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






       THE DEPARTMENT OF DEFENSE AND THE FISCAL YEAR 2014 BUDGET

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

                                HEARING

                               before the

                        COMMITTEE ON THE BUDGET
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             FIRST SESSION

                               __________

             HEARING HELD IN WASHINGTON, DC, JUNE 12, 2013

                               __________

                            Serial No. 113-6

                               __________

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                        COMMITTEE ON THE BUDGET

                     PAUL RYAN, Wisconsin, Chairman
TOM PRICE, Georgia                   CHRIS VAN HOLLEN, Maryland,
SCOTT GARRETT, New Jersey              Ranking Minority Member
JOHN CAMPBELL, California            ALLYSON Y. SCHWARTZ, Pennsylvania
KEN CALVERT, California              JOHN A. YARMUTH, Kentucky
TOM COLE, Oklahoma                   BILL PASCRELL, Jr., New Jersey
TOM McCLINTOCK, California           TIM RYAN, Ohio
JAMES LANKFORD, Oklahoma             GWEN MOORE, Wisconsin
DIANE BLACK, Tennessee               KATHY CASTOR, Florida
REID J. RIBBLE, Wisconsin            JIM McDERMOTT, Washington
BILL FLORES, Texas                   BARBARA LEE, California
TODD ROKITA, Indiana                 DAVID N. CICILLINE, Rhode Island
ROB WOODALL, Georgia                 HAKEEM S. JEFFRIES, New York
MARSHA BLACKBURN, Tennessee          MARK POCAN, Wisconsin
ALAN NUNNELEE, Mississippi           MICHELLE LUJAN GRISHAM, New Mexico
E. SCOTT RIGELL, Virginia            JARED HUFFMAN, California
VICKY HARTZLER, Missouri             TONY CARDENAS, California
JACKIE WALORSKI, Indiana             EARL BLUMENAUER, Oregon
LUKE MESSER, Indiana                 KURT SCHRADER, Oregon
TOM RICE, South Carolina
ROGER WILLIAMS, Texas
SEAN P. DUFFY, Wisconsin

                           Professional Staff

                     Austin Smythe, Staff Director
                Thomas S. Kahn, Minority Staff Director













                            C O N T E N T S

                                                                   Page
Hearing held in Washington, DC, June 12, 2013....................     1

    Hon. Paul Ryan, Chairman, Committee on the Budget............     1
        Prepared statement of....................................     2
        Questions submitted for the record.......................    49
    Hon. Chris Van Hollen, ranking member, Committee on the 
      Budget.....................................................     3
        Prepared statement of....................................     4
    Hon. Chuck Hagel, Secretary, U.S. Department of Defense......     5
        Prepared statement of....................................     8
        Response to questions submitted for the record...........    52
    GEN Martin E. Dempsey, USA, Chairman, Joint Chiefs of Staff..    16
        Prepared statement of....................................    17
        Response to questions submitted for the record...........    61
    Questions submitted for the record from:
        Hon. James Lankford, a Representative in Congress from 
          the State of Oklahoma..................................    49
        Hon. Bill Flores, a Representative in Congress from the 
          State of Texas.........................................    49
        Hon. Luke Messer, a Representative in Congress from the 
          State of Indiana.......................................    51

 
                     THE DEPARTMENT OF DEFENSE AND
                      THE FISCAL YEAR 2014 BUDGET

                              ----------                              


                        WEDNESDAY, JUNE 12, 2013

                          House of Representatives,
                                   Committee on the Budget,
                                                    Washington, DC.
    The Committee met, pursuant to call, at 1:00 p.m., in room 
210, Cannon House Office Building, Hon. Paul Ryan, [Chairman of 
the Committee] presiding.
    Present: Representatives Ryan, Price, Calvert, McClintock, 
Lankford, Ribble, Rokita, Woodall, Blackburn, Nunnelee, Rigell, 
Hartzler, Walorski, Messer, Williams, Van Hollen, Schwartz, 
Yarmuth, Pascrell, Ryan of Ohio, Castor, McDermott, Lee, 
Cicilline, Jeffries, Pocan, Lujan Grisham, Huffman, Blumenauer, 
Schrader
    Chairman Ryan. The Committee will come to order. Welcome, 
everybody. I want to start on time, or as close to on time as 
we can because we have a busy day. Number one, we have got 
votes that are going to hit about 2:30, 2:45. The Secretary and 
the General have to be down at the White House by 3:00, so I am 
going to, with consultation from the Ranking Member, knock our 
question time for each member, including ourselves, down to 
three minutes each so that everybody gets a chance to ask a 
question, and we can get this done in time for the pending 
votes on the floor and in time for their meeting at the White 
House.
    With that, I want to start by thanking our distinguished 
witnesses: Secretary Hagel, General Dempsey, and Secretary 
Hale. Each of you served our country, both in military and 
government, and we thank you for your service. The first duty 
of government is to keep us safe, and to keep us safe, our 
strategy ought to drive our budget. But under this 
Administration, our fear is that the budget is driving the 
strategies. It is the opposite.
    Last year, Secretary Panetta made a budget request, he came 
here to testify on it, that he said was the minimum necessary 
to execute the president's strategy. He said that there was, 
quote, ``little room for cuts if we wanted our troops to 
fulfill our mission.'' This year's budget request covers the 
same mission, but over the next 10 years, it is about $120 
billion lower than last year's request. So far, there has been 
no explanation for this number. Have we changed our strategy?
    Now, the Department of Defense is not immune to waste. 
There is room for improvement, clearly. Every agency must use 
taxpayer dollars wisely, especially the Department of Defense 
because it has a very large budget.
    Secretary Hagel announced the strategic choices that 
management reviewed to develop a new strategy for a smaller 
budget, but a cheaper strategy is not necessarily a better one. 
The Defense Business Board has suggested a number of ways to 
improve the Department, and I want to commend their hard work. 
I think it is excellent work, and I encourage you to act on 
their recommendations.
    That said, national security is our nation's top security, 
it is our top priority. Defense has born have the burden of 
deficit reduction, and the president wants to cut even more. 
This year, the House budget provides the same amount of Defense 
spending that the president requested last year, yet the 
president seems to be opposing our proposal. The president is 
holding Defense hostage for higher taxes and more spending, in 
our opinion.
    These days, every part of government needs to be more 
efficient, but even as we try to cut the fat, we have to make 
sure that we do not cut the bone. We must make sure our troops 
overseas have what they need to complete their mission. We owe 
a debt of gratitude to our military and their families who 
continue to make sacrifices for our country for the freedoms 
that we cherish. They are there fighting for us right now while 
we speak, so we have to get this right. I look forward to 
hearing your thoughts on the challenges we face and the 
resources that we need to meet them.
    With that, I would like to yield to the Ranking Member, Mr. 
Van Hollen.
    [The prepared statement of Paul Ryan follows:]

