[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]



 
                          [H.A.S.C. No. 113-3]

                      THE IMPACTS OF A CONTINUING

                      RESOLUTION AND SEQUESTRATION

                               ON DEFENSE

                               __________

                      COMMITTEE ON ARMED SERVICES

                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             FIRST SESSION

                               __________

                              HEARING HELD

                           FEBRUARY 13, 2013


                                     
[GRAPHIC] [TIFF OMITTED] 

                                     
                      COMMITTEE ON ARMED SERVICES




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                    One Hundred Thirteenth Congress

            HOWARD P. ``BUCK'' McKEON, California, Chairman

MAC THORNBERRY, Texas                ADAM SMITH, Washington
WALTER B. JONES, North Carolina      LORETTA SANCHEZ, California
J. RANDY FORBES, Virginia            MIKE McINTYRE, North Carolina
JEFF MILLER, Florida                 ROBERT A. BRADY, Pennsylvania
JOE WILSON, South Carolina           ROBERT E. ANDREWS, New Jersey
FRANK A. LoBIONDO, New Jersey        SUSAN A. DAVIS, California
ROB BISHOP, Utah                     JAMES R. LANGEVIN, Rhode Island
MICHAEL R. TURNER, Ohio              RICK LARSEN, Washington
JOHN KLINE, Minnesota                JIM COOPER, Tennessee
MIKE ROGERS, Alabama                 MADELEINE Z. BORDALLO, Guam
TRENT FRANKS, Arizona                JOE COURTNEY, Connecticut
BILL SHUSTER, Pennsylvania           DAVID LOEBSACK, Iowa
K. MICHAEL CONAWAY, Texas            NIKI TSONGAS, Massachusetts
DOUG LAMBORN, Colorado               JOHN GARAMENDI, California
ROBERT J. WITTMAN, Virginia          HENRY C. ``HANK'' JOHNSON, Jr., 
DUNCAN HUNTER, California                Georgia
JOHN FLEMING, Louisiana              COLLEEN W. HANABUSA, Hawaii
MIKE COFFMAN, Colorado               JACKIE SPEIER, California
E. SCOTT RIGELL, Virginia            RON BARBER, Arizona
CHRISTOPHER P. GIBSON, New York      ANDRE CARSON, Indiana
VICKY HARTZLER, Missouri             CAROL SHEA-PORTER, New Hampshire
JOSEPH J. HECK, Nevada               DANIEL B. MAFFEI, New York
JON RUNYAN, New Jersey               DEREK KILMER, Washington
AUSTIN SCOTT, Georgia                JOAQUIN CASTRO, Texas
STEVEN M. PALAZZO, Mississippi       TAMMY DUCKWORTH, Illinois
MARTHA ROBY, Alabama                 SCOTT H. PETERS, California
MO BROOKS, Alabama                   WILLIAM L. ENYART, Illinois
RICHARD B. NUGENT, Florida           PETE P. GALLEGO, Texas
KRISTI L. NOEM, South Dakota         MARC A. VEASEY, Texas
PAUL COOK, California
JIM BRIDENSTINE, Oklahoma
BRAD R. WENSTRUP, Ohio
JACKIE WALORSKI, Indiana

                  Robert L. Simmons II, Staff Director
                Jack Schuler, Professional Staff Member
                        Spencer Johnson, Counsel
                           Aaron Falk, Clerk


                            C O N T E N T S

                              ----------                              

                     CHRONOLOGICAL LIST OF HEARINGS
                                  2013

                                                                   Page

Hearing:

Wednesday, February 13, 2013, The Impacts of a Continuing 
  Resolution and Sequestration on Defense........................     1

Appendix:

Wednesday, February 13, 2013.....................................    67
                              ----------                              

                      WEDNESDAY, FEBRUARY 13, 2013
  THE IMPACTS OF A CONTINUING RESOLUTION AND SEQUESTRATION ON DEFENSE
              STATEMENTS PRESENTED BY MEMBERS OF CONGRESS

McKeon, Hon. Howard P. ``Buck,'' a Representative from 
  California, Chairman, Committee on Armed Services..............     1
Smith, Hon. Adam, a Representative from Washington, Ranking 
  Member, Committee on Armed Services............................     3

                               WITNESSES

Amos, Gen James F., USMC, Commandant of the Marine Corps, U.S. 
  Marine Corps...................................................    13
Carter, Hon. Ashton B., Deputy Secretary of Defense..............     5
Dempsey, GEN Martin E., USA, Chairman, Joint Chiefs of Staff.....     8
Grass, GEN Frank J., USARNG, Chief, National Guard Bureau........    15
Greenert, ADM Jonathan W., USN, Chief of Naval Operations, U.S. 
  Navy...........................................................    11
Odierno, GEN Raymond T., USA, Chief of Staff, U.S. Army..........     9
Welsh, Gen Mark A., III, USAF, Chief of Staff, U.S. Air Force....    12

                                APPENDIX

Prepared Statements:

    Amos, Gen James F............................................   126
    Carter, Hon. Ashton B........................................    74
    Dempsey, GEN Martin E........................................    89
    Grass, GEN Frank J...........................................   134
    Greenert, ADM Jonathan W.....................................   104
    McKeon, Hon. Howard P. ``Buck''..............................    71
    Odierno, GEN Raymond T.......................................    94
    Smith, Hon. Adam.............................................    73
    Welsh, Gen Mark A., III......................................   115

Documents Submitted for the Record:

    [There were no Documents submitted.]

Witness Responses to Questions Asked During the Hearing:

    Mr. Bishop...................................................   145
    Ms. Duckworth................................................   146
    Ms. Hanabusa.................................................   145
    Mr. Turner...................................................   145

Questions Submitted by Members Post Hearing:

    Mr. Barber...................................................   168
    Ms. Bordallo.................................................   160
    Mr. Castro...................................................   169
    Ms. Duckworth................................................   169
    Mr. Langevin.................................................   156
    Mr. Loebsack.................................................   166
    Mr. McKeon...................................................   149
    Mr. Shuster..................................................   166
    Mrs. Walorski................................................   170
    Dr. Wenstrup.................................................   170
  THE IMPACTS OF A CONTINUING RESOLUTION AND SEQUESTRATION ON DEFENSE

                              ----------                              

                          House of Representatives,
                               Committee on Armed Services,
                       Washington, DC, Wednesday, October 21, 2013.
    The committee met, pursuant to call, at 10:03 a.m., in room 
2118, Rayburn House Office Building, Hon. Howard P. ``Buck'' 
McKeon (chairman of the committee) presiding.

    OPENING STATEMENT OF HON. HOWARD P. ``BUCK'' MCKEON, A 
 REPRESENTATIVE FROM CALIFORNIA, CHAIRMAN, COMMITTEE ON ARMED 
                            SERVICES

    The Chairman. The committee will come to order.
    Good morning.
    We meet this morning at the 11th hour. This is, I think, an 
unprecedented hearing in my time. I never remember where we 
have had all of you here at one time in a hearing. And I think 
that shows the importance that the committee places on our 
subject and the importance that you all place on the subject 
and the important roles that you play in defending our great 
Nation.
    This committee has undergone 16 months of exhaustive 
examination of the pending damage from sequestration, and now 
it appears that this self-inflicted wound is poised to cripple 
our military forces in just a few days. As the military members 
of our panel noted in a letter I received on January 14th--and 
I quote your letter--``We are on the brink of creating a hollow 
force.''
    None of us came to this committee, or come to this 
committee, with clean hands. The debt crisis we face was 
decades in the making and a result of choosing the easy path 
when we should have explored the bravery of restraint. The 
President is not blameless. His negotiators put sequestration 
on the table during the long fight over the debt ceiling. We 
are not blameless either. Many of us voted for this terrible 
mechanism in the naive hope that the President and the Congress 
could put our politics aside and fix our debt crisis. That was 
a bad bet.
    Today we need to hear the ground truth from our witnesses. 
They have dedicated their lives to providing their best and 
unbiased military advice. We are certainly in need of such 
advice today. Unburdened from Administration orders to defer 
planning and assessments, you can now make it clear to this 
body, the White House, the public, what damage months of 
inaction on sequestration and the continuing resolution have 
done to our Armed Forces.
    General Odierno, you testified yesterday that you began 
your military service in a hollow force and that you were 
determined not to conclude your career the same way. I hope 
that you and the panel can expand on that notion today, 
determining at what level of cuts do Congress and the President 
turn that fear of a hollow force into reality.
    General Dempsey, in April of last year, you testified about 
the $487 billion cut from defense. I don't think a lot of 
people understand how much has been cut from the military in 
just a very short period of time. You told Congress that to cut 
further would require an adjustment of strategy. Going through 
the $487 billion cuts, you all had a year or so to plan and to 
come up with a new strategy, a strategy that changed our 
strategy that we have had of protecting the world since World 
War II. But I think all of you have stated at least publicly or 
to me that we cannot even carry out that strategy with the new 
sequestration cuts.
    You concluded, General Dempsey, that this new strategy 
would--and I quote--``not meet the needs of the Nation in 2020 
because the world is not getting any more stable.'' We see that 
every day. Anybody that turns on the TV or reads the newspaper 
can understand how unsettling this world is. I am interested to 
know if you continue to stand by that statement.
    Today we anticipate detailed answers to our questions. In 
addition to hearing about levels of risk as sequestration's 
blind cuts absolve folks from planning, we want to hear if we 
have crossed a red line and cut too much. If that red line is 
in the near distance, I expect you to point it out.
    Again, I don't think many people understand, other than the 
fact that we have a debt crisis, a problem, that, so far, the 
solution has been to take 50 percent of our debt savings out of 
defense when it only accounts for 17 percent of our overall 
spending.
    Gentlemen, you have no stronger advocate, no stronger ally 
in this fight than this committee here, the Armed Services 
Committee. And we urge you to work with us in these final days.
    In the coming weeks and months, leaders in both parties and 
the White House will, I hope, come together to begin discussion 
of the drivers of our debt and the path to fiscal health. There 
will be no easy choices on that table. I fear that many may 
choose to soften the blow of these choices by turning once 
again to the Department of Defense. Indeed, the formula to 
achieve what the President characterized as a balanced approach 
includes tens of billions in additional cuts for this fiscal 
year. I cannot support any plan, regardless of how it addresses 
entitlement spending or revenue, unless it also offers 
meaningful and real relief for the DOD [Department of Defense] 
from sequester.
    With that, I look forward to your testimony here today.
    Dr. Carter has had commitments scheduled long before this 
hearing was established. He is going to have to leave at 12:45. 
I think the rest of you are committed to 1 o'clock. I would 
encourage Members to really pay attention and really get your 
questions answered in this hearing.
    And I turn now to our ranking member, Mr. Smith.
    [The prepared statement of Mr. McKeon can be found in the 
Appendix on page 71.]

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

    Mr. Smith. Thank you, Mr. Chairman.
    And I want to start by thanking you not just for this 
hearing but for, going back a year, really focusing attention 
on this challenge. We have had a number of hearings on 
sequestration, on the impact of it, on the challenges that the 
Department of Defense has faced. And I think you did what you 
could, basically, to make sure that people were aware of what 
was coming. And now that we are days away from it, I think it 
is beginning to sink in. But I certainly believe you have done 
a good job of shining a bright light on the problem and the 
challenge.
    I also want to thank the gentlemen in front of us for being 
here today but, more importantly, for their service and for 
what they have had to go through, really, for 2 years now in 
not knowing how much money you were going to have or what you 
could spend it on, having to be incredibly creative, figuring 
out how to keep programs running.
    And certainly sequestration is part of the problem, but the 
fact that we haven't passed appropriations bills in a couple of 
years is almost as big a problem. Having to operate under 
continuing resolution is also very, very difficult for the 
Department of Defense. Again, you don't know what programs you 
can fully fund and what programs you can't from one year to the 
next. It has really put an enormous amount of pressure on our 
Government, on our Department of Defense.
    I should point out, this is not just the Department of 
Defense. This is the entire discretionary budget. Every element 
of the Government that is dependent upon discretionary 
spending--transportation, homeland security, and a variety of 
different other programs--have gone through this same exercise. 
And it has had a crippling effect on the ability of our 
Government to function and has also had a very, very negative 
effect on our overall economy. And I believe strongly that we 
need to begin to get back to regular order and fund the 
discretionary budget, pass appropriations bills, and set a 
clear number.
    Now, the idea behind the Budget Control Act and 
sequestration started with concern over the debt and deficit. 
And I will tell you that I share that concern. There are some 
that argue that the debt and deficit aren't really a problem 
and get very creative with the numbers to make that argument. I 
think they are just flat wrong. It clearly is a problem. We 
can't continue to run a trillion-dollar deficit every year and 
not have it impact every aspect of our society. We have to get 
it under control.
    But the problem is, if you are going to get the deficit 
under control, there are sort of three pieces to it. Yes, the 
discretionary portion of the budget is one piece. It is 38 
percent of the budget. But mandatory spending is 58 percent of 
the budget. It is a much larger piece. And then, of course, the 
other big piece is revenue and taxes, raising more money. We 
have systematically over the course of the last 15 years both 
dramatically increased spending and dramatically cut taxes. It 
is not surprising that we are where we are.
    Now, the problem is and the reason sequestration was set 
up, it was set up as a forcing mechanism, to basically torture 
the discretionary portion of the budget, under the belief that 
we would--we in Congress and the President would not want that 
torture to continue and would do something about taxes and 
mandatory spending. But we have not.
    I personally think at this point we need to stop torturing 
the discretionary portion of the budget. I absolutely agree 
that we need to raise taxes and cut mandatory spending, but 
holding hostage the discretionary budget to doing that makes no 
sense whatsoever. It doesn't force it; it doesn't make it any 
more likely. And it does devastate the discretionary portion of 
our budget, make it very difficult for the Government to 
function. And it slams the economy, as we saw in the negative 
GDP [gross domestic product] growth of the fourth quarter that 
was driven by sequestration, by the cuts that were put in the 
discretionary budget.
    So I would propose that the discretionary budget has given 
what it can. It has done what it already can. It has had the 
cuts that the chairman described that were part of the Budget 
Control Act. We should just end sequestration, get back to the 
table talking about mandatory spending and taxes, and get us 
back on a path to some sort of both fiscal sanity and governing 
sanity.
    The Department of Defense and every other department needs 
appropriations bills. They don't need a CR [Continuing 
Resolution], they don't need the threat of not raising the debt 
ceiling, and they don't need sequestration.
    So we will keep working on it. It is an intractable 
political problem, but it has a very real-world impact on a 
number of areas, and certainly the Department of Defense and 
our ability to provide national security is one of the most 
profound. And I think it will help to have this hearing today 
to hear more about the impact of that and, very specifically, 
how you are going to deal with it. Because as bad as the 
problem is, it is what it is. You all and we have to deal with 
it as intelligently as possible. So hearing more details on how 
that process is playing out will be helpful.
    And, again, I thank the chairman for the hearing. I look 
forward to the testimony and the questions of the Members.
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. Smith can be found in the 
Appendix on page 73.]
    The Chairman. Thank you very much.
    I now recognize our prestigious panel of civilian and 
military leaders for their opening statements.
    Secretary Carter, we will begin with you.
    In the interest of time and the number of witnesses that we 
have today and the number of questions that we have from the 
panel, I would remind you that your complete statements will be 
submitted for the record.
    And we will proceed with Secretary Carter.

STATEMENT OF HON. ASHTON B. CARTER, DEPUTY SECRETARY OF DEFENSE

    Secretary Carter. Thank you, Mr. Chairman, Ranking Member 
Smith. I will be brief because I know you want to get to the 
specific impacts of this.
    First, let me just begin by thanking you, the two of you 
but each and every one of you, for giving us this opportunity 
to explain the consequences of sequester and CR.
    You know, Mr. Chairman, I would certainly use the red line. 
That makes perfect sense to me. And Mr. Smith is right, it is 
not just sequester, it is the CR also, which in a different way 
is affecting us very adversely. And it is the fact of but also, 
as Mr. Smith pointed out, the uncertainty engendered by all 
this that we have been living with for quite some time. There 
is a real cost to having that uncertainty.
    So thank you for giving us the opportunity to be here. You 
know, you all know us, and you care about national defense. 
That is shown by your membership on this committee. And we are 
hoping, I am certainly hoping, that by giving you the picture 
of the impacts of CR and sequestration on national defense, you 
can, in turn, turn to your colleagues and, by getting them to 
see this and understand it more, work our way towards what we 
all need, which is a comprehensive solution to this.
    Secretary Panetta and I have been using the word 
``devastating'' for 16 months, Mr. Chairman. And you and others 
on this committee have been speaking about it for 16 months. 
Last August, you gave me the opportunity to testify before you, 
and I said much of what we will be saying today. That was then, 
and now the wolf is at the door.
    The first problem, sequestration, which causes us--will 
cause us to have to subtract, starting in 2 weeks, $46 billion 
from the amount of money that we had planned to spend between 
now and the end of the year.
    The continuing resolution is a different problem. There is 
enough money in the continuing resolution. It is in the wrong 
accounts. In particular, there isn't enough in the operations 
and maintenance accounts. And as my colleagues will explain, 
although we will protect funding for Afghanistan, we will 
protect urgent operational needs, we will protect the wounded 
warrior programs, the President has exempted military personnel 
expenses from sequestration--with all of that, still and all, 
by the end of the year, there will be a readiness crisis this 
year, in just a few months' time.
    And that is the near term. In the far term, if the cuts 
continue over the next 10 years, as suggested in the Budget 
Control Act, if there isn't a comprehensive solution to the 
budget picture in the long run, we aren't going to be able to 
carry out the national security strategy that we so carefully 
devised with the President just 1 year ago.
    So in the near term, a readiness crisis; in the far term, 
an inability to execute our strategy. That is very serious.
    And I just want to say that, you know, I understand, I have 
long understood, that we need to address the Nation's fiscal 
situation. And that is why we have already cut $487 billion 
from our budget plans over the next 10 years. And that was on 
top of the several hundred billion dollars that Secretary Gates 
removed from the defense budget, importantly by eliminating 
some unneeded and underperforming programs. And on top of all 
that, we are making an historic adjustment to the end of the 
wars in Iraq and Afghanistan. So we are doing a lot, we have 
done a lot.
    I also understand that the taxpayer deserves a careful use 
of the defense dollar. And that is--and every dollar we are 
given. And that is why we strive so hard to get better buying 
power for every dollar that we get, why we try to do 
acquisition reform and so forth. But both a strategic approach 
to reducing our budget and good use of the taxpayer money, both 
of those are endangered by this chaos and the abruptness and 
size of these cuts.
    What is particularly tragic to me is that sequestration is 
not the result of an economic recession or emergency. It is not 
because discretionary spending cuts are the answer to our 
fiscal challenge. Do the math. It is not in reaction to a more 
peaceful world. It is not due to a breakthrough in military 
technology or to a new strategic insight. It is not because 
paths of entitlement growth and spending have been explored and 
exhausted. It is not because sequestration was ever a plan 
intended to be implemented. All this is purely the collateral 
damage of political gridlock.
    And for our troops, for the force, the consequences are 
very real and very personal. As the CNO [Chief of Naval 
Operations] can describe in greater detail, we just had to 
cancel the deployment of an aircraft carrier. The reason for 
that was to make sure that we would be able to field an 
aircraft carrier a year from now. But we did that at the very 
last minute, and so families that were all ready for that 
deployment suddenly had to change their plans--the plans they 
had for child care, the plans they had for where they were 
going to live, what their families were going to do after they 
said goodbye to a loved one so abruptly.
    I go around to our bases around the country, and I see 
troops, let's say Army troops, that have come back from 
Afghanistan. They want to maintain the same level of training 
and proficiency that they have become used to. And yet we are 
not going to have the funding to keep their training at that 
level. But the mission is what motivated--motivates them. That 
is what their profession is about; that is what we want to have 
motivate them. And as you will see, we will not have the 
funding to continue that level of training.
    So it has a big effect on the uniformed force. For our 
civilians, also a big effect. You know, our civilians are much 
maligned. A lot of people think that DOD civilians are people 
who wake up somewhere here in the suburbs, get on 395, and come 
in here and work in an office building in Washington. Not true. 
Most of our civilians repair airplanes, they repair ships. 
Eighty-six percent of them don't even live in the Washington 
area. And 44 percent of them are veterans.
    Yet, still and all, starting very soon, we will, as a 
result of sequester, have to furlough the great majority--or at 
least the great majority of our civilians will be subject to 
furlough for the maximum statutory length of time, namely 22 
days, between the beginning of April and the end of the year.
    So there is a real human impact here. I have said I am not 
a--under the law, I am a Presidentially appointed civilian and 
I can't be furloughed, but I am going to give back a fifth of 
my salary at the end of the year because we are asking all 
those people who are furloughed to give back a fifth of their 
salary.
    Finally, this has a big effect on the--in addition to the 
uniformed civilian employees of the Department, on the industry 
upon which we depend. The quality of the weapons produced by 
our defense industry is second only to the quality of our 
people in uniform in making our military the greatest in the 
world. As such, a technologically vibrant and financially 
successful defense industry is in the national interest. The 
act of sequestration and longer-term budget cuts and even the 
prolongation of uncertainty will limit capital market 
confidence in our industry, and companies may be less willing 
to make internal investments in their defense portfolio.
    And the impact will be even greater on our subcontractors. 
Remember that between 60 and 70 cents of every dollar we 
contract is subcontracted to the tier below the prime 
contractors. Many of these smaller companies don't have the 
capital structure that will allow them to withstand this 
uncertainty and turmoil. And yet many of them are small 
businesses; they are a source of innovation and new people for 
our industry. So it is very serious.
    And, finally, sequester will cause a spike in program 
inefficiency because we stretch out programs and we drive up 
costs--all the things you don't like. So for the force, 
military and civilian, for the industry, consequences are very 
direct.
    I would just like to close with an appeal to you to appeal 
to your colleagues. We need to deal with this situation 
broadly, quickly, and comprehensively, and in a balanced way 
that you can support, that the President can support. We need 
to detrigger sequestration. We need to pass appropriations 
bills for all the Federal agencies, for that matter.
    The cloud of uncertainty hanging over our Nation's defense 
affairs is already having a lasting effect. Ultimately, the 
cloud of sequestration needs to be dispelled and not just moved 
to the horizon. The magnificent men and women of the Department 
of Defense and their families deserve no less. They need to 
know with certainty that we will meet our commitments. Our 
partners in the defense industry and their employees need to 
know that we are going to have the same resources to procure 
the world-class capabilities they provide and that we can do so 
efficiently.
    And perhaps most important, the world is watching. Our 
friends and allies are watching, potential foes all over the 
world. And they need to know that we have the political will to 
implement the defense strategy we need.
    Thank you.
    [The prepared statement of Secretary Carter can be found in 
the Appendix on page 74.]
    The Chairman. Thank you, Mr. Secretary.
    We in this room all know who we are going to hear from now, 
but let me--there are, I am sure, going to be people watching 
this who are not in this room. Let me just let them know that 
next we will hear from General Dempsey, who is Chairman of the 
Joint Chiefs of Staff, who is the top military adviser to the 
Commander in Chief, the President of the United States. Then we 
will hear from General Odierno, Admiral Greenert, General 
Welsh, General Amos, General Grass. Each are the top military 
leader of their respective branches.
    So what they are saying--they have put years into 
dedication to this Nation, protecting this Nation, fighting for 
this Nation, and peace around the world. Listen carefully to 
what they have to say.
    General Dempsey.

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

    General Dempsey. Thank you, Chairman, Ranking Member Smith, 
distinguished members of the committee. I would like to echo 
Dr. Carter's expression of appreciation for you to have this 
hearing.
    To your point, Chairman, do I stand by my statement of last 
year? No. I am now jumping up and down; this is not about 
standing next to anything. We are on the verge of a readiness 
crisis due to an unprecedented convergence of factors.
    And, by the way, if there is anybody in this room or 
anybody in this building that thinks we can fix this by 
ourselves, they are incorrect. We are facing the prolonged 
specter of sequestration while under a continuing resolution 
while we are just beginning to absorb $487 billion worth of 
cuts from 2011 and while we are still fighting and resourcing a 
war. That is unprecedented.
    Secondly, these are not the only factors that make this 
drawdown more difficult and decidedly different from any other 
point in our history. There is no foreseeable peace dividend. 
The security environment is more dangerous and more uncertain. 
Much of our equipment is older or aging fast. End-strength caps 
limit our ability to shape the force, and healthcare costs are 
reaching unsustainable levels.
    In this context, sequestration will upend our defense 
strategy. It will put the Nation at greater risk of coercion, 
and it will require us to break commitments to our men and 
women in uniform and their families, to our defense industrial 
base, and to our partners and allies.
    We have and we will continue to be part of the Nation's 
economic recovery. We are committed to remaining responsible 
stewards of the taxpayers' dollars as we work to build an 
affordable and unrivaled force in 2020. But to do this, we need 
budget certainty. That is, we need the antithesis of 
sequestration. We need a steady, predictable funding stream. 
And we also need the time to implement reductions in a 
responsible manner over a manageable timeline. Finally, we need 
the flexibility to transfer and reprogram money to our highest 
priorities. Readiness loses when major portions of the budget 
are deemed untouchable. Everything needs to be on the table.
    We should resist kicking this further down the road. 
Failing to act is a choice of itself, one that will eventually 
require a progressive contraction of security commitments 
around the world and a less proactive approach to protecting 
our interests.
    When I testified before this committee last year, I said 
that if we fail to step off properly on the budget, we will 
reduce our options and therefore increase our risk. Our 
military power will be less credible because it will be less 
sustainable. Now we are only a few days away from making that 
risk a reality.
    Thank you.
    [The prepared statement of General Dempsey can be found in 
the Appendix on page 89.]
    The Chairman. Thank you, General.
    General Odierno.

STATEMENT OF GEN RAYMOND T. ODIERNO, USA, CHIEF OF STAFF, U.S. 
                              ARMY

    General Odierno. Thank you, Chairman McKeon. Thank you, 
Ranking Member Smith and other distinguished Members.
    Nearly 18 months ago, I was charged with the responsibility 
of leading the Army and providing you my best military advice. 
Over the course of my 36-year career, I have commanded every 
level, including most recently division command, corps command, 
and theater command in combat. I know what it takes to prepare 
this Nation's sons and daughters for war. I know what it takes 
to grow leaders in our Army. I know what is required to send 
soldiers into combat, and I have seen firsthand the 
consequences when they are sent unprepared.
    All of us have experienced the Army post-Vietnam. It was 
one that was underresourced, one that was undertrained, one 
that lacked appropriate equipment, was not ready, and lacked 
discipline. We cannot allow careless budget cuts to bring us 
there again.
    And as you said, Mr. Chairman, as I said yesterday, I want 
to repeat it again: I began my career in a hollow Army; I am 
determined not to end my career in a hollow Army. We owe that 
to the young men and women who are willing to raise their right 
hand and defend this country.
    Every day, I am reminded of the uncertainty and danger of 
our global environment. It is the most unpredictable and 
dynamic security landscape I have faced and experienced in my 
career. I remind everyone that today the Army has 58,000 
soldiers in Afghanistan, 23,000 soldiers deployed at other 
places around the world. They will be impacted by these cuts. 
They will be impacted by these cuts.
    The other thing I know is we simply don't know when we will 
be asked to deploy soldiers to fight again, but history is 
clear: We will be asked to deploy our men and women again when 
the security of this Nation is at risk. We owe it to them and 
to the American people that they be ready when we ask them to 
do that. That is our charge, together.
    The fiscal outlook which U.S. Army faces in this fiscal 
year is dire and, to my knowledge, unprecedented. In addition 
to the $170 billion in cuts to the Army levied by the Budget 
Control Act of 2011, the combination of the continuing 
resolution, a shortfall in overseas contingency operations 
funds for Afghanistan, and a sequester in fiscal year 2013 has 
resulted in somewhere between a $17 billion and $18 billion 
shortfall to the Army's operation and maintenance accounts, as 
well as an additional $6 billion cut to other programs. All of 
this will come in the last 7 months of this year.
    So, therefore, it has grave consequences and immediate 
readiness impacts on our forces, especially those not serving 
in Afghanistan or forward in Korea. Because we will ensure they 
have all the money that they need, but what that means is we 
will curtail the funding for the next forces in, for the next 
forces after that in.
    We will curtail training for 80 percent of our ground 
forces. This will impact our units' basic warfighting skills, 
induce shortfalls across critical specialties, including 
aviation, intelligence, engineering, and even our ability to 
recruit new soldiers into the Army.
    We have directed an immediate Army-wide hiring freeze, and 
we will terminate an estimated 3,100 temporary and term 
employees. We will cut 37,000 flying hours from our aviation 
training, which will create a shortfall of over 500 pilots by 
the end of fiscal year 2013. We will create a backlog at flight 
school that will take over 2 years to reduce.
    We will reduce our base sustainment funds by 70 percent. 
This means even minimum maintenance cannot be sustained, which 
will place the Army on a slippery slope where our buildings 
will fail faster than we can fix them. There will be over 
500,000 work orders that we will not be able to execute.
    We will furlough up to 251,000 civilians for up to 22 days. 
We will cancel third- and fourth-quarter depot maintenance, 
which will result in a termination of an estimated 5,000 
employees and a significant delay in equipment readiness for 6 
divisions and an estimated $3.36 billion impact to the 
communities surrounding our depots.
    For fiscal year 2014 and beyond, sequestration will result 
in the loss of at least an additional 100,000 personnel: 
soldiers from the Active Army, the Army National Guard, and the 
U.S. Army Reserve. Combined with previous cuts that have 
already been approved, this will result in a total reduction of 
at least 189,000 personnel from the force, but it will probably 
be higher than that.
    These reductions will impact every Army base and 
installation that we have. Sequestration will result in delays 
to every one of our 10 major modernization programs. It will 
create an inability to reset our equipment after 12 years of 
war and unacceptable reductions in unit and individual 
training. These cuts will be felt across the entire country.
    Since 2008, the total Army budget will have been reduced 
over 40 percent. If sequestration is enacted, it will be 
greater than 50 percent. That is a number greater than any war 
that we have been involved since World War II.
    In my opinion, sequestration is not in the best interest of 
our national security. It will place an unreasonable burden on 
the shoulders of our soldiers and civilians. We will not be 
able to execute the Department of Defense strategic guidance as 
we developed last year.
    I understand the seriousness of our country's fiscal 
situation. We have and will continue to do our part. But the 
significance of these budget reductions will directly impact 
our ability to sustain readiness today and into the future. We 
simply cannot take the readiness of our force for granted. If 
we do not have the resources to train and equip the force, our 
soldiers, our young men and women, are the ones who will pay 
the price, potentially with their lives.
    It is our responsibility, the Department of Defense and 
Congress, to ensure that we never send soldiers into harm's way 
that are not trained, equipped, well led, and ready for any 
contingency, to include war. We must come up with a better 
solution.
    Thank you so much for allowing me to testify here today. I 
look forward to answering your questions.
    [The prepared statement of General Odierno can be found in 
the Appendix on page 94.]
    The Chairman. Thank you, General.
    Admiral.

  STATEMENT OF ADM JONATHAN W. GREENERT, USN, CHIEF OF NAVAL 
                     OPERATIONS, U.S. NAVY

    Admiral Greenert. Good morning, Chair McKeon, Ranking 
Member Smith, members of the--distinguished members of the 
committee, and thank you for the opportunity to testify today.
    And when I last appeared before you, I declared that there 
are two important qualities of our naval forces, and they are: 
One, that we will operate forward where it matters at the 
maritime crossroads of the world, and that they will be ready 
when it matters. This remains our mandate. Your Navy and Marine 
Corps are uniquely qualified to respond immediately to crises, 
to assure allies, to build partnerships, to deter aggression, 
and to contain conflict.
    But these qualities and their value are at great risk by 
the fiscal uncertainty that we now face. Although our primary 
concern with sequestration and the lack of an appropriations 
bill is the impact they have on the readiness during this 
fiscal year, make no mistake: It is going to have an 
irreversible and debilitating impact on Navy's readiness 
through the rest of the decade. We will not be able to respond 
in the way the Nation has expected and depended. And we should 
make that kind of decision consciously and deliberately.
    Three symbolic but not really all-inclusive examples of the 
impact of the delays are the delays of the deployment of the 
Harry Truman [aircraft carrier USS Harry S. Truman], the delay 
in the overhaul of the Abraham Lincoln [aircraft carrier USS 
Abraham Lincoln], and the delay in the initial construction of 
the John F. Kennedy [aircraft carrier USS John F. Kennedy].
    These were not inconsequential decisions or the only 
decisions that we will have to make and that we are going to 
make over the coming weeks. They did not come without 
significant consequences to our people, to the defense 
industry, or to local economies. The impacts of funding that we 
realign today will cascade into the future years.
    The $8.6 billion shortfall confronting us in operations and 
maintenance has compelled us to cancel ship and aircraft 
maintenance, reduce operations, curtail training for forces 
soon to deploy, and plan for the furlough of thousands of 
civilians. These actions enable current missions of forces 
forward-deployed but, subject to congressional action, will 
have inadequate surge capacity at the appropriate readiness to 
be there when it matters, where it matters.
    We ask that the Congress act quickly to replace 
sequestration with a coherent approach to deficit reduction 
that addresses our national security interests. We need an 
appropriations bill for this fiscal year that will allow the 
Department to allocate resources in a deliberate manner.
    Without these actions, the condition and expected service 
life of our ships and aircraft will further degrade, our 
sailors will not be proficient and they won't be confident to 
do the job, and we will be forced to cancel or slow procurement 
of relevant platforms and systems needed to preserve our 
warfighting superiority, platforms such as the Joint Strike 
Fighter [F-35 Lightning II], the P-8 [Poseidon] Maritime Patrol 
Aircraft, the Littoral Combat Ship. All those and even more 
will be in jeopardy.
    Mr. Chairman, I know you are dedicated to the men and women 
of our military and to their families. But our folks are 
stressed by the uncertainty about their jobs, their operational 
schedules, and, more importantly, their future. I appreciate 
the opportunity to testify on their behalf, and I thank you in 
advance for your efforts in this and that of this body in 
trying to avert the very real readiness crisis that we face 
today.
    Thank you.
    [The prepared statement of Admiral Greenert can be found in 
the Appendix on page 104.]
    The Chairman. Thank you, Admiral.
    General Welsh.

