information and assessing it according to our 
criteria. We will do it as expeditiously as we possibly can.
    Senator Gillibrand. I would like to turn my attention now 
to Mr. Hilton. I want to thank you, sir, for your service. The 
men and women who serve and their families are the greatest 
Americans we have. They are some of our best and brightest, and 
certainly sacrifice more than anyone else. So I want to thank 
you for coming to this panel to tell us about what the lives of 
these families are actually like.
    Can you describe to me, to the extent you know, and if Dr. 
Dawson or Dr. Tait can amplify this, I would be grateful. 
Explain what happens when a child is newly diagnosed? How do 
they navigate the current system? Please tell me how they 
navigate whether you are Active Duty or whether you are 
recently separated or whether you are injured and in wounded 
warrior status. What are the differences for each of those 
types of members of our military families, and what needs to be 
addressed for each person?
    Mr. Hilton. That is a pretty big question.
    Senator Gillibrand. Take your time.
    Mr. Hilton. I will just tell you part of our experience 
from our daughter being in born in 2002. In 2004 to 2008, we 
moved five times. That was due to deployments, regular PCS. My 
wife was in training. During that period of time, every time 
you move, I would start preparing for the next move 6 months 
prior to. I can consider myself a pretty decent advocate for my 
daughter, and we only had one daughter at the time. As you are 
going through the normal PCS process and you are dealing with 
the deployment, it takes probably 6 months from getting to the 
next duty station for you to get all the pieces of the puzzle 
back in play.
    Reading through some of the testimony or some of the notes 
from the parents, and you are talking about the retirees or the 
veterans or the wounded warriors particularly, I cannot even 
imagine frankly dealing with those situations and having a 
child with autism or another developmental disorder.
    Senator Gillibrand. Because they are not eligible at all?
    Mr. Hilton. Correct. If you think about that, going from 
something to nothing is like hitting a brick wall for these 
families. For that child, and again, I would really encourage 
everyone to read their stories. You read again and again how 
devastating that is for the family and the child.
    Senator Gillibrand. Dr. Dawson, could you speak a little 
bit to what is the difference for a child that you are treating 
that they have now 11 hours covered a week. Imagine it is a 
child that you have actually prescribed 40 hours a week. What 
is the difference for that child's future to the extent you can 
describe it?
    Dr. Dawson. First of all, it is important to keep in mind 
that the National Academy of Sciences did convene a group. It 
has been a while now, but they convened a group to look at how 
many hours should be standard of care. At that point, and this 
was actually a number of years ago, 2001, it could have even 
changed now. But standard of care was a minimum of 25 hours a 
week for a child during the pre-school period.
    Senator Gillibrand. That was a decade ago.
    Dr. Dawson. That was a decade ago, and the difference is 
really in IQ points, language ability, and adaptive behavior. 
So even in the last few years, there have been studies that 
have examined the difference in IQ, language, and adapted 
behavior of a child who gets fewer hours versus more, and it 
does make a difference.
    If we want children to have the best possible outcome, then 
they need to have access to the number of prescribed hours. It 
is important to keep in mind that that can vary, and it should 
be looked at by each physician working with a family, as Dr. 
Tait has said. For some children, it is going to be 40 hours, 
particularly early on. Other children may only need 10 hours, 
and that needs to be an individual decision so that that child 
has the best outcome.
    Senator Gillibrand. Thank you, Mr. Chairman.
    May I submit a statement for the record that Senator 
Lieberman asked me to submit?
    Senator Webb. That will be entered into the record at this 
point.
    [The prepared statement of Senator Lieberman follows:]
           Prepared Statement by Senator Joseph I. Lieberman
    I would like to lend my strong support for expanded coverage for 
military families affected by autism. I am struck by the figures 
provided by our witnesses that show how autism has reached near-
epidemic levels in our country: one out of every 88 children, including 
one out of every 54 boys, is affected, far beyond the rates of 
childhood AIDS, diabetes, and cancer combined. The Department of 
Defense estimates that 23,000 military dependents have an autism 
diagnosis, and I have heard the deeply moving personal stories of but a 
few of them. It is clear that this is a growing problem that we as a 
country have yet to address.