Prepared Statement of Hon. Paul Ryan, Chairman, Committee on the Budget

    Welcome, everybody. I want to start by thanking our distinguished 
witnesses: Secretary Hagel, General Dempsey, and Secretary Hale. Each 
of you has served our country--both in the military and in government. 
And we thank you for your service.
    The first duty of government is to keep us safe. And to keep us 
safe, our strategy should drive our budget. But under this 
administration, the budget is driving the strategy.
    Last year, Secretary Panetta made a budget request he said was the 
minimum necessary to execute the President's strategy. He said there 
was ``little room'' for cuts if we wanted our troops to fulfill their 
mission.
    This year's budget request covers the same mission. But over the 
next ten years, it's about $120 billion lower than last year's request. 
And so far, there's been no explanation. Have we changed our strategy?
    Now, the Defense department isn't immune to waste. There's room for 
improvement. Every agency must use taxpayer dollars wisely--especially 
the Defense department.
    Secretary Hagel has announced the Strategic Choices and Management 
Review to develop a new strategy for a smaller budget. But a cheaper 
strategy isn't necessarily a better one. The Defense Business Board has 
suggested a number of ways to improve the department. I want to commend 
their hard work--and encourage you to act on their recommendations.
    That said, national security is a priority. Defense has borne half 
the burden of deficit reduction. And the President wants to cut even 
more. This year, the House budget provides the same amount of defense 
funding the President requested last year. Yet the President opposes 
our proposal. The President is holding the defense budget hostage for 
higher taxes and more spending.
    These days, every part of government needs to be more efficient. 
But even as we try to cut the fat, we have to be sure not to cut bone. 
We must make sure our troops overseas have what they need to complete 
their mission. We all owe a debt of gratitude to our military and their 
families, who continue to make sacrifices for our country and the 
freedoms we cherish.
    So I look forward to hearing your thoughts on the challenges we 
face--and the resources we need to meet them.

    Mr. Van Hollen. Thank you, Mr. Chairman. I want to join 
Chairman Ryan in welcoming all our witnesses. Secretary Hagel, 
General Dempsey, Secretary Hale, thank you for your dedicated 
service to our nation. I also want to convey our gratitude to 
the men and women in the Armed Forces for the sacrifices they 
make every day for our country.
    This week, the House of Representatives will be debating 
and voting on the National Defense Authorization Act. That will 
provide an opportunity to provide the resources we need for our 
Armed Forces. It will also be a chance to address some of the 
other significant challenges that must be confronted, like the 
mechanisms for confronting cases of sexual abuse in the 
military.
    Here in the Budget Committee, we can help honor the 
sacrifices of the men and women in the Armed Forces by 
allocating the top-line resources they need to accomplish their 
mission, and by making sure we have a budget plan that ensures 
that America remains economically strong and the land of 
opportunity for their children and grandchildren. The choices 
we make in our federal budget should reflect those goals. We 
should make choices that ensure that our military remains 
second to none, and make investments in education, scientific 
research, and the infrastructure necessary to help power our 
economy, sharpen our competitive edge, and create new 
opportunities. The very deep and very rapid cuts imposed by the 
sequester place all of these objectives at risk.
    You have both spoken very plainly about the negative impact 
on military readiness. There are obviously other major negative 
impacts on the Defense side of the equation. The nonpartisan 
Congressional Budget Office, which serves as the independent 
referee here, has said that deep immediate cuts from the 
sequester will also reduce our economic growth this year by a 
full one-third, which translates into 750,000 fewer American 
jobs this year. I have a letter from a major biotech company in 
my district that talks about the hiring freeze they imposed 
because of the cuts to NIH grants. These are self-inflicted 
wounds to our military, to our kids' education, to our economy.
    Now, the president and House and Senate Democrats have 
proposed budgets that would replace that sequester overall. 
Unfortunately, here in the House, we have not even had an 
opportunity to vote on that proposal. The good news is the 
House Republican budget on Defense provides the same level of 
funding, approximately, as the president's budget and the House 
and Senate Democrats. The bad news is the way they make up for 
that is by absolutely gutting the other parts of discretionary 
spending. So, for example, the part of the budget that funds 
our education and research at NIH would be cut by approximately 
20 percent below 2013 sequester levels. The president has been 
absolutely right to make it clear that he will not support 
appropriations bills that have those lopsided priorities.
    Finally, Mr. Chairman, I would say, given the large 
differences between the House and Senate budgets, you would 
think our Republican colleagues would want to get together now 
to resolve those differences by going to conference. We heard 
for three years about the fact the Senate did not have a 
budget. They have now had a budget for 81 days. We are now 58 
days past the statutory deadline for a conference committee 
being met.
    Speaker Boehner unfortunately continues to block the 
creation of a budget conference. I do not know what happened to 
``No Budget, No Pay,'' but I hope that this hearing and the 
testimony that is given will provide motivation for us to get 
going and doing our job now, go to conference, remove the 
uncertainty, and deal with these issues in a transparent way 
where we actually make the compromises necessary to move our 
country forward. Thank you, Mr. Chairman.
    [The prepared statement of Chris Van Hollen follows:]

      Prepared Statement of Hon. Chris Van Hollen, Ranking Member,
                        Committee on the Budget