STATEMENT OF GEN MARK A. WELSH III, USAF, CHIEF OF STAFF, U.S. 
                           AIR FORCE

    General Welsh. Thank you, Mr. Chairman, Ranking Member 
Smith, and members of the committee. It is always an honor to 
appear before you, and appearing with this group is especially 
a pleasure and a privilege for me.
    In line with what you have already heard, sequestration 
threatens to carve crucial capability from our Air Force, as 
well, with alarming and immediate effects on people, readiness, 
infrastructure, and eventually on modernization.
    Sequestration represents a potential $12.4 billion top-line 
budget reduction for fiscal year 2013 for the Air Force. It 
affects every account and every program. If it occurs, it will 
significantly undermine your Air Force's readiness and 
responsiveness today, it will significantly impact the Air 
Force civilian workforce in the coming months, and its impact 
on modernization would clearly affect the Air Force in the 
future.
    You have heard a lot of examples, and the Air Force is 
dealing with the same types of things. I will highlight just 
three.
    The 22-day furlough that the Deputy Secretary of Defense 
described will affect up to 180,000 civilian airmen, depriving 
our Air Force of over 31.5 million hours of productivity and 
specialized expertise just through the remainder of this fiscal 
year. It will result in a loss of over 200,000 flying hours. 
And what that means to us is that while we will protect flying 
operations in Afghanistan and other contingency areas, nuclear 
deterrence, and initial flight training, roughly two-thirds of 
our Active Duty combat Air Force units will curtail home 
station training beginning in March and will drop below 
acceptable readiness levels by mid-May, and most, if not all, 
will be completely non-mission-capable by July.
    It will cut 30 percent of our remaining weapons systems 
sustainment funds, which means we will need to postpone about 
150 aircraft and 85 engines from depot induction, which creates 
a backlog that will keep giving for years.
    The Air Force's global vigilance, reach, and power are what 
make it one of America's premier asymmetric advantages and a 
critical member of this joint warfighting team. But strategic 
agility and responsiveness require a high state of readiness. 
Sacrificing that readiness jeopardizes the strategic advantages 
of airpower. Sequestration will have an almost immediate effect 
on our ability to respond to multiple concurrent operations 
around the globe, something that we have been asked to do along 
with our sister Services many times in the past.
    Longer term, sequestration cuts to Air Force modernization 
will impact every one of our investment programs. These program 
disruptions will, over time, cost more taxpayer dollars to 
rectify contract breaches, time-delay inefficiencies, they will 
raise unit costs, and they will delay delivery of validated 
capabilities to warfighters in the field.
    The Air Force is long overdue for reconstitution following 
more than 2 decades of war. Our inventory still includes 
aircraft that are as old as I am, which is getting to be a 
scary thought. And our force is as small as we have ever been 
since we became a separate Service. And now we find ourselves 
stuck in the unenviable trade space between readiness and 
modernization, and we need your help to get out.
    Mr. Chairman, Ranking Member Smith, and the committee, 
thank you for what you have been doing to address this problem. 
Anything we can do to help you pass an appropriations bill and 
to eliminate sequestration is our goal.
    Thank you for the chance to be here.
    [The prepared statement of General Welsh can be found in 
the Appendix on page 115.]
    The Chairman. Thank you, General.
    General Amos.

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

    General Amos. Chairman McKeon, Ranking Member Smith, 
members of the committee, forgive me for reading my remarks 
here, but it is a strategic message and there is much inside of 
it, and I didn't want to miss a single point of it. So if you 
would forgive me for doing that.
    I am struck as I sit here looking at my colleagues, all six 
of us, there are almost 240 years of military experience and 
service to our Nation. We have seen a lot. Every one of us are 
combat veterans. So what we have to say is from our hearts. It 
is honest, Chairman. You will get the truth from all of us 
today.
    Speaking today principally as a member of the Joint Chiefs 
of Staff, this body in front of you today, sequestration, by 
its magnitude, its timing, and its methodology, will have a 
devastating impact on our Nation's readiness, both short-term 
and in the long term.
    Combined with the effects of the existing continuing 
resolution, sequestration creates unacceptable risk in four 
main areas: First, risk to our national strategy; then risk to 
our forces; then risk to our people; and, lastly, risk to the 
United States of America.
    Regarding strategy, maintaining a sound international 
economic system and a just international order are the very 
foundation of our Nation's strategic guidance. The effects of 
disruption to this global order could be seen in volatile 
energy prices, fluctuating global markets, sovereign behavior, 
and economic decline.
    Failing to provide leadership in the collective security of 
this global order will have significant economic consequences 
for the American people. Worse, a fiscally driven lapse in 
American leadership and forward engagement will create a void 
in which old threats will be left unaddressed and new security 
challenges will find room to grow.
    There should be no misunderstanding: The combined effects 
of continuing resolution and sequestration will have a 
deleterious effect on the stability of global order, the 
perceptions of our enemies, and the confidence of our allies. 
Sequestration, viewed solely as a budget issue, would be a 
grave mistake, bordering irresponsibility.
    Our collective actions in the next few months would be 
scrutinized--will be scrutinized on a global stage, for even 
the perception of a disruption of our Nation's willingness to 
protect its global interests could and will have strategic 
consequences.
    Regarding risk to our forces, the linkage between resources 
and readiness is immediate and visible. The scale and an abrupt 
implementation of sequestration will have devastating impacts 
on readiness. Sequestration will leave ships in port, aircraft 
grounded for want of necessary maintenance and flying hours, 
modernization programs cancelled, and units only partially 
trained and reset after 12 long years of combat.
    Because of our special role as America's crisis response 
force, Marines place a high premium on readiness. I have done 
everything within my authorities to date to preserve a ready 
Marine Corps. I will continue to do so.
    Under continuing resolution, I have kept deploying units 
ready, but only by stripping away the foundations of the long-
term readiness of the total force. While these short-term 
adaptations are possible, the enduring effects of these 
decisions puts the future health and readiness of my force at 
risk. By the end of this year, more than 50 percent of my 
tactical units will be below minimum acceptable levels for 
readiness for deployment to combat theaters.
    In a very real sense, we are eating our seed corn to feed 
current demands, leaving less to plant for the long-term 
capabilities of the force. This pattern inevitably leads to a 
hollow force, and its impacts are already being felt under the 
continuing resolution.
    The most troubling and immediate risks are those that 
sequestration imposes on our people. Sequestration does not 
hurt things; it hurts our people. The qualitative edge that the 
American service member takes to the battlefield is the 
fundamental advantage that differentiates our forces from our 
enemies. This qualitative combat edge will be severely eroded 
by the impacts of sequestration, leaving America's men and 
women with inadequate training, degraded equipment, and reduced 
survivability.
    While military pay and allowances have been exempted in 
this round of sequester, the quality of life for the All-
Volunteer Force and their families will suffer as we reduce 
family programs and installation maintenance.
    Our civilian marines will likewise be impacted. Ninety-five 
percent of our civilian workforce is employed outside the 
Washington, D.C., national capital area. They are the guards at 
our gates, our financial experts who manage our budgets, our 
acquisition specialists, the therapists who treat our wounded, 
and the teachers who teach our children. The economic impact to 
these families and the local communities are put at risk by 
short-term furlough or long-term termination.
    Protecting our ability to keep faith with our families and 
our wounded warriors is a top priority in my Marine Corps. But 
even this, the most sacred of responsibilities, will be 
increasingly put at risk under sequestration.
    In closing, allow me to articulate one more set of risks: 
the risk to our Nation. In the final analysis, sequestration 
potentially asks the most from those who have borne the 
greatest sacrifice. The effects of sequestration over the next 
10 years will threaten the foundations of our All-Volunteer 
Force, putting the Nation's security on a vector that is 
potentially ruinous. It will dramatically shape perceptions of 
our Government as both an employer and as a customer, thereby 
reducing confidence throughout our Nation's institutions.
    These are strategic matters that demand our immediate 
attention and action. I urge the committee to consider the full 
range of risks created by this legislation and ask for your 
assistance in mitigating them to the extent possible.
    Thank you, Chairman, Ranking Member Smith. I look forward 
to your questions at the right time.
    [The prepared statement of General Amos can be found in the 
Appendix on page 126.]
    The Chairman. Thank you, General.
    General Grass.