    Studies have shown that early diagnosis and intensive therapy are 
the keys to effectively mitigating the effects of autism in children. 
Therapies informed by applied behavior analysis (ABA) can significantly 
help the development of life skills for those affected. The efficacy of 
these methods has been recognized by the U.S. Surgeon General, and 30 
States recognize ABA as a medical treatment that should be covered by 
private insurance. Most notably, the Office of Personnel Management has 
concluded that ABA is a medical therapy that can be covered in Federal 
Employees Health Benefits programs.
    Unfortunately, TRICARE is behind the curve in this critical area. 
Unlike the rest of the Federal workforce and a growing majority of the 
private sector, servicemembers, veterans, and their families continue 
to face restrictions on these effective autism treatments under 
TRICARE's Extended Health Care Option (ECHO) program, which I believe 
place an undue burden on our military families with autistic dependents 
and thereby affect overall readiness. TRICARE classifies ABA as a 
nonmedical educational service. Under TRICARE's current allowances for 
nonmedical services, members can receive limited financial help that is 
capped annually at $36,000, sharply limiting the allotment of 
behavioral analysis hours to less than half what it recommended to make 
a real difference in the life of an autistic child. Furthermore, the 
classification of ABA as a nonmedical service limits provision of even 
this limited support to Active Duty members, leaving retirees and even 
those who have been separated due to combat wounds.
    I believe that our military families should be provided with the 
best available care, and it is clear to me that behavioral analysis-
based therapies constitute the best available means to address autism. 
The time to address this critical gap in TRICARE is now. I look forward 
to supporting legislation to address this issue when the Senate takes 
up the National Defense Authorization Act for Fiscal Year 2013.

    Senator Gillibrand. Thank you, Mr. Chairman. Thank you, 
witnesses.
    Senator Webb. Thank you, Senator Gillibrand.
    Let me make one point, if I may, just as a follow-on to 
Senator Gillibrand's comments about PTSD. I was committee 
counsel on the House Veterans Committee many years ago when we 
did the initial studies on PTSD. If I were to see a parallel 
here--first of all, let me be careful. I know there are a lot 
of frustrated people out here, but I do not think this is a sea 
lawyer syndrome. I do not think that is fair to the people who 
have the burden of having to make these determinations.
    I think it is more that the process of trying to figure out 
how to take care of people is an evolutionary process. We went 
through this back in the late 1970s and early 1980s with 
respect to PTSD. I think the question is a legitimate one in 
terms of evaluating the methodology in order to determine 
whether a particular therapy is medically effective. That is 
what our challenge is here. I think Senator Gillibrand has 
given our subcommittee a great shot in the arm in terms of 
putting this issue in front of the subcommittee.
    With that, Senator Blumenthal.
    Senator Blumenthal. Thank you, Mr. Chairman, and thank you 
for having this hearing, and to all our witnesses for being 
here, and all who have been such effective advocates for 
families in this situation.
    Dr. Dawson, I have read a lot of materials and witness 
testimony regarding ABA. My impression is that ABA is a widely 
accepted, successful set of tools that can be used in assisting 
people who are facing the challenges of being diagnosed with 
autism and other developmental disorders. You have immensely 
impressive background experience, as do all of our witnesses 
here today. I would like to ask you to describe how ABA is 
being used to assist in the treatment and the effectiveness of 
this treatment in relation to autism. If you could highlight 
the differences between the TRICARE coverage of ABA and the 
coverage in the civilian sector.