    I want to join Chairman Ryan in welcoming our witnesses. Secretary 
Hagel, General Dempsey, and Under Secretary Hale, thank you for your 
dedicated service to our nation. I also want to convey our gratitude to 
the men and women in the Armed Forces for the sacrifices they make for 
the rest of us and for our country.
    This week the House will be debating and voting on the National 
Defense Authorization Act. That will provide an opportunity to provide 
the resources we need for our Armed Forces. It will also be a chance to 
address some of the significant challenges that must be confronted--
like the mechanisms for confronting cases of sexual abuse in the 
military. And it will provide a chance to examine the huge growth in 
the number of contractors used by the Defense Department and other 
security related federal agencies--a fact that has been highlighted by 
the recent leaks by a contractor to the National Security Agency.
    Here in the Budget Committee we can help honor the sacrifices of 
the men and women in the Armed Forces by allocating the top-line 
resources they need to accomplish their mission, and by making sure we 
have a budget plan that ensures that America remains economically 
strong and the land of opportunity for their children and 
grandchildren.
    The choices we make in our federal budget should reflect those 
goals. We should make budget choices that ensure that our military 
remains second to none, and make the investments in education, 
scientific research, and infrastructure necessary to help power our 
economy, sharpen our competitive edge, and create new opportunities.
    The very deep and very rapid cuts imposed by the sequester place 
these objectives at risk. You have both spoken plainly about the 
corrosive effects these cuts have on our military readiness. I also 
find it shameful that, in this great country of ours, the children of 
our service men and women stationed on military bases like Fort Bragg 
will lose five days of school this fall while their teachers are 
furloughed because this Congress cannot get its act together.
    The non-partisan Congressional Budget Office (CBO), which serves as 
the independent referee around here, has said that the deep, immediate 
cuts from the sequester will also reduce economic growth this year by 
one-third--which translates into 750,000 fewer jobs in this calendar 
year alone. I have a letter from a major bio-tech firm that provides 
one small example of that drag on the economy--they have imposed a 
hiring freeze because of the cuts in medical research at the National 
Institutes of Health.
    These are self-inflicted wounds to our military, to our kids' 
education, to our economy. The President, and the House and Senate 
Democrats, have all proposed budgets that would replace these deep, 
immediate cuts with a balanced approach that makes the necessary 
investments in our military and our economic growth, while reducing our 
long-term deficit with targeted cuts to spending and tax expenditures 
over a period of time. Here in the House, on seven occasions I have 
asked for a vote on a specific plan to replace the sequester through 
such a balanced approach. Unfortunately, we have not even been allowed 
a single vote on that plan in the people's House.
    Our Republican colleagues continue to reject that approach because 
they oppose any plan to replace the sequester, or to reduce the 
deficit, that includes any new revenue from closing tax breaks for the 
wealthy. Even though, I would point out, the CBO recently issued a 
report showing that 17 percent of the biggest tax breaks go to those 
with the top 1 percent of income.
    The good news in the House Republican budget is that--like the 
Democratic proposals--it would eliminate the very steep and immediate 
cuts to defense in FY 2014. The bad news is that they do it by cutting 
even more deeply into vital investments in our kids' education and in 
the investments in innovation and technology that help grow our 
economy. In fact, the Republican budgets would cut the part of the 
budget that funds education and vital medical research by 19 percent 
below the sequester. And despite claims to want to strengthen our 
embassy security in the aftermath of tragedies like Benghazi, the 
Republican budget slashes State Department operations by over 15 
percent below sequester. The White House has rightly stated that the 
President would veto any such lopsided approach.
    Given the big differences between the House and Senate budgets, you 
would think that our Republican colleagues would be eager to go to a 
budget conference to work out the differences in a transparent manner. 
After all, for years they displayed charts showing how many days it had 
been since the Senate had passed a budget. Well, the Senate passed a 
budget 81 days ago. It has now been 58 days since the statutory 
deadline for Congress to reach a budget conference. Yet Speaker Boehner 
refuses to appoint budget conferees, while the Senate Democrats have 
been blocked 12 times from getting Republicans to go to a budget 
conference. Whatever happened to `no budget, no pay'? Even Senator 
McCain has said that Republican refusal to go to a budget conference is 
`insane' and `incomprehensible.' He is not alone.
    Meanwhile, the sequester continues to eat away at our military 
readiness, at critical investments, and at economic growth. I hope 
today's hearing will inspire our colleagues to get serious about 
starting to tackle these big issues now. I don't know what we are 
waiting for.

    Chairman Ryan. Thank you. Thank you. And I expected similar 
comments like that, and I will say our goal is to get a budget 
agreement at the end of the day, and the decisions we are 
making are to try and maximize the likelihood of an outcome 
that is successful.
    Mr. Van Hollen. Well, today, for the 13th time, Senate 
Democrats asked to go to conference, and they have been blocked 
by Republican Senators.
    Chairman Ryan. Thank you. All right. Remember, 3:00. 
Secretary Hagel, the microphone is yours, then will be followed 
by General Dempsey.

         STATEMENT OF HON. CHARLES T. HAGEL, SECRETARY,
                   U.S. DEPARTMENT OF DEFENSE

    Secretary Hagel. Mr. Chairman, thank you, and Ranking 
Member Van Hollen, thank you, and to the distinguished members 
of this committee, thank you. I note that my friend and 
predecessor, the former chairman of this body, hangs proudly on 
your wall and is carefully monitoring my testimony, so I shall 
do all I can not to embarrass him, and I would say, as you all 
know, and some served with Leon Panetta, he continues to 
contribute a remarkable public servant. So thank you for this 
opportunity.
    As you have both noted, we are here today to talk about the 
president's 2014 budget, and I would begin with first thanking 
this committee and each of you for your support of our men and 
women in uniform, their families, and our civilian workforce, 
all who are associated with the Department of Defense and our 
national security. Thank you.
    The president has requested $526.6 billion for the 
Department of Defense's Fiscal Year 2014 base budget, and 79.4 
billion for overseas contingency operations. Mr. Chairman, my 
written statement, as you have probably noted, contains 
significant details on both budget requests. But this 
afternoon, allow me to very briefly focus on three general 
areas before I take your questions. First, the continued budget 
challenges facing the Department in Fiscal Year 2013 as a 
result of sequestration; second, the Department's Fiscal Year 
2014 budget request; and third, how the Department is preparing 
for future budget uncertainty and the prospects of further 
reduced resources.
    As you all know, the Department has been forced to 
implement deep, steep, and abrupt cuts in the current fiscal 
year because of sequestration. According to the latest guidance 
from the Office of Management and Budget, the Department must 
cut $37 billion in spending through the remainder of this 
fiscal year. With our internal decision to shift the impact of 
sequestration away from those serving in harm's way and our 
force readiness, the cuts now fall heavily on DoD's accounts 
that train and equip those who will deploy in the future. The 
Department is also experiencing higher wartime costs than 
expected. As a result of these factors, the Department is 
facing a shortfall of more than $30 billion in our operation 
and maintenance budget for Fiscal Year 2013.
    To deal with this shortfall, the Department has cut back 
sharply on facilities maintenance, instituted hiring freezes, 
cut overhead spending, reduced important but lower priority 
programs, directed furloughs of nearly 700,000 civilian 
employees, and submitted a $9.6 billion reprogramming request 
to Congress. Given the scale of this shortfall, the 
reprogramming and other steps we have taken to cut nonessential 
spending are not enough. While we have protected spending to 
sustain the war effort and defend America's vital strategic 
interests, the Department's day-to-day activities will be 
significantly disrupted for the remainder of this fiscal year.
    Each of the military services has begun to significantly 
reduce training and maintenance of non-deployed operating 
forces. For example, the Army has stopped rotations at its key 
combat training centers for all but deploying units. More than 
a dozen combat-coded Air Force squadrons either already have or 
will soon stop flying, and the Navy has curtailed all 
deployments.
    To avoid even more significant reductions to military 
readiness, I directed furloughs of up to 11 days for most of 
the Department's 800,000 civilian personnel. I made this 
decision very reluctantly. I made it very reluctantly because I 
recognize the significant hardship this places on our civilian 
personnel and their families. But the current budget 
environment is requiring difficult decisions and difficult 
options to deal with.
    The president's Fiscal Year 2014 budget continues to 
implement the $487 billion in spending reductions over 10 
years, agreed to, as this body knows, in the Budget Control Act 
of 2011. If the sequester-related provisions of the Budget 
Control Act are not changed, the Fiscal Year 2014 funding for 
national defense programs will be subject to an additional $52 
billion reduction in DoD funding, and, if there are no changes, 
continued sequestration will result in roughly $500 billion in 
additional reductions to Defense spending over the next 10 
years.
    The president's Fiscal Year 2014 budget replaces 
sequestration, and gives the Department the time and 
flexibility to plan and to implement spending reductions wisely 
and responsively. In particular, this budget enables the 
Department to support troops still at war in Afghanistan as we 
transition out of Afghanistan, protect readiness, modernize the 
military's aging weapons inventory in keeping with the 
president's Strategic Guidance, and sustain the high quality of 
the all-volunteer force. This budget also continues the 
Department's approach over the last couple of years of 
targeting growing costs in areas of support, overhead 
acquisition, and pay and benefits.
    Over the next five years, DoD has identified $34 billion in 
new savings across these categories. This includes weapons 
programs, restructuring and terminations that achieve $8.2 
billion in savings, slowdowns in military construction, and 
reductions in other low-priority programs. Our military 
compensation package preserves DoD's world-class pay and 
benefits while putting our military on a more sustainable path 
for the future. It includes changes to the TRICARE program to 
bring the beneficiaries' cost share closer to the levels 
envisioned when the program was implemented.
    The Department of Defense also must be able to eliminate 
excess infrastructure. The president's Fiscal Year 2014 budget 
requests authorization for one round of base realignment 
closure. BRAC, as we all know, is an imperfect process, and 
there are upfront costs, but in the long term, there are 
significant savings. The previous rounds of BRAC are saving $12 
billion annually. We cannot justify funding unnecessary 
infrastructure when we are reducing our forestructure.
    Since 2003, DoD has divested more than 100 foreign bases 
and operations, and we are on schedule to close or consolidate 
over 20 more overseas operations. Although there are clearly 
opportunities to achieve significant savings by improving 
efficiency, consolidations, and reducing overhead, the scale of 
the current spending reductions will also require cuts and 
changes to military operations. The fiscal 2014 budget request 
seeks to further align budget programs with the president's 
Defense Strategic Guidance while continuing to reduce the size 
of the ground forces and retire aging aircraft and ships. This 
budget invests in key elements of our defense strategy 
including implementing a rebalance to the Asia Pacific region, 
maintaining a safe, secure, and effective nuclear stockpile, 
increasing investment in cyber capabilities, and sustaining the 
growth of Special Operations forces. Finally, this budget seeks 
to preserve a combat-ready force, and sustain the high quality 
all-voluntary force.
    Now, let me just very briefly note what the chairman had 
mentioned in his opening remarks about a strategic choices 
management review that I directed three months ago. The Fiscal 
Year 2014 budget reflects DoD's best efforts to match ends, 
ways, and means, and this is during a period of intense fiscal 
uncertainty. It is obvious that significant changes to the 
Department's top-line spending would require changes to this 
budget plan.
    Consequently, I directed a strategic choices management 
review in order to assess the potential impact of further 
reductions, and plan for those continued reductions. I have 
received the initial internal results of the review, and I am 
now reviewing all the documents. This Defense Department will 
continue to find new ways to operate more affordably, 
efficiently, and effectively. However, as I have stated, 
continued cuts on the scale and the timeline of sequestration 
will require significant reductions in core military 
capabilities and the scope of our activities around the world. 
The president's Fiscal Year 2014 budget sustains our military 
strength in an environment of constrained resources, giving DoD 
the time and the flexibility to make the necessary reductions 
and adjustments over a 10-year timeframe.
    Hard choices will have to be made over the next few years. 
In the past, many modest reforms to personnel and benefits, 
along with efforts to reduce infrastructure and restructure 
acquisition programs, were met with fierce political 
resistance, and they were never implemented. As you all know, 
we are now in a different fiscal environment. New realities are 
forcing us to more fully confront these tough and painful 
choices, and to make the reforms necessary to put this 
Department on a path to sustain our military strength for the 
21st century and meet new complicated threats; we must do 
better.
    This will require the continued partnership and assistance 
of this Committee and the Congress. Before I take questions, I 
would ask if it is okay, Mr. Chairman, if General Dempsey 
present his statement as well.
    [The prepared statement of Secretary Hagel follows:]