STATEMENT OF GEN FRANK J. GRASS, USARNG, CHIEF, NATIONAL GUARD 
                             BUREAU

    General Grass. Chairman McKeon, Ranking Member Smith, 
members of the committee, thank you for the opportunity to be 
here today.
    Over the past 11 years, sustained investment and engagement 
in overseas and domestic operations has transformed the 
National Guard from a strategic reserve into an operational 
force that provides dual-mission capability to our Nation and 
our communities. The readiness of this operational force is 
clearly at risk, and the total force is on the verge of a 
readiness crisis.
    The National Guard rapidly expands the capacity of the Army 
and the Air Force. The National Guard does the same for 
civilian authorities by providing organized, disciplined, 
properly equipped military units on short notice. The Guard can 
do this because of the institutional procurement, training, 
education, and depot-level maintenance programs the Army and 
Air Force provide.
    The reduction in these critical areas would have an 
immediate impact on National Guard readiness. In a matter of 
months, our readiness as an operational force for the Nation's 
defense and as an immediate homeland response capability will 
be eroded. With the inability to transfer funds between 
programs, sequestration and the possibility of a year-long 
continuing resolution will further degrade our overall 
readiness.
    I have provided all 54 Adjutants General with a summary of 
near-term measures to assist them in mitigating risks and 
threats to our readiness. I have asked them to examine 
overhead, curtail conferences, not renewing temporary civilian 
positions, and implementing hiring freezes. And that is just 
the start.
    We are planning to defer sustainment and maintenance 
requirements for aircraft facilities to conserve operations and 
maintenance funds and to use those conserved funds only for 
mission-essential, mission-critical functions. Sustainment, 
restoration, and modernization cuts will degrade our already 
aging armory infrastructure. The continuing resolution 
prohibits any new starts in military construction, further 
threatening our armory and facility modernization master plans.
    The capability of our facilities to support guardsmen 
across the States in more than 3,000 communities directly 
impacts our ability to reach and support areas of our country 
suffering from disasters.
    If we face a full sequestration scenario, the National 
Guard may have to furlough soldiers and airmen serving as 
military technicians, as well as other Government civilians. 
This means more than half of the National Guard's full-time 
members may be furloughed, resulting in maintenance backlogs in 
every State. These actions will reduce National Guard readiness 
and the forces available to the Governors to respond to natural 
and manmade disasters.
    Preparation and training of nearly 13,000 soldiers and 
airmen assigned to the units given the mission to mitigate the 
effects of chemical, biological, and nuclear terrorist attacks 
or industrial accidents in the homeland will suffer as 
exercises and training events are delayed or cancelled by 
reductions in operations and maintenance funds.
    In summary, the potential impact described today will have 
a measurable and dramatic negative effect on critical National 
Guard capabilities, both for at home and abroad.
    I thank you for the opportunity to appear before you today, 
and I look forward to your questions.
    [The prepared statement of General Grass can be found in 
the Appendix on page 134.]
    The Chairman. Thank you, General.
    You know, when I went to the Steering Committee to apply 
for this job as chairman of this committee, I told them I 
thought that the responsibility of the chairman was to ensure 
that every one of our people that we send into harm's way would 
have the training, the leadership, the equipment, the time, 
everything they needed to carry out their missions in 
protecting this Nation and our allies at peace around the world 
and return home safely.
    One of the things that I think disturbs me most about all 
of this discussion that we have been having now for the last, 
actually, couple of years: Doesn't even address the real 
problem that we face. Yes, debt is a problem, but where does it 
come from?
    I have a little chart here that I have been using the last 
week that shows what our spending has been over the last 50 
years, major percentage-wise over all of the Government area.
    The top, the purple, is what we spend each year for 
interest on the money that we borrow. The red is mandatory 
spending, those items that we don't get to vote on each year. 
They have been decided in the past, and they are on autopilot, 
and they are just moving forward. Social Security, Medicare--
many of those items that fit into this category. The green is 
the nondefense discretionary spending that we spend here out of 
Washington: education, roads, transportation, FBI [Federal 
Bureau of Investigation], border security, all of those. And 
the blue at the bottom is defense.
    Now, we can see how defense spending has gone down. We can 
see that discretionary nondefense has kind of remained a 
constant. We can see that mandatory spending has way more than 
doubled in that time period. We know that those numbers on that 
progression, the ones that are going down are continuing to go 
down; the mandatory is continuing to grow.
    That is the real driver of all of this that we are talking 
about. If we eliminated all of defense, if we eliminated all of 
the discretionary spending, we would still be running a deficit 
each year of a half-trillion dollars just for the autopilot 
mandatory programs. So those need to be addressed. We need to 
put people back to work; we need to grow the economy. That 
needs to be addressed.
    But, so far, we have focused heavily on cutting 
discretionary spending, with at least half of that coming out 
of defense, which only accounts for, like, 17 percent of our 
overall spending. The President has talked about a balanced 
approach. This has been very unbalanced.
    None of you in uniform have ever made the decision to go to 
war. That is always done by civilians. Yet, once that decision 
is made, the responsibility to carry it out falls on you. And 
you do a tremendous job.
    One of the things that I am most stressed about is what the 
impact that this is going to be on our readiness. Now, the way 
I interpret that is the soldiers, sailors, flyers, marines, 
Guard, all of them that are going to be deployed over the 
next--you know, we know the troops are going to come home from 
Afghanistan. I wish we could say that will be the last war we 
ever have to fight, but look at our history. Look at what we 
did after World War II. Look what we did after Korea, after 
Vietnam. We have cut, cut, cut so that we won't be prepared for 
the next one.
    If we could have testimony from all of those who are not 
able to testify anymore, who lost their lives because of a lack 
of readiness, a lack of training, a lack of proper leadership, 
which is the direction we are heading in--I think, General 
Odierno, you told me earlier before we came in here that the 
American people have always trusted you and even trusted us, 
even though our Congress, I think we were given about an 11-
percent approval rating. You probably have the highest approval 
rating from the American public of anyone. But they have 
expected us and they have taken for granted the fact that we 
will always be able to be there to respond when we are 
attacked. And we get attacked when we show weakness. And as we 
cut our readiness, that around the world shows weakness, and it 
opens us up and makes us vulnerable. And then that causes more 
lives to be lost.
    I am concerned about the troops that are going to be 
deployed next year to Afghanistan, and are they getting the 
proper total training that they need now. I hear stories that 
they are not already, before sequestration fully kicks in.
    I would like, if you could, in place of those who are not 
able to testify, who have lost their lives--the first ones 
going across Africa when they didn't have that training and 
leadership and equipment, those who were in Korea when we were 
almost pushed into the ocean that lost their lives, that were 
not able to have that training--will you please, General 
Odierno, Admiral, General Welsh, General Amos, General Grass, 
will you tell us some specifics that you already see happening 
or you know will happen as they don't get enough ammo to 
practice firing their weapons enough, as they don't get enough 
flying hours, as we have to bring ships into port, how are we 
going to be hit, so that the American people can really 
understand?
    They think we are cutting waste, fraud, and abuse. That is 
a term we throw out. We are way past that. If they understood 
what we are really talking about, I think there would be a 
rising up of people in this Nation to say, ``Do not try to fix 
this problem on the backs of our military.''
    General Odierno.
    General Odierno. Thank you, Chairman. The impacts are 
significant across every area. Over time, you know, first what 
we do is we degrade the capabilities of our individual 
soldiers. We degrade it because their equipment begins to fail, 
it is not maintained at the right level, their training is 
reduced, so their proficiency, although still good, is not at 
the level we would like it to be, but most importantly it is as 
you grow up in terms of the type of unit you train in. For 
example, we like to be trained at battalion level proficiency, 
so they understand how to coordinate activities at the 
battalion level.
    Because of these training reductions, right now we believe 
we are down to about squad level capability for fiscal year 
2013, for example. So that means you only going to train up to 
a squad, you won't do the coordination, you won't do the live 
fires, you won't do the kind of capability you need to 
synchronize and organize yourselves, so when you get somewhere 
and have to deploy somewhere, your ability to coordinate and 
execute has not trained, and that puts lives at significant 
risk.
    Secondly, flying, let me talk about flying. You know, for 
example in Afghanistan, it is probably one of the most 
difficult places we have ever had to fly rotary wing aviation 
because of the environment, because of the altitude, because of 
the weather conditions, and if we have to reduce the amount of 
training we give our pilots, they will go in there with a hell 
of a lot less capability. And what does that mean? That means 
there will be mistakes made. And what does that mean? That 
means we will have accidents or that means we will be more 
likely to be shot down by enemy fire, and ultimately that 
results not only in the death of our pilots, but those who are 
riding with them, and then of course it will then hinder us in 
conducting the operations the way we see fit in conducting 
operations, so then across a broader range, you now lose your 
capability to conduct the type of operations that are necessary 
in order for us to be successful.
    It is about how well are we able to train our support 
forces, our logistics capability that has to go throughout any 
area of operation and deliver logistics. And as we have to 
prioritize because we don't have enough money, do they get the 
right training so they are prepared to run convoys over long 
distances, that they are coordinated and prepared to protect 
themselves? All of those things now come at risk, and 
ultimately those all result in the loss of life and the loss of 
capability that we have. And that is what we are concerned 
about.
    And over the long term it will degrade. It will be worse a 
year from now than it is today. It will be worse 2 years from 
now than it is a year from now, and it will slowly degrade over 
time and then you start to lose the expertise on how to train 
and what the right standards are, and it continues to build on 
itself as you go forward and it really becomes risky, and then 
you find yourself in a hollow force, one that is not capable of 
doing the missions that we are going to ask them to do.
    Our soldiers, our airmen, our marines, they do the most 
complex missions of any military in the world, and we have to 
train them so they are able to do those complex missions. That 
is why they are so much better than any other military, because 
we ask them to do missions that are much more complex and 
difficult.
    The Chairman. Admiral.
    Admiral Greenert. Chairman, let me take you to early 2014, 
to calendar year 2014. As a result of what we are not going to 
do, training and preparing people here in the near future so 
that we can be out there where it matters, like I said before, 
right now here is the situation in 2014. We have no ships in 
the Southern Command, so the hundreds of tons of drugs that are 
being intercepted, there is nobody there to do that, and we are 
not nurturing future relationships there and keeping stability 
down there.
    You have one carrier strike group, an air wing in the 
Central Command 2014 instead of the two, which is the demand 
signal. So you don't--that central commander does not have the 
option to be able to support strikes as appropriate in 
Afghanistan while being in the Arabian Gulf to maintain 
stability and deterrence there, and again nurture relationships 
and keep the peace, if you will, in and around that area.
    There are no ships, no amphibious ships or cruisers and 
destroyers to support counterterrorism operations, support our 
embassies over there for quick reaction, because we don't have 
an amphibious ready group over there in and around the African 
Command, so that is the support option around Somalia, around 
Yemen, the Red Sea, Sudan, all of that, there is no one there. 
We would have to kind of surge forward to there. So we are not 
there when it matters and we are not ready when it matters in 
that regard.
    In the ballistic missile defense, we would start stepping 
down and we would have no ballistic missile defense deployments 
in 2014. Well, we have commitments to meet, so we would have to 
figure that out. We have commitments to Israel, we have 
commitments in the Central Command to provide ballistic missile 
defense.
    These are the things that we won't be able to support on 
the current situation as you look at 2014.
    The Chairman. Thank you. General.
    General Welsh. Chairman, to be clear on this from an Air 
Force perspective, readiness levels aren't just a problem in 
the future, they have been a problem since about 2003, when 
operations tempo and things began to build up on the force, and 
our readiness levels have been declining ever since. Right now 
almost half, just under 50 percent of our Air Force units, the 
squadrons, which are our fighting level units, are below what I 
would consider an acceptable combat readiness level. The 
operational tempo of deployments, equipment degradation over 
time, failure to modernize have created this problem now, which 
we have been managing with a level of risk that we thought was 
acceptable, but we were getting close to what I think Ray 
Odierno would describe to you as the razor edge that he feels 
the Army is now on.
    We set aside full-spectrum training a few years ago to 
focus on the fight that we are currently engaged in. We kept a 
small piece of our Air Force supremely ready in areas like the 
nuclear mission, et cetera, because we knew we had to do that, 
but the rest of our combat air forces did not maintain that 
readiness level, and so our ability today to go fight a 
determined enemy in a contested environment with degraded 
communications, degraded navigation, degraded weapons systems 
capability is not where it should be, and we are fully aware of 
that.
    Our Secretary this year for the 2013 budget and then 
forward into 2014 declared it a readiness POM [Program 
Objectives Memorandum] to try and get back to that kind of 
training, improve our simulation capabilities. Our range 
airspace is not fully funded to even have this kind of 
training, because we haven't been doing it for the last 2 
years. So we are trying to recover to that.
    The problem as I see it is as we try to get back to that, 
Mr. Chairman, when the next major conflict starts, we will send 
our joint force to fight regardless of how ready they are, and 
they will go and they will fight, and they will die in greater 
numbers than they have to, the conflict will last longer than 
it should, civilian casualties will be more than we would like 
to accept. We owe them better than that.
    The Chairman. Thank you. General Amos.
    General Amos. Chairman, I think General Welsh's last 
comment, the very last point he made about we will go when the 
next conflict happens, that is a true statement. There will be 
nobody at this table that will hold back, but I am reflected 
back to Korea when we came out of World War II and that great 
struggle in Europe and the struggle in the Pacific, and that 
both those campaigns were over, 1946, America turned its back 
on its military across the board, and statements like, we will 
never do another amphibious assault, there is no reason to have 
that kind of talent, those ships. We had over 1,100 amphibious 
ships in World War II. We are down to 30 today.
    It was Inchon, 1952, where the marines landed under General 
MacArthur and came in the backdoor of the North Koreans that 
actually began to relieve the pressure on Seoul. But when that 
force was put together, it was cobbled together across the 
United States of America. We had marines that went even without 
boot camp; never been to boot camp. Medal of Honor recipient, 
2nd Battalion 7th Marines, never went to boot camp. Now, you 
could say, well, maybe that is okay then, but I will tell you 
what, there was a lot of young men that didn't come home from 
the Korean conflict as a result of our negligence coming out of 
World War II.
    For us some mechanical things that you can attribute to, we 
have got nine F/A-18 [Hornet fighter jet] squadrons in the 
United States Marine Corps. That is it, nine. There are more 
than 80 aircraft carriers. There are four deployed to Iwakuni, 
Japan. We have some right now in the Persian Gulf postured to 
do our Nation's bidding there.
    By January of next year, I will have less than half of the 
airplanes available to put in squadrons. What that means is 
those four deployed squadrons will have their full complement 
of 12 airplanes. Those squadrons that are back home preparing 
to go will have less than five of a 12-plane squadron.
    Our training is already being degraded back home because we 
are taking money from training ranges and training 
opportunities to make sure that those units that are next to 
deploy, the ones that are going to go into Afghanistan, we are 
in the middle of changing over right now, in the month of 
February and March what we call the 13 Tach I Force is going 
into Afghanistan. They have already been trained. They are 
fine. They are at what we call a C-1. They are at the highest 
level of training. The forces that will relieve them in the 
August and September timeframe will be the same. But as I said 
in my opening remarks, the seed corn for that was eaten and 
paid for for long-term readiness to get those forces ready to 
go.
    And finally, I would like to throw this out to the 
committee here. Several things have happened in the last 3 
years, and I think it would be instructive to ask ourselves, 
what is it we would not want to do? When we start talking about 
Jon Greenert's ships and his faithfulness in trying to get his 
ships forward deployed and he is working hard on it, and I am a 
partner in that, but here is a couple of things that we did 
since 2010, with your Marine Expeditionary Forces forward 
deployed. 2010, the 15th Marine Expeditionary Unit, deployed 
for 7 months, rescued the crew from the Magellan Star, flew 312 
combat sorties over Afghanistan. The 53-Echoes [CH-53E Super 
Stallions], they are 35-year-old helicopters, flew 400 miles 
deep into Pakistan up in the most dangerous part to rescue over 
9,000 people in the Pakistani floods.
    The 31st Marine Expeditionary Unit in the Western Pacific 
went to the Philippines as a result of a mega-typhoon, 
delivering 170,000 pounds of relief and rescuing 600,000 
victims. I mean, the magnitude of that is staggering. They 
turned and they went to northern Japan to Sendai. Nobody told 
them to go. They just anticipated the mission, and the very 
next morning after that terrible earthquake and tsunami and the 
impending nuclear disaster, the marines of the 3rd Marine 
Expeditionary Force went up there for 45 days and flew into 
radioactive plume, rescuing over 9,000 Japanese and delivering 
more than a hundred--several hundred thousand supplies.
    2011, 26th Marine Expeditionary Unit rescued the displaced 
persons from Tunisia when that country began to unravel.
    Operation Odyssey Dawn started, the air campaign over 
Libya. For the first 2 days, those were marines that were 
flying the deny flight campaign over Libya. They rescued the F-
15 [Eagle fighter jet] pilot late at night in an MV-22 [Osprey 
tiltrotor aircraft].
    Lastly, a series of other things, but in 2012, the 24th 
Marine Expeditionary Unit just this past December on its way 
home, had left after being in the Central Command AOR [area of 
responsibility] for 8\1/2\ months, they were outside the 
Straits of Gibraltar and got turned around and headed east when 
the Palestinian and Israeli conflict broke in the Gaza Strip. 
And the whole world looked at that. We didn't know what was 
going to happen. And yet the 24th knew, found itself off the 
coast of Israel.
    Those are the kinds of things that our Nation is going to 
either have to say we are not going to do in the future, and 
that is a significant strategic decision. And that is why I 
said in my opening comments, this is not a budgetary issue. 
These are strategic consequences that we are dealing with.
    Thank you.
    The Chairman. General.
    General Grass. Mr. Chairman, I think the last time I 
checked there is about less than 1 percent of our population 
serving in uniform today. And we are all, I think if you ask 
any of us, we are all very proud of an All-Volunteer Force, 
well led, well trained, well equipped. And the National Guard 
is a part of that All-Volunteer Force, and we train with the 
Army and the Air Force at their installations, we train at 
their combat training centers, we train combat training center 
operations and command post exercises with every level from 
division down to company.
    That training gives us leaders that can go into situations 
like not too long ago, Hurricane Sandy, as it came ashore, 
12,000 guardsmen from 10 States and a host of other aircraft 
that moved equipment and personnel, both military and civilian, 
into the area, 12,000 across those States. The reason they were 
able to do what they do every day is the individual training 
they received at basic training and advanced individual 
training and then the additional training, collective training 
they received back home, and at some of these combat training 
centers where we train today, these regional locations.
    They were also able to do it because of the leadership they 
had both at the company battalion level, but also at the 
brigade and division level. We have going those leaders over 
time because we have had the opportunity to do that training.
    On the air side, I am very concerned about our pilots, 
especially our rotary wing pilots who do search and rescue 
every day across this country somewhere. And I am very 
concerned about them flying because when they do fly into 
situations like last week with the storm that approached and 
came up the Northeast, very extreme conditions and as you 
continue to degrade the experience level of the flying hours 
and the opportunities to go to some of the most difficult 
places to train, like the high-altitude training center in 
Colorado, if you degrade those opportunities our pilots are 
going to be less qualified. And I think, sir, we do have to 
keep that. We will put everything we can into moving forces 
into these training centers that are going overseas first, but 
I do see a degradation of those back home.
    Thank you.
    The Chairman. Thank you.
    Mr. Smith.
    Mr. Smith. Thank you, Mr. Chairman. I will try to be quick 
here. I know there are a lot of other members who want to get 
in, so I will just direct my questions actually to Dr. Carter. 
And the focus of the questions is if you were able to get some 
certainty, I want to know how much that would help.
    Now, obviously, you know, there are concerns about any 
further cuts in the discretionary budget. There are many folks 
on this panel who think that there shouldn't be any further. 
Personally I think there probably is room for some further 
cuts, but the big problem is that you have had 2 years now with 
the CR, with the debt ceiling threat, threat of Government 
shutdown, CR does not enable you to fund the right programs. So 
let's say hypothetically, you know, we were to take a 10-year 
number and say, you know, we would ask for another $175 billion 
cut from defense, but you could do it pretty much wherever you 
want, we do it through a normal appropriations process, but 
right now today we said that is the number, we are going to 
give you an appropriations bill, we are going to kill 
sequestration, we are going to raise the debt ceiling, we are 
basically going to take that uncertainty off the table and let 
you budget going forward for 10 years with $175 billion more 
that you need to cut. How much of everything that we have heard 
here would that help solve?
    And I will throw one other little curve ball in there, 
something we haven't mentioned today: There are cuts that DOD 
has proposed that Congress has legislatively prohibited you 
from doing. I think the most dramatic of these was the cruisers 
that we wanted to decommission that you now have to keep, but 
you also don't have the money to operate. How much of that also 
throws into that problem? If you could just touch on those two 
points, that is all I will have.
    Secretary Carter. A very good question. I will try to 
answer, because I think someone watching this from the outside 
would reasonably ask everything that we have been saying: Why 
does it go to pot so fast? That is the near-term question, and 
it has to do with the continuing resolution and the immediate 
effect of sequester.
    And what is going on here is that a lot of the impacts that 
are so severe are in the operations and maintenance accounts.
    Mr. Smith. That is what gives us the hollow force, is you 
have got a situation where, you know, you can only cut from 
certain places. You can't make the long-term planning of 
reducing, you know, longer term procurement or reducing force 
size. You have got to cut right now, and if you are cutting 
right now, that is day in and day out training. You are not 
able to train the force, basically. Sorry. But that, I think--
--
    Secretary Carter. That is exactly right, and that is why 
this year with sequestration, with the continuing resolution, 
we just run out of training money toward the end of the year, 
and the consequences of that have been described.
    You are asking a longer term question about defense 
spending in the long run. It is a very good question. And we 
last year began an adjustment that we are still just embarked 
on to accommodate $487 billion in budget adjustments. We have 
worked very hard to do that in a strategic way in accordance 
with the President's strategy. We have not gotten all of the 
congressional authority that we need, so there were adjustments 
that we wanted to make that were in the best interests of the 
strategy that were not accepted, not supported by the Congress, 
and that is a big issue for us going forward if we are going to 
accomplish that $487 billion adjustment.
    Mr. Smith. Because you face the same consequence there. If 
you are planning on a $487 billion reduction, I think it is 
fair to say, by the way, that that was a reduction in what we 
were projected to spend. It is not a dollar-for-dollar cut, it 
is what we were projected to spend, but if you are projecting 
that out and you say, okay, here is what we are going to do, 
and then we can come in and say, nope, you can't do that, then 
you are forced back into a similar situation of, okay, well, we 
have got to get the money somewhere else, and that forces you 
back into those short-term, difficult, hollow-force 
adaptations.
    Secretary Carter. The turbulence and uncertainty all by 
itself is a problem to us. I will just give you one other 
illustration of that, which is in our programs with--
acquisition programs. Every time we have a program that we have 
on a sound footing, we are trying to get the best value we can, 
we have an industry partner who has thought through how they 
are going to operate their line, how they are going to operate 
their workforce, and so forth, that is what you want, you want 
the most economically efficient possible way of providing our 
equipment. All that gets thrown into the turmoil every time one 
of these changes is made. So turmoil, uncertainty all by itself 
is a bad thing.
    And this year the combination of continuing resolution and 
sequester is just particularly severe, particularly this late 
in the fiscal year, and that is why the consequences that are 
so dire and so immediate are very real.
    Mr. Smith. So, I mean, so basically, I mean, long-term cuts 
are a challenge. You have got 10 years to sort of figure it 
out. And I don't want to minimize that. It certainly is a 
challenge. But it pales in comparison to the short term not 
knowing if you can continue any one of the programs that is 
right in front of you because you don't have an appropriations 
bill that enables you to do it because sequestration is coming. 
Those short-term things cause chaos, frankly.
    Secretary Carter. Right. Well, they are both concerning to 
me. The short-term chaos is concerning and the long-term 
endangerment of our strategy and our position in the world and 
our ability to have the force structure and the modernization 
and the people that we require for defense, both in the short 
term and the long term are----
    Mr. Smith. Okay. General Dempsey.
    General Dempsey. I do feel obligated, I feel like I would 
like to respond as well, Congressman. Clearly budget certainty, 
time and flexibility help, but there is a magnitude issue here, 
too. We built a strategy last year that we said we can execute 
and absorb $487 billion. I can't sit here today and guarantee 
you that if you take another 175 [billion dollars], that that 
strategy remains solvent.
    And if you are wondering why this is so hard, let me just 
use the Army. You know, people say, well, hell, you did it 
after World War II, you did it after Vietnam. After World War 
II, we went from a million-man Army to 781,000. After Vietnam 
actually, 781. In the 1990s we went from 781 to 495 [495,000]. 
We grew it for Desert Storm, for OEF and OIF to 570 [570,000]. 
It is on the way to 490 [490,000] because of the Budget Control 
Act.
    The question I would ask this committee, what do you want 
your military to do? If you want it to be doing what it is 
doing today, then we can't give you another dollar. If you want 
us to do something less than that, we are all there with you 
and we will figure it out.
    Mr. Smith. Okay. That makes sense. Thank you. I yield back.
    The Chairman. Thank you.
    Mr. Thornberry.
    Mr. Thornberry. Thank you, Mr. Chairman. And I just have to 
observe that I think in the 51 years we have had a defense 
authorization bill, I don't think we have ever swallowed any 
President's proposal whole without making some adjustments, but 
of course what we are talking about today is on a different 
scale, as General Dempsey was just describing.
    General Odierno, in November 2011 we had a hearing in this 
room on sequestration, and you testified that if we go beyond 
that, talking about the 487 [$487 billion], it becomes critical 
and it becomes a fact that we will no longer modernize, we will 
no longer be able to respond to a variety of threats. General 
Dempsey just said another dollar beyond the cuts that you all 
have already planned for changes the strategy. And it sounds to 
me like your testimony said if we go beyond that, we cannot 
respond to those threats. Is that still your testimony today?
    General Odierno. What I said was in the context of what we 
are required to do, so I want to make that clear, so back in 
2011, that was in the context of what you are asking the Army 
to do, we would not be able to do that. I think it is very much 
in line with what General Dempsey said.
    I would just throw out one other point, is with the Army it 
is about force structure. So, you know, you have got to balance 
force structure, readiness, and modernization. You know, for us 
to move forward, any significant cuts is a further reduction in 
our force structure.
    And what I would just tell everybody, we haven't even 
started our reductions yet based on the $487 billion cut. That 
will start in 2014. Everything we have done so far has been 
overseas. That now starts in the continental, in the 50 United 
States in 2014. That is going to be dramatic. And I just want 
everybody to be braced for that. That has nothing to do with 
sequestration. If sequestration goes into effect, that doubles, 
and we haven't even started the reductions yet. And that has a 
significant impact on readiness and our ability to respond in 
itself.
    Mr. Thornberry. Okay. General Amos, at the same hearing, 
you testified that, so if you go beyond that amount, $1 
billion, $2 billion, $5 billion, it is going to come down in 
force structure and it will mean capabilities and ability to 
respond. And is that still your position today, that beyond 
what you have already had to deal with, this 487 [$487 
billion], further cuts as, you said, 1 billion, 2 billion, 5 
billion, it comes down to force structure and our ability to 
respond?
    General Amos. It certainly does, sir. I absolutely agree 
with that today. The landscape has changed a bit. Just even the 
very matter of resetting a force that is currently in 
Afghanistan, all the gear that we have had, we still have that 
bill and it continues to slide. So not only will we have less 
capability because reset is now in competition with 
modernization, which is in competition with O&M [Operations and 
Maintenance], which is in competition with readiness, and 
finally in competition with personnel costs, all of it fits in 
the alchemy.
    So, yes, what will have to happen is our capacity, you 
know, the total volume, the ability to be able to do the things 
that our Nation expects its Marine Corps to do will be reduced.
    Mr. Thornberry. General Welsh, you weren't here at that 
hearing, but your predecessor testified that we are confident 
that further spending reductions beyond the Budget Control 
Act's first round of cuts cannot be done without substantially 
altering our core military capabilities and therefore our 
national security.
    Do you agree with that?
    Mr. Welsh. I do, Congressman. We were already in a position 
in the Air Force of trading modernization for readiness. You 
saw it in the decision on the C-27 [Spartan military transport 
aircraft] last year and our recommendation on the Global Hawk 
Block 30 [RQ-4 unmanned aircraft system]. We didn't want to get 
rid of those platforms because we wanted to get rid of the 
platforms, it is because we couldn't afford to keep doing 
everything we were doing. So we are trading new capability in 
the Global Hawk Block 30 to improve our readiness numbers for 
the remainder of the Air Force. I absolutely agree with General 
Schwartz's comments.
    Mr. Thornberry. Well, let me just observe that the 
President's answer to sequestration has been more cuts in 
defense, at least as part of what he calls a balanced approach. 
And I hope each of you all are describing these consequences to 
him, because further cuts beyond the Budget Control Act are 
going to move us in the direction that you have all warned 
about here today.
    One other observation during my last 20 seconds, the House 
has acted twice last year to substitute sequestration cuts 
for--or other targeted cuts for sequestration cuts. The 
chairman has introduced a bill to prevent sequestration by 
Federal attrition. I introduced a bill to stop sequestration 
just by delaying further implementation of the Healthcare Act 
[Patient Protection and Affordable Care Act]. There are other 
ideas that members have, and to quote the President, we can do 
this, we just have to want to.
    I yield back.
    The Chairman. Thank you.
    Mr. Cooper.
    Mr. Cooper. Thank you, Mr. Chairman. This is a sad day for 
this committee, a sad day for Congress, a sad day for America. 
The witnesses have basically told us of a military emergency 
that is going to be facing this country, but I don't sense that 
we feel like there is a congressional emergency. This is one of 
the largest, if not the largest committee in the House of 
Representatives, and apparently we don't have the ability to 
force a vote between now and March 1, when sequestration kicks 
in. Maybe there is one scheduled that I am not aware of, but 
basically the House has been doing trivial pieces of 
legislation for the last several weeks and we are about to go 
on a district work period next week. So as our Nation faces a 
crisis, and this is the Armed Services Committee, we are doing 
almost nothing, in fact, there is not even very good attendance 
at this hearing to hear the Chairman of the Joint Chiefs and 
all the Chiefs. This is amazing. There is a disconnect here.
    As Dr. Carter said, this is all the result of collateral 
damage from political gridlock, and a lot of the members' 
statements we are hearing more signs of political gridlock. 
This is a congressional responsibility and this is the Armed 
Services Committee. What are we doing about it? We have the 
power to fund this shortfall. Let's use that power. And if we 
refuse to do that, we at least have the power to give you all 
the flexibility to minimize the damage. We are not even doing 
that, because we insist on micromanaging the Department.
    So let's take some responsibility here. And as General 
Dempsey said, if we won't fund the mission, let's have the 
courage to admit a smaller mission. We are refusing to do that. 
So why does this committee exist if we don't take 
responsibility, if we don't do our job? Because our men and 
women in uniform are doing their jobs. We in Congress are not. 
And we are about to take a week's vacation right as 
sequestration is about to hit. How does that make sense? We do 
not even curb our CODELs [congressional delegations], much less 
take a salary reduction as a result of shared sacrifice 
principles, like Dr. Carter and others are doing, who are 
political appointees. We are political appointees. We were 
lucky enough to get elected by our folks back home. What are we 
doing to help our military?
    Mr. Chairman, the best I can tell this committee is doing 
little or nothing except talking about it, and yet we are about 
the largest committee in Congress. We presumably have enough 
votes, enough clout with both parties to get something done, to 
shake something loose before it is too late. As you all know, 
as a practical matter, it is already way late, because fourth 
quarter growth last year was negative partly as a result of 
defense drawdowns already anticipating problems, and we are 
about to make that worse due to congressional inaction, due to 
congressional gridlock?
    America deserves better. And Mr. Chairman, I think it is up 
to this committee to do better. And we have precious few days 
left to do it. So I would urge my colleagues, I would urge 
congressional leadership, let's at least have a vote on this 
before sequestration happens, let's go on record. Let's not 
just duck and dodge, as Congress has been doing for too long. 
America deserves better and America deserves a vote.
    Thank you, Mr. Chairman.
    The Chairman. Thank you, Mr. Cooper. This is the largest 
committee in the Congress. We have 62 members. We have now 34 
Republicans and 28 Democrats.
    I will just point out, this is a bipartisan committee and 
we do strive always to work in a bipartisan way. Thirty-one of 
the 34 Republicans are here in this hearing today or have been 
here. And I agree with you, I don't know why everyone isn't 
here. And we have introduced bills. As Mr. Thornberry said, he 
introduced one, I have introduced one, and we have tried to 
move things in this, but the funding that you are talking about 
generates from other committees. So within the jurisdiction of 
our committee, we got our bill passed last year, we got our 
bill passed the year before, and we have done the things. If 
you have other things that we could do within our jurisdiction, 
I would be happy to see that we have a vote in this committee.
    Mr. Cooper. If the chairman would yield, how about 
flexibility for the Department of Defense so that at least they 
have the discretion to manage within their means?
    The Chairman. That is a good suggestion.
    Mr. Jones.
    Mr. Jones. Mr. Chairman, thank you. And your comment early 
about it is the Congress and the policymakers that send our 
troops to war and whether they are necessary or not, and that 
is debatable, but I think about the fact we spent over $1.56 
trillion in Afghanistan and Iraq combined.
    And Secretary Carter, the problem is the American people do 
not fully understand the deficit and the debt problems facing 
our country. And we have had the policies that have worn out 
the budget for our military, and I blame the Congress for that, 
and I am part of that, but it leads me to a point, a comment 
you made, and I want to build on this very quickly. You said 
protect the money for Afghanistan. Well, this Monday, driving 
from North Carolina to D.C., I was listening to C-SPAN, and 
John Sopko, who is the inspector general for Afghan 
reconstruction, made the comment that we are spending $28 
million a day in Afghanistan. He took calls from the American 
people.
    Secretary Carter. That is right.
    Mr. Jones. Most of them were very anxious to hear that kind 
of money being spent in Afghanistan. He actually said there is 
so much fraud and abuse, and gave an example of building a 
police barracks, I believe, and the Taliban bombed it a week or 
two later, blew it up, so they are rebuilding that. And this is 
where it is not fair to the military that--the American people 
love the military, the majority do, and yet when they see that 
we are spending this kind of money overseas and the country we 
are in is known as the graveyard of great empires, I want to 
thank the President for reducing the number of troops this 
year, and I mean that sincerely, but we signed a 10-year 
strategic agreement with Afghanistan, so that means there is 
still going to be money going to Afghanistan, there will be 
some troops there, and we will have nothing to show the 
American people. So therefore, it is tough for us not to issue 
sequestration. I agree with the chairman and Mr. Cooper. I 
didn't vote for the bill, by the way, so I am not trying to 
blame anybody else, but I didn't vote for it because I didn't 
understand sequestration, and it was something that if I don't 
understand it, I try not to vote for it, but we are not--when 
we are telling the American people yesterday in the Marine 
[Corps] Times, it says Obama okays $50 million to assist France 
in Mali, well, I know that that might not sound like much to 
this committee or to those that are testifying, but the people 
that read that in eastern North Carolina, that is a lot of 
money. Yes, we are supposed to get repaid by the French, but I 
think we have got a public relations problem with the American 
people. I don't think the military does, but I think we 
policymakers and the Administration, I even go back to the Bush 
administration and now the Obama administration, we have got a 
problem when they see us spending all this money in a foreign 
country with very little accountability, and then we come here 
and talk about our concerns. And we all are very concerned 
about sequestration and continuing resolutions, but Mr. 
Secretary, that is the problem we have got. They see us being 
the big cock on the block on one hand and the man with the cup 
begging for pennies on the next. It just doesn't wash with the 
American people.
    Secretary Carter. Well, Congressman, you have a number of 
important points there. I mean, the first is the strategic 
question of why do we have our military in the first place, 
what are we doing in Afghanistan, how long are we going to be 
in Afghanistan, are we going to succeed in Afghanistan. You 
mentioned Mali as well. These are the kinds of commitments that 
America has long fulfilled and that we have believed are 
important for our security. And I think what you have been 
hearing here today is that unless we have long-term budgetary 
stability and adequate funding, we indeed can't do these 
things, and then we can discuss whether they are necessary or 
not for our security, and after all, Afghanistan was the 
location from which 9/11 originated.
    You made another very important point, two other very 
important points. If we are going somewhere, and just for the 
moment leave aside whether we should be in Afghanistan, given 
that we are there we can't short the troops. And that is what 
we have done, is protect the funding for Afghanistan in this 
year of where we have the continuing resolution and 
sequestration hitting us, and that is one of the reasons why it 
is even worse in the other part of the budget, and that is why 
for things that are not directly related to Afghanistan, the 
hit is even larger.
    And finally, you mentioned fraud and bad contracting 
practices. They do occur, they are unacceptable anywhere. And I 
think that the Department has tried to learn the lessons of 
Iraq in Afghanistan, improved contingency contracting, 
crackdown on waste, fraud, and abuse, but even a single dollar 
lost that way is unacceptable and it doesn't make any sense for 
us to be asking for funding from the taxpayer if we are not 
also making sure that every dollar is spent the right way. So 
that is an excellent point.
    The Chairman. The gentleman's time has expired, and that is 
a good point. I wish he had gone on to tell about the 
investigations and the people that are in jail and the 
contracts that have been--they have done a lot in trying to 
clean that up.
    Ms. Bordallo.
    Ms. Bordallo. Mr. Chairman, thank you. Gentlemen, I thank 
you all for your time today. It is clear through the many 
hearings that we have already had on this topic that 
sequestration would have lasting effects on the readiness of 
our Armed Forces. We all agree on that.
    My first question would be to you, Dr. Carter, or perhaps 
General Amos. Kim Jung-un once again this week showcased 
partially why we are rebalancing to the Asia-Pacific region. 
His reckless actions highlight the need for the United States 
to maintain a robust presence in this region of the world. So 
to that end, I am concerned about the possible impact of 
sequestration on our rebalance efforts.
    Keeping in mind that the U.S. has an international 
agreement with Japan, what impact would sequestration have on 
the realignment of Marines from Okinawa to Guam, Hawaii, and 
Australia? It would seem to me, gentlemen, that we need to 
fulfill our international agreement.
    Dr. Carter.
    Secretary Carter. I will make one comment and then ask 
General Amos and then perhaps General Dempsey more generally 
for the Asia-Pacific.
    You are right. The cuts that would begin with sequestration 
in 2013 and that would extend out over the decade that we are 
saying would require a change in our strategy, one of the ways 
our strategy would need to change is we couldn't do what we 
want to do in the rebalance to the Asia-Pacific theater. And 
that is a very important strategic objective for this country, 
because for 70 years we have kept the peace in the Asia-Pacific 
region. That is what has led to prosperity there, which we have 
benefited from, and we are trying to keep that pivotal role of 
the U.S. military in the Asia-Pacific theater going, and in 
fact to renew it after a decade of focus and concentration on 
Iraq and Afghanistan. And all that, which is critical to our 
strategy, is put in doubt and put in jeopardy if these further 
budget cuts go on.
    Ms. Bordallo. General Amos.
    General Amos. Congresswoman, I will be happy to talk about 
this, because it is very important to me. We have taken aboard 
the shift to the Pacific and the reorientation of Marine forces 
as directed pretty seriously. We have got over $3 billion in 
the FYDP [Future Years Defense Program], and there is a portion 
of that that is in serious jeopardy.
    As you are aware, we have begun the groundwork for some of 
the early realignment of forces on Guam. We have more to do 
this year. There is money in the budget to do this. We can't 
get the project started. So in essence the realignment from 
Okinawa to Guam, if sequestration continues, is going to 
jeopardize that shift to the Pacific. But we have already begun 
putting more forces in the Pacific. We put another unit 
deployment. In fact, we have got two more infantry battalions 
on the ground in Okinawa today. You are aware that we have got 
the force on Australia that we are working with them. All of 
that is going to be in jeopardy. If sequestration hits, the 2nd 
Battalion that I just put on the ground on Okinawa, I won't 
have enough money to bring them home.
    So we are serious, we have the money, we have aligned the 
forces for the Marine Corps over the next 18 to 24 months to 
move to the Pacific. We are committed. We are committed to go 
to Guam, we are committed to reduce the presence on Okinawa, 
all the things that our Government and Japan have agreed to. 
But if sequestration hits, it is untold yet exactly what the 
impact is going to be, but Congresswoman, you can rest assured 
it will be a significant impact.
    Thank you, Congresswoman.
    Ms. Bordallo. Thank you. General Dempsey.
    General Dempsey. Thank you. Just to let you know, what the 
Joint Chiefs do, the reason we exist, is to balance priorities. 
So the combatant commanders keep sending demands: We need this, 
we need that. This group right here takes it in almost weekly, 
actually, and tries to balance the priorities. And the 
balancing act, if you will, gets a lot harder as the resources 
shrink.
    Ms. Bordallo. I just want to remind everyone, this is my 
only question, Mr. Chairman, but, you know, we do have an 
international agreement to fulfill here. And I think this may 
have--if we begin to withdraw or decide not to go ahead with 
this, could have lasting effects between our ally Japan and 
ourselves. So I want to thank--is there anybody else that wants 
to comment on this?
    General Amos. Congresswoman, I would like to just make one 
more comment on the Pacific, on just the importance of it. We 
have got five international treaties. It is more than just 
Japan. It starts in Japan, it goes to South Korea, it goes to 
the Philippines, it goes to Thailand, and it goes to Australia 
and New Zealand.
    So we have 60 percent of the world's population is in the 
Asia-Pacific area. Seventy thousand people die of natural 
disasters every single year in that area. Forty-nine percent of 
the world's oil passes through the Straits of Malacca, 100 
percent of China's oil does, 100 percent of South Korea's. This 
is an important region for us and they are trading partners 
with us and they are active, so we have a very vested interest 
in the Asia-Pacific area.
    Ms. Bordallo. Thank you very much, General, and Dr. Carter 
and Mr. Chairman.
    The Chairman. Thank you.
    Mr. Forbes.
    Mr. Forbes. Thank you, Mr. Chairman. General Odierno, you 
know, I hope, how much I respect you and each of the gentlemen 
to your left who head our Services. I respect your service to 
our country and your military judgment, but each of you now 
face probably the largest deficit in your O&M accounts that you 
have faced in a decade. And, General, I am going to ask you the 
question, because you have the largest.
    If you look at the chart that I have up here, I was a 
little bit surprised when Secretary Carter thanked us for 
giving him the opportunity to explain the impact of 
sequestration. This committee has not only given that 
opportunity, we have begged and pleaded to try to find out that 
impact for well over a year.
    If you have trouble reading this chart, you can look and 
see that the BCA [Budget Control Act] was signed into law in 
August, not of 2012 but of 2011. Like many people, I didn't 
vote for it, I didn't sign it into law. I lost. Congress passed 
it, the President signed it into law. It was the law of the 
land in August of 2011. The ``super committee'' [Joint Select 
Committee on Deficit Reduction] failed in November of 2011.
    There has been 560 days since it was signed into law as the 
law of the land, 447 days since the super committee failed. And 
if you look to the far right, that is just within the last 
couple of weeks when we have received the memos from you guys 
about the impacts that this was going to have.
    We know that this planning didn't take place, because 
Secretary Hale testified before this committee in September of 
last year that they were still trying to understand how the law 
worked, this is over a year after it was passed, and that they 
would do the planning as they got closer. We then heard the 
Assistant Secretary for Defense for Public Affairs say that 
they were just beginning the planning, that we would get more 
specifics in December, just a couple of months ago.
    So General Odierno, my first question to you is based on 
your best professional military judgment, was it a mistake to 
wait that long, all this period of time of silence, was it a 
mistake to wait that long to do the planning and communicate to 
the American people the impacts that we would have from 
sequestration?
    General Odierno. I think first there is a couple of things 
here, Congressman. First there was a kind of a Bermuda Triangle 
happened. So the problem we have for 2013 is part----
    Mr. Forbes. And, General, I don't mean to cut you. I only 
have 5 minutes.
    General Odierno. Okay. But----
    Mr. Forbes. If you refuse to answer my--because I am going 
to come back to the Triangle.
    General Odierno. Okay. Well, the problem we have is, you 
know, we thought if necessary the $6 billion reduction would 
not have as great an impact as I am now testifying to, because 
it is now an $18 billion. Sequestration is about $6 billion. 
And, yes, that still has a significant impact, but in 
combination with the other two it has grown, and that is why 
you are hearing these grave impacts now.
    Mr. Forbes. But as to sequestration, was it a mistake to 
wait that long to do the planning and communicate its impact to 
Congress, yes or no?
    General Odierno. I communicated the impact of sequestration 
last year. You know, I mean, we were very--I mean, it might 
have been general in nature, but we were very clear on the 
impact of sequestration. So our testimony on sequestration is 
not new.
    Mr. Forbes. Well, General, we were asking these questions 
and we couldn't get specificity. And again I come back to Mr. 
Hale's testimony in September. If you were doing the planning, 
Mr. Hale certainly didn't indicate the planning was being done.
    General Odierno. No. We made a decision in the Department 
of Defense, which we agreed with, that we would wait on 
planning. And, frankly, that is because we never thought it 
would be executed.
    Mr. Forbes. And, General, if you don't do the planning, how 
do know the impacts?
    General Odierno. We knew in general terms the impacts. We 
knew the--you understand the impacts of a $6 billion reduction 
in 2013, you understand the impact of a $170 billion reduction 
across the armed----
    Mr. Forbes. General, the only thing I will just tell you is 
this: We heard over and over again when we were asking you guys 
what is the impact, we were hearing, we are not doing the 
planning, you can't plan for chaos. And the American people 
needed to know that.
    Let me go to General Welsh. General Welsh, I just heard you 
say that the Air Force has been in a decline in readiness since 
2003. How then could the Air Force sign off on $487 billion of 
additional cuts to national defense in 2011?
    General Welsh. As I mentioned, Congressman, our view was 
that we could do that with manageable risk. There is no----
    Mr. Forbes. But you----
    General Welsh. There is no margin remaining.
    Mr. Forbes. But that wouldn't have turned around the 
readiness decline that you testified was happening since 2003, 
would it?
    General Welsh. Well, it would if we tried to within the Air 
Force change the way we spend our money, which was the purpose 
of the PB [President's Budget] 2013 budget that was originally 
submitted.
    Mr. Forbes. Admiral Greenert, when you gave us the impacts 
on this, you didn't give them to this committee--you know, 
basically I had to find them from a reporter when they were 
given out recently on that.
    Let me ask you, I heard you testify early about all the 
ships that we don't have in places across the globe, and I 
think that was your testimony earlier. Did I mistake that?
    Admiral Greenert. That we would not.
    Mr. Forbes. We would not have?
    Admiral Greenert. Today we do.
    Mr. Forbes. With these $487 billion of cuts, in retrospect, 
you know, you heard General Odierno say that this is the 
perfect storm. Was it a mistake to sign off on those $487 
billion of cuts?
    Admiral Greenert. That $487 billion in cuts were a law, 
so----
    Mr. Forbes. So was sequestration, Admiral.
    Admiral Greenert. We still have time, Congressman.
    Mr. Forbes. Okay.
    Admiral Greenert. It is not yet.
    Mr. Forbes. I yield back.
    Secretary Carter. Mr. Chairman, can I say something about 
the planning and the timetable here since it was raised and----
    The Chairman. Could you do it very briefly?
    Secretary Carter. No. I just want to say----
    The Chairman. We have got a lot of people who want to ask 
questions.
    Secretary Carter. I just want to say it is a very good 
question, it is a fair point to raise, but I would make two 
important points about it. The first is that we have been 
describing the consequences of sequester for a very long time. 
We have been anticipating them. They are not hard to see. So 
planning isn't the problem, never been the problem. The problem 
was doing something.
    Now, we didn't do anything until the last few months in the 
sense of beginning to act as though sequestration might really 
occur, because doing so is harmful. So we have always tried to 
balance acting in a way that is harmful to defense in the 
anticipation that you might not act to stop sequestration 
against the risk associated with carrying out something that 
might not actually come to pass. We have tried to make that 
balance. We made that balance in the fall by not beginning to 
do things like lay people off and release temp and term 
employees and so forth.
    Beginning in January, I did instruct us to begin taking 
action. That is different from planning. That is taking action. 
We don't like to do that. These are not things that we will 
wish we had done if 2 weeks from now there is no sequester. 
These are not good things to be doing.
    The Chairman. I think what the gentleman was getting at in 
his question is we in previous hearings were told that you had 
been ordered not to plan up until last December, which was 
about 2 weeks before it was supposed to begin. That is probably 
what the gentleman----
    Mr. Forbes. Mr. Chairman, since I asked the question, my 
concern was this: We have been after the Pentagon for well over 
a year, as you know, to give us the specificity of what this 
would actually mean, and we were constantly told, we can't get 
that information because we haven't done the planning. And my 
point is it would have been a lot easier for us to persuade 
Congress to act had we had that specificity months ago instead 
of waiting until a couple weeks before the deadline would take 
place.
    The Chairman. Thank you.
    Mr. Courtney.
    Mr. Courtney. Thank you, Mr. Chairman. You know, in 
fairness to the panel that is here, I actually think it was 
reasonable for them to expect Congress to do something in the 
intervening period. Again, sequestration has a legislative 
history that goes back to 1985, which is in our memo today. The 
sequestration language that was adopted in the Budget Control 
Act verbatim adopted the 1985 sequestration. And if you go back 
to read one of the sponsors, Phil Gramm, who authored that back 
in 1985, he states very clearly, it was never the objective of 
Gramm-Rudman to trigger a sequester. The objective of Gramm-
Rudman was to have the threat of the sequester force compromise 
and action.
    And we saw a little microscopic example of that on January 
1st of this year when the fiscal cliff bill was passed and we 
actually delayed sequestration for 2 months. I mean, obviously, 
you know, pathetically inadequate, but nonetheless, if you look 
at the structure of that compromise, of that act that Congress 
approved, it was equally divided between revenue and spending 
cuts. That is the Da Vinci Code here in terms of trying to get 
the people on both sides of the aisle to actually find a real 
solution, and that really should be what we are focused on.
    Again, I give this panel great credit for the fact that you 
are still, you know, doing your duty to the people of this 
country, but frankly you shouldn't be in this position. And, 
again, looking at the history of Gramm-Rudman through 2002, 
when it was finally laid to rest because we had a balanced 
budget, it was Congress that had to sort of bump and grind its 
way through budgets that eventually got us to the place where 
it became a nullity. And that is our job, that is really how we 
fix this, not sort of finger pointing about whether or not 
people were doing planning for the indiscriminate cuts which 
Secretary Carter described those I think about two or three 
times before this committee last year.
    Admiral Greenert, I would just like to actually, though, 
focus for a second. I mean, your testimony, which again talks 
powerfully about sequestration, I mean, the fact is, though, 
that the Navy has other issues here in terms of CR's impact on 
your O&M account, repair and maintenance.
    And I just, you know, if we, again, pull a rabbit out of 
our hat in the next 24 hours and get sequestration off the 
table, I mean, the fact is is that Congress still has more work 
to do in terms of the CR and its impact in terms of keeping a 
fleet that is ready to fulfill its mission. Is that correct?
    Admiral Greenert. Yes, sir, it is. We have a $4.6 billion 
delta, if you will, between what I need to get the job done in 
fiscal year 2013 and what would be in the budget, which is the 
fiscal year 2012 level.
    Mr. Courtney. And, again, just in the last year, I mean, 
there have been, you know, the usual unexpected events like a 
fire of a submarine up in Maine and collisions at sea that you 
have to fix. I mean, this is not stuff that, you know, again, 
you can just sort of eat with a flat line from last year's CR. 
Is that basically the problem?
    Admiral Greenert. Yes, sir, that is correct. The 
difference--the 3.2 billion [dollars] literally is the 
difference between fiscal year 2012 and fiscal year 2013 in our 
President's budget, but as you said, the world kind of gets a 
vote. So there was an arsonist started a fire on a submarine, 
$350 million. That is not budgeted. There is a collision, $125 
million not budgeted. And there is operations in the Gulf to 
support UAVs [Unmanned Aerial Vehicles] from ships, to support 
an additional carrier strike group, which we spoke to, would 
have been the Truman and other operations, the Ponce [USS Ponce 
(AFSB(I)-15)], which is our Afloat Forward Staging Base, all 
rolled together at $1.4 billion.
    Mr. Courtney. Thank you. And obviously it has a ripple 
effect on the workforce when you cancel repairs, you know, 
planning for having folks in the shipyards obviously takes a 
hit when that happens.
    Admiral Greenert. Well, there is a double whammy, if you 
will. If we furlough, then the workforce is less. And then we 
will eventually, we don't--they don't have the work, so 
readinesswise, we have less workers, we have less work to be 
done.
    By the way, this doesn't go away. You don't change the oil 
in your car, go in for the 20,000-mile checkup, you won't get 
that car for its warranty, and the expected service life is an 
issue then for the ships. It is a bill we have to pay.
    Mr. Courtney. Secretary Carter, briefly. The President 
called for a drawdown to 34,000 troops by the end of this year. 
Your budget last year had $88 billion for Afghanistan, going 
down to $44 billion. Again, projecting out, I mean, assuming 
that we stay on course to 2014, getting down to kind of a rump 
force, I mean, there are savings there that we can book at some 
point. Am I being too optimistic?
    Secretary Carter. No. You are absolutely right. The 
Overseas Contingency Operations budget, which is separate from 
our base budget, which was about $89 billion last year will go 
down as the commitment in Afghanistan goes down.
    I should just add parenthetically that in addition to 
funding operations in Afghanistan, OCO [Overseas Contingency 
Operations] also funds, for example, the reset of equipment of 
particularly Army and Marine Corps equipment. So those bills 
will need to be paid even as the Afghanistan war winds down, 
but you will see OCO go down in the next few years. And we will 
be calculating that budget, and Secretary Hale will in coming 
months.
    Secretary Hale. Just to add briefly, there are other costs 
like retrograde, getting the forces out, that are going to add 
to our near-term expenses. So I think it remains to be seen how 
quickly, but the Secretary is exactly right. It will eventually 
come down.
    Mr. Courtney. Thank you.
    The Chairman. Thank you. The gentleman's time has expired.
    Mr. Wilson.
    Mr. Wilson. Thank you, Mr. Chairman. And thank each of you 
for being here today. I want you to know it is my view that you 
indeed are providing testimony from the heart. This is the most 
candid hearing that I have had the privilege of attending. And 
also it reminds me of how in the world did we get here? And 
according to Bob Woodward in his book, The Price of Politics, 
this originated in the White House, on page 326. And so there 
shouldn't be finger-pointing. It needs to be addressed. That is 
why I am very grateful that our chairman has twice led the 
House to address sequestration to avoid this. Additionally, 
there is other legislation. And so I truly hope the White House 
that originated this issue, and I think crisis, needs to come 
and meet with our chairman and have a positive effect.
    Additionally, General Amos, I am very grateful that I--my 
late father-in-law was a very proud marine, so I know that it 
is the service of our American military that provides us the 
freedom to be here today. The Marine Corps is to be reduced by 
20,000 marines to 182,000. We know that personnel costs are 
significantly higher for marines than the other branches.
    Will there be additional personnel reduction below 182,000 
to address the issues relative to hollowing out of the 
military?
    General Amos. Congressman, just to kind of make a 
correction here, the actual cost per marine is less than any 
other service member. So I have got a little----
    Mr. Wilson. Well, that is even--hey, hey, this is good.
    General Amos. True statement. Our percentage inside our 
total obligating authority is higher than any other Service's. 
You raise my total obligating authority, my percentage of 
personnel costs go down. So I just want to make that point.
    So we are on our way down to 182,000, as planned and agreed 
to. I don't know if that is the floor because we don't know 
what will happen with all the--you know, we think we do. We are 
planning on sequestration; we have already discussed that. But 
right now the President has held the manpower account as 
stable, so that only leaves two other accounts within my 
Service and all ours that you can deal with. You can pull on 
the O&M lever, which is training, readiness, or you can pull on 
the procurement, which is modernization and reset.
    So I don't know where it is going to go. Right now I am 
planning on 182 [182,000]. Quite honestly, 182 I consider to be 
kind of the standard floor that I can do the missions that are 
assigned to the United States Marine Corps around the world, is 
a 182 size force. Will I go lower? It is hard for me to tell. 
It is just a function of the budget.
    Mr. Wilson. And thank you for your explanation.
    General Odierno, you earned your way to credibility with me 
when I visited with you in Baghdad. And I was so impressed by 
your candidness, by the success of the reduction in violence in 
that country, which has been so important for the American 
people.
    As we proceed, the Army is to be reduced by 80,000 
personnel to 490,000. You have already very eloquently 
documented the dire consequences of sequestration. Do you 
anticipate a further reduction below 490,000 personnel?
    General Odierno. If sequestration goes into account, we 
will have to reduce somewhere around 100,000 more soldiers. 
That would be a combination of the Active, National Guard, and 
Reserve. So, yes, we will have--we have no choice because 48 
percent of our budget is personnel costs. So if our budget goes 
down, we have to take personnel out.
    And that starts to reduce our capabilities and abilities to 
respond. And it will reduce the number of brigade combat teams, 
reduce our logistics formations. It will reduce our intel 
formations--all that are now supporting combatant commanders 
around the world.
    Mr. Wilson. And, again, thank you for being so candid and 
letting the American people know.
    A specific issue is the LUH-72 helicopter [Lakota light 
utility helicopter]. And, General Grass and General Odierno, it 
is my understanding that they will be placed in nonflyable 
storage, possibly on 15 March. What does this do for the 
homeland missions of the National Guard? And what effect does 
this have on Army readiness?
    General Odierno. Let me answer that first, and then I will 
turn it over to General Grass.
    First, the issue is these aircraft were purchased in order 
to support our training that goes on, our installation, and 
then support the National Guard in their support of the State 
Governors in order to meet the missions that they have. And 
because they are not currently aircraft that are deployed in 
combat, they are one of the first ones to reduce as we reduce 
training.
    But I will turn it over to General Grass.
    General Grass. Congressman, the first impact is going to be 
on the southwest border and the mission there. And we are 
looking at that right now to try to find ways to mitigate the 
risk on the southwest border mission in support of the States.
    Also, we use those aircraft at every disaster, practically, 
now. And there is a mission equipment package on there that the 
first responders like that actually can give them pictures from 
the sky down to the ground.
    And one of the major issues that we are going to deal with, 
these aircraft are very, very economical to fly compared to a 
UH-60 [Black Hawk medium-lift utility helicopter]. So if we 
have to go back to flying our 60s, it is going to drive up our 
operations costs, our flying hour costs. And, again, with those 
counts being devastated here in the long term, we won't be able 
to fly.
    Mr. Wilson. Again, thank you very much.
    The Chairman. Mr. Loebsack.
    Mr. Loebsack. Thank you, Mr. Chair.
    Thanks to all of you for being here today and testifying 
and for your service, of course.
    People often ask me--you know, I am from Iowa--why are you 
on the Armed Services Committee? We don't have any bases. I 
used to joke, you know, I follow Joe Courtney, we don't have 
any submarine facilities, we don't have any bases at all. But 
we have a lot of brave men and women in the Active service, on 
Active Duty, in all of the different branches of our military. 
We have a lot of Guard folks, Air Guard, and Army Guard. We 
just redeployed, in the case of about 10 or so folks from the 
833rd in Ottumwa, an engineering unit to Afghanistan. And, as I 
said, in the case of some of those folks, it is a third 
deployment for them.
    General Amos knows all too well. My wife Terry and I have a 
couple children who are in the Marine Corps. As General Dempsey 
knows, they attended the Naval Academy, but we don't talk about 
those games anymore.
    But, at any rate, there is a lot to be said for Iowa's 
connection to the military, not the least of which, of course, 
is the region around the Quad Cities which borders Illinois, 
and we have the Rock Island Arsenal there. That is why I am 
very interested in arsenals and depots. Also, I have the Iowa 
Ammunition Plant in my district, in West Burlington, or in 
Middletown--a very, very important facility.
    But before I get to my question for General Odierno, in 
particular, with respect to the organic industrial base, I want 
to associate myself with the remarks of Mr. Cooper. A number of 
us did not vote for the BCA in the first place precisely 
because we feared we would be in this position that we are in 
right now. Nobody wants the sequester. It doesn't make any 
sense whatsoever.
    And my own view is those who thought that somehow we were 
going to avoid this because somehow in a fit of rationality 
Congress was actually going to get its act together and the 
present Congress were going to get their act together to avoid 
a sequester, I simply didn't have the confidence that that was 
going to happen. And that is a big reason why I voted against 
the BCA in the first place. I just was not at all convinced 
that somehow this institution and that the leadership in this 
institution, along with the Administration, were going to get 
their act together and avoid it.
    But we are here now, and we are facing these problems, not 
only for our military but for many other services that are very 
worthy that our Government performs, that it provides our 
population. It is very, very critical. I am hopeful but I am 
not optimistic that we are going to avoid this. I am very 
concerned about it.
    When it comes to the readiness of our military and the 
organic industrial base in particular, I have a concern about 
that. And if I might, General Odierno, can you please detail 
for us, if you can, the long-term effects, the steps that are 
already being taken in terms of hiring freezes, reduction of 
temporary and term employees you mentioned earlier, reduction 
in base operations? What kinds of effects will these have on 
the Army's organic industrial facilities and really essential 
capabilities? And are these effects--even more importantly, are 
these effects, are they reversible or not? And, if so, how 
would that be the case?
    General Odierno. Well, thank you, Congressman.
    Over the last several years, we have spent a lot of time 
really improving the capability of our depots. They have come a 
long way over the last several years. And they have become 
efficient; in fact, so efficient, frankly, some of our 
industrial partners have trouble competing with them because of 
the efficiencies that we have developed in all our depots.
    But we have to sustain this capability of both our depot 
and industrial base that is right for us as we move forward. 
The depots are going to be affected. We are going to have 
longer backlogs. We think, as I mentioned earlier, we are going 
to reduce about 5,000 employees this year. Frankly, if 
sequestration goes into effect, we think that would probably 
double the number of people that we would have to take out of 
our depots.
    So what does that mean? We want to sustain the capability 
in our depots; we will do that. But it is going to reduce their 
capacity and throughput of equipment, which is going to slow 
down our readiness, which is going to take us longer to recover 
from the wars in Afghanistan and Iraq, which they have done 
such a great job of helping us as we have got our equipment 
back and get it reset for use for our soldiers. So you are 
going to see a significant delay.
    The other thing is the partnerships that have been formed 
with our depots and our industrial base which have become 
critical to our future. And I worry that we will have to 
continue to adjust that and lose the great gains we have made.
    But when you get down to the individual, personal level 
here, what is going to happen is and what I am afraid of is we 
are going to lose some of our engineers, we are going to lose 
some of our welders, we are going to lose some of our 
mechanics, and we won't be able to get them back, those who are 
experienced in understanding how to repair our equipment. And 
that you can never recover from. And we would have to then 
rebuild that expertise.
    So those are the concerns I have.
    Mr. Loebsack. Yes, I think it is important we continue to 
think strategically about this, too. Because whether we like it 
or not, there is a likelihood--how high we don't know--we will 
engage in conflicts down the road. We have to have that organic 
base there. We have to have it ready to be warm as quickly as 
possible.
    We know that in Rock Island, for example, the uparmoring of 
the Humvees was very critical. And the private sector simply 
could not take care of that in the same kind of fashion that 
the arsenal did.
    So thank you very much. I really appreciate this.
    The Chairman. The gentleman's time has expired.
    I ask unanimous consent to include into the record all 
Member statements and extraneous material.
    Without objection, so ordered.
    Mr. Bishop.
    Mr. Bishop. Thank you, Mr. Chairman.
    And I appreciate this panel. I came here to listen, and I 