    Dr. Dawson. Let us first look at the evidence in terms of 
what is the impact of ABA on children's outcomes. There have 
been numerous clinical trials that have been conducted and 
published. There was a study that was funded by the National 
Institutes of Health. It was published in the Journal of 
Pediatrics. This is the flagship journal of the American 
Academy of Pediatrics, and it was published in 2010, that 
showed that the impact of the early intervention for 50 percent 
of the children, they had a 15-point IQ gain, and for 30 
percent of the children, they had a 30-point IQ gain. That is 
to standard deviation.
    So the majority of children who received this treatment 
actually moved from a status of intellectual disability into 
the normal range of cognitive functioning. We know that in 
terms of predicting long-term outcome, that IQ is the strongest 
predictor.
    Also, let us think about the cost to society. The current 
estimates, based on an analysis that was conducted this year, 
are that the costs are $137 billion annually to care for people 
with autism in the United States. Most of that cost is based on 
adult care. The average cost per individual is reduced by about 
half if they do not have intellectual disability.
    Imagine now that we provide this early intervention. You 
change the life course. This individual has either less severe 
intellectual disability or none at all, and they have a chance 
now to go to a regular classroom, form friendships, have 
language, go on to have a job, and be productive members of 
society. From a cost benefit analysis, it saves taxpayers a 
tremendous amount of money.
    In terms of TRICARE, the issues are several. One is the 
fact that they limit the amount of coverage to cover about 11 
hours of ABA. For some children, particularly in that early 
period, they need more than that in order to get the kind of 
gains that I am talking about. The parents are not getting 
adequate medically prescribed treatment, what the physician 
would recommend.
    The second has to do with the status, and this has to do 
with when you retire, you no longer have access to treatment. 
Or if you are in the National Guard, you are going to have 
intermittent access to treatment. So if you can imagine your 
child is doing well and they are in intervention, and then you 
change your status, and suddenly the treatment program is gone. 
What happens is that families will do anything. They will 
mortgage their home. They will give up their other children's 
college savings in order to get treatment because they know 
that these are effective. They are aware of the literature. The 
idea of a parent, after learning about a diagnosis and then 
rising to the challenge, and then finding that the treatments 
that we know are effective and that can make a difference for 
their child are not available to them, it is just not something 
that we should be doing. We really need to do better by these 
families.
    Senator Blumenthal. It strikes me as I listen to you Dr. 
Dawson, and I want to thank you for your service, this hearing 
room is a very colorless, antiseptic, majestic, but still very 
abstract setting to talk about what a parent faces in this 
situation. Since many of us--I have four children--are parents, 
if we were called in the middle of a family emergency out of 
the most important hearing in this room or the most important 
vote ever, we would all be gone in a flash.
    The instinctive reaction that you have described to 
disregard cost and to sacrifice almost anything to mortgage 
homes, to, in effect, put a family's future under a severe 
financial cloud, is one that I think we need to understand. We 
as a Nation, we as a Congress, need to understand.
    The hopes offered by ABA, I think, are very impressive. 
Maybe I can ask others who are on this panel whether they have 
any comments on what we have just heard.
    Dr. Tait. If I may comment for just a moment, thank you so 
much. I was just keying off of some of the things that have 
been said thus far, and I think whether you are looking at PTSD 
or whatever we are talking about here. We spend a lot of time 
not separating our head from our body. So when we are talking 
about health of children, that includes the behavioral health. 
That includes the physical health.
    For a child to be healthy and learn and grow, we have to 
look at all of those issues, and that is exactly what parents 
want. They just want their kids to have the services that they 
need to be able to have them fulfill their potential. I know 
that is what you all want too.
    I just wanted to comment on the navigation of families 
within systems. I can remember when I have talked to families, 
and one mother said to me, I want you to know that I spend all 
my day trying to navigate the payment system and nine care 
coordinators. I coordinate the care coordinators. They do that 
willingly, and day-in and day-out so that their children can 
receive the services that they need.
    From the perspective of this hearing, what we want is to 
make that as successful and easy to the families as we can make 
it. If they have to worry about what is getting paid or what is 
not getting paid and not concentrate on the children and the 
families, then that just puts extra stress on a family that is 
already stressed for a number of reasons. Thank you.