           Prepared Statement of Hon. Chuck Hagel, Secretary,
                       U.S. Department of Defense

    Chairman Ryan, Ranking Member Van Hollen, members of the committee, 
thank you for this opportunity to discuss the President's Fiscal Year 
2014 budget request for the Department of Defense.
    Allow me to express my appreciation to this committee for its 
continued support of our men and women in uniform and our civilian 
workforce. They are doing tremendous work and making great sacrifices, 
along with their families, as they have for the more than 11 years our 
nation has been at war. Whether fighting in Afghanistan, patrolling the 
world's sea lanes, standing vigilant on the Korean peninsula, supplying 
our troops around the world, or supporting civil authorities when 
natural disasters strike, they are advancing America's interests at 
home and abroad. Their dedication and professionalism are the 
foundation of our military strength.
    As we discuss numbers, budgets, and strategic priorities, we will 
not lose sight of these men and women serving across the globe. As you 
all know, their well-being depends on the decisions we make here in 
Washington.
                      fiscal and strategic context
    Today, the Department of Defense faces the significant challenge of 
conducting long-term planning and budgeting at a time of considerable 
uncertainty both in terms of the security challenges we face around the 
world and the levels of defense spending we can expect here at home.
    Even as the military emerges--and recovers--from more than a decade 
of sustained conflict in Iraq and Afghanistan, it confronts an array of 
complex threats of varying vintage and degrees of risk to the United 
States, to include:
     the persistence of violent extremism throughout weak 
states and ungoverned spaces in the Middle East and North Africa;
     the proliferation of dangerous weapons and materials;
     the rise of new powers competing for influence;
     the risk of regional conflicts which could draw in the 
United States;
     faceless, nameless, silent and destructive cyberattacks.
    Meanwhile, the frenetic pace of technological change and the spread 
of advanced military technology to state and non-state actors pose an 
increasing challenge to America's military.
    This is the strategic environment facing the Department of Defense 
as it enters a third year of flat or declining budgets. The onset of 
these resource constraints has already led to significant and ongoing 
belt-tightening in military modernization, force structure, personnel 
costs, and overhead expenditures. It has also given us an opportunity 
to reshape the military and reform defense institutions to better 
reflect 21st century realities, as I outlined in a speech in April at 
the National Defense University.
    The process began under the leadership of Secretary Gates, who 
canceled or curtailed more than 30 modernization programs and trimmed 
overhead costs within the military services and across the defense 
enterprise. These efforts reduced the Department's topline by $78 
billion over a five year period, as detailed in the Department's FY 
2012 budget plan.
    The realignment continued under Secretary Panetta, who worked 
closely with the President and the Joint Chiefs of Staff to craft new 
defense strategic guidance and a FY 2013 defense budget plan which 
reduced the Department's topline by $487 billion over the course of a 
decade. Even while restructuring the force to become smaller and leaner 
and once again targeting overhead savings, this budget made important 
investments in the new strategy--including rebalancing to Asia and 
increasing funding for critical capabilities such as cyber, special 
operations, global mobility, and unmanned systems.
    The President's request of $526.6 billion for the Department of 
Defense's base budget for FY 2014 continues to implement the 
President's Defense Strategic Guidance and enhances the Department's 
efforts at institutional reform. Most critically, it sustains the 
quality of the all-volunteer force and the care we provide our service 
members and their families, which underpins everything we do as an 
organization. The accompanying OCO request for $79.4 billion provides 
the resources to continue the responsible drawdown in Afghanistan and 
restore equipment damaged or worn out by more than a decade of war.
    DoD's base-budget request for FY 2014 does not reflect the effects 
of sequester cuts that would occur if the Budget Control Act (BCA) is 
not changed. However, the President's Budget includes balanced deficit 
reduction proposals that are more than sufficient to allow Congress to 
meet BCA goals and then repeal sequester-related reductions.
                         challenges in fy 2013
    Before discussing the particulars of this budget request, however, 
allow me to address the profound budget problems facing the Department 
in FY 2013 and beyond as a result of sequester--because they have 
significantly disrupted operations for the current fiscal year and 
greatly complicated efforts to plan for the future. The Congress and 
the Department of Defense have a responsibility to find answers to 
these problems together--because we have a shared responsibility to 
protect our national security. DoD is going to need the help of 
Congress to manage through this uncertainty.
    The FY 2013 DoD Appropriations bill enacted by the Congress in 
March addressed many urgent problems by allocating DoD funding more 
closely in line with the President's budget request, giving the 
Department authorities to start new programs, and allowing us to 
proceed with important military construction projects. Nonetheless, the 
bill still left in place the deep and abrupt cuts associated with 
sequester--some $37 billion in spending reductions. With military pay 
and benefits exempt from the sequester, and our internal decision to 
shift the impact of sequestration away from those serving in harm's 
way, the cuts fall heavily on DoD's operations, maintenance and 
modernization accounts that we use to train and equip those who will 
deploy in the future.
    Furthermore, the military is experiencing higher wartime operating 
tempos, and higher transportation costs than expected when the budget 
request was formulated more than a year ago. As a result of all these 
factors, the Department is now facing a shortfall of more than $30 
billion in our operation and maintenance (O&M) budget for FY 2013.
    The Department has been doing everything possible to reduce this 
shortfall while ensuring we can defend the nation, sustain wartime 
operations, and preserve DoD's most critical asset--our world-class 
civilian and military personnel. To that end, we have cut back sharply 
on facilities maintenance, instituted a hiring freeze, cut overhead and 
all non-essential spending, reduced many other important but lower-
priority programs, and worked to shift funds from investment to O&M 
accounts.
    Still, these steps have not been enough to close the shortfall. 
While we have protected spending to sustain the war effort and defend 
America's vital strategic interests, the Department's day-to-day 
activities will be significantly disrupted for the remainder of the 
fiscal year. Each of the military services has begun to significantly 
reduce training and maintenance of non-deployed operating forces--steps 
that are having effects on military readiness.
    Specifically:
     The Army has stopped rotations at its key combat training 
centers for all but deploying units. By the end of the year, this and 
other training cutbacks will leave most non-deployed Army units at 
unacceptable readiness levels.
     The Air Force has or will soon stop all flying at more 
than a dozen combat coded squadrons. These units will soon no longer be 
ready to fight on short notice.
     The Navy has curtailed deployments, including the decision 
not to send a second carrier strike group to the Gulf.
    We have also recently submitted a $9.6 billion reprogramming 
request to Congress. Most of this reprogramming seeks permission to 
move unneeded military personnel funding, and non-executable or lower 
priority investment funding, into our O&M accounts that are 
experiencing the largest budget shortfalls.
    To avoid even more significant reductions to military readiness, 
and after extensive review of all options with the DoD's senior 
military and civilian leadership on how we address this budget crisis, 
I have decided to direct furloughs of up to 11 days for nearly 700,000 
of the Department's civilian personnel. I have made this decision very 
reluctantly, because I know that the furloughs will adversely impact 
DoD operations. I also recognize the significant hardship this places 
on our civilian personnel across the country and their families. But 
the current budget is requiring difficult decisions and options.
    After required notifications, we will begin the furlough period on 
July 8 at the rate of one furlough day per week for most personnel. We 