have heard quite a bit that is beneficial. I have four specific 
questions, perhaps, and then one general one, if I could do it 
very quickly.
    Mr. Carter, if you could do this quickly, have you done any 
calculations as to the termination costs with the supply 
chain--our contract termination costs that we have developed 
for our suppliers?
    Secretary Carter. To begin with, we don't anticipate 
terminating a lot of contracts. Sequestration applies to 
unobligated funds. So contracts that we have already entered 
into in the main we will continue----
    Mr. Bishop. So there are no termination costs to calculate?
    Secretary Carter. Well, there may be down the road, 
particularly if we go beyond this year. There may be contracts 
that extend over several years. And they won't necessarily have 
termination charges associated with them, but there will be 
real costs to stopping them.
    Mr. Bishop. You have calculated that?
    Secretary Carter. Yes. I mean, we can----
    Mr. Bishop. Do you know what that number is?
    Secretary Carter. I don't know what the total number is 
over the Department. We can get you----
    Mr. Bishop. Thank you. I appreciate it if you would.
    Secretary Carter [continuing]. Those kind of figures 
program by program.
    [The information referred to can be found in the Appendix 
on page 145.]
    Mr. Bishop. Mr. Welsh, or General Welsh--I am sorry--can 
you just tell me very quickly what the impact of the 50-50 
statute will be with sequestration?
    General Welsh. Yes, sir, it is a major problem. As we 
furlough civilian employees, for example, in the depots, the 
problem we will have is that we will be managing for the last 
couple of months of the year day to day, activity to activity 
to try and avoid violating the 50-50 rule. Relief from that 
rule would be a huge plus on the management side of the depots.
    Mr. Bishop. Can you tell me the impact of sequestration on 
the F-35 production?
    General Welsh. Yes, sir. I think this year we will probably 
lose two airplanes, one for sure, probably two Air Force 
models, the CTOL [Carrier Take Off and Landing] model.
    And then, of course, I think there is some impact on the 
RDT&E [Research, Development, Test, and Evaluation] side, and I 
think we will lose about $176 million. That will affect 
software development, software testing, development of the 
Block 4 software, which is our initial operational capability.
    Mr. Bishop. Thank you.
    Am I making the assumption that the 22-week furlough--you 
are making the assumption that that will actually suffice, or 
will there be program cuts in addition to that, specifically at 
depots?
    General Welsh. Sir, I think as the--I think we will lose 
about $550 million of work in the depots if we in fact don't 
introduce that 150 aircraft and the 85 engines.
    I think there will also be an associated half-billion to 
three quarters of a billion [dollars] in contract logistics 
support break, which will also cause a ripple effect on the 
small businesses that are the suppliers and support.
    Mr. Bishop. So that will equate to some kind of program 
loss at the same time?
    General Welsh. Yes, sir, I think so.
    Mr. Bishop. Which, once again, goes back to my question 
about the termination of contracts, whether you are applying 
for it or not. I appreciate those.
    Let me ask just one quick general question here that goes 
along with this. I look at the panel in front of me, and you 
guys are the good guys. If this was the first cut the military 
was supposed to be taking, I really wouldn't have any sympathy 
for you. But if you go back over the last 6 years, the kinds of 
reductions that we have had over the last 6 years in the 
military makes this part unacceptable. And that is what the 
problem deals with.
    Now, I feel comfortable, even some--well, I voted against 
sequestration. I also voted for the two solutions that we 
presented in the last session. And that would have been very 
helpful if you could have taken some of the extra personnel 
that you have and gone to the Senate and helped them to 
actually pass one of those bills to solve this particular 
problem.
    But I want you to know at the same time that even though 
the opening invitation talked about how the divisiveness of the 
Congress has caused this, you guys have helped cause this as 
well. You are part of the problem. Mr. Forbes was exactly 
right. When I kept asking the one-stars, the two-stars, and 
three-stars, what will be the impact you will have on your 
facility because of sequestration, there was no answer to it.
    You know very well, just as much as anyone, how long it 
takes Congress to work. You realize you can't start in January 
and get a solution to a problem that is supposed to be coming 
up at us. You realize there has to be some kind of lead time. 
And the silence that was coming out of the Pentagon, the 
silence that was coming out from the Department, from the 
military establishment did not help in actually presenting to 
the American people what this means. And I am sorry to say 
this, but you owe some of that responsibility. You bear some of 
that burden, along with us.
    And I wish--for heaven's sake, December was too late to 
start this question. Had you actually been doing something 
earlier about it, we may have been able to get the momentum 
that was extremely necessary. And I am sorry, there is a lot of 
blame to go around if we actually have to have sequestration. 
Don't think you are going to get out of accepting some part of 
that blame.
    I am out of time. I yield back. Thank you.
    The Chairman. Thank you.
    Ms. Hanabusa.
    Secretary Carter. Mr. Chairman, I just need to respond to 
that.
    Let me just start with the Secretary and I. The Secretary 
and I have been saying for 16 months that sequestration would 
be devastating.
    I was up here on August 1st, which would make a very good 
diamond right in the middle of the chart that Mr. Forbes 
showed, saying just exactly what I said today. There was plenty 
of detail. There were--Congressman, I was talking about 
furloughs.
    And, by the way, in answer to your question, even if we 
furlough everybody, all 800,000 civilian employees of the 
Department, for the full time that we are allowed to 
statutorily, we only get $5 billion of the $46 billion that we 
have to get before the end of the year.
    So we have been thinking about this a long time and worried 
about it for a long time and speaking out about it for a long 
time.
    And the second thing I want to say is, you know, it doesn't 
take a genius to figure out what the consequences of sequester 
are. Sequester, it cuts every account one by one. You could see 
it all coming. So it is not something that is mysterious. It 
is, by design, something that is very mechanical. And so we 
knew what was going to happen.
    And the last point I would make is that we are now acting 
as though sequestration is going to happen. I wish we weren't, 
and I still hope it gets averted, but we have had to start 
taking some actions now so that it doesn't get worse later.
    So the actions that we have started to take over the last 
couple of months are, as you hear today, harmful. And they will 
have been completely unnecessary if sequester is averted. But 
we are starting to take them, we have to take them----
    Mr. Bishop. Mr. Chairman?
    Secretary Carter [continuing]. So that it doesn't get 
worse.
    Mr. Bishop. Since this was in answer to my question--I did 
have 11 seconds I yielded back. Can I do 11 seconds right now?
    The Chairman. Sure.
    Mr. Bishop. I am sorry, that answer is not acceptable. The 
mere fact of the matter is the planning actually came out in 
2012. You were not vigilant on this issue early enough. I am 
sorry. That goes back to it. You were not vigilant on this 
issue early enough. To stop--to do this only in December of 
2012 and then start this type of obvious public campaign does 
not help us move forward.
    It was too long in which people were saying, We hope it 
won't happen, we don't think it will happen; having the 
President say, It is not going to happen. A lot of people took 
you at your word. That word needed to be different much earlier 
than December of 2012.
    Now I will yield back, and I apologize for forcing you to 
go over. It wasn't my intent.
    The Chairman. Ms. Hanabusa.
    Ms. Hanabusa. Thank you, Mr. Chair.
    Secretary Carter, on page 4 of your testimony, you make an 
interesting statement. Basically you say that if you are given 
the authority to transfer funds or reprogram funds, that the 
dollars would be sufficient in the base budget, but what you 
need to do is take them from the investment accounts to the 
operations and maintenance account.
    In addition to that, Admiral Greenert says on page 8 of his 
testimony that if he has transfer authority as well, he can 
probably reduce the impact on his O&M.
    And on page 7 of General Amos's testimony, he also talks 
about transfer authority. I am not quite sure where he is going 
to transfer from, but he has a $406 million shortfall in terms 
of operations and maintenance. And we have been having the 
discussion of operations and maintenance.
    So what exactly do you need in terms of the transfer 
authority that you are asking for?
    And I do understand, we are talking about two things. You 
are talking about a short-term solution for the immediate 2013 
to offset the CR as well as the sequestration. And then we are 
going to discuss, hopefully, if you answer me quickly enough, a 
long-term issue as well.
    So can you tell me, whatever authority you want, will that 
take care of Admiral Greenert plus General Amos and anyone else 
who needs this authority?
    Secretary Carter. Well, there are two problems here.
    Ms. Hanabusa. Right.
    Secretary Carter. One is the continuing resolution. We very 
much need and would like to have an appropriations bill, a 
normal appropriations bill----
    Ms. Hanabusa. I agree.
    Secretary Carter [continuing]. That will relieve us from 
the CR. And no question about that, that will relieve a lot of 
the pressure that we are talking about today.
    With respect to sequester, it is--we only have a few months 
left, and we have to absorb $46 billion. What that means is you 
kind of have to go wherever you can get the money in that 
period of time. And so, while additional flexibility is always 
helpful, at this point it doesn't help that much.
    Ms. Hanabusa. But the implication of your statement is, 
what you can assume from your statement is that there is some 
fund of money that could, if we were--if you were given this 
flexibility, you could transfer.
    And I assume, because of the statement that it provides 
sufficient total base budgets to DOD but these numbers or these 
moneys are in the wrong bucket, for lack of a better 
description, that you can do something with this authority, 
correct?
    Secretary Carter. Yes. If we had a full appropriations 
bill, the part of the problem that we have been--part of the 
problem that we have been discussing today, namely that related 
to the continuing resolution, would be alleviated. Sequester 
would still remain.
    Let me ask Secretary Hale if he wants to add anything to 
that.
    Secretary Hale. The only thing I would add, if we do end up 
on a continuing resolution, what we would like the 
appropriators to do to the CR is to eliminate the limit--there 
is a legal limit on the amount of money we can move; it is $4 
billion on the general fund accounts--to eliminate that for 1 
year or, if not, set it at a very high level so we have the 
opportunity to move this money.
    Ms. Hanabusa. Okay.
    The other question--and, by the way, all the gentlemen to 
your left signed it, basically, in that letter of January 14th 
to the chair.
    The other question is sort of following up on what Ranking 
Member Smith was talking about, and that is the $487 billion. 
And thank you for clarifying. I always wondered what happened 
to Secretary Gates when $100 billion or $200 billion, part of 
it being reinvested--and you seem to say that that is also in 
the account. So I think we are talking about whether you are 
taking it from future spending or not. You are talking about 
maybe $687 billion that you believe that the DOD has agreed to.
    Now, my question is, where and how is that money accounted 
for? I mean, we are saying you are going to do--am I to assume 
that the assumption is you are doing $487 billion in this 
period of time, taking your 50 percent of the $1.2 trillion, 
plus taking the budget cap, which is also part of the Budget 
Control Act, and Secretary Gates's $200 billion on top of that? 
Or are you fudging--I am not saying it in a negative way--are 
you fudging the $487 [billion] and the $200 billion in that 
process?
    And if you don't have enough time, I will ask the chair to 
get it in writing anyway.
    Secretary Carter. No. And we will provide it in writing, a 
detailed racking of it.
    [The information referred to can be found in the Appendix 
on page 145.]
    Secretary Carter. But, no, it is not double counting.
    Under Secretary Gates, we made major adjustments in our 
budget plans. And then again with the $487 [billion], those are 
distinct and both very--very major.
    And I just want to repeat something that I think General 
Dempsey and General Odierno said already, which is we are just 
on the--we are just beginning to make that big move represented 
by the 487 and the Gates cuts before that, the huge strategic 
adjustment from the era of Iraq and Afghanistan to the era that 
is going to define our security future. So we have laid in 
those plans, but we have to actually carry them out. They are 
challenging managerially, they are challenging budgetarily. 
They are challenging for everybody at this table actually to 
carry out, and we are just embarking on them.
    And that is why, as we try to make this historic adjustment 
with $487-plus billion cut, to have on top of that this turmoil 
associated with the CR and the sequestration just makes it 
doubly difficult. We are happy to do the first part, to make 
the post-Iraq/Afghanistan adjustment, but it is almost 
impossible to do it in this environment of uncertainty and 
turmoil.
    The Chairman. Do you want to change that statement that you 
are happy to do the first part?
    Secretary Carter. Yes, I do. I am not happy to do it.
    The Chairman. You can survive the first part.
    Secretary Carter. Yes. And we are committed to making that 
work. But it is awfully damn hard when you have seen all 
these----
    The Chairman. Thank you.
    Mr. LoBiondo.
    Mr. LoBiondo. Thank you, Mr. Chairman.
    Secretary Carter, current law allows OMB [Office of 
Management and Budget] to reorder the sequester once it takes 
effect, proposing an alternative budget to allocate the cuts. 
Congress would have to pass it, but the President is already 
authorized to propose a framework that would provide more 
flexibility to all of you.
    However, at the hearing you attended last August with the 
Acting OMB Director, he stated in response to a question for 
the record that the Administration would not propose an 
alternative budget to grant the military more flexibility in 
how it allocates the cuts.
    So, given the current circumstances and the concerns that 
we all have of all of you, the chiefs, has senior leadership at 
DOD reengaged with the White House on this subject to request 
the President to take advantage of his current authorities?
    Secretary Carter. I am going to let Secretary Hale respond 
about what exactly the law provides. But my understanding is 
that to amend the provisions of sequester in the Budget Control 
Act and the laws that precede it would take a law.
    And the larger point I would want to make is that we really 
need this cloud of sequestration and uncertainty dispelled. It 
hangs over our head. Even if you move it a little bit toward 
the horizon, it is still pretty harmful to us. So I just have 
to say that we need, once and for all----
    Mr. LoBiondo. Well, excuse me, Mr. Secretary. We all know 
that it is a cloud, and we all want it to be fixed. But in this 
real world that we are working in, it may not be. So the next 
best thing may be to give you the flexibility so that you can 
manage better what is a horrible situation.
    And with all due respect, sir, you did not answer my 
question.
    Secretary Carter. I am sorry. I see where you are getting 
to now, so let me say something and then ask Secretary Hale to 
say something.
    Yes, more flexibility is good. I have to say, though--and I 
made this point earlier--at this point--that particularly 
applies to the continuing resolution, where we would love to 
have an appropriations bill. At this late date in the year, any 
additional flexibility with respect to sequestration is less 
helpful than it may seem, simply because we have to go wherever 
the money is at this point. So we don't have----
    Mr. LoBiondo. Excuse me----
    Secretary Carter [continuing]. A lot of flexibility----
    Mr. LoBiondo. Excuse me again, sir.
    Secretary Carter [continuing]. About where we find----
    Mr. LoBiondo. I apologize for interrupting you, I really 
do, but maybe I wasn't clear. I am anxious to know if you, the 
senior leadership of DOD, will reengage the White House to use 
their current authorities in a worst-case scenario to help us 
minimize what is going to be a horrible situation. So I will 
take it that you are not going to reengage the White House to 
do this.
    Secretary Carter. Let me ask Secretary Hale. I am not sure 
what the law provides----
    Secretary Hale. I am not aware of any authorities the 
President has to change this law.
    Mr. LoBiondo. Well, we will make sure we give you chapter 
and verse. I could be----
    Secretary Hale. All right, give me chapter and verse, 
because you passed the law.
    Mr. LoBiondo [continuing]. Wrong, but I understand that 
there is an allowance for that. The President can propose; we 
must pass it. But it would give you the flexibility. But the 
President needs to propose it.
    Secretary Hale. Well, you could introduce it, I guess.
    Secretary Carter. Yes, if you want to change the law----
    Mr. LoBiondo. Well, the President needs to propose it, sir.
    Secretary Hale. If you want to change the law, you could.
    Mr. LoBiondo. And if DOD senior leadership will engage him, 
it will be helpful to get a proposal that we can then look at, 
is what we are saying.
    Secretary Hale. I would just like to underscore what 
Secretary Carter said. At this point in the year, with 5 months 
gone, even with flexibility, to get $46 billion out, we will 
have to go guns blazing at all unobligated funds.
    Mr. LoBiondo. I understand that.
    Secretary Hale. Flexibility isn't going to help very much.
    Mr. LoBiondo. Okay. I understand that. So I will take that 
as that senior DOD leadership will not reengage the White House 
on this issue.
    Secretary Hale. We will do anything we can to try to help, 
but that----
    Mr. LoBiondo. Okay. Thank you.
    Secretary Hale [continuing]. I don't think would solve the 
problem.
    Mr. LoBiondo. I yield back, Mr. Chairman.
    The Chairman. Ms. Duckworth.
    Ms. Duckworth. Thank you, Mr. Chairman.
    I have two questions. One is for Dr. Carter.
    And, Dr. Carter, this might seem a little micro, and if you 
can't answer this right away, no problem. If you can't answer 
this right away, I would ask the chairman to allow you to 
respond in writing.
    In the face of sequestration, I am somewhat concerned when 
I hear that DOD is still considering expenditures such as the 
proposed DISA [Defense Information Systems Agency] building of 
a brand-new, multilevel--a multiprotocol label switching 
network, MPLS network, that would basically take over the 
entire IT [information technology] network, requiring major 
capital investment, not available for fully functioning 
capability for at least 5 years, significant degradation in 
security capabilities from those that are being provided 
already by commercial network providers who currently provide 
it for financial services industries, for Wall Street and the 
like.
    So why, when faced with sequestration, would DISA seek to 
build an entirely new network with degraded capabilities, less 
security, and significantly higher costs?
    Secretary Carter. If I may, I would like to get back to you 
on that, in specificity on that matter. It is a very good 
question. We have to ask why we are doing everything that we 
are doing under this circumstance. A very fair question. I will 
make sure I get you a good answer.
    [The information referred to can be found in the Appendix 
on page 146.]
    Ms. Duckworth. Thank you, Mr. Carter.
    My next question is for General Grass.
    You spoke of maintaining an operational force. And I am 
concerned about the resources that the National Guard is going 
to have access to under sequestration for that, to maintain 
that operational force. You perform, for example, 95 percent of 
all domestic missions. And I don't think people generally are 
as aware of the range of missions that you provide--everything 
from the civil support teams that provide nuclear, biological, 
and chemical sweeps for the inauguration to the regular, you 
know, natural disaster recovery.
    I, as part of the Illinois National Guard, flew the oldest 
flying Black Hawk in the United States Army inventory, and it 
is still flying missions in Kuwait today. It was the fourth one 
delivered, 1978 model. I understand that 400, over 400, of your 
Black Hawks are alpha models, not set even before sequestration 
to be replaced until fiscal year 2023 because we will do the 
Active Duty forces first before we come to the National Guard.
    Could you discuss, General Grass, sort of the range of 
missions that you are providing and what sequestration will do 
for you if you are not getting the ability to modernize your 
equipment and train some of these very specialized mission--
troops that are performing these missions?
    General Grass. Thank you for the question, Congresswoman.
    Of course, being a first responder in the homeland from a 
military perspective, we have to always be ready to support 
those Governors and in surrounding States. Just like today in 
the Northeast, we have three States that have come to the aid 
of Connecticut to help out with the storms.
    But I think the problem we are going to get into, as our 
equipment degrades and our pilots can't get into schools and 
can't continue to maintain their proficiency, it will take 
longer and longer to respond into a timely disaster, and we 
will have to come from further and further.
    And the other thing that I am very concerned about is, we 
have been working very closely with FEMA [Federal Emergency 
Management Agency] and NORTHCOM [U.S. Northern Command] to look 
at responding to complex catastrophes across the Department of 
Defense and how we might bring the forces of the Guard, as well 
as any other forces that might be available, to respond to that 
scenario. And even the planning we are doing now for that, that 
response would be at risk, no doubt.
    From a National Guard perspective, I think the investment 
we make every day--and we work very closely with the Army and 
Air Force. And our procurement comes through the Army and Air 
Force, for the most part. We do have some under the NGRE 
[National Guard and Reserve Equipment] account that we do 
specific dual-purpose equipment. But for the most part, all the 
training and equipment and the procurement and investment 
accounts that we rely on, the Army and Air Force are just 
critical to be able to do the homeland mission.
    Ms. Duckworth. Thank you, General Grass.
    And as a Democrat, I am going to talk a little bit about 
the States' rights and my concern that Governors do maintain 
the ability to access the troops under State Active Duty in 
Title 32, you know, when you have to switch over to Title 32 
for those troops.
    Can you talk a little bit about your ability under 
sequestration and some of these cuts to respond quickly, 
especially when you have the State agreements where one State 
will come to the aid of another, and how you will be able to 
maintain the readiness of those forces?
    General Grass. Yes, Congresswoman.
    If I look at just in the last 3 days, I mentioned the three 
States that responded. During Hurricane Sandy, and which is 
more of a regionally based contingency that we responded to, if 
you look at all the States coming in, most of that was done in 
State-to-State agreement. Even last year, your State of 
Illinois provided helicopters to the State of Vermont during 
Hurricane Irene.
    And what we try to do at the National Guard Bureau is 
identify where that equipment is and facilitate the move 
quickly. Again, sequestration will definitely degrade our 
ability to do that.
    The Chairman. The gentlelady's time has expired.
    Mr. Turner.
    Mr. Turner. Thank you, Mr. Chairman.
    I want to thank all of you for being here. I have a very 
high regard for each of you and what you do.
    General Dempsey, I have a particular high regard for you. I 
appreciate your statement that, when looking at budgetary 
issues, you have to consider what are we going to ask the 
military to do. You said that you could--that the DOD could not 
give another dollar if you are going to be doing what you are 
doing today. And I appreciate that very strong statement. It is 
very helpful.
    It is my understanding, General Dempsey, that General 
Odierno, Admiral Greenert, General Welsh, General Amos, General 
Grass, and yourself, General Dempsey, have not been asked to do 
less yet. Is that correct; you have not been asked to do less?
    General Dempsey. No.
    Mr. Turner. Thank you.
    Now, I have a slide. If we could put the slide up?
    This is the President's proposal. I want to point out--Mr. 
Carter, you had said a long list of what this is not because 
of. It is not because of the peace dividend, it is not because 
of technology. It is also not because of my support; I voted 
``no'' on sequestration.
    But we need to talk about what it really is because of. It 
is because the President--we know it was his idea, his plan, 
and his failure of leadership.
    Now, this is the President's proposal on the answer of 
sequestration. Before I get to that, I want to point out that 
the House passed H.R. 5652, H.R. 6365, H.R. 6684. Mr. Carter, I 
have a file for you to take with you so the next time you see 
the President--since I had the opportunity to sit in the State 
of the Union where he chanted at Congress to take a vote, I 
would like you to communicate to him our request that he asked 
for a vote on these three bills that have been passed by the 
House, have been sitting over at the Senate, that would take 
not a dollar from DOD, as General Dempsey said. We passed three 
plans that not a dollar would be asked of DOD.
    Now, let's go back to the President's proposal, if we could 
put that up.
    The President actually proposed cuts of $250 billion in his 
sequestration solution. Two hundred fifty billion dollars you 
can see would be letting half of sequestration go in. Now, he 
had campaigned saying that he would not let sequestration 
happen. He didn't say he would let half of sequestration 
happen.
    So, Mr. Carter, I have a really simple question for you. 
Since we have General Dempsey and the other generals on the 
record that not a dollar more can be taken out of DOD without 
them doing less, and we have passed three bills that wouldn't 
take a dollar out of DOD, and the President's proposal is $250 
billion that would come out of DOD, is $250 billion greater 
than a dollar? It is a really simple math question.
    Secretary Carter. Yes, of course it is.
    Mr. Turner. Thank you. So we would appreciate if the 
President would ask the Senate to take a vote on our three 
proposals.
    Next, General Dempsey, to go to the scope of you not being 
asked to do less, one of the things that we are always 
concerned about is what is the threat, what is it that we are 
trying to respond to, so we can make certain you are not asked 
to do less.
    Last December, the President threatened to veto, fiscal 
year 2013, the National Defense Authorization Act, because that 
legislation would have required the President to certify prior 
to any U.S. nuclear force reduction that Russia is in 
compliance with its arms-control obligations to the United 
States.
    General Dempsey, can you tell me today if Russia is in 
compliance with its nuclear arms-control obligations to the 
United States? And those include the Comprehensive Nuclear Test 
Ban Treaty, New START [Strategic Arms Reduction Treaty], and 
the Intermediate-Range Nuclear Forces Treaty, and the Moscow 
Treaty.
    And please don't say that the answer is classified. How we 
would know and how they are not in compliance certainly would 
be classified, but whether or not they are in compliance is 
not.
    General Dempsey, are they in compliance?
    General Dempsey. Well, I would like to refresh my 
understanding, so I will take that for the record.
    [The information referred to can be found in the Appendix 
on page 145.]
    Mr. Turner. Good. Thank you, General.
    Well, going back to the President's proposal, the President 
has proposed cutting $250 billion out of DOD over the next 10 
years. We have three proposals on the table that would cut 
nothing. We have General Dempsey saying that you can't give 
another dollar without the military doing less.
    Mr. Carter, since I am assuming that the President ran this 
by you, that you could tell us what exactly the President is 
going to ask DOD to do less of under his proposal of cutting 
this from the DOD's budget.
    Secretary Carter. Congressman, I don't know where the 
proposal is that is reflected in your chart, and the President 
hasn't indicated to us in the Department any additional----
    Mr. Turner. Okay. Mr. Carter, I just want to thank you for 
acknowledging that because Mr. Carney, yesterday I think it 
was, specifically acknowledged that over the next 9 years the 
President's proposal would cut $250 billion from defense. So I 
hope that you do get in touch with the White House, since 
Carney is saying that the President's proposal would do that, 
and ask what less he would have you do.
    And I will tell you, it is very important to me because I 
have Wright-Patterson Air Force Base in my community, which is 
why I voted ``no'' against this. There are tens of thousands of 
people who are critical to our national security, as all of you 
are, and this needs to be averted. And the President needs to 
take action, and that action isn't cutting $250 billion out. It 
needs to be asking for a vote on the three bills that have been 
passed by the House.
    Thank you, Mr. Chairman.
    The Chairman. Thank you.
    And that plan that Mr. Turner put up there was given to us 
by the President last week after months of saying he would veto 
any short-term plan, indicating that he would veto these plans 
if, in fact, the Senate had taken them up. But it put us in a 
very difficult position.
    And basically what he does is he cuts the $500 billion from 
defense, the $500 billion-plus from nondiscretionary that are 
going to be now over 10 years by law, he cuts that in half. And 
he makes up the difference by increasing another $600 billion--
$500 billion, $600 billion in taxes.
    Mr. Enyart.
    Mr. Enyart. Thank you, Mr. Chairman.
    Gentlemen, I am a newcomer here. I am a freshman. And I 
want to say that as a member of the new freshman class, I am 
frankly appalled at the questioning that you have endured 
today, the political finger-pointing and blame game that you 
have had to sit here and listen to.
    There have been some substantive questions, and I intend to 
ask you substantive questions. But before I do that, as a 
member of the 70 or so freshmen who intend to work in a 
bipartisan manner to resolve some of these issues that are 
facing us, I want to apologize to you for that political blame 
game that you have sat through this morning.
    Now, General Dempsey, I would like to ask you, please, in 
my past life I had occasion to frequently visit with senior 
NATO [North Atlantic Treaty Organization] commanders, general 
officers, MODs [Ministry of Defence]. And invariably what I 
would hear from them is that the United States is the 
indispensable partner, largely because of our tanker refueling, 
General Welsh, because of our intel capabilities, and all of 
those other things that we could bring--not necessarily the 
boots on the ground, but all of those, I will call them back-
office things that we could bring to the fight.
    And those NATO and--because I dealt mostly with NATO, but I 
am sure also our Asia partners rely on us to be that 
indispensable partner in securing peace and security through 
the world.
    What are you hearing today from our NATO partners, from our 
Asia partners? What concerns have they expressed to you about 
what they are viewing today with this sequester threat?
    General Dempsey. Well, they clearly are concerned, although 
the most interesting comment was from a British colleague who 
said, you know, you are one big budget deal away from regaining 
your mojo. And I think that is right, actually.
    You know, look, what we are talking about today is 
degradation over time. This won't be a cliff. But some of the 
effects are already being felt, as you have heard here today. 
So our NATO partners are concerned, as our Asian partners are. 
You know, frankly, they can't imagine we won't figure this out.
    And where they are really concerned is in the capabilities 
that we bring uniquely--tankers, ISR [Intelligence, 
Surveillance, and Reconnaissance], you know, the things that 
they simply can't replicate. But just to let you know, I also 
push on them, that they have to do more, as well, because some 
of them are underresourcing defense on their side.
    Mr. Enyart. Thank you, General.
    General Welsh, could you tell me, what impact will the 
cancellation of the third- and fourth-quarter aircraft depot 
maintenance have on the Air Force's global mobility and long-
range capabilities for Air Force tankers and for airlift 
capacity?
    General Welsh. Yes, sir. Thanks for the question.
    The last time this happened and the depot workforce was 
affected this way was in the early 1990s after Operation Desert 
Shield and Desert Storm. It took, according to the people who 
were managing the depots at that time, 2 to 3 years for the 
workforce to recover and become a vibrant, fully productive 
workforce in the depots.
    The longer problem that we would face is going to be the 
backlog of aircraft going through the depot and the work that 
we can't surge to make up quickly because we have--capacity is 
capacity. And making up is--the longer this continues, the 
longer time frame it will take to recapture the bow wave of 
work that was not accomplished this year.
    Mr. Enyart. Thank you, General.
    General Dempsey, as the Chairman of the Joint Chiefs, I 
would like to refer this question to you. Now, I realize that 
this is not a direct impact on DOD, but how will cuts to other 
Government programs outside of DOD impact the military and 
their families that comprise all the Services? And I am 
thinking such cuts as the Veterans Administration or other 
cuts. How is that going to impact your recruiting, your long-
term stability of the force?
    General Dempsey. Well, you know, Congressman, we are part 
of the Nation's fabric, so our men and women live across 
America. And so--and take advantage of not only the unique 
things we provide them but also the things that exist out in 
their communities, whether it is schools or child care or 
whatever it happens to be. And so, to the extent that America 
writ large is affected, we will be affected.
    That same thing is true, by the way, in things like 
information technology. We talk about cyber on occasion. We are 
vulnerable--even though I can protect the dot-mil, we can 
protect the dot-mil domain in cyber, to the extent that the 
rest of the architecture is vulnerable, we are vulnerable. I 
mean, look, we are part of the landscape of America, and if 
America is affected, we are affected.
    Mr. Enyart. Thank you.
    The Chairman. The gentleman's time has expired.
    Mr. Rogers.
    Mr. Rogers. Thank you, Mr. Chairman.
    I appreciate all of you all taking the time to come here 
and describe in such vivid detail the consequences of 
sequestration. I think most of the members of this committee 
were aware, but the country needs to know, and this is going a 
long way to helping that end.
    General Dempsey, you all have described pretty clearly what 
is going to happen, and you have told us today. Have you had 
that conversation with the President?
    General Dempsey. I have, Congressman.
    Mr. Rogers. And does he seem to appreciate it? Because last 
night in his speech he seemed to be in denial that we have a 
problem. He didn't make any proposals as to how to deal with 
sequestration.
    General Dempsey. I can't speak for his plan going forward. 
I can simply tell you that we have had that conversation, and 
he has expressed concerns in his role as Commander in Chief.
    Mr. Rogers. But he has not told you that he expects to be 
able to stop this?
    General Dempsey. He assured me he is working on it.
    Mr. Rogers. Yeah, well, he hasn't told us about it. You 
know, the chairman has offered legislation to put this off. 
There are initiatives, but we have got to have help from the 
other end of Pennsylvania Avenue to remedy this.
    Ash Carter--I know he had to leave--had sent out a memo to 
you all about proposed ways of dealing with sequestration. It 
scared the heck out of folks at the Anniston Army Depot in my 
district, for obvious reasons.
    General Odierno, based on the notification timelines, when 
will the first date of DOD furloughs occur?
    General Odierno. We believe that about 45 days required 
notification, and so they would begin quickly after that.
    Mr. Rogers. And what level the chain of command is that 
trigger pulled?
    General Odierno. That will be done by the Secretary with 
guidance from myself.
    Mr. Rogers. And when will that formal notification to 
Congress come?
    General Odierno. It is going to come very shortly.
    Mr. Rogers. Okay.
    How does Mr. Carter's recommendations to significantly 
curtail unit training and readiness impact the projected 
organic industrial bases workload for each military service in 
the aggregate and for each center of industrial and technical 
excellence in fiscal 2014?
    General Odierno. Yeah, what it does, obviously it creates a 
backlog of equipment that will be in all of our depots. As I 
stated before, the depots have become a critical part of what 
we do. And so what we have done by delaying it, it will require 
backlogs and it will require us longer and longer to get that 
equipment out.
    Mr. Rogers. Again, I represent the Anniston Army Depot. As 
you know, we call it the pit crew for the American warfighter. 
We have a backlog there. Do you know how much of a backlog? 
That has already been paid for.
    General Odierno. I don't. I don't know the exact number, 
but I can get back with you on that.
    Mr. Rogers. I would appreciate that.
    General Dempsey, you made the comment a few minutes ago in 
response to my predecessor's question about degradation over 
time, that the sequestration is not going to be a cliff, it is 
going to be degradation over time.
    But yet, Ash Carter is recommending and I understand you 
all have embraced the proposal to cease any additional work 
going into the depot systems for the third and fourth quarter 
of this year. If it is not a cliff, why is that action being 
taken?
    General Dempsey. What we are trying to do is stretch 
readiness as far as we can stretch it. I mean, the decision not 
to deploy the Truman is probably the best case, but we are 
trying to stretch the readiness dollars as far as they will go. 
And so the actions we are taking, we hope that some of those 
will be reversible, but we are in the business of stretching 
readiness right now.
    Mr. Rogers. Well, see, that is my concern, when you talk 
about ceasing. You know, I have talked with the colonel in 
charge of the depot, and he has told me he is taking no 
additional tanks into the system after the 15th of next month. 
I think it is the 15th of next month. That sounds like a cliff 
to me.
    General Dempsey. Well, I happen to be a tanker, so I think 
the answer on the tanks is probably that these gentlemen to my 
left are prioritizing--as they stretch, they are prioritizing. 
And in the near term we are not using tanks in Afghanistan. It 
doesn't mean we will never use them again, but we are probably 
prioritizing those things that we think we will use.
    Mr. Rogers. Okay.
    General Odierno. If I could, Congressman----
    Mr. Rogers. Certainly.
    General Odierno [continuing]. Give you--I do have some 
data.
    From February to September, it will be about $294 million 
worth of work that is planned in Anniston. There will be about 
a $131.8 million carryover into 2014 in Anniston Army Depot.
    Mr. Rogers. Okay. That makes me think that we are not going 
to need to close it down third and fourth quarter.
    General Odierno. No. No. But--no, we are not going to close 
it down. We will just reduce.
    Mr. Rogers. Man-hours.
    General Odierno. Man-hours.
    Mr. Rogers. Great.
    General Dempsey, last question. As you know, President 
Obama did not request any funding for the Israeli Iron Dome 
missile defense system in 2012. And with the CR, that means 
that there is no funding going to be in the 2013 fiscal year.
    Can you commit that you are going to prioritize making sure 
that funding is provided to keep Iron Dome----
    General Dempsey. Well, what I can commit to is what I can 
control, and that is my recommendation that we continue to 
support the Israelis and their acquisition of Iron Dome. But, 
you know, the decision will be a policy decision made by my 
wingman, who is not here right now.
    Mr. Rogers. So the reprogramming of any money to cover that 
will be done by the Secretary, not you?
    General Dempsey. It will be approved by the Secretary, with 
our recommendation.
    Mr. Rogers. Okay. And your recommendation will be to do 
that?
    General Dempsey. It will.
    Mr. Rogers. Thank you, sir.
    Thank you all for your service.
    The Chairman. Thank you.
    Mr. Gallego.
    Mr. Gallego. Thank you, Mr. Chairman. I would like to yield 
15 seconds of my time, please, to the ranking member.
    Mr. Smith. Thank you, Mr. Chairman.
    I, by and large, agree with Representative Enyart that we 
don't need to get into the blame game and get overly political 
here and certainly put you in position of commenting on the 
politics of this. But there are a couple things in the record 
that I think need to be clarified.
    The President has made numerous proposals to stop 
sequestration. In the lead-up to January 1st, in particular, he 
made countless proposals, including cutting mandatory programs. 
He put the chained CPI [Consumer Price Index] out there, saying 
that we should cut Social Security and Medicare to help make up 
the money.
    So there is plenty of room to work on this on both sides. 
It is not one side has had an idea and the other side hasn't. 
That is first of all.
    Second of all, all of the Republican proposals to deal with 
this have included substantial cuts to the civilian workforce. 
Now, I realize that some of my colleagues seem to think that 
the civilian workforce does absolutely nothing, but all of you 
sitting up here realize that is not the case. If you cut the 
civilian workforce within the Department of Defense, you are 
cutting defense.
    Now, maybe that is okay, but I will also tell you--I will 
answer the question, since Ash Carter isn't here to answer it--
cuts to civilian workforce are more than one dollar. Okay? So 
there are cuts on the table, and those are things that we have 
to consider.
    And, lastly, the box that we are in here, no one really 
wants to cut defense by this amount, but no one also wants to 
have a trillion-dollar deficit. And unless we are willing to 
raise taxes and cut mandatory programs, we wind up stuffed into 
that corner.
    Now, all of that has plenty of room for bipartisan effort 
to work together, but I don't think it is helpful to say it is 
just all one person's fault. This is a collective 
responsibility. And I will close by thanking the chairman for 
his opening remarks, which very clearly acknowledge that.
    Thank you. I yield.
    Mr. Gallego. Thank you.
    General, I, too, join Mr. Enyart. I want to thank you for 
your passionate defense and your candid comments on behalf of 
our brothers and sisters in uniform. Because my guest at the 
State of the Union last night was a wounded warrior from El 
Paso, and I wonder what he would think if he was here to listen 
to this testimony this morning.
    I am somewhat disappointed in the he-said/she-said and even 
the Bob-Woodward-said. I have just got here, and so I don't 
know. I know that we have to find our way out of this, and I 
know that we have to find our way forward. And I know that this 
is too important to mess up.
    And I am curious, General Welsh, for example, Laughlin Air 
Force Base in Del Rio, which has more flying time and more 
training, it is one of your best bases, and they have a 
significant civilian workforce. Have you all analyzed what the 
economic impact would be on the local area of the sequester 
cuts? And what happens--I mean, I know what happens on the 
military side, but I think it is so important also to talk 
about the economic side. Because in many places you are a key 
component of the local economy.
    General Welsh. Yes, sir. We have not completed an analysis 
of every base and the impact on the local economy of 
furloughing civilian workforce.
    Laughlin Air Force Base is a great example for another 
reason, though, because we do have a civilian workforce at 
Laughlin that does the aircraft maintenance, scheduling, and 
lots of support for the training activity there. So while we 
plan to start drawing back all of our advanced flying training 
courses on the 1st of April, we will continue our basic flying 
courses to produce pilots at Laughlin and other training bases 
as long as we can. We hope to make it as long as August, early 
September.
    The problem is that, as we furlough civilian workforce, we 
won't be able to fly the same number of sorties, we won't fix 
airplanes as quickly, and those dates will start to slide to 
the left, further impacting our ability to train even our basic 
pilots. And that has a repercussion that will take us years to 
recover from.
    Mr. Gallego. And the other question--I have an article from 
the El Paso Times, for example, that Fort Bliss is bracing for 
a 30-percent cut. I mean, what happens at Fort Bliss if Fort 
Bliss takes a 30-percent cut?
    General Odierno. I am not sure what the 30 percent means; I 
think it is from base operations. And so what that means is 
there will be a reduction in services to our soldiers and our 
families. It could be anything from gate guards to cutting 
morale, welfare, recreation programs to reducing some other key 
programs that are there for recreation, as well as counseling 
and other things that occur.
    We are trying to fence those things that are most important 
to our families and to our soldiers, but that 30-percent 
reduction is significant to any installation. That is across 
all installations, by the way, not just Fort Bliss.
    Mr. Gallego. Well, I want to tell you that I do not believe 
that you are part of the problem. I look forward to working 
with you toward a solution.
    And, frankly, I served with a guy who I got along with very 
well when he was the Governor of Texas who later became 
President of the United States. And one of his mantras was 
always personal responsibility. And it is a mantra that I 
believe in.
    And it is interesting to me to learn today that it is your 
job to tell us about the consequences of our own actions. 
Because it seems to me that each one of these decisions has 
been a law passed by the Congress which has set us on the 
course that we are at today. And so the idea that you would 
tell us--have to tell us about the consequences of our own 
actions doesn't seem in line with this concept of personal 
responsibility.
    Thank you for your testimony.
    General Dempsey. Mr. Chairman, could I just take 15 
seconds?
    The Chairman. Yes.
    General Dempsey. The first chairman, Omar Bradley, in 1948, 
in his memoirs said the biggest mistake he ever made was--he 
said he knew that the Army was on a path and wouldn't be able 
to fight its way out of a paper bag in the early 1950s. In his 
memoirs he said that is the greatest mistake he ever made. We 
are here today to make sure we don't make that same mistake.
    The Chairman. Thank you.
    Mr. Gallego, before you got here, we were also engaged in 
this problem. If you could get staff to brief you on a hearing 
that we held a year ago September. We held five hearings before 
that on the impact on the military, sequestration. Then we held 
one on the impact on the economy of the country, and there was 
some very good information there. And that did break down the 
loss of jobs and basically said this would take us into another 
recession.
    And to respond to Mr. Smith's comment, I introduced a bill 
last Congress and I introduced it again last week that does cut 
the civilian workforce, not because I think that they don't do 
a good job and they are necessary. My father-in-law spent his 
entire adult life working for the civilian Navy, starting with 
trying to get torpedos to explode when they hit a ship rather 
than just bounce off. So I have great respect for the civilian 
side of the equation also.
    But what my bill did was cut the workforce by 10 percent 
through attrition. It didn't require furloughs; it didn't 
require firing people, laying people off. It was over a 10-year 
period. It did just pay for sequestration the first year, both 
nondefense and the defense side. And my thought and my hope was 
that it would push it after the election, give us some time to 
bring some real thought to bear on the issue.
    So far, we have ignored that solution and, as a 
consequence, probably going to have a lot of people now 
furloughed and people lose their jobs. And my legislation would 
have eliminated that. Unfortunately, it didn't happen.
    Mr. Franks.
    Mr. Gallego. Thank you, Mr. Chairman.
    Mr. Franks. Well, thank you, Mr. Chairman.
    And let me add my name to the list of all those who have 
expressed respect and gratitude to those of you in this panel 
today. I remind myself every day that my greatest hope is my 
children being able to walk in the sunlight of freedom. If they 
do that, it will be in large part because of those of you that 
have given your lives to the cause of human freedom. And I 
appreciate it very deeply.
    I suppose it is in that backdrop that I am bewildered that 
the national command structure at the highest echelons, even 
your Commander in Chief, have placed all of you in the 
untenable position of having to essentially cannibalize the 
capability and readiness that you oversee in the interest of, 
understandably, maintaining your commitment and support of 
those in theater. And it is just an untenable, unfortunate, 
tragic situation. And I have to express just a sense of real 
sadness that we have all put you in that position.
    Having said that, you know, oftentimes in a predictive 
environment we don't know what we are going to face. Right now 
we look at North Korea's advances and the potential of an 
emerging nuclear Iran. Those are all things that we see, but we 
don't know exactly all the things we will see. And it is 
especially challenging, in my mind, when we don't allow for 
additional room for unforeseen possibilities. And the only 
thing I know to do in that situation is to make sure that we 
have a robust force that is comprehensive in nature.
    So with that in mind, I am hoping--I am hoping that the 
President of the United States will, before this sequester 
takes place, sit down with the Congress still--still--and do 
what we can to prevent the worst of this situation from 
occurring. And I think the only way I know to motivate that is 
to once again do like we have done today, to try to emphasize 
the seriousness of it.
    So, General Welsh, my first question is to you. You last 
week issued Air Force Space Command budget actions that you 
will have to take if the sequester kicks in on March 1st. In 
the memo, as a point of action you stated that it will, 
``reduce some missile warning and space surveillance of 24/7 
operations to 8-hour-a-day operations.''
    Now, you know, given that a nuclear missile can ruin our 
whole day, that seems like an astonishing action. And it seems 
important to allow you the opportunity to demonstrate the 
pressure and the realities that you face that would press you 
to such a decision.
    General Welsh. Yes, sir. One of the benefits of our space 
operations funding streams is that there is a little 
flexibility across the set of sensors that provides both space 
warning, missile warning, as well as space surveillance.
    And so what our Air Force Space Commander has decided to do 
is to try and concentrate the 9-percent, nominal 9-percent 
sequestration cut in secondary modes of radars that allow us to 
continue the missile warning mission for the United States so 
that we are not at risk of not having warning of an incoming 
missile from our ground-based radar sites as well as the second 
phenomenology, the satellites in space that help contribute to 
that, and instead shut down modes of some of the ground-based 
radars that allow them to then--that are redundant capabilities 
so we don't have as much redundancy now in the system and we 
don't have as much capacity to track objects in orbit.
    And so that is where he has taken that cut in order to save 
money to put against the critical things that those radars do.
    Mr. Franks. Well, thank you, sir.
    Let me direct my last question to General Dempsey.
    General Dempsey, last night, President Obama called for 
even more cuts to our nuclear arsenal. Ashton Carter said 
something recently, that the Nation's nuclear deterrent is, 
``the last thing that you want to do serious damage to.'' And I 
find myself in full agreement with that.
    But would you agree that the sequester will have pressure 
on reducing our strategic weapons? And would that weaken our 
strategic nuclear deterrent?
    General Dempsey. I am not sure there is a cause-and-effect 
relationship there, but I will say that, as we look to the 
future--again, in my capacity, what I am responsible for in 
terms of military advice--I would say, as I have, that we need 
to preserve the triad, we need to ensure that the stockpile is 
well maintained, and we need to--if we were to take any further 
reductions, it would be in the context of negotiations, notably 
with Russia.
    Mr. Franks. Thank you, Mr. Chairman.
    Thank you, gentlemen.
    The Chairman. Thank you.
    It looks like we are going to be called in to vote in 15, 
20 minutes possibly. We have nine Members left that haven't had 
the chance to ask their questions, so we will try to move it 
along as quickly as we can.
    Mrs. Davis.
    Mrs. Davis. Thank you, Mr. Chairman.
    And thank you to all of you. I know how difficult all the 
choices are that we have before us, and I would certainly hope 
that, as we continue to move forward, that we are open to some 
of that negotiation. Because we know that, you know, there are 
difficult choices, and we don't want to be necessarily 
shielding special interest groups who don't need subsidies that 
they are already receiving. I mean, there are a lot of choices 
out there; that is just among them. And you are faced every day 
with these choices, and I know you are trying to make the best 
ones you can.
    I wonder--I know, Secretary--or Admiral Greenert--I am 
sorry--that you have been dealing with a number of 
extraordinary cost-cutting measures and trying to do some of 
those up front and soon. And Secretary Carter has also talked 
about the fact that we need them to be reversible where 
possible.
    And I am wondering if you could talk a little bit about how 
you would hope to stop some of the ripple, some of the effects 
throughout the economy, throughout the civilian force as well, 
as you make some of those upfront decisions right now that are 
scaring everybody, of course, and could create some real 
problems down the line.
    How are we thinking about reversing any of those decisions?
    Admiral Greenert. Well, first of all, if we had an 
appropriations bill, we could then reverse these things that we 
laid out there because we would have the funding. And I will 
speak to operations and maintenance first.
    Secondarily, if we don't have an appropriations bill, if we 
had the ability to reprogram money, then the kinds of things 
which are now near-term could be, if you will, reversed. As we 
lay these out, we start, in this case, the third quarter 
through the fourth quarter. At any given time during that 
period, if we can reprogram money, get a bill or find 
unobligated funds, we will then put them where--invest that 
where it can best be----
    Mrs. Davis. Uh-huh. Are there some areas that this is more 
problematic than others? Obviously, I mean, one can anticipate 
if you are cutting, you know, contracts, that is very difficult 
to do. But are there some that are just, you know, not 
reversible, actually?
    Admiral Greenert. Once we do not do a ship availability in 
a private shipyard, the ship goes back into its rotation, if 
you will. Someone else is up next. That is not reversible. Once 
that contract is cancelled, number one, the contractor might be 
on to something else; number two, again, we have to do the 
ship. Same applies to aircraft maintenance, as well.
    Mrs. Davis. Uh-huh. Is there an opportunity to spread out 
that impact? We had done some of that with Hurricane Katrina, 
trying to go to different shipyards. Is that a possibility at 
all?
    Admiral Greenert. It is a possibility. Step one is, we need 
the agility with the money, if you will, other options with 
funding.
    Mrs. Davis. Uh-huh. Thank you.
    If I could turn just quickly to military personnel, as 
well, I mean, the President has said that military personnel 
will not be immediately affected by sequestration. And yet we 
know that, with the exception of current levels of pay, 
basically, that there is a way that they would be affected. And 
I am wondering how we might be making some of those decisions 
of protecting some programs over others.
    Admiral Greenert. Well, for me, first, their military pay 
itself is protected. Of course----
    Mrs. Davis. Right.
    Admiral Greenert [continuing]. It is exempted. But I worry 
about the furlough of civilian employees who support us: fleet 
family service centers in the world I live in; childcare 
centers; the, of course, sexual assault advocates of sexual 
assault prevention. All of those we worry about.
    And I am working very hard and I have directed that we will 
not unfund, if you will, for these savings our programs, our 
family readiness programs. We will protect those. And so I am 
watching that very closely.
    Mrs. Davis. Uh-huh.
    Did anybody else want to comment on that in terms of other 
services?
    General Amos. Congresswoman, just like Admiral Greenert, 
our military force structure and pay structure, once we get 
down to the 182 [182,000] and all the Services adjust to their 
new levels, that is hedged off. But I would like to just 
reemphasize what Admiral Greenert is talking about, is when we 
sat down and looked at our O&M shortfall this year, for CR it 
is $406 million, but you add it all up, sequestration, it is 
about $1.8 billion, $1.9 billion O&M this year, just for 2013, 
for my Service.
    As we have prioritized where we are going to try to get 
that money to pay those O&M bills, that is readiness, it is 
training, and all the things we have talked about here today. 
At the very top of the tier--in other words, the last fruit; it 
is like the apples on the very top of the tree, they are the 
very last ones you take--is wounded warrior care, it is family 
readiness programs, it is the 42 brand-new sexual assault 
response coordinators that we have hired, the other 42 victim 
assault--victim advocates that we have hired, it is our highly 
qualified experts to help in the prosecution.
    So it is not--I am not throwing, you know, the red flag 
down, but I am just saying at the very top of the tree are 
these things that are really sacred to all our services, and 
they will eventually be impacted. To the degree, I am not sure, 
but we are going to be working real hard to try to minimize 
that. But I just wanted to be honest with you.
    Mrs. Davis. Thank you. I appreciate that, General, because 
those are some of the choices that the Congress has to make, as 
well, in terms of where we put our great emphasis.
    The Chairman. Thank you.
    Mrs. Davis. Thank you.
    The Chairman. The gentlelady's time has expired.
    Mr. Wittman.
    Mr. Wittman. Thank you, Mr. Chairman.
    Gentlemen, thank you so much for----
    The Chairman. Could the gentleman suspend for just a 
second?
    We are not, obviously, going to have time, and some of 
these Members, I know, have been here the whole hearing, as 
have you. We are not going to have time for all of their 
questions. The vote has already started. I will monitor it and 
run it as long as we can.
    But those of you who don't get to ask, if you will get your 
questions to the staff. I would ask you, gentlemen, if you 
would answer them for the record. Thank you.
    Mr. Wittman.
    Mr. Wittman. Thank you, Mr. Chairman.
    Gentlemen, again, thank you so much for your service to our 
Nation. I know it is a very challenging time.
    I want to go directly to Admiral Greenert and to General 
Amos. This picture was in The Washington Times just this week, 
and I think it is a snapshot of the readiness crisis that we 
are in. And, gentlemen, this could be part of any of our 
Services. This could be an air wing on a flight line idle. This 
could be an airborne battalion without the equipment or the 
planes to fly to train. This is really a snapshot, and this 
snapshot just happens to be taken in Norfolk, but it could be 
in San Diego, it could be in Pearl Harbor, it could be in 
Everett, it could be in Mayport. It could be at any of our 
places.
    But the thing that concerns me about this is what we see in 
this picture are five nuclear aircraft carriers. Now, granted, 
one of those is Enterprise, getting ready to be decommissioned. 
But what we are seeing now is only 10 aircraft carriers 
available through 2015. We know that the Theodore Roosevelt 
that is across the river is going through a refueling, so it is 
not available. We have two aircraft carriers that are in need 
of service, and we have one being decommissioned. Also in this 
picture are four of our large-deck amphibs [amphibious assault 
ships]. They are the backbone of our MEUs [Marine Expeditionary 
Unit].
    Now, gentlemen, this picture pretty much sums up, I think, 
our readiness crisis. And as they say, a picture is worth a 
thousand words. This picture to me denotes a number of things: 
number one, great risk. Everyone here on this panel has said 
it: readiness crisis. I think that is absolutely at the heart 
of this. It is a decreased capability. Lack of resources, loss 
of talent, limited response--all those are issues, things that 
come to mind.
    And, gentlemen, I am not here to place any blame. I don't 
think this is a blame game. But what I want to ask Admiral 
Greenert and General Amos is, is this picture the future of 
what we can expect under sequestration, and is this the future, 
what the American taxpayer can expect in the next decade for 
our fleet if sequestration goes into place?
    Admiral Greenert. Yes, it is, because what you have just 
said, Congressman, is we don't have the Navy where it matters, 
which is operating forward.
    And what you have there is the Abraham Lincoln tied up 
getting ready for overhaul; that is okay. But you don't have 
the George Herbert Walker Bush under way getting ready for her 
workup. The Truman is one of those. And we have discussed 
Truman before; I won't belabor your time. Enterprise is 
decommissioned. And, as you said, Eisenhower will leave in due 
time.
    But I am very concerned about the Amphibious Ready Group 
future, and I spoke to that, especially in 2014, early 2014. We 
won't have an Amphibious Ready Group where it matters so that 
she can be ready when it matters. And we know the value of 
that.
    And I will defer now to the Commandant.
    General Amos. Congressman, you are absolutely right, it is. 
If you remember those new deployments that I referred to 
earlier, about 2 hours ago, some or perhaps all of them would 
not have been there. So that is a fact. That could be the 
future.
    Mr. Wittman. Uh-huh.
    General Amos. And the last thing I would say is that you 
have those Amphibious Ready Groups as our Nation's insurance 
policy. That is what we are; it is an insurance policy. You buy 
insurance, health--no, life insurance for the unknown. We don't 
know what is out there. We have already heard our chairman talk 
about the unstable--the world we live in right now is very 
dangerous. It is going to be that way for the next two decades.
    I am not trying to scare everybody, but you have to have a 
hedge force such that you can do something when something 
happens to buy time for our national leaders.
    General Odierno. Congressman, if I could just----
    Mr. Wittman. Please. Yes.
    General Odierno. It is the same type of problem we have. 
And I mentioned it yesterday and I will mention it here, is 
that right now we are training the next set of units to go to 
Afghanistan. We are now not training the ones that go after 
them. And that will cause a significant impact there.
    But to get to what General Amos just said, what really 
concerns me is we will now see a slow degrade in our readiness 
that will cause us to have to respond if we have to respond to 
contingencies. And as was said earlier, we will respond, but 
they will not be as ready as we would like them to be. And that 
will ultimately cause--and the cost will be in lives and our 
ability to accomplish the mission in a timely fashion, which 
ultimately costs us more money in the long run. And that is 
what we are trying to prevent here.
    Mr. Wittman. Sure. Thank you.
    General Welsh.
    General Welsh. Congressman, you said it. That is the 
future.
    And I mentioned in my opening statement that by the end of 
July I won't have 75 or 70 percent or so of our combat air 
forces combat-ready. They will be flying enough to keep takeoff 
and landing currency. That is it. No mission training at all.
    Mr. Wittman. Got you. Very good.
    Thank you, Mr. Chairman. I yield back.
    The Chairman. The gentleman's time has expired.
    Dr. Fleming.
    Dr. Fleming. Thank you, Mr. Chairman.
    And thank you, panel. And thank you for your service to our 
Nation.
    You know, Admiral Mullen, when he was before us, made the 
statement that, when asked what is the most pressing problem 
that this Nation has certainly in the defense of our Nation, 
and basically he said it was our debt and deficit.
    Eighty-three percent of Americans agree with that, a Gallup 
poll shows. We are simply spending too much. That is the debate 
that led us to the Budget Control Act. And, of course, that was 
the consideration of holding our defense hostage for a debate 
that we all know--both sides of the aisle admit that reforming 
entitlements, streamlining entitlements, making entitlements 
strong and sustainable is really where we are going to have to 
have savings in outyears.
    Having said that, you have been asked to cut almost $500 
billion even before the BCA. And I felt like that it was 
inappropriate for us to hold our national defense hostage, so I 
voted, like many on the panel here, against the Budget Control 
Act of 2011 and the sequester. But we still have it.
    And the President, on the one hand, he talks in platitudes, 
he floats trial balloons. The only thing I know of that he has 
been specific about that would help put the money back into the 
sequester for the military would be to raise taxes. Well, we 
have already done that with a trillion dollars through the 
Affordable Care Act, another $620 billion barely a month ago 
added, and that is crushing our economy today. We are going 
into a second recession. And we know this could cause even 
worse recession going forward.
    So my question for you is this, and this is much more 
specific and down in the weeds. I have two important military 
bases, Barksdale Air Force Base and Fort Polk. Fort Polk has 
JRTC [Joint Readiness Training Center], and we have these 
rotating brigades that come in for training.
    Would it make sense, could we streamline and lower costs by 
permanently locating at least one of these brigades at Fort 
Polk? We are adding, as you know, 100,000 acres. It is becoming 
a wonderful training site, even much better than it was.
    And, General Odierno, go ahead.
    General Odierno. Sure. Well, Congressman, as I said 
earlier, first, the improvements that have been made at Fort 
Polk have been tremendous. I was just down there not too long 
ago. And the criticality of the training that we do there is 
irreplaceable. So it is a really valuable place for us to 
continue to go.
    However, that said, as I just told you, we are in the 
process now of reducing by 80,000 soldiers, and we are now 
reviewing where do they come out of. And so for us to think 
about moving and increasing somewhere is a very difficult time 
for us to do that. We are trying to figure out where are the 
best places for us to reduce our footprint. And that is what we 
are going through now.
    So I have to figure out where I get 68,000 worth of 
structure out of the Army, and it is going to affect every 
installation. So after that is done--and part of that process, 
looking at where do we want to sustain our bases and how do we 
want to sustain our capability across the Army. Fort Polk is 
one that we will absolutely continue because of the value of 
JRTC. But if we are able to reinvest there yet, I don't know 
yet. We are still reviewing that.
    Dr. Fleming. Okay. Thank you, General.
    General Welsh, my concern, of course, with Barksdale Air 
Force Base is the fact that we have a fleet of bombers that are 
older than many of the people in this room today, and it will 
probably fly another 30 years. But I do support the nuclear 
triad. I have heard it mentioned today. I think you do, as 
well.
    So my concern, of course, is the program going forward of a 
modern bomber, a next-generation bomber. We know that, even if 
we commit to it, we have another 12 years before the first one 
rolls off the assembly line.
    Can you help me understand what the impact may be on that, 
the next bomber fleet that we are seeing down the road, what 
sequester and any other things that we are doing at the 
Pentagon may affect that?
    General Welsh. Congressman, the Long-Range Strike Bomber 
program, because of a change in the contract administration of 
mechanics here earlier this year, isn't affected by 
sequestration this year. The impact would be as the top line 
decreases for--whatever the top line is for the future, that 
has the potential to impact everything we are doing.
    Dr. Fleming. Right.
    General Welsh. And so, as we look at the programs going 
forward, once we have an answer on what the funding will look 
like in the future, we will take a look at those.
    I think you know we are committed to the Long-Range Strike 
Bomber. It is something that is foundational to our Air Force 
for the future. And, clearly, 60-year-old B-52s [Stratofortress 
strategic bombers] aren't going to extend for too much farther 
in the future.
    Dr. Fleming. Yes.
    Thank you, gentlemen.
    The Chairman. The gentleman's time has expired.
    Mr. Palazzo.
    Mr. Palazzo. Thank you, Mr. Chairman.
    Just a quick statement--first of all, thank you for your 
service--but because we are running out of time and I want my 
colleague from Alabama to have an opportunity to ask some 
questions.
    I just wish the American people could actually see what we 
are discussing today and hear your remarks, hear our questions, 
hear your answers. I think we would be over with this in a 
week. I think the people would say, this is real. This isn't 
mainstream media trying to pick on one party or the other, but 
this is real. It is going to affect lives, and people are going 
to die over the decisions that we make here. And so I just wish 
there was an opportunity for the whole--all the American people 
to be able to see exactly what has taken place right here 
today.
    And I am tired, personally, of people pointing fingers. You 
know, I mean, everybody is saying, hey, I didn't vote for 
sequestration, I didn't do this. Nobody voted for sequestration 
of the military. So let's quit pointing fingers.
    I am tired of our President being a little bit AWOL on this 
subject. And I am not talking about ``absent without leave''--
``absent without leadership.'' He is our Commander in Chief. He 
is the supreme authority when it comes to all things military, 
and we need to see his leadership on this.
    And I am not pointing fingers at him. I mean, I tell you, I 
am kind of aggravated with many of my own colleagues from my 
same party who are sitting here, hey, let's just let 
sequestration happen, let's see what takes place. Look at this 
general over in AFRICOM [U.S. Africa Command], you know, just 
spending money as if it is--you know, taxpayer money with 
disregard. Look at the overruns that we have on weapons 
programs and so forth and so forth.
    So, at the end of day, I think it is morally irresponsible. 
And it has been said in this room, as I think it has been said 
and paraphrased by the chairman. It is morally irresponsible to 
try to balance the financial woes and our bank accounts on the 
backs of our men and women in uniforms and their families. And 
I am praying that we will be able to put this behind us, find a 
way to avert sequestration, but also to get our spending under 
control in this country.
    Thank you for your service.
    I yield back.
    The Chairman. The gentleman yields back.
    Ms. Roby.
    Mrs. Roby. Well, I thank you. I am glad I stuck it out. I 
didn't know I was going to get any time.
    So thank you all for being here today, and thank you for 
your patience and your candor. We appreciate all of you and 
what you do.
    And I am going to submit my question for the record, but I 
would like just to get it out there, and any brief comment.
    But, General Odierno, we talked about your testimony and 
the fact that 500 qualified aviators--pending aviator students 
will not be able to receive the necessary training at Fort 
Rucker. And we know this is going to have a huge impact.
    But I want to know a little bit more specifically about 
these rotary-wing--potential rotary-wing pilots and the impact 
on readiness and how it is not just going to affect us under 
our current obligations, which are still there--and, certainly, 
you all know how important these pending aviator students are 
to our current mission as well as that down the road, but even 
more importantly than that, the impact, the specific impact 
that that is going to have 2 to 5 years down the road.
    General Odierno. Well, 500 aviators equals 250 aircraft. So 
that means we will have 250 aircraft that we will not be able 
to man immediately based on this lack of training we will be 
able to do this year. So that is significant. I mean, that is a 
lot of aircraft, that is a lot of capability.
    And then what happens is you form this backlog, so it will 
take us longer to get aviators out of the system at Fort 
Rucker. So that will cause us to even have more unmanned 
platforms because of this backlog. So the implications are very 
serious to our future readiness, and it will take us 2 to 3 
years to get ourselves out of this problem.
    You know, Fort Rucker, we have streamlined our ability 
there to train our pilots, but we cannot take shortcuts because 
this is very serious business. So we have to make sure that 
they are trained to the quality necessary to meet all the gates 
necessary for them to be able to be effective as they report to 
their units.
    Mrs. Roby. Well, I appreciate that.
    And, sir, I would like to submit the rest of my questions 
for your review on the record.
    But thank you again for being here.
    The Chairman. Thank you very much.
    Let me thank you for being here. I know this was planned to 
go till 1 o'clock, so you have been very patient and stayed 
longer with us.
    I have one request, that you expedite, if you would, the 
questions of these Members that stayed all this time. Because 
this is very timely, and we will get those questions to you 
promptly.
    I have one final question that will be very brief. I think 
I know the answer. All I need is a ``yes'' or a ``no'' for the 
record.
    We have already cut billions under Secretary Gates that 
many people have forgotten about, the $487 billion that we have 
talked about but are just coming into play that are massive 
cuts. If you were asked to support an additional cut of $250 
billion, could you do so, given current missions, yes or no?
    General.
    General Dempsey. Not and execute the current strategy. I 
would have to know the change to the strategy and the increased 
risk.
    The Chairman. Given current missions, the answer is no.
    General Odierno. No.
    The Chairman. General.
    Admiral Greenert. No.
    General Welsh. No, sir.
    General Amos. No, sir.
    General Grass. No, sir.
    The Chairman. Nor could I.
    Thank you very much. Your service is greatly appreciated. 
Your patience here today has been greatly appreciated. Your 
answers have been very, very helpful.
    This committee stands adjourned.
    [Whereupon, at 1:32 p.m., the committee was adjourned.]