    Mr. Hilton. Sir, if I could offer one other thought. 
Looking through these 80-plus testimonies of individual 
military families, I realize it is not a scientific study, so 
you cannot rely on it exactly. But there is no one in here in 
this enormous population that says, ``oh, we tried ABA and it 
did not work out.'' Literally in every story, they say ABA--and 
it has been beneficial through the ECHO program, and we are 
thankful, I will admit. It is an amazing program, and it has 
been helpful to a lot of families.
    Every one of them then says, ``what we are worried about is 
retirement,'' and retirement is one of the stories. It is 
literally a week away for this family, and they are looking 
forward to retirement after multiple deployments, after many, 
many years. I know families that have put off retirement for a 
variety of reasons when they would like to, and they simply 
cannot.
    Senator Blumenthal. Thank you. Again, thank you, Mr. 
Chairman. My time has expired, but I am going to continue my 
interest. I would like to, again, thank the chairman for being 
very much attuned to this issue, and my colleagues, especially 
Senator Gillibrand, for being so active and attentive to it. 
Thank you.
    Senator Webb. Thank you, Senator Blumenthal. Again, let me 
emphasize that I do not think there is any disagreement in this 
room about wanting to help the people who are in need, and 
particularly for us at this moment, family members and people 
who are serving and who have served.
    Our question, our burden, is evaluating the methodology in 
order to determine whether this therapy is medically effective. 
If it is, in those cases where it should be applied, there 
should not be any question about what we do. But that is the 
question that is before us.
    I understand there are people who would like a second 
round. Senator Begich?
    Senator Begich. No, I am good.
    Senator Webb. Okay. Senator Gillibrand, I know you want to 
ask questions or have other comments.
    Senator Gillibrand. I would like to go back to the 
conversation about specifically what we can do to hasten the 
re-review process. I would like guidance to this subcommittee 
about how we can help you legislatively.
    Dr. Guice. I do not believe at this point that we would 
require additional legislation to do it. I think it is just 
getting the evidence and having the time to sift through it.
    I would like to add, though, I think one of the witnesses 
said that TRICARE limits the ECHO or the payment available for 
ABA therapy to the $36,000 per year. That limit is set by 
Congress.
    Senator Gillibrand. We could change that. What would the 
limit have to be to cover the prescribed ABA therapies, Dr. 
Dawson or Dr. Tait?
    Dr. Tait. We have looked at some of those costs, and they 
run anywhere from $30,000 to $50,000 depending on where you are 
and whether you need the 40 hours versus the 20 hours. I 
believe that it is in that range, and that is generally what we 
are asking at the State level per child, of course.
    Dr. Dawson. I think that is the way to look at it. Think 
about it from the point of view of a physician making a 
prescription, and I do not think many children would go above 
40 hours. One would look at the range that would cap at 40 
hours a week and what that would cost, particularly during that 
early intensive period. Obviously, when children are entered 
into school and they are spending the majority of their time in 
school, they are not going to require 40 hours. So it would 
over time, that amount would be lessened. But to have that 
option during the early period is what is critical.
    Senator Gillibrand. Is there a way to facilitate, both Dr. 
Dawson and Dr. Tait, getting the studies that you mentioned 
today to DOD so that you can have immediate answers on trying 
to prove the case to DOD so when they do their re-review, they 
have those studies on hand and those peer review studies?
    Dr. Dawson. Absolutely. In fact, just to point out, since 
the evaluation was done, which I think was based on 2010, there 
have been well over a dozen studies that have been published 
since then. I can certainly provide that literature. Even the 
Agency for Healthcare Research and Quality (AHRQ) report, which 
I think was referred to in the testimony, is historically 
already out of date, and also very limited in its scope. It 
only looked at 10 years worth of literature, and the literature 
now that actually began in 1987 was the first clinical trial 
that was published. None of those studies were included in that 
particular report.