plan to continue these furloughs through the end of the current fiscal 
year. If our budgetary situation permits us to end furloughs early, I 
would strongly prefer to do so. That is a decision I will make later in 
the year.
                         fy 2014 budget request
    Let me turn now to FY 2014. If the sequester-related provisions of 
the Budget Control Act of 2011 are not changed, FY 2014 funding for 
national defense programs will be subject to a steeply reduced cap, 
which would cut DoD funding by roughly $52 billion further. And, if 
there is no action by the Congress, roughly $500 billion in reductions 
to defense spending would be required over the next ten years covered 
by the BCA.
    As an alternative, the President's budget proposes some $150 
billion in additional defense savings (measured in terms of budget 
authority) over the next decade when compared with the budget plan 
submitted last year. These cuts are part of a balanced package of 
deficit reduction. Unlike sequester, these cuts largely occur in the 
years beyond FY 2018--which gives the Department time to plan and 
implement the reductions wisely, and responsibly, anchored by the 
President's defense strategic guidance.
    The President's FY 2014 request reflects these changes. It 
continues to balance the compelling demands of supporting troops still 
at war in Afghanistan, protecting readiness, modernizing the military's 
aging weapons inventory in keeping with the president's strategic 
guidance, and sustaining the quality of the all-volunteer force.
    The requested funding of $79.4 billion for FY 2014 OCO provides 
funds to continue the responsible drawdown in Afghanistan and is lower 
than the roughly $89 billion enacted for FY 2013. The top-line budget 
request of $526.6 billion for base-budget funding FY 2014 is 
essentially flat compared to the President's request for FY 2013, and 
roughly in line with what both the House and Senate have passed in 
their FY 2014 budget resolutions.
    The following are the major components of the $526.6 billion base 
budget request for FY 2014:
     Military pay and benefits (including TRICARE and 
retirement costs)--$170.2 billion (32% of the total base budget);
     Operating costs (including $77.3 billion for civilian 
pay)--$180.1 billion (34%);
     Acquisitions and other investments (Procurement, research, 
development, test and evaluation, and new facilities construction)--
$176.3 billion (33%)
    The base budget presented today, at its most basic level, consists 
of a series of choices that reinforce each of the following 
complementary goals:
     making more disciplined use of defense resources;
     implementing the President's defense strategic guidance;
     seeking to sustain the readiness and quality of the all-
volunteer force;
     supporting troops deployed and fighting in Afghanistan.
    As I discuss each of these goals, I must note that, unfortunately, 
many of the reductions we are being forced to make in FY 2013 as a 
result of sequester run directly counter to the FY 2014 goals.
          1. making more disciplined use of defense resources
    In developing the FY 2014 budget, the Department identified about 
$34 billion in savings over the current Future Years Defense Program 
(FYDP), which covers FY 2014 to FY 2018. These savings were used to 
help pay the costs of implementing the new defense strategy and to 
accommodate budget reductions.
    These efforts continue the Department's approach of the last 
several years to first target growing costs in areas of support, 
overhead, acquisition, and pay and benefits, before cutting military 
capabilities and force structure.
Reducing Support Costs
    In order to maintain balance and readiness, the Department of 
Defense must be able to eliminate excess infrastructure. Therefore, the 
President's FY 2014 budget requests authorization for one round of Base 
Realignment and Closure (BRAC) in 2015. While the commission would meet 
in 2015, the actual closing of any bases would involve a multiyear 
process that would not begin until 2016.
    BRAC is a comprehensive and fair tool that allows communities a 
role in re-use decisions for the property and provides redevelopment 
assistance. BRAC is an imperfect process, and there are up-front costs 
for BRAC, and this FYDP adds $2.4 billion to pay them, but in the long-
term there are significant savings. The previous five rounds of BRAC 
are now saving a total of $12 billion annually.
    We cannot justify funding unnecessary infrastructure when we are 
reducing force structure. Since 2003, DoD has divested more than 100 
foreign bases and operations and we are on schedule to close or 
consolidate over 20 more overseas operations.
    We are also taking other important steps to cut back on support 
costs. We have begun a study of our Military Treatment Facilities, 
including many hospitals and clinics that are currently underutilized. 
By the end of this year we will have a plan in place that suggests how 
to reduce that underutilization while still providing high-quality 
medical care. This restructuring, coupled with a BRAC round and other 
changes, would permit us to plan on a cut in our civilian workforce 
that will comply with Congressional direction.
    We are also continuing our successful efforts to hold down military 
health system costs. Due primarily to changes in payments to health 
care providers, our projected costs for FY 2014 are about four percent 
lower than those costs in FY 2012, a significant turnaround compared to 
health care trends over the past decade. But costs will soon start to 
grow again. Therefore, we continue efforts to slow the growth of 
medical care costs through actions such as re-phasing military 
construction, making full use of past changes in provider costs, taking 
advantage of the slowing of growth in medical costs in the private 
sector, and modest changes in user fees and co-pays.
    Another important initiative is our effort to improve the 
Department's financial management and achieve auditable financial 
statements. We need auditable statements, both to improve the quality 
of our financial information and to reassure the public, and the 
Congress, that we are good stewards of public funds. We have a focused 
plan and are making progress. Our next goal is audit-ready budget 
statements by September 2014. We are working hard to achieve this goal, 
though the current budget turmoil is hampering our efforts 
significantly. I strongly support this initiative and will do 
everything I can to fulfill this commitment.
    These and many other changes led to total savings of about $34 
billion in FY 2014-2018, including $5.5 billion in FY 2014. However, we 
are concerned that these savings from more disciplined use of resources 
could be eroded by sequester, as we are forced to make inefficient 
choices that drive up costs. Today, for example, we are being forced to 
engage in shorter and less efficient contracts and cuts in unit buy 
sizes that will increase the unit costs of weapons.
Restructuring and Terminations of Weapons Programs
    In this budget, the Department has shifted priorities within its 
modernization portfolios and achieved $8.2 billion in savings from 
weapons program terminations and restructuring. For example, by 
revising the acquisition strategy for the Army's Ground Combat Vehicle 
(GCV) program, the Department will save over $2 billion in development 
costs. In other cases the Department proposes evolutionary approaches 
to develop new capabilities instead of relying on leap-ahead gains in 
technology.
    For example, the Department:
     Realigned investment funding and restructured the SM-3 IIB 
interceptor--a high-risk, high-cost system--to improve the capabilities 
of existing missile defense systems, resulting in savings of about $2.1 
billion during the Future Year Defense Program (FYDP);
     Cancelled the Precision Tracking Space Satellite system--
another high-risk project--saving $1.9 billion during the FYDP; the 
Department invested a portion of these savings in technology upgrades 
to existing ground-based radars and sensors.
    To lessen the potential impact on local communities from the 
reductions in defense procurement, the Department is requesting an 
additional $36 million in support of the Defense Industry Adjustment 
program.
    The Department is continuing to take steps to tighten the contract 
terms and reduce risk in our largest acquisition program, the F-35 
Joint Strike Fighter. The FY 2014 budget request includes $8.4 billion 
for the Joint Strike Fighter.
Military Pay and Benefits
    The costs of military pay and benefits are another significant 
driver of spending growth that must be addressed in the current fiscal 
environment. In this budget, the Department is submitting a new package 
of military compensation proposals that take into consideration 
Congressional concerns associated with those from FY 2013. These 
changes save about $1.4 billion in FY 2014 and a total of $12.8 billion 