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


                            A P P E N D I X

                           February 13, 2013

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


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


              PREPARED STATEMENTS SUBMITTED FOR THE RECORD

                           February 13, 2013

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


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

              Chairman, House Committee on Armed Services

                               Hearing on

        The Impacts of a Continuing Resolution and Sequestration

                               on Defense

                           February 13, 2013

    Good morning. We meet this morning at the eleventh hour. 
This committee has undergone 16 months of exhaustive 
examination of the pending damage from sequestration, and now 
it appears that this self-inflicted wound is poised to cripple 
our military forces in just a few days. As the military members 
of our panel noted in a letter I received on January 14th, ``We 
are on the brink of creating a hollow force.''
    None of us come to this committee with clean hands. The 
debt crisis we face was decades in the making and a result of 
choosing the easy path when we should have explored the bravery 
of restraint. The President is not blameless. His negotiators 
put sequestration on the table during the long fight over the 
debt ceiling. We are not blameless either. Many of us voted for 
this terrible mechanism in the naive hope the President and 
Congress could put our politics aside and fix our debt crisis. 
That was a bad bet.
    Today we need to hear the ground truth from our witnesses. 
They have dedicated their lives to providing their best and 
unbiased military advice. We are certainly in need of such 
advice today. Unburdened from Administration orders to defer 
planning and assessments, you can now make it clear to this 
body, the White House, and the public, what damage months of 
inaction on sequestration and the Continuing Resolution have 
done to our Armed Forces. General Odierno, you testified 
yesterday that you began your military service in a hollow 
force, and that you are determined not to conclude your career 
the same way. I hope that you and the panel can expand on that 
notion today, determining at what level of cuts do Congress and 
the President turn that fear of a hollow force into reality.
    General Dempsey, in April of last year you testified about 
the $487 billion we have already cut from defense. You told 
Congress that to cut further would require an adjustment of 
strategy. You concluded that this new strategy would, and I 
quote, ``Not meet the needs of the Nation in 2020 because the 
world is not getting any more stable.'' I am interested to know 
if you continue to stand by that statement. Today, we 
anticipate detailed answers to our questions. In addition to 
hear about levels of risk as sequestration's blind cuts 
absolves folks from planning, we want to hear if we have 
crossed a red line and cut you too much. If that red line is in 
the near distance, I expect you point it out. Gentlemen, you 
have no stronger advocate, no better ally in this fight than 
the Armed Services Committee, and we urge you to work with us 
in these final days.
    In the coming weeks and months leaders in both parties and 
the White House will, I hope, come together to begin discussion 
of the drivers of our debt and the path to fiscal health. There 
will be no easy choices on that table. I fear that many may 
choose to soften the blow of those choices by turning once 
again to the Department of Defense. Indeed, the formula to 
achieve what the President characterized as a balanced approach 
includes tens of billions in additional cuts for this fiscal 
year. I cannot support any plan, regardless of how it addresses 
entitlement spending or revenue, unless it also offers 
meaningful and real relief for DOD from sequester.
    With that, I look forward to your testimony.

                      Statement of Hon. Adam Smith

           Ranking Member, House Committee on Armed Services

                               Hearing on

        The Impacts of a Continuing Resolution and Sequestration

                               on Defense

                           February 13, 2013

    I would like to thank our witnesses for attending this 
hearing today. Since the so-called Super Committee failed to 
reach an agreement, the perils of sequestration have been 
apparent, but a deal to avoid its effects has been elusive. It 
is clear that, so far, sequestration has failed to motivate 
Congress to adopt sound fiscal policy. Now, we have hit a 
critical point in the effort to resolve our budgetary problems.
    We have repeatedly heard from our military leaders that 
sequestration will be damaging to national security. I agree 
with Secretary Panetta's description of sequestration as a 
``disaster in terms of the Defense Department.'' Damage has 
also already been done to our economy.
    I think everyone in this room can agree that sequestration 
must be prevented. It is clear that large, indiscriminate, 
across-the-board cuts to the Federal budget would have serious 
implications for national security, our economy, and a wide 
range of important Federal programs. The damage from 
sequestration compounds the uncertainty created by funding the 
Federal Government, particularly the Department of Defense, 
through a Continuing Resolution.
    Without a doubt, we need to take action to reduce the 
Federal debt and deficit, but that cannot and should not be 
done through sequestration. Our economy is still fragile, too 
fragile to absorb such a blow, and our national security is too 
important. Reducing Federal spending by lopping off the top of 
the Federal budget without any discretion is bad government and 
fundamentally irresponsible. Congress should move toward a 
solution that reduces spending and that provides new revenues 
for sustaining important Federal programs that ensure national 
security and our long-term economic viability.
    While hearings like this are useful, to an extent, we have 
already established that sequestration would be bad. I share 
the view that informing the American people of sequestration's 
harmful effects may be useful in pushing Congress to fix the 
problem it created, but it is time to stop talking and take 
immediate action to stave off the impending disaster that would 
occur should sequestration be implemented. There is too much at 
stake.
    Sequestration is coming. The first of March is only a few 
legislative days away, and the prospects for severe damage to 
national security and our economy are real. Congress must act 
now to remove the threat of sequestration once and for all. Our 
economy and national security are at stake.


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?