    I think we really need to include the breadth of knowledge 
in the review that is available today.
    Senator Webb. If I may, as chairman, if there are studies 
that have not been provided to our staff along those lines, I 
think we would appreciate being able to look at them as well.
    Senator Gillibrand. I have at least an informal commitment 
of this group of people to be a working group to coordinate 
data, coordinate studies, get it done. To the extent this 
subcommittee asks for a recommendation in the near future from 
DOD, that might be a way to formally, at least, request that 
this process continue as quickly as possible. We could either 
do that by letter or put something as an amendment into the 
authorization bill. I would like to work with you on how that 
should be requested in the way most effective to help your team 
apply the proper resources to do it now.
    Dr. Guice. We would appreciate that. Thank you.
    Senator Gillibrand. Thank you very much. Thank you, Mr. 
Chairman.
    Senator Webb. Thank you, Senator Gillibrand. Again, I 
appreciate all of the testimony from a very wide breadth of 
knowledge and experience, and it has been extremely useful to 
us.
    Your written testimony will be reviewed in very thorough 
detail as well. Thank you, Senator Gillibrand, for being the 
motivating factor in having this hearing. I think it has been 
very useful for us.
    This hearing is now adjourned.
    [Questions for the record with answers supplied follow:]
             Questions Submitted by Senator Scott P. Brown
                       applied behavior analysis
    1. Senator Brown. Dr. Guice and Dr. Posante, recently the Office of 
Personnel Management (OPM) stated there is enough evidence to classify 
Applied Behavior Analysis (ABA) as a medical therapy rather than an 
educational service. Can you please explain how the TRICARE Management 
Activity continues to rely upon information regarding ABA that it 
gathered in 2010?
    Dr. Guice and Dr. Posante. The TRICARE program medical benefit 
coverage determinations are governed by separate statutory and 
regulatory mandates not applicable to the insurance plans that 
participate in the Federal Employees Health Benefits (FEHB) Plan. 
Currently, the TRICARE program has no authority to provide coverage of 
educational services, behavior modification modalities, or other 
nonmedical services under the Basic Medical Program. The authority and 
scope of the TRICARE program to cover medical treatments under the 
Basic Medical Program are defined by statute.
    In addition, any proposed TRICARE Basic Medical Program benefit 
characterized as a drug, device, medical treatment, diagnostic, or 
therapeutic procedure must be determined to be safe and effective in 
accordance with the longstanding, reliable evidence criteria set forth 
at Title 32, Code of Federal Regulations Part 199.4(g)(15). The 
Department of Defense (DOD) has used this published ``reliable 
evidence'' standard for the TRICARE Basic Medical Program benefit 
coverage determinations since 1997 (see 62 Federal Register 625, 629, 
January 6, 1997). The requirement to use peer-reviewed evidence of 
safety and efficacy allows DOD to ensure the benefits our beneficiaries 
receive are tested and proven safe and effective in either the 
diagnosis or treatment of an injury, illness, or disease.
    It should be noted that apart from the medical benefits provided 
under the TRICARE Basic Medical Program, DOD is authorized to provide 
additional non-medical services to dependents of Active Duty 
servicemembers eligible for and enrolled in the Extended Care Health 
Option \1\ (ECHO) to reduce the disabling effects of a qualifying 
condition. This program was created to support the readiness of Active 
Duty members who might have a dependent with special needs not 
otherwise covered under the health plan ECHO supplements other public 
resources for Active Duty dependents that are subject to geographic 
relocations based on their sponsor's duty assignment.
---------------------------------------------------------------------------
    \1\ ECHO is a supplemental program to the basic TRICARE program. 
ECHO provides financial assistance for an integrated set of services 
and supplies to eligible Active Duty family members (including family 
members of activated National Guard or Reserve members). There is no 
enrollment fee for ECHO; however, family members must have an ECHO-
qualifying condition, enroll in the Exceptional Family Member Program 
(EFMP) as provided by the sponsor's branch of Service, and register in 
ECHO through ECHO case managers in each TRICARE region.