in FY 2014-2018
    This package includes a modest slowing of the growth of military 
pay by implementing a one percent pay raise for service members in 
2014. The Department is also seeking additional changes to the TRICARE 
program in the FY 2014 budget to bring the beneficiary's cost share 
closer to the levels envisioned when the program was implemented--
particularly for working age retirees. Today military retirees 
contribute less than 11 percent of their total health care costs, 
compared to an average of 27 percent when TRICARE was first fully 
implemented in 1996.
    The proposed TRICARE changes include:
     For retirees, increases in TRICARE Prime enrollment fees, 
instituting an enrollment fee for TRICARE Standard/Extra, and 
increasing Standard/Extra deductibles.
     Implementation of an enrollment fee for new TRICARE-for-
Life beneficiaries, while grandfathering in those who are Medicare-
eligible at enactment.
     Increases in pharmacy co-pays and, where appropriate, 
mandatory use of mail order delivery of pharmaceuticals.
     Indexing of fees, deductibles, co-pays and the 
catastrophic cap to the growth in the annual retiree cost-of-living 
adjustment.
    Survivors of military members who died on active duty or medically 
retired members would be excluded from all TRICARE increases. Even 
after the proposed changes in fees, TRICARE will remain a generous 
benefit--as it should be.
    These adjustments to pay and benefits were among the most carefully 
considered and difficult choices in the budget. They were made with the 
strong support of the Joint Chiefs of Staff and Senior Enlisted 
Leadership, in recognition that in order to sustain these benefits over 
the long term without dramatically reducing the size or readiness of 
the force, these rising costs need to be brought under control.
2. implementing and deepening our commitment to the president's defense 
                           strategic guidance
    Spending reductions on the scale of the current drawdown cannot be 
implemented through improving efficiency and reducing overhead alone. 
Cuts and changes to capabilities--force structure and modernization 
programs--will also be required. The strategic guidance issued in 
January 2012 set the priorities and parameters that informed those 
choices, and the FY 2014 budget submission further implements and 
deepens program alignment to this strategic guidance.
    The new strategy calls for a smaller and leaner force. Last year we 
proposed reductions of about 100,000 in military end strength between 
FY 2012 and FY 2017. Most of those reductions occur in the ground 
forces and are consistent with a decision not to size U.S. ground 
forces to accomplish prolonged stability operations, while maintaining 
adequate capability should such activities again be required. By the 
end of FY 2014 we will have completed almost two thirds of the drawdown 
of our ground forces, and the drawdown should be fully complete by FY 
2017.
    Last year DoD submitted proposals for changes in Air Force and Navy 
force structure; some were rejected by Congress. We continue to 
believe, however, that these reductions are consistent with our defense 
strategy and the need to hold down costs. Therefore, DoD is 
resubmitting several proposals from its FY 2013 budget submission that 
were not supported by Congress, including the retirement of seven Aegis 
cruisers and two amphibious ships at the end of FY 2014 when funds 
appropriated for their operation run out. Despite the growing 
importance of the Asia-Pacific--a mostly maritime theater--the high 
costs of maintaining these older ships relative to their capabilities 
argues strongly for their retirement.
    The FY 2014 budget continues implementation of the Air Force total 
force proposal included in the FY 2013 National Defense Authorization 
Act. In response to state and congressional concerns about proposed 
reductions to the Air National Guard that DoD made in the original FY 
2013 budget, the Department added back 44 aircraft to the Guard, 30 
aircraft to the Air Force Reserve, and is taking away 31 aircraft from 
the active Air Force.
    These shifts were forced primarily by political realities, not 
strategy or analysis. While this active-reserve compromise allows the 
Air Force to move forward with prior year retirements and transfers, 
and approved mission changes for many reserve units, it does require 
the Department to retain excess aircraft capacity. The Department's 
position continues to be that retaining excess air capacity in the 
reserve component is an unnecessary expenditure of government funds 
that detracts from more pressing military priorities outlined in the 
defense strategic guidance.
    Increased emphasis on the Asia-Pacific and Middle East represents 
another key tenet of the new defense strategic guidance. This budget 
continues to put a premium on rapidly deployable, self-sustaining 
forces--such as submarines, long-range bombers, and carrier strike 
groups--that can project power over great distance and carry out a 
variety of missions.
    This new strategy not only recognizes the changing character of the 
conflicts in which the U.S. must prevail, but also leverages new 
concepts of operation enabled by advances in space, cyberspace, special 
operations, global mobility, precision-strike, missile defense, and 
other capabilities.
 3. seeking to sustain the readiness and quality of the all-volunteer 
                                 force
    The high-quality of our all-volunteer force continues to be the 
foundation of our military strength. This budget seeks to ensure that 
our troops receive the training and equipment they need for military 
readiness, and the world-class support programs they and their families 
have earned. However, as in other areas of the budget, the steep and 
abrupt cuts caused by the FY 2013 sequester has harmed these programs. 
The remainder of this discussion outlines the goals of the FY 2014 
budget, but they would be significantly impacted if sequester-level 
cuts persist.
Readiness Investments
    Even in the face of flat and declining defense toplines, this 
budget seeks to press ahead with the transition from a 
counterinsurgency-focused force to a force ready and capable of 
operating across a full range of operations across the globe. The 
service budgets all fund initiatives that seek to return to full-
spectrum training and preparation for missions beyond current 
operations in Afghanistan.
    The Department continues its work to understand and quantify 
readiness activities as we seek to maximize our preparedness for real-
world missions. We do not yet know the costs of fixing the readiness of 
the force following the six months of sequester cuts to training in 
this fiscal year. Therefore these costs are not included in the FY 2014 
budget.
Family Support Programs
    The Department's budget submission makes clear that people are 
central to everything we do. While sequester cuts would unfortunately 
counter many of these initiatives, especially for our civilian 
workforce, the initiatives remain important statements of the intent in 
this budget.
    The Department continues to support key programs in FY 2014 that 
support service members and their families, spending $8.5 billion on 
initiatives that include:
     Transition Assistance and Veteran's Employment Assurance--
the Department continues to support the Transition Assistance Program 
(TAP) to ensure every service member receives training, education, and 
credentials needed to successfully transition to the civilian 
workforce.
     Family Readiness--the Department continues to ensure that 
family support is a high priority by redesigning and boosting family 
support in a number of ways.
    The Department is also providing support to our people with a 
number of other important initiatives, including:
     Behavioral Health--the Department maintains funding for 
psychological health programs and expands those programs that are most 
effective, such as Embedded Behavioral Health, to provide improved 
access to care, improved continuity of care, and enhanced behavioral 
health provider communication.
     Suicide Prevention--the Department continues to implement 
recommendations from the Suicide Prevention Task Force and act on other 
findings from think tanks, the National Action Alliance's National 
Suicide Prevention Strategy, and DoD and Department of Veteran's 
Affairs (VA) Integrated Mental Health Strategy (IMHS).
    Another area of focus has been Sexual Assault Prevention and 
Response. I have no tolerance for sexual assault in the military. This 
is a terrible scourge in our military and it must end. It will end. We 
will fix it. I have directed a number of initiatives to advance DoD's 
efforts to prevent and respond to the crime of sexual assault, along 
five lines of effort:
Accountability
     I directed DoD's Acting General Counsel to propose to the 
Congress changes to Article 60 of the Uniform Code of Military Justice 