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


              WITNESS RESPONSES TO QUESTIONS ASKED DURING

                              THE HEARING

                           February 13, 2013

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

      
              RESPONSE TO QUESTION SUBMITTED BY MR. BISHOP

    Secretary Carter. As I mentioned previously, the Department has 
consistently stated and still does not anticipate having to terminate 
or significantly modify contracts as a result of sequestration. This is 
because most existing contracts are fully funded at the time of 
contract award; incrementally funded contracts would have to be 
reviewed on a case by case basis.
    As a rule, the Department does not terminate fully-funded contracts 
if termination costs will not result in significant savings. During 
sequestration, cost savings will arise from buying less in the future 
rather than terminating contracts. We expect the Military Departments 
and Defense Agencies to de-scope some of their operations and 
maintenance-funded service contracts and subsequently make decisions 
not to exercise options or award follow-on contracts. An example is 
Navy's decision to delay overhauls. Another is the reduction in our 
base maintenance posture.
    The Military Departments and the Defense Agencies will re-assess, 
program by program, their unobligated funding balances, their mission 
priorities, and critical needs, and make appropriate funding decisions. 
It will take some time to determine if there are any cost impacts and, 
if so, what they are, as decisions are made. [See page 40.]
                                 ______
                                 
             RESPONSE TO QUESTION SUBMITTED BY MS. HANABUSA
    Secretary Carter. The budget reductions made under Secretary Gates 
as well as the budget cuts levied by the Budget Control Act of 2011 
have all been applied to the Department of Defense's budget topline.
    In the months leading to the release of the FY 2012 budget, 
Secretary Gates directed efforts within the military services, and in 
DOD as a whole to generate efficiency savings by reducing overhead 
costs, improving business practices, or culling excess or troubled 
programs. In total, DOD identified savings of $178 billion in FY 2012-
2016, including $24 billion in FY 2012. The Services were allowed to 
reinvest $100 billion of the $178 billion savings to improve readiness 
and warfighting capabilities (``tail-to-tooth'') and the Defense 
topline was reduced $78 billion in FY 2012-2016, including $13 billion 
in FY 2012. The Budget Control Act levied an additional $487 billion of 
cuts against the DOD topline, spread across fiscal years (FY) 2012-
2021. The President insisted that the resulting defense cuts be driven 
by strategy and U.S. defense needs in the coming decade. The Department 
has taken a hard look at the new security environment and developed a 
strategy that appropriately allocates reduced defense resources to the 
highest priority needs and ensures our national security objectives are 
met. The FY 2013 Department of Defense budget was shaped by the 
strategic guidance and reflects key mission and capability priorities 
emerging from the strategic review. The strategy is executable with the 
resource levels currently detailed in the Budget Control Act, but the 
potentially severe cuts stemming from sequestration would seriously 
threaten the Department's ability to implement the strategic guidance. 
[See page 44.]
                                 ______
                                 
              RESPONSE TO QUESTION SUBMITTED BY MR. TURNER
    General Dempsey. The answer to your question on whether Russia is 
in compliance with its nuclear arms-control obligations is more complex 
than a simple yes or no. Treaty compliance is assessed and reported 
annually to Congress. Each year the Department of State leads an 
interagency examination of treaty compliance, the findings of which are 
provided to Congress in two reports. Condition (10) of the New START 
Treaty Resolution of Advice and Consent to Ratification calls for the 
President to submit a report to the Senate Committees on Foreign 
Relations and Armed Services not later than 31 January of each year. 
This report was released to Congress earlier this year. Additionally, 
the President's report on Adherence to and Compliance with Arms 
Control, Nonproliferation, and Disarmament Agreements and Commitments 
is submitted pursuant to section 403 of the Arms Control and 
Disarmament Act, as amended (22 U.S.C. Sec. 2593a). This report is in 
final coordination and forthcoming but has not yet reached my desk for 
review. However, from my perspective, execution of New START is going 
well. We continue to work within the Bilateral Consultative Commission 
to resolve early interpretation issues, not unlike the pattern of the 
original START. I would note that the Treaty of Moscow was superseded 
by the New START Treaty and is no longer in force, and the 
Comprehensive Nuclear Test Ban Treaty, which the United States has not 
ratified, has not officially entered into force. [See page 49.]
                                 ______
                                 
            RESPONSE TO QUESTION SUBMITTED BY MS. DUCKWORTH
    Secretary Carter. The DOD is not buying a new network, rather we 
are implementing technology refresh for an existing network (the 
Defense Information Systems Network, or DISN) that has existed for many 
years supporting the internal DOD IT capability, providing mission 
critical support to the Department and Intelligence Community and 
resulting in significant savings. The current effort is an initiative 
to improve efficiencies and more closely align with commercial trends 
and network evolutions.
    The ongoing efforts to upgrade our network infrastructure are 
critical since the existing technologies and equipment used in our 
infrastructure are becoming obsolete and will soon not be supported 
(for example Asynchronous Transfer Mode) by the vendor community. The 
primary focus is to converge multiple, disparate physical and protocol 
networks into a common, standards-based network. Key to this is the 
implementation of Multi Protocol Label Switching (MPLS) technology as 
the standard network protocol. The technology refresh will begin this 
quarter using the existing technical refresh budget and the first 
instantiation is expected by the end of Calendar Year 2014. This will 
continue for several years. All security required is being provided via 
existing DISN encryption and security methodologies that meet or exceed 
all standards and requirements. Additionally, we are currently using an 
instantiation of this capability to support the National Geospatial-
Intelligence Agency in Southwest Asia. [See page 46.]
?

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


              QUESTIONS SUBMITTED BY MEMBERS POST HEARING

                           February 13, 2013

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

      
                   QUESTIONS SUBMITTED BY MR. MCKEON

    Mr. McKeon. In the event of a year-long Continuing Resolution, will 
the DOD's Title III Defense Production Act Advanced Drop-In Biofuel 
Production Project continue? Additionally, if sequestration were to 
occur, would this project proceed? If it does proceed, will there be 
any funding or program adjustments? Please provide details of those 
changes, if any.
    Secretary Carter. A. With respect to the impact of a Continuing 
Resolution (CR) for FY 2013:
    1. Funding required for Phase 1 of the Defense Production Act Title 
III (approximately $24 million) is from the FY 2012 appropriation. 
These funds are no-year, no-color funds that are valid until expended. 
The CR for FY 2013 funding does not restrict that action.
    2. An additional $6M was planned for Phase 1, but is not needed. 
These funds will be allocated to Phase 2, for a total of $76M. These 
funds will not be impacted by a CR for FY 2013.
    3. Beyond the now $76M from FY 2012 available for Phase 2, $70M was 
included in the FY 2013 budget request. If the CR does not reduce the 
FY 2013 request, there will be a total of $146M for Phase 2, which 
would be obligated in middle CY 2014.
    4. If a CR were to eliminate the FY 2013 request of $70M, the $76 
million of FY 2012 funds will remain available for funding of Phase 2 
of the project. This level of funding will enable selection of probably 
only one contractor for Phase 2, for the construction, initial 
operation, and verification of a biofuel production facility.
    B. With respect to sequestration:
    1. A total of $170 million in FY 2012 and FY 2013 funding is 
budgeted for the Defense Production Act Title III Advanced Drop-In 
Biofuel Production Project. The execution plan calls for obligation of 
approximately $24 million for Phase 1 of the FY 2012 appropriation 
(initial process verification, site selection, cost estimates, etc.) in 
March/April 2013, plus $146 million ($76 million FY 2012/$70 million FY 
2013) available for Phase 2 (construction, initial operation, 
verification of production operation, and costs of production) to be 
awarded in summer 2014 to at least one or possibly two contractors. 
Early Government and contractor estimates for execution of Phase 2 
established an expected need for $70 million of Title III funding for 
each phase 2 contractor.
    2. Current DOD planning projects a nine percent sequestration 
reduction against the $170 million for the Biofuel project, which will 
total $15.3 million. The $15.3 million reduction will be applied to the 
$146 million allocated for Phase 2. Phase 1 will proceed as planned and 
funding of $130.7 million will be available for the contractor(s) 
selected for Phase 2. The reduced Government funding may force higher 
cost shares on the part of the selected contractors or a reduction in 
the scope/scale of the Biofuel Phase 2 effort. It is likely that at 
least one contractor could be funded with available funds.
    C. Restrictions imposed in the National Defense Authorization Act 
for Fiscal Year 2013
    1. The NDAA (Sec. 315) provided specific direction that embargoes 
the $70 million of biofuel funding in FY 2013, saying, ``Sec. 315: 
Amounts made available to the Department of Defense pursuant to the 
Defense Production Act of 1950 (507 U.S.C. App. 2061 et seq.) for 
fiscal year 2013 for biofuels production may not be obligated or 
expended for the construction of a biofuel refinery until the 
Department of Defense receives matching contributions from the 
Department of Energy and equivalent contributions from the Department 
of Agriculture for the same purpose.''
    2. It is unclear at this time whether or when DOE will provide 
their share of the funding.
    3. If FY 2013 funding is not available for the project, the nine 
percent sequestration reduction would restrict Phase 2 funding to $67 
million of the FY 2012 appropriation ($76M from FY 2012 less $9M of 
sequestration cut). The reduced Government funding may force slightly 
higher cost shares on the part of the selected contractor(s) or a 
reduction in the scope/scale of the Phase 2 effort.

    Mr. McKeon. To delay sequestration for the rest of FY 2013, the 
President's plan would cut $21 billion more from the military, plus the 
$2 billion his proposal already cut from FY13 as part of the fiscal 
cliff deal. General Odierno, how would an additional $23 billion cut to 
the military this year impact the readiness crisis you described in 
your testimony and would you support such a cut, assuming sequestration 
is not resolved, but merely delayed to October?
    General Odierno. Additional reductions to our FY13 budget would 
create serious challenges because of the combined impact of 
sequestration, the CR, and the OCO shortfall. In a broad sense, our 
challenge is driven by a persistent lack of predictable funding 
evidenced by the Army operating under a continuing resolution for 14 of 
the last 28 months. Each continuing resolution prevents new starts for 
needed programs, limits reprogramming actions, and often results in 
wasteful funding for accounts that we no longer need. This year we are 
also facing a significant known shortfall in Overseas Contingency 
Operations (OCO) funding. These two facts are challenging propositions 
when taken in isolation, but together the impact is tremendous. Add to 
this the potential of sequestration and the impact is devastating. The 
proposal to delay sequestration until next fiscal year and replace it 
with a smaller reduction this year does little to help us address our 
current problems and brings no clarity to the Army's future funding 
levels.
    It is difficult to state the detailed impacts to the Army of a $23 
billion reduction in FY13 because the bill would be apportioned to the 
Services by OSD. It would further depend on how the reductions were 
stipulated in the law (i.e., directed by appropriation or a topline 
reduction). Regardless, Army readiness will still likely suffer in the 
near-term as this reduction would be in addition to the current 
shortfall of $6 billion caused by the continuing resolution and the $5-
7 billion OCO shortfall. The Army would continue to ensure the 
readiness of all soldiers in Afghanistan, those next to deploy, those 
stationed forward in Korea, and the Army's Global Response Force at the 
expense of non-deploying units and other less critical programs. Our 
ability to employ this approach may be extended beyond what we are 
anticipating given the full reductions of sequestration, but it would 
still erode Army readiness through FY14 when full sequestration would 
then be implemented. Delaying sequestration only delays the hollowing 
of the force that would ensue as a result of only being able to train 
next-deployers and forces for Korea. It means that the forces that 
would follow would require a longer period to meet the same standards 
as those deploying today, an effect that would only amplify over time, 
resulting in greater expenses to rapidly buy back lost readiness over 
time.
    Mr. McKeon. On November 2, 2011 you testified before the House 
Armed Services Committee as follows, ``So, once you get beyond $465 
billion, we have taken all of the efficiencies we can take. We have 
taken out structure. We have reduced modernization, in my mind, in some 
cases lower than we really needed to reduce modernization, already. If 
we go beyond that, we now--it becomes critical, and it becomes a fact 
that we will no longer modernize. We will no longer be able to respond 
to a variety of threats. We will have to get to a size that is small 
enough where I believe, as I said earlier, we might lose our 
credibility in terms of our ability to deter. And that is the 
difference. So it is not ``okay'' at $465 billion. It is something we 
have been able to work ourselves through, with risk. But anything 
beyond that becomes even higher risk.'' Do you continue to stand by 
this statement?
    General Odierno. Yes.
    Mr. McKeon. When was the Department of the Army authorized to begin 
detailed planning for sequestration?
    General Odierno. The Army was authorized to ``plan to plan'' for 
sequestration on 7 Dec 2012.
    Subsequent guidance specifically prohibited detailed planning until 
after sequestration is triggered. Army received draft technical 
guidance for planning from OSD on 28 Dec 2012 for detailed planning.
    Mr. McKeon. Are there any choices that you are being forced to make 
now that you might not have made, had you begun to initiate this 
planning earlier? For example, could any depot maintenance have been 
rescheduled to preserve readiness for the rest of FY13 and beyond? 
Would you have changed your spend rate this year?
    General Odierno. The Operation and Maintenance, Army appropriation 
is currently facing significant funding shortfalls due to the prospect 
of a full year continuing resolution at the FY12 Base enacted level, 
and fully funding wartime operations while facing a significant 
Overseas Contingency Operations funding shortfall. The compounding 
effect of these pressures and sequestration would have required 
adjustments to any plans and must now be adjusted by operational 
requirements. Earlier planning for sequestration may have altered the 
magnitude, but not eliminated the myriad of programs and functions 
required to be reduced to meet the statutory ceiling.
    Mr. McKeon. The January 14th letter sent to the congressional 
defense committees calls for legislative solution to the readiness 
crisis you are facing. ``We ask for legislative action that adequately 
resources readiness while granting the Department the authority and 
flexibility to shape the force to new budget realities.'' But the 
letter didn't include an actual legislative proposal. General Odierno, 
do you have a specific legislative proposal in mind? If so, please 
describe such legislation.
    General Odierno. OMB provided the enclosed list of anomalies for an 
FY13 full-year Continuing Resolution to Congress, which includes 
proposed legislative provisions increasing general transfer authority 
from $3.75B to $4.5B, authorizes the Department to begin new programs, 
projects, and activities or increase rates of production relative to FY 
2012 levels, removes the requirement that no more than 20 percent of 
current one-year appropriations may be obligated during the last 
quarter of the fiscal year, allows the Army to enter into multiyear 
contracts for CH-47F Chinook helicopters, and includes a table that 
realigns funds to resolve CR O&M, APA, and RDTE shortfalls.
    Mr. McKeon. The January 14th letter sent to the congressional 
defense committees also mentions potential civilian furloughs. Based on 
notification timelines to Congress and to civilian personnel, when 
would be the first date an Army civilian could be furloughed? When does 
the Army plan to issue the formal notification of civilian furloughs to 
Congress?
    General Odierno. Secretary Panetta provided Congress the required 
furlough notification for the entire Department, including all 
Components, on February 20, 2013. Considering the mandatory 
Congressional waiting period and the need for at least 30 days notice 
to employees, the earliest we anticipate an employee might be 
furloughed is late April 2013.
    Mr. McKeon. We have seen State by State estimates of civilian 
personnel furloughs from the Air Force and the National Guard, and a 
regional break down from the Navy. Is the Army planning on issuing a 
similar analysis?
    General Odierno. Detail PowerPoint slide provided to congress on 15 
February, please see attached copy (on page 152) for committee use.
[GRAPHIC] [TIFF OMITTED] 79491.070

    Mr. McKeon. How many Army civilians will have to be furloughed by 
the end of FY13? Is there any consideration for retaining critical 
skills, if so, in which areas?
    General Odierno. The vast majority of the Army's over 251,000 
civilian employees will be furloughed with very limited exceptions, 
approved by only myself and the Secretary, for those with duties that 
are critical at this time. One of the categories of civilians excepted 
from furlough, for instance, will be employees who are deployed in 
combat zones. Other exceptions may be for those who are protecting the 
safety of life or property, but only to the extent that their 
continuous presence is required to provide that protection. Lastly, we 
will likely exempt civilian employees at Arlington National Cemetery 
due to the significant disruption it would cause in maintaining the 
current burial schedules. These furloughs are driven by the substantial 
combined impacts of a Continuing Resolution, Sequestration, and the 
cost to support the war above the current allocated funding.
    Mr. McKeon. How much of a cut can the Army take in FY13 before 
having to furlough civilians--assuming the cut was not through 
sequester, but to the topline?
    General Odierno. Civilians are paid from multiple appropriations 
across the Army but primarily from Operation and Maintenance, Army. 
Since we are operating under a Continuing Resolution through 27 March 
and the authorized amounts are based on an FY12 annualized amount, we 
are already approximately $6B short of our request for FY13. 
Additionally, our OCO request is approximately $5-7B underfunded in 
FY13 and we have made a commitment to ensure no degradation occurs in 
our support to the warfighters. Thus, we will be required to use our 
already short base funds to support the warfight. The cumulative effect 
of the FY12 base shortfall, the reduced topline through sequestration 
and emerging OCO requirements could require us to use furlough as an 
option of last resort to mediate our fiscal deficiency.
    Our dedicated civilians do not deserve to be furloughed. It simply 
is not right. However, due to the magnitude of our shortfalls, we will 
most likely have to use it to achieve the mandated savings.
    Mr. McKeon. Has the Army considered a reduction in force as part of 
its planning? If so, is that a potential near-term solution to absorb 
the cuts from sequestration?
    General Odierno. The Army is working to reduce its Civilian on-
board strength in order to meet funding targets established by the 
Secretary of Defense in Resource Management Directive 7032A. 
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. As a result, the Army may execute 
reductions in force during Fiscal Year (FY) 2013 that were initiated 
last FY or earlier this FY. However, a reduction in force will not 
serve as a near-term solution to address the FY 13 effects of 
sequestration because of the costs associated with conducting a 
reduction in force and the timeframes for Congressional and employee 
notifications.
    As part of the FY12 DOD civilian workforce reductions the Army 
submitted 54 RIF actions to DOD targeted at achieving end strength 
targets and eliminating positions where workload is complete or 
discontinued. Those FY12 RIF's will continue executing this year 
separating 1,433 employees. In FY13 four RIFs are in progress for a 
total of 433 separations. For FY13, based on the on the notification 
timelines both in law and policy, there is not enough time left in the 
year to plan and accomplish RIFs, nor would it result in any dollar 
savings to meet sequestration targets.
    Mr. McKeon. In a recent interview, Secretary Panetta indicated 
that, ``We have identified $30 billion in new initiatives over the next 
five years to eliminate overhead and duplication,'' which would be 
included in the FY14 budget request. To assist in realizing this 
savings, the Secretary has also indicated the Department's desire to 
seek another round of BRAC. Likewise, your January 14th letter to the 
congressional defense committees states, ``We must also be given the 
latitude to enact the cost-saving reforms we need while eliminating the 
weapons and facilities we do not need.'' Presumably, this is a 
statement expressing the uniformed military's support for another round 
of BRAC. Considering BRAC 2005 will not realize a payback on its $35 
billion price tag until 2018, 13 years after the start of the initial 
investment, can the Nation afford to exacerbate a potential 
sequestration deficit in 10 years by moving forward with another round 
of BRAC now?
    General Odierno. The BRAC 2005 process was, by design, primarily 
about maximizing military value and helping the Army Transform itself 
from a Division-based force into modular Brigade Combat Teams, the 
modest payback period was a worthwhile investment. While payback 
periods can be calculated in different ways, the Army's view is that 
BRAC savings are real and substantial. It is better to align 
infrastructure with evolving force structure to hasten the realization 
of fiscal savings. Delaying the realignment of infrastructure and 
civilian staffing with future force structure inevitably increases 
future costs and makes future budgetary decisions more difficult.
    In Europe, a 45% reduction in force structure resulted in a 51% 
reduction in infrastructure, a 58% reduction in civilian staffing, and 
a 57% reduction in base operating costs. At overseas installations 
(i.e., Asia and Europe), the Army is consolidating facilities already 
and Congressional authorization is not required. Army active duty 
component end-strength is declining by 80,000 from a peak end-strength 
of 570,000 in Fiscal Year 2010 to 490,000 by Fiscal Year 2017. This is 
a significant reduction in the Army. Almost every installation will be 
affected in some way. Given that total facility square footage at Army 
installations has either remained constant or slightly increased since 
2005, a reduction of 14 percent in end-strength will create excess 
installation infrastructure.
    Is another round of BRAC affordable? Perhaps the more revealing 
question is whether the Army and the Nation can afford to carry excess 
infrastructure and overhead expenses and divert scarce resources away 
from critical and future requirements. The Army would use an authorized 
round of BRAC, if it were authorized, to conduct a rigorous analysis to 
identify excess infrastructure, and prudently align supporting civilian 
personnel and infrastructure with reduced force structure and reduced 
industrial base demand. If sequestration were fully implemented, an 
additional 100,000 soldiers or more would be reduced out of the Active 
Duty, National Guard, and U.S. Army Reserve. This reduction would 
create further pressure to bring infrastructure and civilian staffing 
into proper balance with force structure. The Army and Nation cannot 
afford to carry excess infrastructure and overhead expenses created by 
the downsizing of the force. The Army anticipates that a future round 
of BRAC, if authorized by Congress, would more closely resemble prior 
rounds of BRAC in which elimination of excess installation capacity was 
the main objective. BRAC allows for a systematic review of existing DOD 
installations for Joint and multi-service component utilization.
    Mr. McKeon. If sequester goes into effect for only 1 or 2 months, 
but is then resolved, please describe the impact on training, including 
the impact on operations, civilian personnel, facilities sustainment, 
depot maintenance, and training.
    General Odierno. One of the persistent challenges to the Army has 
been a lack of predictable funding, evidenced by operating under a 
Continuing Resolution (CR) for 14 of the last 28 months. Each 
continuing resolution prevents new starts for needed programs, limits 
reprogramming actions, and often results in wasteful funding for 
accounts that we no longer need. This year we are also facing a known 
shortfall in Overseas Contingency Operations (OCO) funding between five 
and seven billion dollars. These two facts are challenging propositions 
when taken in isolation, but together the impact is tremendous. Add to 
this the potential of sequestration and the impact is devastating--and 
those effects are already being felt by the Army. Even if the sequester 
is in effect for only one to two months, its resolution will do little 
to help us address our current fiscal problems and will likely bring no 
greater clarity or predictability to the Army's future funding levels.
    The budget uncertainties outlined above have caused the Army to 
begin implementing steps to prepare for reduced budget caps. We began 
in January to limit the training and overall readiness of units that 
are not deploying or scheduled to deploy in order to ensure those that 
are have adequate resources to train. Should sequestration only last 
one to two months, the Army will still require an extended period of 
time and significant resources to restore readiness.
    The Army has also implemented cost saving measures that affect the 
civilian workforce. We have implemented a civilian hiring freeze with 
limited exceptions, and have initiated the release of term and 
temporary civilian employees. We also announced the intent to furlough 
all civilian personnel, with very limited exclusions, for 22 work days 
prior to the end of fiscal year 2013. If a final decision to furlough 
is made, the Army anticipates the first furloughs to begin near the end 
of April. Should the resolution of sequestration and an OCO shortfall 
render a furlough unnecessary prior to that time, furlough plans could 
be cancelled and employees would not be affected. If employees are 
furloughed prior to resolution being reached, those employees who were 
furloughed would not be paid for the furloughed time, unless Congress 
takes action to specifically authorize retroactive payment. All of 
these actions directly affect the morale of our dedicated civilian 
workforce, and the impact has already been felt. Restoring capabilities 
and capacities lost due to the hiring freeze and release of civilians, 
and restoring the faith of our dedicated civilian workforce could take 
a considerable length of time.
    The Army has implemented similar measures to reduce costs 
associated with facility sustainment and depot maintenance of 
equipment. Specifically, we have reduced funding for facility 
sustainment to only work that is required for life, health and safety. 
The Army has also eliminated most restoration and modernization funding 
for facilities due to sequestration and has not implemented any 
significant FY13 military construction projects because of the 
continuing resolution. Facility conditions will continue to deteriorate 
until funding is restored to adequate levels and the backlog of 
deferred maintenance can be addressed. The Army is also prepared to 
implement cost savings measures across our depots. In the immediate 
future, the Army will direct that only equipment required by deploying 
forces will be inducted into the depots for the remainder of this 
fiscal year. This defers maintenance on a majority of the equipment 
returning from Afghanistan as well as other equipment scheduled for 
depot level maintenance. Overall unit readiness will be impacted by 
reduced equipment readiness conditions and/or the lack of equipment on-
hand.
    Regardless of the duration of sequestration, the impacts of an OCO 
shortfall and a CR to Army training, to include the impact on 
operations, civilian personnel, facilities sustainment, and depot 
maintenance, will be significant. The Army has already implemented cost 
saving measures across all of these activities because of the current 
budget uncertainties and these measures will take time and a 
significant commitment of resources to overcome.
    Mr. McKeon. Are the effects of a 1- or 2-month sequester 
reversible?
    General Odierno. The effects of a one or two month sequester can be 
reversible--given sufficient time and resources to restore what is lost 
(i.e., readiness). However, the situation facing the Army is not solely 
driven by sequestration, but rather the cumulative effect of 
sequestration, the continuing resolution and the Overseas Contingency 
Operations (OCO) shortfall. These budget uncertainties have already had 
a significant impact on the Army and sequestration will only add to 
that, regardless of duration.
    The Army began implementing measures in January 2013 to reduce 
spending to prepare for the reduced budget caps and ensure resources 
were available to address critical operations and programs, like 
Operation Enduring Freedom and Wounded Warriors. Additional cost-saving 
measures, to include a 22 work day civilian furlough, will soon be 
executed absent any legislative action to address the current budget 
uncertainties. These measures have already affected training, equipment 
maintenance and sustainment, the civilian workforce, facility 
sustainment, and installation services. A short duration sequester will 
further impact these programs prolonging the period of time and 
increasing the resources it will take to recover what has been lost.
    Mr. McKeon. The January 14th letter sent to the congressional 
defense committees from the Joint Chiefs of Staff describes the 
readiness crisis resulting from a full-year continuing resolution and 
sequestration. The letter goes on to state, ``The combination of 
capabilities and capacities of the Nation's military force required to 
defend our national security interests with an acceptable degree of 
risk is a separate issue.'' How do you interpret this statement? Do you 
believe the readiness crisis before us, or the issue of full 
sequestration, can be separated from the issue of the risk to our 
national security?
    General Odierno. A full year continuing resolution and 
sequestration will have immediate impacts on readiness for our current 
requirements, not only to our combat operations, but our military 
obligations in the near term. The capabilities and capacities 
envisioned to meet military strategies that address anticipated threats 
to national security interests over the long term are beyond the 
purview of readiness to meet current missions. The Army can meet its 
obligations to the current Defense Strategic Guidance with a gradual 
reduction of forces to previously planned levels. Drastic changes to 
the schedule or scope of that drawdown will warrant revisiting that 
strategic guidance to determine how best to balance further reduced 
capabilities and capacities and how best to employ them against the 
ends derived from our national security interests. We must avoid the 
grave risk of an imposed mismatch between the size of our Nation's 
military force and the funding required to maintain its readiness. 
Failure to do so will inevitably lead to a hollow force.
    Mr. McKeon. If sequestration happens and if the White House and 
Congress cannot reach agreement on funding, will the military be able 
to defend our interests with an acceptable degree of risk, given the 
current security environment?
    General Odierno. The specific level of risk is dependent on the 
legislation passed by the Congress replacing the Continuing Resolution. 
In my opinion, sequestration is not in the best interests of our 
national security. It will place an unreasonable burden on the 
shoulders of our soldiers and civilians. We will not be able to execute 
the Department of Defense strategic guidance as we developed last year. 
It is our responsibility--the Department of Defense and Congress--to 
ensure that we never send soldiers into harm's way that are not 
trained, equipped, well-led, and ready for any contingency to include 
war. We must come up with a better solution.
                                 ______
                                 
                  QUESTIONS SUBMITTED BY MR. LANGEVIN
    Mr. Langevin. I am particularly concerned about the effect of 
sequestration on cyber operations, which by their nature are more 
vulnerable to short-term budgetary pressure.
    Can you address the effects of sequestration on cyberspace 
activities and how you intend to manage the fiscal pressures given 
increasing demands in this regime, particularly in light of the reports 
of CYBERCOM's plan to grow the number of cyber operators?
    Secretary Carter. The indiscriminate, across the board nature of 
the sequestration will have an adverse impact on the Department's 
ability to carry out cyber missions, including IT and network 
modernization to improve cyber defense capabilities and developing 
capabilities supporting integration of cyber into the Combatant 
Commands planning. The result will likely be delays in implementing 
some of the activities planned in the near-term. The Department does, 
however, recognize the importance of supporting critical Cyberspace 
Operations, including those associated with defending the Nation 
against cyber threats, in these difficult economic times.
    The FY13 defense budget includes funds that support CYBERCOM's 
cyber personnel request and similarly, the FY14 DOD budget request 
includes funding to grow the number of cyber operators.
    Mr. Langevin. Secretary Carter, can you speak to the effect of 
sequestration on research and development, particularly long-term 
research, as well as on defense investments in STEM (science, 
technology, engineering, and mathematics) education?
    Secretary Carter. Sequestration will have a disruptive and negative 
impact on both the Department's long-term research and on investments 
in STEM education. A principle of both long-term research and STEM is 
funding stability, since both are about the people.
    A. The effect on long-term research:
    One important impact of sequestration on R&D would be a reduction 
to the roughly $2.2B that the Department spends annually in research at 
United States universities. This reduction would be about $198M in FY 
2013. Since the average university award is approximately $400K, the 
reduction would be about 495 fewer DOD-funded university awards this 
year. Further, these research efforts support more than 6,800 graduate 
students. Therefore, sequestration would reduce by about 612 the number 
of science and engineering graduate students who are both performing 
defense research and receiving DOD support for research training toward 
advanced degrees in fields important to national defense. These impacts 
compound over time since the return on investment compounds with time 
as researchers build on the knowledge and understanding generated by 
the work of earlier researchers. We therefore project a greater 
potential long-term impact of the loss of hundreds of university awards 
in FY 2013 than one might anticipate solely from the immediate effects 
in the current year. We may never know the full impact of these long-
term research cuts to our technological edge over future adversaries, 
but it is a risk we cannot take lightly.
    B. The effect on defense investment in STEM:
    The Department invests in STEM in two ways: directly through 
programs like ``Science, Mathematics, and Research for Transformation'' 
(SMART), and indirectly through research grants, contracts, and other 
awards. SMART is an undergraduate and graduate service-for-scholarship 
education program with 550 current students. Under sequestration we 
could only support previously selected students, and we would not be 
able to select any new students for CY 2013. This would result in a net 
loss of approximately 150 students. SMART is so attractive to the DOD 
because it makes the DOD competitive for the top ten percent talent--in 
2012, there were 4,000 applicants for 134 awards. As for indirect 
effects, there are a large number of STEM students supported through 
research grants, contracts, and other awards to institutions of higher 
education. We know a nine percent reduction from sequestration would 
remove support for at least 612 students; what we don't know is how 
many of these students will continue their advanced STEM degree using 
other sources.

    Mr. Langevin. I am particularly concerned about the effect of 
sequestration on cyber operations, which by their nature are more 
vulnerable to short-term budgetary pressure.
    Can you address the effects of sequestration on cyberspace 
activities and how you intend to manage the fiscal pressures given 
increasing demands in this regime, particularly in light of the reports 
of CYBERCOM's plan to grow the number of cyber operators?
    General Dempsey. I share your concerns about the effects of 
sequestration on all military operations, including cyber operations. 
The deep, across-the-board spending cuts, combined with a dangerous and 
uncertain security environment place the Nation squarely on the verge 
of a readiness crisis. I am particularly concerned with the evolving 
and increasingly dangerous cyber threat. We must have a professional 
cyber workforce across the Active and Reserve Components that is 
trained, certified and ready to respond to this evolving threat. 
Sequestration will require tough decisions, to include furloughing 
civilian employees and curtailing training. In the short-term, we are 
putting measures in place to ensure support of critical missions such 
as cyber operations. In the medium and long-term, sequestration could 
affect our ability to recruit, train, develop, and retain a skilled 
cyber work force and will degrade our ability to carry out our assigned 
missions.

    Mr. Langevin. I am particularly concerned about the effect of 
sequestration on cyber operations, which by their nature are more 
vulnerable to short-term budgetary pressure.
    Can you address the effects of sequestration on cyberspace 
activities and how you intend to manage the fiscal pressures given 
increasing demands in this regime, particularly in light of the reports 
of CYBERCOM's plan to grow the number of cyber operators?
    General Odierno. Without proper funding, sequestration will have a 
significant impact on Army cyber operations and capability development. 
It is important to understand that cyber operations are already under 
budgetary pressure by the Continuing Resolution, but when coupled with 
sequestration, the effects are compounded significantly. The pending 
reduction to cyber-related funding, coupled with a Continuing 
Resolution that enforces ``No new starts,'' will result in the Army's 
inability to directly support emerging U.S.Cyber Command requirements. 
Further, the ability to detect and prevent the 600,000 (+) unauthorized 
daily attempts from adversaries to access Army Information Systems will 
be diminished since the majority of this work is done by civilians and 
contractors. As a reminder, during a significant cyber attack in 2003, 
three installations were severely impacted and the cost to rebuild 
servers and restore service was approximately $32M per installation.
    Funding constraints will also affect the Army's ability to enhance 
its cyber capabilities. In response to U.S. Cyber Command requirements, 
the current plan of fielding offensive and defensive cyber operations 
teams will require an additional 1,008 military and civilian personnel 
in Fiscal Years 13-16. Sequestration will affect the Army's ability to 
hire and train the civilians necessary to field enhanced cyber 
operations teams. Army Cyber Command will be forced to stop or curtail 
several initiatives to advance Army cyber capabilities including: the 
integration of cyberspace into plans and exercises; cyber leader 
development, education and training; and developing the concept for 
unified Land Cyber operations.
    The full impact of sequestration is unknown. The Army is balancing 
Cyber Command requirements against other competing needs.

    Mr. Langevin. I am particularly concerned about the effect of 
sequestration on cyber operations, which by their nature are more 
vulnerable to short-term budgetary pressure.
    Can you address the effects of sequestration on cyberspace 
activities and how you intend to manage the fiscal pressures given 
increasing demands in this regime, particularly in light of the reports 
of CYBERCOM's plan to grow the number of cyber operators?
    Admiral Greenert. Sequestration will have impacts to Navy's ability 
to support National and Fleet cyber-related missions. Like all other 
warfare areas, Navy will be required to take added mission risk to 
forces as materiel maintenance, technological upgrades, and operator 
training designed to provide enhanced effectiveness and efficiency 
across all cyberspace operations (network operations and defense) will 
be deferred or cancelled. While appropriate risk mitigation measures 
are being implemented, in general, sequestration cuts will have the 
following impacts to Navy cyber operations:
      Increased Vulnerabilities to Navy Networks
      Degradation to Information Assurance (IA) standards
      Degradation of skill set training and Navy succession 
planning for Cyber civilians
      Longer lead times for supplies with associated increased 
costs
      Decreased C2 collaboration environment and global mission 
support for both
    Navy and Joint forces to include Humanitarian and Homeland Security 
missions/crisis. Risk may still increase over time even with effective 
prioritization of resources.