    2. Senator Brown. Dr. Guice and Dr. Posante, how is TRICARE 
Management Activity able to rely upon dated information regarding ABA?
    Dr. Guice and Dr. Posante. The TRICARE program medical benefit 
coverage determinations are governed by separate statutory and 
regulatory mandates not applicable to the insurance plans that 
participate in the FEHB Plan. Currently, the TRICARE program has no 
authority to provide coverage of educational services, behavior 
modification modalities, or other non-medical services under the Basic 
Medical Program. The authority and scope of the TRICARE program to 
cover medical treatments under the Basic Medical Program are defined by 
statute.
    In addition, any proposed TRICARE Basic Medical Program benefit 
characterized as a drug, device, medical treatment, diagnostic, or 
therapeutic procedure must be determined to be safe and effective in 
accordance with the longstanding, reliable evidence criteria set forth 
at Title 32, Code of Federal Regulations Part 199.4(g)(15). DOD has 
used this published ``reliable evidence'' standard for the TRICARE 
Basic Medical Program benefit coverage determinations since 1997 (see 
62 Federal Register 625, 629, January 6, 1997). The requirement to use 
peer-reviewed evidence of safety and efficacy allows DOD to ensure the 
benefits our beneficiaries receive are tested and proven safe and 
effective in either the diagnosis or treatment of an injury, illness, 
or disease.
    It should be noted that apart from the medical benefits provided 
under the TRICARE Basic Medical Program, DOD is authorized to provide 
additional non-medical services to dependents of Active Duty 
servicemembers eligible for and enrolled in ECHO to reduce the 
disabling effects of a qualifying condition. This program was created 
to support the readiness of Active Duty members who might have a 
dependent with special needs not otherwise covered under the health 
plan ECHO supplements other public resources for Active Duty dependents 
that are subject to geographic relocations based on their sponsor's 
duty assignment.

    3. Senator Brown. Dr. Guice and Dr. Posante, can you please explain 
the reasons behind why children of DOD civilians have greater access to 
ABA rather than children of the men and women we send off to war?
    Dr. Guice and Dr. Posante. For DOD civilians, OPM's 
reclassification of ABA as a medical therapy rather than an educational 
service is an administrative decision and does not require FEHB plans 
to add ABA services to their basic benefits package. Rather, it allows 
plans to propose ABA as an additional benefit, under conditions where 
medical necessity is satisfied and appropriate, qualified providers are 
available. Those plans that include ABA may adjust their premiums 
accordingly.
    The ECHO program for Active Duty servicemembers that allows DOD to 
help our beneficiaries minimize the disabling effects of Autism 
Spectrum Disorder (ASD). Importantly, the ECHO program exists to 
supplement other public resources for Active Duty dependents who are 
subject to geographic relocations based on their sponsor's duty 
assignment. Beneficiaries are required by law to first seek services 
from the State in which they reside, but DOD realizes the requirements 
of military service are demanding and may, at times, place a family in 
a State with more limited State benefits. The ECHO program allows us to 
augment public services to assist special needs dependents of our 
Active Duty servicemembers.
    To increase access to ABA services, DOD implemented, within ECHO, 
the Enhanced Access to Autism Services Demonstration in March 2008. The 
demonstration expands the opportunity for access to ABA through a 
variety of provider types, including tutors. TRICARE extended the 
demonstration to March 2014, pending inclusion of the demonstration 
model as a permanent benefit within ECHO.

         As of May 31, 2012, there were 3,793 beneficiaries 
        enrolled in the demonstration, 1,881 ABA supervisors, and 9,201 
        ABA tutors across all three TRICARE regions.
         DOD's evaluation of the results of the demonstration 
        concluded that it increased the number of and access to the 
        services of authorized ABA providers, as evidenced by the 
        sustained 3 to 5 percent monthly growth in the number of 
        demonstration enrollees since implementation in 2008.