(UCMJ) that would eliminate the ability of a convening authority to 
change findings in courts-martial, except for certain minor offenses. 
These changes would also require the convening authority to explain in 
writing any changes made to court-martial sentences, as well as any 
changes to findings involving minor offenses. These changes, if 
enacted, would help ensure that our military justice system works 
fairly, ensures due process, and is accountable.
     I have also directed the Service Chiefs to develop methods 
to evaluate military commanders' performance in establishing command 
climates of dignity and respect and in incorporating sexual assault 
prevention and victim care principles in their commands. This includes 
providing commanders the results of their subordinate's annual command 
climate surveys in order to enhance accountability and improve insight 
in command climate at every level of the chain of command.
     I have named a set of highly respected and experienced 
experts to serve on a panel called for in the National Defense 
Authorization Act for FY 2013. The panel will conduct an independent 
review and assessment of DOD's systems used to investigate, prosecute 
and adjudicate crimes involving adult sexual assault and related 
offenses. It will convene its first meeting no later than July 1st. I 
have spoken to the panel and asked it to accelerate its work and 
provide a final recommendation within 12 months.
Prevention
     I have directed the complete and thorough review of 
credentials and qualifications for DoD's sexual assault victim 
advocates, coordinators, and recruiters.
     I have directed DoD to improve the effectiveness of Sexual 
Assault Prevention and Response (SAPR) programs in recruiting 
organizations.
     I have directed DoD component heads to direct 
comprehensive and regular visual inspections of all DoD workplaces to 
include military academies to ensure that our facilities promote an 
environment of dignity and respect for all members and are free from 
materials that create a degrading or offensive work environment.
Investigation
     Consistent with the FY 2012 and FY 2013 National Defense 
Authorization Acts, DoD has established new policies to retain 
restricted and unrestricted reports for 50 years, and is developing 
policy for Special Victim Capability, which includes standards and 
training for prosecutors and investigators.
Advocacy
     DoD has implemented a sexual assault crisis intervention 
line, the DoD Safe Helpline, to give victims 24/7 global access to 
crisis support staff, implemented an expedited transfer policy for 
victims requesting transfer to a new unit, and expanded emergency care 
and services to DoD civilians stationed abroad.
     I have directed the Service Secretaries to implement 
methods to improve victim treatment by their peers, coworkers, and 
chains of command. Direct victim input will also be incorporated into 
these methods.
Assessment
     DoD has added sexual assault questions to DoD Command 
Climate Surveys and implemented policy to conduct assessments within 
120 days for new commanders and annually thereafter, consistent with 
the FY 13 NDAA.
     I have begun holding a weekly review and progress meeting 
on DoD's various sexual assault directives to ensure that they are 
bringing about real change.
    I receive weekly updates on the Department's prevention efforts in 
regularly scheduled weekly meetings. I also have an individual on my 
personal staff that I have tasked to oversee all of these directives 
and Department-wide efforts.
    Everyone in this department at every level of command will continue 
to work together every day to establish an environment of dignity and 
respect, where sexual assault is not tolerated, condoned or ignored, 
where there is clear accountability placed on all leaders at every 
level. The leadership of this department has no higher priority than 
the safety and welfare of our men and women in uniform, and that 
includes ensuring they are free from the threat of sexual harassment 
and sexual assault. I will continue as Secretary of Defense to 
prioritize the Department's efforts to turn this problem around.
          4. supporting troops deployed and fighting overseas
    The amendment to the FY 2014 President's budget includes $79.4 
billion for Overseas Contingency Operations (OCO). Military operations 
in Afghanistan comprise a significant portion of the OCO request. Over 
the course of the year, American forces in Afghanistan are moving into 
a support role as Afghan forces take the lead. By February 2014, half 
of our troops there will have returned home, and by December 2014, 
United States' combat operations in Afghanistan will have ended. Still, 
the United States will maintain a commitment to Afghanistan's 
sovereignty and security, and we will continue to equip, train, advise, 
and assist the Afghan National Forces; support economic development and 
governance efforts; and pursue al Qaeda and its affiliated groups.
    Of the total OCO request, $78.1 billion is for activities in 
support of Operation Enduring Freedom (OEF) and $1.3 billion is for 
finalizing transition activities in Iraq.
         the way ahead: strategic choices and management review
    The FY 2014 budget is a reflection of DoD's best efforts to match 
ends, ways, and means during a period of intense fiscal uncertainty. It 
is a balanced plan that would address some of the Department's 
structural costs and internal budget imbalances while implementing the 
President's defense strategic guidance and keeping faith with our men 
and women in uniform and their families.
    It is obvious that significant changes to the Department's top-line 
spending would require changes to this budget plan. The Department must 
be prepared for any additional reductions to the defense budget that 
might result from Congress and the Administration agreeing on a deficit 
reduction plan, and it must be prepared in the event that sequester-
level cuts persist for another year or over the long-term.
    Consequently, earlier this year I directed a Strategic Choices and 
Management Review (SCMR) in order to assess the potential impact of 
further reductions up to the level of full sequester. The purpose of 
the SCMR is to re-assess the basic assumptions that drive the 
Department's investment and force structure decisions and to search for 
additional management efficiencies.
    It is designed to help understand the challenges, articulate the 
risks, and look for opportunities for reform and efficiencies presented 
by resource constraints. Everything is on the table during this 
review--roles and missions, planning, business practices, force 
structure, personnel and compensation, acquisition and modernization 
investments, how we operate, and how we measure and maintain readiness.
    I have received the initial internal results of the SCMR and am 
reviewing them now. The results will inform our planning for FY 2014 as 
well as our FY 2015 budget request, and will they be the foundation for 
the Quadrennial Defense Review due to Congress in February 2014.
    It is already clear to me that achieving significant additional 
budget savings without unacceptable risk to national security will 
require not just tweaking or chipping away at existing structures and 
practices but, if necessary, fashioning entirely new ones that better 
reflect 21st century realities. And that will require the partnership 
of Congress.
    The FY 2014 budget and the ones before it have made hard choices. 
In many cases, modest reforms to personnel and benefits, along with 
efforts to reduce infrastructure and restructure acquisition programs, 
met fierce political resistance and were not implemented.
    We are now in a different fiscal environment dealing with new 
realities that will force us to more fully confront these tough and 
painful choices, and to make the reforms we need to put this Department 
on a path to sustain our military strength for the 21st century. But in 
order to do that we will need flexibility, time, and some budget 
certainty.
    We will also need to fund the military capabilities that are 
necessary for the complex security threats of the 21st century. I 
believe the President's budget does that. With the partnership of 
Congress, the Defense Department can continue to find new ways to 
operate more affordably, efficiently, and effectively. However, 
multiple reviews and analyses show that additional major cuts--
especially those on the scale and timeline of sequestration--would 
require dramatic reductions in core military capabilities or the scope 
of our activities around the world.
    As the executive and legislative branches of government, we have a 
shared responsibility to ensure that we protect national security and 
America's strategic interests. Doing so requires that we make every 
decision on the basis of enduring national interests and make sure 
every policy is worthy of the service and sacrifice of our service 
members and their families.