    Mr. Langevin. I am particularly concerned about the effect of 
sequestration on cyber operations, which by their nature are more 
vulnerable to short-term budgetary pressure.
    Can you address the effects of sequestration on cyberspace 
activities and how you intend to manage the fiscal pressures given 
increasing demands in this regime, particularly in light of the reports 
of CYBERCOM's plan to grow the number of cyber operators?
    General Welsh. Over the past few years, we have seen the threat in 
cyberspace grow more sophisticated, evolving from individuals or 
loosely associated groups of amateur hackers to organized non-state 
actors and even nation-states hostile to the United States and our 
national interests. Nations like China and Iran have become more bold 
and aggressive in their attempts to gain access to our critical 
infrastructure as reflected in the Mandiant report released last week. 
The Air Force alone blocks one billion probes per week, and we still 
have 1,200 to 1,400 cases per year inside the network that are 
categorized as suspicious. With the threat level this high, it is not 
prudent to reduce resources to network defense. To help mitigate these 
threats, my cyberspace superiority core function lead integrator 
directed the continued funding of cyber operations during sequestration 
at the expense of other mission areas. Therefore, the major direct 
impact to cyber during sequestration is the civilian workforce 
reduction due to furlough.
    Our cyber operations workforce is comprised of approximately 20 
percent civilians; therefore, the sequestration furloughs will result 
in an immediate impact in our reduced ability to assess, pinpoint, and 
respond to vulnerabilities, increasing an adversary's ability to 
exploit systems and increasing their time on the network. Our decrease 
in civilians will also reduce our ability to restore connectivity of 
critical command and control and combat support capabilities to the 
network, resulting in outages of three to four days for our mission 
planning and maintenance systems, vice our current average restoral 
rate of one to two days.
    Longer term challenges due to sequestration include a decrease in 
our ability to provide mission assurance in support of air and space 
operations for combatant commands. Sequestration also causes a 
degradation in our ability to plan for, and transition to, new Air 
Force capabilities, including AFNet migration, data center 
consolidation, internet gateway protection, and Joint Information 
Environment and Department of Defense Enterprise email initiatives. We 
cannot quantify these effects at this time.
    In response to U.S. Cyber Command's (USCYBERCOM) plan to grow the 
number of cyber operators, it is developing a cyber force construct 
which seeks to remedy our current offensive and defensive capability 
gaps. The Air Force, along with the other Services, fully supports 
USCYBERCOM's plan to move forward. However, sequestration will hinder 
our ability to quickly organize, train, and equip the forces that are 
necessary to enable USCYBERCOM's mission. USCYBERCOM's new Cyber 
Mission Force will contain approximately 20 percent civilian personnel. 
These personnel are not yet hired nor trained, and since 20 percent of 
the force is made up of civilians, the Cyber Mission Force will be 
decreased and delayed.
    The Air Force is committed to delivering a credible cyber force. To 
continue operations under sequestration, the Air Force has placed a 
priority on cyber operations to minimize the impact.

    Mr. Langevin. I am particularly concerned about the effect of 
sequestration on cyber operations, which by their nature are more 
vulnerable to short-term budgetary pressure.
    Can you address the effects of sequestration on cyberspace 
activities and how you intend to manage the fiscal pressures given 
increasing demands in this regime, particularly in light of the reports 
of CYBERCOM's plan to grow the number of cyber operators?
    General Amos. Sequestration will likely impose severe consequences 
on both short and long-term Marine Corps cyber operations including 
network operations, information assurance/cyber security, defensive 
cyber operations, computer network exploitation, and offensive cyber 
operations. The full extent of the Budget Control Act includes 
sequester-related cuts beginning in FY13 and continuing through FY21. 
The scale and abrupt manner in which sequestration cuts are designed 
will likely disrupt on-going Marine Corps cyber operations, and will 
diminish the Marine Corps' ability to develop and grow its cyber 
workforce in the manner required to meet emerging threats.
    U.S. Marine Corps Forces Cyberspace Command
    For U.S. Marine Corps Forces Cyberspace Command (MARFORCYBER), the 
linkage between resources and readiness is immediate and apparent. 
MARFORCYBER Headquarters has 136 active duty and civilian marines on-
hand. By FY15, MARFORCYBER Headquarters is expected to increase its 
workforce by an additional 87--bringing the total active duty and 
civilian workforce to 223. Additionally, as approved by the Joint 
Chiefs of Staff, the Marine Corps will increase its cyber workforce 
investment by an additional 579, which will include a combination of 
active duty marines, civilian marines, and contractors.
    As MARFORCYBER grows its workforce capability and capacity, it is 
simultaneously planning a mission support building aboard Fort George 
G. Meade, Maryland. Military Construction (MILCON) funding for the new 
mission support building is planned to be appropriated in FY14 with 
expected building occupancy in FY17. The Marine Corps expects 
sequestration will cause delay or cancellation of many MILCON projects, 
including the mission support building. The impacts of MILCON delays or 
cancellations will be felt across the Marine Corps. Should the MILCON 
project be delayed or cancelled the likely result will be degradation 
of workforce readiness; decreased capacity and capability of 
MARFORCYBER to command, control and conduct cyberspace operations; 
continued commercial leased facility expenses; and, unmitigated 
operational risk associated with inadequate anti-terrorism/force 
protection measures at the current facility.
    MARFORCYBER anticipates further readiness and capability 
degradation due to equipment shortfalls. MARFORCYBER has planned 
software tool purchases to provide needed capabilities for MARFORCYBER 
to command, control and conduct cyberspace operations. These purchases 
would be delayed or cancelled depending upon the severity of budget 
reductions.
    Network Operations
    Sequestration will negatively impact the Marine Corps' ability to 
operate and defend the Marine Corps Enterprise Network (MCEN). The 
Marine Corps Network Operations Center (MCNOSC) will continue to 
operate and defend the MCEN as well as provide enterprise equipment 
(IT) asset management. However, the MCNOSC will do so with reduced 
funding and capacity, which will likely increase incident response 
times targeting the MCEN. The MCNOSC will likely have significant 
capacity reductions in the Marine Corps Computer Emergency Response 
Team (MARCERT). Without full MARCERT capacity available, the 
identification of new threats and vulnerabilities will be delayed. 
Reduced MCNOSC and MARCERT capacity will decrease the overall health, 
availability, and security of the Marine Corps segment of the 
Department of Defense Information Network. Computer Network Defense 
surge capability for major events will likely be reduced.
    The MCNOSC will be unable to provide enterprise engineering 
services. Without such services, the MCNOSC will be unable to provide 
required critical upgrades to the MCEN infrastructure due to emerging 
threats, field solutions to new requirements, or address emerging 
threats and security imperatives. Under sequestration, the MCNOSC would 
be unable to implement USCYBERCOM/MARFORCYBER operational directives 
and DOD/DON/USMC policy mandates in a timely manner due to a reduction 
in personnel. Sequestration would likely result in a considerable 
reduction to preventative maintenance of the MCEN, increasing the 
likelihood of service disruptions and diminishing the ability of the 
MCEN to support critical operational capabilities required by Operating 
Forces.
    The Marine Corps has one Global/Service Network Operations Security 
Center and four Regional Network Operations Security Centers (RNOSCs), 
which are strategically located to support MCEN operations and defense. 
The RNOSCs provide regionally focused command and control capabilities 
for executing Network Operations supporting our MARFOR Commanders, 
which in turn support the Combatant Commanders. The likely furlough of 
civilian employees will degrade operations of both the MCNOSC and 
RNOSCs. The potential impacts include degraded management and 
completion of network operations tasks; decreased situational 
awareness; limited capacity to execute priorities and tasks; less 
detailed operational impact assessments; and, reduced response to and 
control of network defense response actions.
    Information Assurance
    Sequestration will impact the Marine Corps' ability to provide 
information assurance within its networks. The Marine Corps anticipates 
a reduction in the number of information assurance inspections and 
validation of remediation activities; delay to field automated tools 
for network security protection, software assurance (code review), and 
system monitoring; and, delay to completion of public key 
implementation on the unclassified and secret classified networks as 
well as the optical network infrastructure improvements. Lastly, the 
Marine Corps cyber security program will likely be further reduced. 
This program oversees Marine Corps efforts and capabilities to protect, 
monitor, analyze, detect, and respond to unauthorized activity within 
the MCEN as required by National Security Presidential Directive-54/
Homeland Security Presidential Directive-23, Titles 40 and 44 of the 
U.S.Code, DOD Directive 8500.01E, DOD Instructions 8500.2, 8510.01, and 
Chairman, Joint Chiefs of Staff Instruction 6211.02.

    Mr. Langevin. I am particularly concerned about the effect of 
sequestration on cyber operations, which by their nature are more 
vulnerable to short-term budgetary pressure.
    Can you address the effects of sequestration on cyberspace 
activities and how you intend to manage the fiscal pressures given 
increasing demands in this regime, particularly in light of the reports 
of CYBERCOM's plan to grow the number of cyber operators?
    General Grass. At this time we are unsure of the exact impact of 
sequestration on cyber operations. We believe that sequestration will 
impact National Guard cyber operations in the areas of planning and 
coordination, policy oversight and resource management capability, and 
training and readiness. The loss of productivity from civilian 
furloughs and a hiring freeze will lead to degradation in planning a 
coordinating capability as well as oversight and resource management. 
Planning and coordinating capability and training and readiness will 
also be impacted by the loss in productivity from civilian furloughs 
and a hiring freeze along with: reduced funding available for cyber 
exercise planning and execution; reduced funding available for 
mandatory individual training beyond professional military education; 
simulator contracts cancelled or delayed; and cancellations of staffing 
in support of cyber experiment.

    Mr. Langevin. I am particularly concerned about the effect of 
sequestration on cyber operations, which by their nature are more 
vulnerable to short-term budgetary pressure.
    Can you address the effects of sequestration on cyberspace 
activities and how you intend to manage the fiscal pressures given 
increasing demands in this regime, particularly in light of the reports 
of CYBERCOM's plan to grow the number of cyber operators?
    Secretary Hale. Cyber operations is a high priority area for the 
Department with regard to investment of both resources and management 
oversight. Deterring and, if necessary, defeating such attacks will be 
a continued key challenge.
                                 ______
                                 
                  QUESTIONS SUBMITTED BY MS. BORDALLO
    Ms. Bordallo. I am troubled that 800,000 of our civil service 
employees, who contribute greatly to the Department of Defense, may be 
furloughed up to 22 days. These employees would take as much as a 20% 
cut to their income; and the Department would lose their valuable 
contribution to the mission. As we curtail the work of these critical 
civil service employees, the Department of Defense in many cases will 
continue to pay for contract employees. I am concerned that this 
contracting approach will unnecessarily punish our civilian workforce. 
What can be done to ensure that the civilian workforce will not be 
unduly targeted if sequestration occurs? What criteria are you using to 
determine whether a Federal civilian or a contractor stays on the job 
or goes?
    Secretary Carter. The magnitude of the reductions that must be 
absorbed in the Operation and Maintenance accounts leaves the 
Department no choice but to reduce the funding required for civilian 
personnel. The timing of the sequestration exacerbates the situation, 
leaving only 6 months or less to execute these furloughs. This will 
result in making almost all Department civilians subject to being 
placed in a furlough status for 2 days of every pay period beginning in 
April and ending in September. This equates to a 20% reduction in their 
salaries for the remainder of the year. Unfortunately, the Department 
has little ability to minimize the financial impact on our civilians. 
However, the financial impact on civilian personnel can be avoided if 
the Congress were to act to avoid sequestration.
    Ms. Bordallo. I believe that these challenging times present us 
with an opportunity to review how we do businesses and find ways to 
improve our processes. The effects of sequestration are obviously 
detrimental to the readiness of our Armed Forces; I would like to know 
examples of how any of the Services and OSD have made fundamental 
changes to your business practices in light of the austere fiscal 
times.
    Secretary Carter. Over the past few years the Department of Defense 
has been diligent in seeking out more efficient business practices in 
order to reduce costs. Examples of these efficiencies include: the 
Army's 2012 enterprise-wide deployment of Lean Six Sigma which has 
already yielded $3.2 billion in benefits from over 2,979 projects with 
another 1,300 projects in progress; DOD reduced health care costs in 
FY12 by shifting to using Medicare's Outpatient Prospective Payment 
Systems (OPPS) for reimbursing private sector institutions for 
outpatient care delivered to TRICARE beneficiaries, resulting in an 
estimated savings in FY12 of $840M.
    However, the combination of the Continuing Resolution and 
Sequestration now has us taking steps that undermine readiness and are 
not efficiencies. For example, the Services have reduced or delayed 
deployments, such as the recent delay of the aircraft carrier USS 
TRUMAN, in order to maintain the capability to surge ready-forces to 
emergent events. The Services have also reduced and delayed maintenance 
and training of military units not directly tied to current operations, 
as well as reducing base operations and facilities maintenance. The 
Department has frozen the hiring of civilian employees, planned 
furloughs of up to 22 days for the overwhelming majority of the 800,000 
members of DOD's civilian workforce, and planned for layoffs of up to 
46,000 temporary and term employees. The Department has also curtailed 
travel that is not mission-critical, including terminating or 
postponing participation in conferences.

    Ms. Bordallo. I believe that these challenging times present us 
with an opportunity to review how we do businesses and find ways to 
improve our processes. The effects of sequestration are obviously 
detrimental to the readiness of our Armed Forces; I would like to know 
examples of how any of the Services and OSD have made fundamental 
changes to your business practices in light of the austere fiscal 
times.
    General Dempsey. First, I defer to the Service Chiefs and OSD to 
answer the question for their immediate interests and areas of 
responsibility.
    In response to the immediate fiscal situation, the Joint Staff will 
achieve savings by aggressively looking at internal business practices; 
curtailing travel, conference and printing expenses; consolidating and 
leveraging IT networks and increasing scrutiny of joint warfighting 
requirements through the Joint Requirements Oversight Council.
    As examples of changes in our business practices, we have made 
significant changes at the National Defense University to improve our 
core functions and better align the mission with fiscal realities. By 
refocusing NDU on Joint Professional Military Education, we have been 
able to disestablish three organizations as well as realign two others 
for greater efficiency while maintaining core capability in those 
areas. We have also realigned and rescaled our Joint Staff in Suffolk 
to significantly improve unity of effort, efficiencies, and operating 
speed by organizing along functional lines, flattening command levels, 
and better integrating responsibilities.
    To more closely scrutinize and reduce our spending on conference 
hosting and attendance, the Joint Staff has established conference 
approval authorities for Joint Staff-hosted conferences and non-DOD 
conferences that Joint Staff personnel attend. The Comptroller's office 
reports all conferences the Joint Staff hosts or attends, regardless of 
cost to OSD quarterly and all conferences where total expenses are in 
excess of $100,000 to OSD annually. In addition, we report monthly to 
the Vice Director of the Joint Staff all conferences and contract 
actions. Finally, during the sequestration, the Joint Staff is only 
participating in mission critical hosted conferences, sending as few 
participants as possible and reducing costs as much as possible.
    Finally, a Labor Validation Board (LVB) has been established and 
meets monthly to review all hiring actions. Though we currently have a 
hiring freeze in place due to funding constraints, the board reviews 
all actions to determine if any exceptions should be made for critical 
fills. If one is determined, it will go forward to the Director of the 
Joint Staff for approval prior to any offers moving forward.

    Ms. Bordallo. I believe that these challenging times present us 
with an opportunity to review how we do businesses and find ways to 
improve our processes. The effects of sequestration are obviously 
detrimental to the readiness of our Armed Forces; I would like to know 
examples of how any of the Services and OSD have made fundamental 
changes to your business practices in light of the austere fiscal 
times.
    General Odierno. While the Army is always looking for ways to 
improve the way we do business, fiscal constraints require us to 
deliver strategic land power in the most cost-effective way possible. 
Within Army business practices, we continue to drive efficiency gains 
into everything we do. The following examples highlight recent 
improvements.
    Last July, the Army successfully deployed the General Fund 
Enterprise Business System. This was a major step in moving us away 
from supporting, maintaining and training soldiers and Army civilians 
to operate over 100 legacy systems that are almost all written in 20 or 
30 year old code. This fielding has enabled the Army to retire 31 
separate IT systems to date, and we are on schedule to replace a total 
of over 100 separate systems by 2017. Having one financial management 
system eliminates the need to enter like data in multiple systems, 
maintain interfaces or re-enter reporting data among systems and 
reconcile data across different systems. This integrates information 
into a single source that better serves decision-making at every 
echelon. Additionally, the General Fund Enterprise Business System 
complies with 97% of the Federal Financial Management Improvement Act 
and DOD regulatory requirements. This compliance provides visibility 
and traceability that was lacking in the proliferation of legacy 
systems, and the Army is looking forward to improved accountability and 
stewardship as a result.
    The Army is also leveraging its enterprise resource planning 
systems to improve business practices in human resources and logistics. 
These enterprise resource planning systems are being fielded on 
schedule and will also improve audit-readiness. The Integrated 
Personnel and Pay System-Army, the Army's human resources enterprise 
resource planning system, is reengineering 157 business processes 
across 3 Army Components and will retire 53 legacy systems by 2017. 
Today, the Logistics Management Program manages $4.5 billion worth of 
inventory, processes transactions with 50,000 vendors and integrates 
with more than 80 DOD systems. The Global Combat Support System-Army is 
80% developed and tested and received a full deployment decision in 
December 2012. Given this trajectory of success, the Army is on track 
to achieve audit-readiness requirements for an auditable Statement of 
Budgetary Resources by Fiscal Year 2014 and full audit-readiness by 
Fiscal Year 2017.
    In 2012, the enterprise-wide deployment of Lean Six Sigma continued 
to drive efficiencies into major processes across the Army with over 
2,979 projects which yielded $3.2 billion in benefits. Another 1,300 
projects are in progress. These continuous process improvement efforts 
increased throughput, reduced delays and improved effectiveness while 
reducing costs. Throughout 2012, the Army's Lean Six Sigma program 
trained 1,408 leaders. We also trained 304 senior and mid-grade leaders 
on how to sponsor Lean Six Sigma initiatives.
    In September 2010, the Army followed OSD's guidance to implement 23 
actions under the initiative called Better Buying Power. These 
initiatives collectively mandated affordability as a requirement, 
eliminated redundancy within acquisition portfolios, promoted 
competition among vendors, incentivized innovation, and improved 
Service acquisition activities. The collective efforts of the Army 
Acquisition community have yielded measureable cost savings and cost 
avoidance across the FYDP.
    To reduce energy costs and help preserve the environment, the Army 
initiated 13 energy conservation projects which will save 73 billion 
British Thermal Units (BTU) of energy and generate 81 billion BTUs of 
renewable energy. Further, the Army's Net Zero Installation Initiative 
is improving installations so that they consume only as much energy or 
water as they produce.
    The Army migrated almost all of its users to a common enterprise 
email system provided by the Defense Information Systems Agency. This 
effort comprised the Army's foremost technology efficiency initiative 
and eliminated redundant requirements for servers, standardized 
hardware and software, enabled Army users to operate anywhere in the 
world with a single online identity, centralized administration and 
reduced vulnerabilities. This effort was also coupled with the Army's 
Data Center Consolidation Plan which has already closed 54 data 
centers. The Army expects to save $380 million between 2013 and 2017. 
These efforts comprise only a small part of the Army's transformation 
of its business practices, and more efforts are detailed in the Army's 
2013 Annual Report on Business Transformation. Senior leaders across 
the Army are performing in-depth assessments of their organizations and 
processes with the ultimate aim of improving performance, enhancing 
agility and decreasing costs. This effort comprises one of the most 
complex projects any organization has ever attempted and requires the 
continued support of leaders in Congress.

    Ms. Bordallo. I believe that these challenging times present us 
with an opportunity to review how we do businesses and find ways to 
improve our processes. The effects of sequestration are obviously 
detrimental to the readiness of our Armed Forces; I would like to know 
examples of how any of the Services and OSD have made fundamental 
changes to your business practices in light of the austere fiscal 
times.
    Admiral Greenert. During the development of each budget, the Navy 
strives to be bold in challenging our current organization, constructs, 
and structure to maximize the resources available to our warfighters. 
During FY 2012 we terminated poor performing or lower priority programs 
such as Offshore Vessels and Maritime Aerial Layer Network, contained 
Total Ownership Costs through strategic sourcing initiatives, and 
achieved contract savings through Multiyear Procurements and revising 
the Littoral Combat Ship acquisition strategy. The Navy streamlined 
organizations and operations by reducing and consolidating shore 
commands such as patrol wings, SECOND Fleet, SYSCOM Warfare Centers, as 
well as submarine squadron and carrier strike group staffs.
    The FY 2013 President's Budget request, as submitted to Congress, 
contains similar efforts such as initiatives to reduce IT costs and 
consolidate data centers, eliminate duplicate overhead functions 
between the Commander, Navy Installations Command and the Naval 
Facilities Engineering Command, as well as revised phasing of CVN 
Refueling Complex Overhauls (RCOHs) and DDG procurement, and improved 
alignment of Joint Strike Fighter (JSF), FA-18, and DDG modification to 
overall requirements.

    Ms. Bordallo. I believe that these challenging times present us 
with an opportunity to review how we do businesses and find ways to 
improve our processes. The effects of sequestration are obviously 
detrimental to the readiness of our Armed Forces; I would like to know 
examples of how any of the Services and OSD have made fundamental 
changes to your business practices in light of the austere fiscal 
times.
    General Welsh. The Air Force is fully committed to improving 
business practices. We are invested in Department-wide commitments made 
to reduce the cost of business operations. The following are a few 
examples of business practice changes the Air Force has implemented.
    The Air Force is a major consumer of Department of Defense (DOD) 
aviation fuel. As our largest user of aviation fuel, Air Mobility 
Command (AMC) has been focused on large aircraft energy efficiencies 
for several years and has established a Fuels Efficiency Office (FEO) 
to identify and implement aircraft energy efficiencies and tradeoffs. 
AMC leadership and the FEO have tapped into the expertise of commercial 
airlines, conducted business case analyses and continual process 
improvement initiatives, and implemented policies and methods, which 
are driving real savings. The Mobility Air Forces (MAF) now have C-5, 
C-17, KC-10, and KC-135 flight crews using commercial methods to plan 
and fly more efficiently, taking advantage of atmospheric conditions 
for optimal flight altitude, speed, and routes. This is referred to as 
mission index flying (MIF). As a result, the Air Force is seeing a 
mission and fuels consumption benefit of a 37 percent improvement in 
ton-miles moved per gallon by the MAF and 9.3 million gallons saved 
across all four platforms combined in fiscal year 2012 (FY12). Another 
good example of the Air Force using commercial methods is Mobility Air 
Forces Cost Avoidance Tankering (MAFCAT). When cargo loads permit, MAF 
crews have been carrying extra fuel from locations with cheaper 
aviation fuel into Afghanistan locations where fuel prices are much 
higher. The result is a slight increase in total fuel burned due to 
flying heavier aircraft, but a decrease in the overall cost of the fuel 
consumed. Since less fuel is purchased at a higher price, the Air Force 
has avoided an average of $13 million per month since the effort began 
in June 2012.
    A second significant and fundamental change in Air Force business 
processes has been occurring within our logistics and supply chain 
operations, and continues to evolve. The Air Force initiated an 
enterprise logistics strategy (ELS), a shared ownership of the 
logistics enterprise designed to accelerate the pace of change and 
drive key initiatives to generate cost-effective readiness. The Air 
Force has consolidated supply chain management, merging wholesale and 
retail supply responsibility for greater end-to-end management and 
control. The Air Force consolidated funding for weapon system 
sustainment and the flying hour program within a centralized asset 
management account to improve fleet support and enable supply chain 
transformation. A last example within evolving, fundamental change in 
logistics is the rationalization of repair capabilities and 
establishing enterprise repair in place of intermediate base repair. 
This is illustrated in the consolidation of AMC's C-130 intermediate 
engine repair at Little Rock Air Force Base, and more recently, the 
Pacific Air Force commander's approval last year to consolidate F110 
engine maintenance in the western Pacific at Misawa Air Base, Japan. 
Our body of work in making improvements to the logistics and 
installations business is a foundation for continuing work to deliver 
savings of over $7 billion across FY12-17.
    A third area in which change is occurring is in reshaping how 
supporting headquarters activities are conducted in order to reduce the 
size of overhead staffs across the Air Force while maintaining 
appropriate levels of customer support. In 2012, the Air Force 
deactivated three numbered air forces and one air operations center as 
part of overhead reductions. Their functions were absorbed into the 
supported major command staffs and into a combined air operations 
center construct, respectively. The Air Force initiated consolidation 
of installation services functions from across the major command 
headquarters, Headquarters Air Force (HAF), and field operating 
agencies aligned to the HAF. By consolidating activities within central 
supporting organizations, the Air Force eliminated 289 civilian 
manpower spaces in FY13, growing to a reduction of 354 by FY16. 
Headquarters Air Force established common output level standards across 
the Air Force for 40 installation support functions. Performance 
against these standards is reported by installation commanders (the 
customer) back to the central management team, ensuring continued 
emphasis on commanders' needs despite the re-organization. Air Force 
acquisition practices are another area where we are driving significant 
change, with initiatives ranging from a major weapon system perspective 
(such as a new aircraft) to base level procurement (such as tools, 
computers, and parts). An example of a major weapon system change was 
to stabilize the Evolved Expendable Launch Vehicle (EELV) procurement 
by establishing a fixed annual production rate to control costs. 
Anticipated savings of over $1 billion will be confirmed in the coming 
months as we complete the next EELV contract award. At the other end of 
the procurement spectrum, we established commodity councils to 
strategically source installation level services and material for 
information technology, knowledge based services, civil engineering, 
force protection, medical services, and commodities. The Civil 
Engineering Commodity Council awarded two five-year contracts in August 
2011 for LED taxiway lighting that is expected to reduce costs by over 
30 percent and reduce energy consumption by 60 percent over 
incandescent lighting. The Air Force accomplished this through analysis 
and aggregation of our buying power across the enterprise.
    The last example is the work to establish and codify a standard 
method for root cause problem solving and continual process improvement 
within the Air Force. We call it Air Force Smart Operations (AFSO) and 
our airmen apply tools, such as Lean and Six Sigma, to identify and 
eliminate waste. We have established proven commercial practices in an 
AFSO eight-step problem solving model. We have trained Air Force 
leaders and certified practitioners to help solve problems from the 
shop level to enterprise-wide in order to maintain mission 
effectiveness. We have applied problem-solving from root cause as part 
of our continuing efforts to strengthen the Air Force nuclear 
enterprise. We are directing commanders to use appropriate problem-
solving tools, including the eight-step model, for all Inspector 
General-identified deficiencies.
    These are just a few examples of significant change we have made. I 
look forward to reporting in the future more successes in driving 
fundamental change to financial management, information technology, 
human resources, and other areas of logistics and installation business 
practices in which we are engaged.

    Ms. Bordallo. I believe that these challenging times present us 
with an opportunity to review how we do businesses and find ways to 
improve our processes. The effects of sequestration are obviously 
detrimental to the readiness of our Armed Forces; I would like to know 
examples of how any of the Services and OSD have made fundamental 
changes to your business practices in light of the austere fiscal 
times.
    General Amos. The Marine Corps maintains a long-standing reputation 
in the Department of Defense as being a frugal, lean Service that 
delivers the best value for the defense dollar. As such, the Marine 
Corps has adapted to budgetary reductions by continuing our tradition 
of pursuing ways to streamline operations, identify efficiencies, and 
reinvest savings in order to get the most out of every dollar. It is 
this mentality that has allowed us to continue to provide the best 
trained and equipped Marine units to Afghanistan, even in this era of 
constrained resources.
    The Marine Corps recognizes the fiscal realities that currently 
confront the United States, and we are already making hard choices 
inside the Service and ensuring that we ask only for what we need as 
opposed to what we may want. We understand that the Nation will face 
difficult resource decisions in the future, and these difficult times 
will undoubtedly have an impact on the manner in which we address the 
challenges presented by an uncertain and ever-changing world. The 
Marine Corps has aggressively sought and found efficiencies in how we 
spend our scarce resources, and these efficiencies have saved precious 
resources while ensuring the Marine Corps remains America's ``Force in 
Readiness.'' Savings have been found through reductions in basic 
allowance for housing costs, more efficient use of energy, greater use 
of simulators/reduction in training ammunition, and more efficient 
procurement practices. Additionally, we have undergone extensive audits 
for the past three years with ever improving results.
    However, the lack of an appropriations bill and the implementation 
of sequestration have had a negative impact on the Marine Corps' 
ability to reap the savings we initially expected. For example, under 
the CR, new starts are prohibited without specific approval. This means 
that options on existing contracts may have to be renegotiated, which 
will likely prevent the Marine Corps from receiving any expected 
pricing benefits. This is especially true of savings that were expected 
to result from multi-year procurements such as MV-22. Loss of the 
ability to enter into a multi-year procurement for the MV-22 will undo 
months of tough negotiations that would have resulted in approximately 
$1 billion in cost avoidance and reductions in total program cost.
    Sequestration threatens our efforts and will impact all of our 
investment programs through increased unit costs, schedule delays, and 
slowing of necessary research and development. For example if 
sequestration occurs, the Ground/Air Task Order Radar (G/ATOR) program 
will likely have a Nunn-McCurdy breach. The potential impact of such a 
breach will include a restructuring of the program and a delay of 
initial operational capability by two years. The G/ATOR's production 
transition, including timely semiconductor technology insertion, will 
also be significantly impacted leading to a loss of planned cost 
savings and misalignment of funding due to a shift in schedule.
    In the area of operations and maintenance, the Marine Corps will 
have to mortgage the future to pay for readiness today--we will have to 
forgo necessary modernization and sustainment to support our forward 
deployed forces. We are tasked by the Congress to be the most ready 
when the Nation is least ready. In order to accomplish this, we have 
been forced to make sacrifices in our modernization and infrastructure 
sustainment accounts to pay for the readiness of today's force. This 
will mean that we will be forced to delay the purchase of new equipment 
and maintain legacy equipment for longer periods of time, incurring 
greater maintenance cost. Further, our facilities will not be sustained 
at planned rates, meaning that maintenance will be delayed or omitted, 
hastening the deterioration of buildings, and driving up long term 
costs and the ability to properly train our force.
    The Marine Corps prides itself on its ``get by with less'' 
mentality, and we have always sought more efficient ways of fulfilling 
our mission. We clearly recognize that we and the Nation are entering a 
period of austerity, and we have identified numerous efficiencies and 
reductions--we will continue to deliver the best Marine Corps the 
Nation can afford. Unfortunately, the current fiscal uncertainty will 
likely undo a number of these initiatives, which will result in further 
setbacks and exacerbate the effects of the CR and sequestration-induced 
reductions.

    Ms. Bordallo. I believe that these challenging times present us 
with an opportunity to review how we do businesses and find ways to 
improve our processes. The effects of sequestration are obviously 
detrimental to the readiness of our Armed Forces; I would like to know 
examples of how any of the Services and OSD have made fundamental 
changes to your business practices in light of the austere fiscal 
times.
    General Grass. The National Guard Bureau has instituted strict 
management controls to validate our operations and maintenance 
requirements and to limit our expenditure of funds to those 
requirements that are critical to our mission of ensuring a trained and 
ready National Guard. All travel not related to critical aspects of 
that mission has been suspended. Service contracts that don't directly 
and substantially contribute to that mission are being scrutinized for 
reduction or discontinuation. Supply purchases for office requirements 
have been significantly curtailed. Civilian term employees are being 
dismissed, and we've instituted a hiring freeze for all new civilian 
personnel actions. Career civilian employees are subject to being 
furloughed by 20% of their normal hours within each pay period.

    Ms. Bordallo. I believe that these challenging times present us 
with an opportunity to review how we do businesses and find ways to 
improve our processes. The effects of sequestration are obviously 
detrimental to the readiness of our Armed Forces; I would like to know 
examples of how any of the Services and OSD have made fundamental 
changes to your business practices in light of the austere fiscal 
times.
    Secretary Hale. The Department of Defense has always taken its duty 
to be an excellent steward of taxpayer dollars very seriously. The 
Department takes this duty seriously both because of its responsibility 
to the American taxpayer and also because improved business practices 
better serve the warfighter. Through the continued implementation of 
the Secretary's Efficiencies Initiative and President Obama's Campaign 
to Cut Waste, as well as its broader business transformation efforts, 
DOD has focused on reducing costs, ensuring that policies and controls 
are in place to prevent waste, duplication, or abuse, and improving 
business outcomes.
    Through these initiatives the Department has identified billions of 
dollars to shift from ``tail to tooth,'' made specific, targeted policy 
improvements and cost reductions in areas such as travel and 
conferences, and pursued many broader business improvement efforts. 
These broader business improvement efforts include initiatives such as 
Financial Improvement and Audit Readiness, acquisition and contracting 
reform, logistics and supply chain management improvements, information 
technology and defense business systems investment and acquisition 
management improvements, and energy efficiency efforts.
                                 ______
                                 
                  QUESTIONS SUBMITTED BY MR. LOEBSACK
    Mr. Loebsack. How are decisions being made about the impact of 
workforce reductions on the military, civilian, and contractor 
workforces? What factors, such as retaining critical skills in the 
civilian workforce, are being taken into account in decisions regarding 
reductions to each one of these segments of the workforce? How are 
these reductions being balanced across the total force?
    Secretary Carter. Within whatever funds are available, the 
Department's military and civilian workforces, as well as contracted 
support, are sized and structured based on the capabilities needed to 
implement the national military and security strategies of the United 
States. The sourcing of functions and work among military (active/
reserve), civilian, and contracted services must be consistent with 
workload requirements, funding availability, readiness and management 
needs, as well as applicable laws, even in times of budgetary 
uncertainty and reductions. Under sequester, the military personnel 
account has been exempted by the President and all other programs must 
take equal reductions in funding.
    The Department aligns its workforces (both in size and structure) 
to mission. As such, the Department formulates the current size or 
possible reductions/increases in the workforce based on mission 
workload rather than competency or skill gaps to deliver capabilities. 
The capabilities-based approach is predicated on a mission, function, 
and task construct and informed by current and projected workload, risk 
mitigation, and resource availability. The budgetary environment, 
including the current hiring freeze and sustained pay freezes, along 
with the potential furloughing of civilians employees has an adverse 
impact on the Department's ability to recruit and/or retain talented 
civilian employees, including those that have critical skills.
    As funding is reduced, we will strive to maintain a properly sized 
and highly capable civilian workforce that is aligned to mission and 
workload. However, under the sequester, the military personnel accounts 
have been exempted and many contracts are fully funded, while civilians 
will be furloughed to make up for the funding gap. As a result, a 
balanced approach is very difficult.