         Parents of dependent children with autism who 
        responded to a DOD survey reported that improved access to ABA 
        contributed to improved military family readiness and 
        retention.
         A proposed rule to establish TRICARE coverage under 
        ECHO of ABA for the Assistant Secretary of Defense was 
        published in the Federal Register, Vol. 76, No. 250 on December 
        29, 2011. Upon final implementation of this rule, DOD intends 
        to categorize ABA as an ``Other Service'' and adopt a tiered 
        ABA services delivery and reimbursement methodology.

    4. Senator Brown. Dr. Guice and Dr. Posante, with the eventuality 
that ABA is considered a medical therapy, I realize there may be some 
challenges that will need to be worked through to make this change a 
reality. One is the possible shortage of qualified professionals 
available to provide. How do you suggest this issue be addressed?
    Dr. Guice and Dr. Posante. The National Defense Authorization Act 
for Fiscal Year 2007 directed the Secretary of Defense to develop a 
plan within the authority of the ECHO program to provide services to 
military dependent children with autism. The legislation mandated that 
DOD develop: (1) requirements for the education, training, and 
supervision of autism service providers; (2) the ability to identify 
the availability and distribution of those providers; and (3) 
procedures to ensure that such services provided by DOD supplement 
those available through other public sources. In response to Section 
717, DOD submitted the required plan (DOD 2007) to Congress in July 
2007. In addition to meeting the requirements of Section 717, the 
report outlined a proposed demonstration that would test the 
feasibility of expanding the types of providers authorized to deliver 
autism treatment services to include those not meeting the strict 
requirements of the then-current departmental regulations. However, the 
requirements for establishing TRICARE-authorized providers coupled with 
the relative newness of the Behavior Analyst Certification Board (BACB) 
and the ABA profession resulted in a shortage of qualified providers 
available to TRICARE beneficiaries with autism. To mitigate this 
shortfall, TRICARE has used its authority in ECHO to use non-
professional ``tutors'' to provide ABA through the Enhanced Access to 
Autism Services Demonstration. The demonstration has been extended to 
March 14, 2014. The demonstration expands the provider model by 
including tutors under the supervision of a TRICARE-authorized ABA 
provider to deliver the hands-on therapy. The supervisor retains all of 
his/her other responsibilities.
    To be eligible for the demonstration, the Active Duty family member 
must be registered in ECHO. Eligible beneficiaries can receive ABA 
services under ECHO but that program recognizes only ABA providers who 
are State-licensed or certified or are certified by the BACB. Under 
ECHO, those providers are responsible for developing a behavior plan, 
providing periodic beneficiary assessments, and delivering ABA therapy.
    TRICARE continues to increase access to ABA services and is leading 
the Nation in fielding an effective ABA provision model that overcomes 
the national shortfall in available BACB credentialed providers. 
Regular reports to Congress demonstrate increasing participation by ABA 
supervisors, tutors, and TRICARE beneficiaries. Based on positive 
results from the demonstration (as noted in the response to Question 
#3), a proposed rule to establish TRICARE coverage under ECHO of ABA 
for Assistant Secretary of Defense was published in the Federal 
Register, Vol. 76, No. 250 on December 29, 2011. Upon final 
implementation of this rule, DOD intends to categorize ABA as an 
``Other Service'' and adopt a tiered ABA services delivery and 
reimbursement methodology. However, reducing or eliminating the 
national shortfall of board-certified providers of ABA will require a 
concerted national effort that falls outside of DOD's mission area and 
might best be led by other departments.
                                 ______
                                 

                           Appendix A

      
    [The prepared statement of the National Military Family 
Association follows:]
      


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                           Appendix B

      
    [The prepared statement of the National Council on 
Disability follows:]



[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]




    [Whereupon, at 3:55 p.m., the subcommittee adjourned.]

                                 
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