    Mr. Loebsack. How will sequestration and a Continuing Resolution 
affect the transfer of new missions to Air National Guard units that 
are seeing a change of mission under the re-submitted FY13 Air Force 
budget plan that was approved as part of the FY13 NDAA?
    General Grass. Sequestration and a Continuing Resolution (CR) will 
affect Air National Guard unit mission conversions, but to what degree 
remains to be determined. Depending on how and when the sequester is 
addressed, we could see anything from minor delays in initiating 
conversions (delays in environmental assessments and site activation 
task force visits), to severe delays which would put conversions at 
risk (formal training cancellation and unit flying training cuts). 
Sequester could reduce or altogether prevent equipment procurement and 
facility funding, and would prevent the 5 ANG MQ-9 Reaper units in 
conversion from even reaching an Initial Operating Capability (IOC). 
This would also be true for Intelligence missions relying on equipment 
and facilities to reach IOC.
    The questions surrounding sequestration and CR could also affect 
the ability of units converting to new missions to recruit personnel 
due to uncertainty and lack of predictability. In fact, when Air 
National Guard members see technician furloughs and massive cuts in 
operations, training deployments and other areas, this could erode 
retention which will further hinder a unit's ability to convert. It is 
very difficult to accurately quantify the total impact to Air National 
Guard personnel.
                                 ______
                                 
                   QUESTIONS SUBMITTED BY MR. SHUSTER
    Mr. Shuster. Does the Department of Defense continue to believe 
that it is inappropriate for industry to issue WARN Act notices even 
though you are about to start notifying DOD civilians?
    Secretary Carter. As circumstances evolve, each contractor must 
make its own decisions with regard to sequestration's impact on its 
business and whether the requirement to issue WARN Act notices has been 
triggered. As made clear in the Department of Labor's Training and 
Employment Guidance Letter No. 3-12, if and when ``specific closings or 
mass layoffs are reasonably foreseeable,'' notice would be required.
    Mr. Shuster. Now that DOD will only have seven months to pay for 
the sequester in FY13, when will contract modifications, or other 
changes that will affect our industry partners, begin?
    Secretary Carter. The Military Departments and Defense Agencies 
will announce plans to de-scope some of their operations and 
maintenance-funded service contracts and subsequently make decisions to 
not exercise options or not award follow-on contracts. An example is 
Navy's decision to delay overhauls and the Army decision to defer depot 
maintenance. Another is the reduction in our base maintenance posture.
    The Department has consistently stated and still does not 
anticipate having to terminate or significantly modify many contracts 
as a result of sequestration. This is because most existing contracts 
are fully funded at the time of contract award; incrementally funded 
contracts would have to be reviewed on a case by case basis.
    As a rule, the Department does not terminate fully-funded contracts 
if termination costs will not result in significant savings. During 
sequestration, cost savings will arise from buying less in the future 
rather than terminating contracts.
    Finally, it should also be noted that once a contract is 
terminated, it takes months to reprocure under a new contract, 
increasing the workload on an already taxed acquisition workforce, and 
increasing the costs of the program in the long term.
    Mr. Shuster. Will DOD continue to cover the costs of any litigation 
associated with industry's failure to issue WARN notices?
    Secretary Carter. As circumstances evolve, each contractor must 
make its own decisions with regard to sequestration's impact on its 
business and whether the requirement to issue WARN Act notices has been 
triggered. As made clear in the Department of Labor's Training and 
Employment Guidance Letter No. 3-12, if and when ``specific closings or 
mass layoffs are reasonably foreseeable,'' notice would be required, 
and if a contractor failed to provide appropriate notice in that 
circumstance that failure would be taken into account in the 
application of the relevant Federal Acquisition Regulations principles 
in the determination of the allowability of any costs related to 
litigation.

    Mr. Shuster. What are the current backlogs at Letterkenny Army 
Depot in Chambersburg, PA?
    General Odierno. Assuming the cancellation of new 3d and 4th 
Quarter orders, LEAD programs with funded work available include: Route 
Clearance Vehicle, Force Provider, Aviation Ground Power Unit, Theater 
Readiness Monitoring Directorate Equipment, Family of Medium Tactical 
Vehicles, Patriot Missile/Radar and numerous additional programs to 
include other Service work.
    However, the Army is currently reviewing the work scheduled at LEAD 
to determine if it supports the Army's most critical priorities. We 
will realign work and available funding to meet the Army's most 
critical priorities to mitigate some of the projected $18 Billion OMA 
shortfall that the Army estimates will occur due to the Continuing 
Resolution, Sequestration and Emerging Overseas Contingency Operation 
(OCO) requirements.
    Mr. Shuster. What is the projected increase to these logs by 
cancelling the 3rd and 4th quarter depot maintenance and reset orders?
    General Odierno. Ongoing work at Letterkenny Army Depot funded 
programs is being assessed. Cancellation of new 3d and 4th Quarter 
orders will defer some Route Clearance Vehicle, Force Provider and 
generator work.
    The Army is evaluating ongoing and scheduled work at Letterkenny 
Army Depot to ensure that it supports the most critical requirements. 
Less critical work will be deferred and addressed once funding becomes 
available.
    The Army has an approximate $18B shortfall due to the combined 
impact of the Continuing Resolution, Sequestration and Emerging 
Overseas Contingency Operations (OCO) requirements.
    Mr. Shuster. What is the projected timeframe to get caught up on 
this log as a result of the sequester? Does this increased backlog 
effectively take into account the additional loss of the highly skilled 
and technical workers at this depot and the other depots from the 
estimated predictions of laying off an additional 5,000 individuals 
from the original assessment? Additionally, if funding does return for 
these essential programs, has the realistic difficulty to bring these 
highly demanded individuals back to the depots been realized in these 
analyses?
    General Odierno. We anticipate that it will take 2-3 years to get 
caught upon on this backlog, depending on availability of funding and 
resolution of the Continuing Resolution (CR) and Sequestration. The 
expected backlog increase does take into consideration workforce 
adjustments--loss and reconstitution of highly skilled and technical 
workers--due to funding availability. Letterkenny Army Depot estimates 
that it will lose 796 personnel in FY13 and 174 in FY14 due to the CR 
and Sequestration.
    Additional programs and increases to current planned quantities 
will be initiated based on Army prioritization and receipt of funding. 
Workforce shaping takes into consideration available funded workload in 
FY13, as well as the forecasted workload requirement in FY14 from the 
Army, Navy, Air Force, Marine Corps, foreign militaries and other 
Government agencies. Flexibility in the workforce is always planned to 
ensure that changes in workload can be addressed in a timely manner 
given some certainty in the budget process. Absent budget certainty, we 
cannot provide the workforce with predictable employment.
    This uncertainty in funding due to the combined effects of the CR, 
Sequestration, and Overseas Contingency Operations (OCO) requirements 
re-emphasizes the importance of having budget certainty so the 
department can adequately plan and make timely decisions to achieve 
equipment readiness at best value without jeopardizing capabilities--
highly skilled and technical workers--that will be needed in the 
future.
                                 ______
                                 
                   QUESTIONS SUBMITTED BY MR. BARBER
    Mr. Barber. Last September, in this hearing room, I asked the Vice 
Chairs how the threat of Sequestration was affecting the morale of our 
service members and their families, and they all said there was 
significant anxiety among the force. Marine Corps General Dunford, in 
his response, focused on the civilian community. He was concerned, he 
said, because the civilian community takes care of our service members 
in the field. So if the civilian personnel are suffering here at home, 
that will translate to the service members not getting the support they 
need to finish the mission overseas. This is certainly true in my 
district, and I have heard the same concerns from my constituents. The 
civilian community in Southern Arizona makes many of the weapon systems 
that the Army, Navy, Marines and Air Force use in Afghanistan and 
around the world. They provide Information and Technology support to 
the troops in the field. They help make our installations run smoothly. 
They answer the phones, and deliver the mail. And I would say we are 
treating both our service members and our civilians poorly by not 
providing them with any certainty for their future. Secretary Carter, 
can you tell me, if Sequestration comes to pass what measures has the 
Department of Defense taken to mitigate the potential loss to the 
civilians who work on post, or the civilian industrial base outside the 
gates?
    Secretary Carter. Due to sequestration, regrettably, the Department 
is forced to place most of our civilian employees on unpaid furlough 
for up to 22 discontinuous workdays. These furloughs translate to 
roughly a 20 percent pay cut over the next six months for our civilian 
employees. The Department is deeply concerned about the negative 
effects of furloughs on the morale and effectiveness of our valued 
civilians, and the impact on their pay will also affect the economies 
in the communities where they live and work. Sequestration will also 
affect Defense contractors, and thus, the industrial base. The 
Department is doing everything within our power to minimize adverse 
effects of sequestration on military readiness and the effects of 
sequestration on our personnel and priorities to the extent feasible.

    Mr. Barber. General Grass, I have a question about the effects of 
Sequestration on our National Guard units. If Sequestration is 
triggered March 1, I understand that there will be very little time in 
the remaining 6 months of the 2013 budget to absorb the cuts that the 
sequester will bring. National Guard units are supporting counterdrug 
efforts that run along the 80 miles of the U.S. border with Mexico in 
my district in Southern Arizona. A large amount of the drug smuggling, 
human trafficking, and transnational crime from Mexico takes place 
along those 80 miles and I'm very concerned about the possibility of a 
loss of resources that would adversely impact their ability to support 
border security efforts in my district.
    The Department of Defense has reported that there will be funds and 
resources to support overseas operations, including National Guard 
units currently deployed, in the short term. But will we have enough 
for the operation and training of our Guard units here at home? What is 
the impact of Sequestration on the funding of the National Guard, and 
will the Sequester diminish the Guard's ability to perform their 
mission, whether along our border with Mexico, or responding to a 
natural disaster or national emergency?
    General Grass. Sequestration will significantly degrade the 
National Guard's ability to maintain a truly operational force, able to 
rapidly contribute to contingency operations both domestically and 
overseas. Further, if sequestration is executed in accordance with the 
current law, it will have a significant effect on training 
opportunities, equipment, and personnel readiness, which will have a 
negative impact on the National Guard as an operational force.
    The National Guard Counterdrug Program could also potentially be 
subject to sequestration just as many other valuable DOD programs. 
Given the fiscal uncertainty of sequestration and a six-month 
Continuing Resolution, the Deputy Assistant Secretary of Defense for 
Counternarcotics and Global Threats and the National Guard Bureau 
distributed $105.8 million (the President's requested level for FY2013) 
for the Counterdrug program in October 2012, along with guidance to 
reserve adequate funds to maintain a program for the entire fiscal 
year. Although the National Guard Program has received substantial 
congressional increases in recent years that could help mitigate a 
funding shortfall in the second half of the fiscal year, those 
additional funds would not likely be available until later in the 
fiscal year. It is my understanding that those funds could also be 
subject to cuts necessitated by the sequester.
    On a related note, we do not currently anticipate any significant 
sequestration-related impacts to our support to the Department of 
Homeland Security's Operations Phalanx within Arizona.
                                 ______
                                 
                    QUESTION SUBMITTED BY MR. CASTRO
    Mr. Castro. In your testimony regarding depot maintenance, you 
mentioned your desire for Congress to grant ``relief'' from the 50-50 
Rule. This refers to Federal law mandating that no more than 50 percent 
of depot maintenance funds may be used for private sector work. Can you 
please elaborate on specific measures that may provide ``relief'' from 
the rule?
    General Welsh. According to 10 U.S.C. Sec. 2466, each Military 
Department may not spend more than 50 percent of all funds for 
contractor depot maintenance support. The requirement pertains to all 
depot maintenance funds regardless of the source of those funds. Each 
year the Secretary of Defense (SECDEF) submits a report to Congress 
showing the allocation of depot maintenance between the public and 
private sector. If a Military Department cannot comply with the 50 
percent requirement, the SECDEF may waive the 50 percent limitation and 
is required to submit a notice of the waiver to Congress along with the 
reasons that a waiver is necessary. At this time the Air Force is 
uncertain as to whether it will require a SECDEF waiver from 50/50, but 
believes that it is prudent to alert Congress that a breach may occur. 
If required, a waiver to fiscal year 2013 (FY13) will be requested from 
SECDEF in accordance with the law as soon as the impacts to the 
continuing resolution (CR) and sequestration reductions have been 
finalized. The extent, specifics, and duration of the waiver request 
will depend on the actions Congress takes to address the FY13 and 
beyond CR and sequestration reductions.
                                 ______
                                 
                  QUESTION SUBMITTED BY MS. DUCKWORTH
    Ms. Duckworth. In the face of sequestration, it is troubling that 
the DOD is still considering expenditures such as DISA's proposed 
building of a brand new multi-protocol label switching--MPLS--network 
that would basically take over the existing Internet backbone in use by 
the individual Services. Such an expenditure would require major 
capital investment, estimated between $5-15 billion, and an ongoing 
yearly maintenance tail for all the new hardware to be purchased. The 
proposed DISA MPLS network will not be available at a fully functioning 
capability for at least 5 years and will likely degrade security 
capabilities from those that are being provided to DOD already under 
existing contracts with commercial network providers. These commercial 
network providers are trusted by Wall Street and other financial 
services providers with records of efficiency and efficacy for handling 
billions of financial transactions annually. So why, when faced with 
sequestration, is the Department of Defense building an entirely new 
Government network with degraded capabilities, less security, and 
significantly higher costs that will directly compete with the existing 
more secure, lower cost ones provided by commercial providers? Also, in 
keeping with our fiduciary responsibilities to the American people: 
What measures are you taking to provide oversight and monitor the 
Business Case Analysis supporting DISA's proposal to indicate the true 
cost, functionality, and legality of this investment?
    Secretary Carter. The DOD is not buying a new network, rather we 
are implementing technology refresh for an existing network (the 
Defense Information Systems Network, or DISN) that has existed for many 
years supporting the internal DOD IT capability, providing mission 
critical support to the Department and Intelligence Community and 
resulting in significant savings. The current effort is an initiative 
to improve efficiencies and more closely align with commercial trends 
and network evolutions.
    The ongoing efforts to upgrade our network infrastructure are 
critical since the existing technologies and equipment used in our 
infrastructure are becoming obsolete and will soon not be supported 
(for example Asynchronous Transfer Mode) by the vendor community. The 
primary focus is to converge multiple, disparate physical and protocol 
networks into a common, standards-based network. Key to this is the 
implementation of Multi Protocol Label Switching (MPLS) technology as 
the standard network protocol. The technology refresh will begin this 
quarter using the existing technical refresh budget and the first 
instantiation is expected by the end of Calendar Year 2014. This will 
continue for several years. All security required is being provided via 
existing DISN encryption and security methodologies that meet or exceed 
all standards and requirements. Additionally, we are currently using an 
instantiation of this capability to support the National Geospatial-
Intelligence Agency in Southwest Asia.
                                 ______
                                 
                  QUESTIONS SUBMITTED BY DR. WENSTRUP
    Dr. Wenstrup. Why does the National Guard have separate 
representation on the Joint Chiefs of Staff but the Reserve does not? 
If sequestration occurs, to what extent are you willing to expand our 
Reserve forces to mitigate the effects of reductions in Active Duty 
force strength?
    General Dempsey. There are six individual Reserve Components (RCs) 
in the Department of Defense and two of them reside in the National 
Guard. The Army National Guard and Air National Guard have gained 
additional representation on the Joint Chiefs of Staff (JCS) since the 
designation of the Chief, National Guard Bureau (CNGB) as a permanent 
member of the Joint Chiefs of Staff by the Fiscal Year 2012 Defense 
Authorization Act. The statute specifies the CNGB role of addressing 
matters involving non-Federalized National Guard forces in support of 
homeland defense and civil support missions. Army, Navy, Air Force and 
Marine Reserve and Active Components are fully represented on the JCS 
through their respective Service Chiefs.
    The Active and Reserve Component mix of forces is a complex balance 
of capabilities weighed against our global posture. As Chairman, I have 
made it clear to all of the Joint Chiefs that we must ensure the long-
term viability of the Joint Force of 2020 and beyond, which requires 
special attention to the strategic capacity provided by properly 
manned, trained and equipped Reserve Components. We have also learned 
over the past 10 years of war that an intelligently planned rotation of 
Reserve Component units into our operational deployments preserves the 
capabilities of those units manned by our nation's citizen-soldiers, 
sailors, airmen, and marines.

    Dr. Wenstrup. Why does the National Guard have separate 
representation on the Joint Chiefs of Staff but the Reserve does not?
    General Grass. On December 31, 2011, the President signed into law 
the National Defense Authorization of Act for Fiscal Year 2012 (P.L. 
112-81). Section 512 of this NDAA amended section 511(a) of title 10, 
United States Code, adding the Chief of the National Guard Bureau as 
the seventh member of the Joint Chiefs of Staff. As a full member of 
the Joint Chiefs of Staff, the Chief of the National Guard Bureau has 
the specific responsibility for ``addressing matters involving non-
Federalized National Guard forces in support of homeland defense and 
civil support missions.''
                                 ______
                                 
                  QUESTIONS SUBMITTED BY MRS. WALORSKI
    Mrs. Walorski. General Dempsey, at the time the President's budget 
request for FY13 was submitted, following the first $487 billion in 
cuts, did you believe those cuts and that budget request represented 
the limits of the acceptable degree of risk? If so, can you please 
speak to the additional risks presented by the following scenarios? a. 
Sequestration and a Continuing Resolution at FY12 levels. b. A partial 
mitigation of sequestration or CR.
    General Dempsey. Yes, but determining acceptable levels of risk is 
at the President's and Secretary's discretion. At the time the Budget 
Control Act was passed, I believed we would be able to achieve our 
national security objectives within the law's resource limits and the 
Defense Strategic Guidance.
    Under sequestration and a full-year continuing resolution we will 
no longer be able to execute this strategy. Taken together, 
sequestration and the continuing resolution will lead to declining 
readiness rates and, with limited ability to shape necessary but 
difficult budget decisions, hollow our force. The cuts will also have a 
demoralizing effect on our civilian workforce, require us to take sharp 
cuts in critical investment programs and reduce our forward presence in 
strategically important regions. This means we will need more time to 
respond to crises or advance our security objectives; we will have 
reduced capacity to maintain global awareness during a crisis; and we 
will retain limited ability to respond to multiple crises. Ultimately, 
slower response and less capacity will impose greater risks to our 
forces.
    Sequestration's impact is felt in both its magnitude and mechanism. 
Because of the law's inflexibility and magnitude of the funding cuts in 
FY13, we must disproportionately reduce our readiness and investment 
accounts, which are both key areas to preserve our Joint Force. 
Likewise, the continuing resolution inhibits our ability to move 
resources between accounts, which drives current readiness and forward 
presence decisions. Having additional flexibility in the near-term to 
prioritize critical accounts will lead both to longer-term savings and 
help preserve the readiness of our forces. It is therefore essential to 
have regular appropriations with appropriate transfer authority between 
accounts. However, given the magnitude of the additional cuts, 
flexibility alone will be insufficient to execute our current strategy.
    Mrs. Walorski. Concerning plans briefed by each Service to reduce 
costs by cancelling scheduled deployments of units either overseas or 
on training center rotations, what will the personnel in those units do 
to minimize: a. loss of individual proficiency, b. loss of collective 
unit proficiency, c. erosion of morale, and d. disruption of career 
progression?
    General Dempsey. If sequestration goes into effect, commanders will 
take advantage of local resources to maintain individual and unit 
readiness as best they can. Commanders will try to preserve individual 
proficiency through weapon ranges, virtual training facilities, and 
Military Occupational Specialty (MOS) training. Additionally, Service 
Members may take advantage of distance learning centers, local colleges 
or universities and online resources to further individual development 
and limit the disruption of individual career progression. However, 
installation commanders will be challenged to prioritize resources due 
to the installation's reduced funding and furloughed civilian 
workforce.

    Mrs. Walorski. At the time the President's budget request for FY13 
was submitted, following the first $487 billion in cuts, did you 
believe those cuts and that budget request represented the limits of 
the acceptable degree of risk? If so, can you please speak to the 
additional risks presented by the following scenarios? a. Sequestration 
and a Continuing Resolution at FY12 levels. b. A partial mitigation of 
sequestration or CR.
    General Odierno. In 2010, the DOD developed a ten-year plan to 
achieve nearly $300 billion in efficiencies under Secretary Gates. To 
comply with the discretionary caps outlined in the Budget Control Act 
of 2011, the FY 2013 Budget proposed $487 billion in DOD funding 
reductions over ten years, of which the Army's share is estimated to be 
$170 billion. Consistent with the drawdown of forces in Afghanistan and 
Iraq and in support of the 2012 Defense Strategic Guidance, the Army is 
in the process of reducing the authorized endstrength for active duty 
from a wartime high of about 570,000 to 490,000, the Army National 
Guard from 358,000 to 350,000, the U.S. Army Reserve from 206,000 to 
205,000, and the civilian workforce from 272,000 to 255,000 by the end 
of fiscal year 2017 (FY17). This is a net loss of 106,000 soldier and 
civilian positions.
    By FY17, we will downsize our active component force structure from 
45 Brigade Combat Teams to potentially as low as 32. On January 18th, 
we released a Programmatic Environmental Assessment describing the 
impact of potential force structure reductions across the Army. We 
began these force reductions in FY12 focused initially on our overseas 
formations. In 2014, however, we will begin significant force 
reductions in the United States. In addition to personnel and force 
structure reductions, we have had to extend the timelines of our 
modernization programs and reduce the frequency of our training 
exercises. Our efforts to both comply with the 2011 Budget Control Act 
and implement 2012 Defense Strategic Guidance put us on the outer edge 
of acceptable risk for creating the future Army force and our ability 
to meet our National Security Strategy.
    The actions we have taken in response to the 2012 Defense Strategic 
Guidance are independent of the continuing resolution and 
sequestration. However, the domestic impacts of these actions are only 
now beginning to be felt and will be magnified over the next several 
years.
    In Fiscal Year 2013, the combination of the continuing resolution, 
a shortfall in overseas contingency operations funds for Afghanistan, 
and the sequester has resulted in at least $18 billion dollar shortfall 
to the Army's Operation and Maintenance (OMA) accounts, as well as an 
additional $6 billion worth of cuts across all of our other programs. 
The impacts of these shortfalls will cause the Army to focus training 
resources on next-to-deploy units and to accept significant risk in the 
training of non-deploying units. The Army will no longer be able to 
train next-to-deploy units to the highest level of readiness prior to 
deployment, equipment readiness will continue to decline and the leader 
development backlog will expand. Additionally, the Army will not have 
trained forces available to respond to emerging contingencies in a 
timely manner. Restoring adequate readiness across the force will take 
years and significant resources. In addition to the immediate impact of 
sequestration for FY13, the lowering of discretionary caps for FY14-
FY21 will have long term impacts that extend far beyond the current 
fiscal year. In order to maintain a balance between end strength, 
readiness, and modernization, the Army will have to reduce additional 
100,000 personnel across the Active Army, Army National Guard and U.S. 
Army Reserve. This will generate, at a minimum, a total reduction of 
189,000 soldiers in the coming years, but the figure will probably be 
closer to 200,000. These reductions of 14% of the Army's endstrength 
will equate to an almost 40% reduction in our Brigade Combat Teams and 
excess U.S.-based installation infrastructure.
    A partial mitigation of sequestration or CR in FY13 will not 
resolve the Army's $18 billion OMA shortfall. Immediate removal of 
budgetary reductions triggered by sequester and a FY13 appropriations 
bill still leaves the Army with a $5-7 billion shortfall in OMA due to 
emerging costs associated with Overseas Contingency Operations in 
Afghanistan. An appropriations bill would resolve one third of the 
Army's OMA shortfall and allow flexibility for us to prioritize funding 
cuts through reprogramming actions. In addition, the removal of the 
across the board nature of sequester for FY13 would increase 
flexibility and prevent cuts to our top priority programs. Even if we 
get relief through these mitigations, the budget reductions in FY13 and 
beyond that are associated with sequestration will pose a significant 
risk to Army readiness and will force us to reconsider the Army's 
ability to execute its obligations under the Defense Strategic 
Guidance.
    Mrs. Walorski. Will Professional Military Education and Permanent 
Change of Station (PCS) costs be reduced at the same or greater rate as 
readiness-related activities such as ship deployments, flying hours, 
and training center rotations?
    General Odierno. The essence of readiness is founded upon quality 
leadership, supported by the best equipment, training and people. 
Professional Military Education is a national strategic resource; it is 
the way we cultivate the leadership that is so critical to meeting 
current deployment requirements and generating long-term readiness in 
our Army. The current fiscal situation is challenging. However, history 
definitively shows that we will deploy soldiers again and we must be 
careful we do not mortgage our great strategic advantage--our world 
class leaders.
    There will be some reductions in PME expenses, but not in PCS costs 
associated with PME. PCS costs are paid from the MPA authorization, 
which is not subject to sequester. However, many PME courses are 
attended by personnel in a temporary duty status, which is funded by 
OMA. Due to FY13 OMA funding shortfalls, we expect a commensurate 
reduction in the historical output of our schools, about 20,000 
officers/NCOs a year. While the exact magnitude of the cut is being 
finalized, we expect it to increase the wartime backlog of 30,000 
Active Component NCOs, 3700 Active Component WOs/Officers and 30-60% of 
most Reserve Component cohorts. Furthermore, FY13 shortfalls in OMA 
will require us to cancel the NCOES common core distance learning 
program. Finally, we may have to cancel the Structured Self Development 
(SSD) program. Many mandatory subjects and all Joint training for NCOs 
reside in the SSD, so the impact of this change will be significant. We 
are currently working to determine the exact amount of all of these 
cuts.
    Mrs. Walorski. I want to discuss a program of great significance to 
our future military readiness, the Joint Light Tactical Vehicle (JLTV). 
As currently constituted, the program will deliver prototype vehicles 
for testing later this year, with low rate production scheduled to 
begin in 2015. I worry that the progress that has been made in 
streamlining the program timeline while reducing costs will be 
compromised if the budget cuts we are talking about go into effect. Can 
you please give the Committee a sense of your plan to ensure this 
program remains on track to deliver a vehicle by 2015? If the program 
is delayed, what problematic issues might face maintenance and overhaul 
on humvee and other light tactical vehicles in the current inventory 
while waiting for JLTV to start production?
    General Odierno. The JLTV Joint Program Office has made substantial 
progress in streamlining the program timeline, and both the Army and 
Marine Corps remain committed to the program. JLTV is currently on 
schedule to meet the proposed Milestone C in third quarter fiscal year 
2015 (3QFY15) and Low Rate Initial Production (LRIP) contract award in 
4QFY15. However, that schedule cannot be maintained in the face of 
possible sequestration reductions, resulting in an approximate schedule 
slip of three months without a reduction to planned testing. Vendor 
contracts are firm fixed price and FY13 funds have been fully 
obligated. Any sequestration cuts would have to be taken from the 
program's remaining FY13 test budget. Even assuming a sequestration cut 
is fully ``paid back'' in FY14, the program could not restore the 
original schedule. Any efforts to preserve the current program 
schedule, despite the reduction imposed by sequestration, would require 
reduction in planned test activities. This change would be subject to 
the agreement of Service and DOD test agencies and would also increase 
the program risk. If the JLTV program is delayed, there is moderate 
risk associated with the readiness of the HMMWV fleet. The Army has 
planned for enduring HMMWV requirements well into the future, so 
maintenance and overhaul capabilities are already established. Even 
after 100 percent of JLTVs (49,099) are fielded, HMMWVs (59,000) will 
outnumber JLTVs. Additionally, through Recapitalization and Reset 
efforts over the past several years, the HMMWV fleet is in very good 
health. The current average age is nine years, so a modest delay in the 
JLTV program will not have a significant impact on the Light Tactical 
Vehicle fleet.

    Mrs. Walorski. Will Professional Military Education and Permanent 
Change of Station (PCS) costs be reduced at the same or greater rate as 
readiness-related activities such as ship deployments, flying hours, 
and training center rotations?
    Admiral Greenert. Professional Military Education will be impacted 
at the same rate as other readiness-related activities to meet the 
Navy's overall reduction target. Reductions within the Training and 
Education domain will impact capabilities supporting Professional 
Military Education, to include contractor support to education, War 
Gaming and Maritime Staff Operators Course (MSOC). Limitations on 
travel, the civilian hiring freeze and the potential civilian furloughs 
will also impact the ability to deliver Professional Military 
Education.
    The Navy PCS program is funded in the Military Personnel, Navy 
(MPN) appropriation. The majority of funding in the MPN appropriation 
is directly tied to strength and must be paid for each member on-board. 
PCS funding, however, is not strength-related and could be reprogrammed 
to offset strength pay requirements if sufficient funds are not 
available under the Continuing Resolution. In accordance with Section 
255(f) of the Balanced Budget and Emergency Deficit Control Act of 
1985, as amended, the President exempted Military Personnel accounts 
(Military pay, benefits and PCS) from Sequestration.

    Mrs. Walorski. Will Professional Military Education and Permanent 
Change of Station (PCS) costs be reduced at the same or greater rate as 
readiness-related activities such as ship deployments, flying hours, 
and training center rotations?
    General Welsh. The President exempted the Military Personnel 
Account from sequestration and the Permanent Change of Station (PCS) 
budget is part of that account. In this light, we will continue our 
long-term Professional Military Education (PME) programs. The Air Force 
considers long-term PME as mission critical. The PME schools are 
essential to developing the in-depth, critical thinking skills needed 
by our strategic leaders. Intermediate-level Air Command and Staff 
College (ACSC) and senior-level Air War College (AWC) help the Air 
Force develop the intellectual framework necessary to cultivate Air 
Force personnel with the skills and knowledge needed to make analytical 
and strategic decisions within the national security environment. The 
Air Force must continue to build a cadre of leaders who have been 
deliberately developed to operate in the complex, uncertain, and 
ambiguous environment of 21st century warfare.

    Mrs. Walorski. Do you believe the $487 billion in cuts and the FY13 
budget request represented the limits of the acceptable degree of risk? 
If so, can you please speak to the additional risks presented by the 
following scenarios? a. Sequestration and a Continuing Resolution at 
FY12 levels. b. A partial mitigation of sequestration or CR.
    General Amos. Yes, the $487 billion in cuts and the FY13 budget 
request represent the limit of our acceptable degree of risk. As stated 
in the February 2012 Posture of the United States Marine Corps report 
to this committee, the four priorities for the Marine Corps are: (1) 
provide the best trained and equipped Marine units to Afghanistan; (2) 
rebalance our Corps, posture it for the future and aggressively 
experiment with and implement new capabilities and organizations; (3) 
better educate and train our marines to succeed in distributed 
operations and increasingly complex environments; and (4) keep the 
faith with our marines, our sailors, and our families. Those priorities 
can be accomplished at requested FY13 budget levels, albeit with some 
degree of risk.
    Assuming sequestration and a full year Continuing Resolution, the 
risk to our ability to accomplish these priorities increases 
exponentially, and cuts of this magnitude, due to their timing and 
methodology, will have a devastating impact on our readiness, both 
short and long term. The combined effects of an annualized continuing 
resolution and sequestration pose a severe risk to our national 
strategy, our forces, our people, and to the United States of America. 
While the Marine Corps may be able to mitigate the near term effects on 
our deployed forces, it will be at the expense of home station units 
and our long term readiness--we are mortgaging long term readiness to 
form a short term capability to addresses immediate priorities.
    Despite the constrained funding resulting from the CR and 
sequestration, we expect we will be able to continue meeting Marine 
Corps deployed warfighting needs and the training of next-to-deploy 
forces for the next six months. Between six and twelve months, however, 
we'll continue to decrement readiness accounts resulting in an ever 
increasing erosion of home station unit readiness and force 
modernization; we also expect that we will begin to see small impacts 
to our next-to-deploy forces. Beyond 12 months, we will see a real 
impact to all home station units and more substantial impacts to our 
next-to-deploy and some deployed forces--in all, a slide to a hollow 
force we have fought so hard to avoid. Our Marine Expeditionary Forces 
(MEFs) will be forced to postpone or cancel preventive maintenance and 
selectively replace replacement equipment with reduced readiness in the 
last half of 2013, with a ripple effect on training, negatively 
impacting readiness. In aviation, the Marine Corps' F/A-18 squadrons, 
as an example, will still be able to source the required aircraft to 
meet operational commitments, but the squadrons that are preparing to 
deploy will only have five of the twelve aircraft that compose a 
squadron available for training by January of 2014. Additionally, each 
of the pilots in those squadrons preparing to deploy would complete 
approximately seven hours of training per month when the minimum 
deployable readiness requires approximately seventeen hours per month. 
For the individual aircrew, this equates to greater personal risk due 
to less experience--for the Nation, it means we will respond with less 
ready forces, and we will pay a price in terms of lives and equipment. 
We predict over 55% of USMC forces (ground combat, logistics, and 
combat support) will have unsatisfactory readiness ratings, which will 
have a dramatic impact to respond to crises outside of Afghanistan when 
called upon by the Nation.
    A partial mitigation of sequestration or CR, depending on how it 
would be implemented, could serve to lessen the risk to our ability to 
meet our four priorities and could slow the rate of readiness 
deterioration. However, the cumulative effect of multiple years of cuts 
will cause the Marine Corps to re-evaluate current plans and make 
difficult decisions regarding which missions would continue to be 
supported. Depending on the manner in which a partial mitigation would 
be implemented, the Marine Corps may still have to mortgage the future 
to pay for readiness today, forgoing necessary modernization and 
sustainment to support our forward deployed forces. This would mean 
that we would be forced to delay the purchase of new equipment and 
maintain legacy equipment for longer periods of time, incurring greater 
maintenance cost. Further, our facilities would likely not be sustained 
at planned rates, meaning that maintenance will be delayed or omitted, 
hastening the deterioration of buildings and driving up long term costs 
and the ability to properly train our force.
    Mrs. Walorski. Will Professional Military Education and Permanent 
Change of Station (PCS) costs be reduced at the same or greater rate as 
readiness-related activities such as ship deployments, flying hours, 
and training center rotations?
    General Amos. Permanent Changes of Station and Professional 
Military Education for our marines are, in and of themselves, readiness 
related activities and are critical to our ability to accomplish our 
mission. Without the ability to move marines to the correct unit, units 
will not be sourced with the proper personnel prior to deployment; 
without the ability to provide Professional Military Education, marines 
will not have the necessary training prior to deployment. These two 
components are key aspects of overall readiness.
    The Marine Corps uses a framework by which it can manage its 
readiness as an institution. Called the Five Pillars of Institutional 
Readiness, this framework seeks to ensure that Service-wide activities 
lead to the proper balance among five categories (i.e. pillars) that 
underpin the readiness of the Marine Corps. These pillars capture the 
Marine Corps' approach for generating ready forces today and informing 
an investment strategy that will ensure the future readiness of the 
Marine Corps and enable it to meet the tenets of the Defense Strategic 
Guidance. Maintaining balance across these pillars is critical to 
achieving and sustaining the Nation's expeditionary force-in-readiness 
for today and tomorrow. The five pillars are:
      High Quality People (Recruiting, training, educating and 
retaining high quality people plays a key role in maintaining our high 
state of readiness).
      Unit Readiness (Maintaining readiness of the operating 
forces, including appropriate operations and maintenance funding to 
train to core missions and maintain equipment).
      Capacity versus Requirements (Force-sizing and naval 
capabilities to meet Geographic Combatant Commander requirements with 
the right mix of capacity and capability).
      Infrastructure Sustainment (Investing in real property, 
maintenance, and infrastructure).
      Equipment Modernization (Ensuring ground and aviation 
equipment matches the needs of the emerging security environment).
    Sequestration, compounded by a full year Continuing Resolution, 
will result in across-the-board reductions that will affect all of the 
Marine Corps' readiness pillars, will allow for little to no 
flexibility in how the cuts are applied, and will mandate reductions in 
accordance with the law without regard for requirements and priorities. 
In the case of permanent change of station funding, the President 
exempted military personnel funding from sequestration cuts in FY13, 
and as such, PCS is not subject to a sequestration-induced reduction. 
The Operations and Maintenance (O&M) appropriation is subject to 
sequestration reduction and will be reduced by the amount prescribed by 
the law. Within the O&M appropriation, the Marine Corps will reduce 
programs such as professional military education such that we achieve 
the best balance possible among our pillars of readiness.

    Mrs. Walorski. Will Professional Military Education and Permanent 
Change of Station (PCS) costs be reduced at the same or greater rate as 
readiness-related activities such as ship deployments, flying hours, 
and training center rotations?
    General Grass. Permanent Change of Station (PCS) costs are paid for 
using National Guard Personnel Appropriations funds, which are not 
affected by sequestration. The majority of Professional Military 
Education (PME) is also funded through the Personnel Appropriations; 
however, some PME courses would be curtailed due to budget constraints. 
In addition, Operations and Maintenance funds are used to support 
schoolhouses, and those could be subjected to sequestration impacts.

                                  
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