    Chairman Ryan. Absolutely. General Dempsey.
    Secretary Hagel. Thank you.

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

    General Dempsey. Thank you, Chairman Ryan, Ranking Member 
Van Hollen, distinguished members of the Committee. Thanks for 
the opportunity to come before you today and discuss the fiscal 
year 2014 budget. This hearing comes at a time of extraordinary 
uncertainty, as Secretary of Defense mentioned. Risks to our 
nation's security are increasing, but the resources for and the 
readiness of our force is decreasing. The will to win of our 
service men and women remains undaunted, but the means to 
prepare to win are more uncertain every day.
    This budget was purpose-built to keep our nation immune 
from coercion. It is a responsible investment in an unrivaled 
joint force that is ready with options for that dangerous and 
uncertain future. It supports our forward-deployed operations, 
upholds funding for emerging capabilities such as cyber, and it 
resources the conventional and nuclear forces that have proven 
so essential and effective to our defense.
    Most importantly, it protects our real decisive edge, which 
is our people. It treats being the best-led, best-trained, and 
best-equipped military as the non-negotiable imperative. It 
also makes sure our wounded warriors and their families receive 
world-class care, family and medical services that are worthy 
of their service to the nation.
    Now, there are some things that this budget does not do. It 
does not reflect full sequestration. Rather, it imposes less 
reduction and gives us more time to implement new reductions. 
The consequences of full sequestration and its attended risks 
to our national security will gain clarity in the weeks ahead 
due to the Secretary of Defense's strategic choices management 
review. As you know, the Senate has actually asked us--tasked 
us to provide our assessment on the impact to the joint force 
by 1 July.
    Nor does this budget account for the costs of restoring 
lost readiness. We do not yet know the full cost to recover 
from the readiness shortfalls that we have imposed this year. 
As expected, we continue to curtail or cancel training and 
exercises across all services for units that are not about to 
deploy, and as a result, we are less everyday for an unforeseen 
crisis or for an unpredictable contingency operation. In 
effect, we are foreclosing on options.
    It is also more expensive to become ready than it is to 
stay ready. This means that the cost to recover our lost 
readiness will inevitably compete with the cost that we 
anticipate in building the joint force we need in 2020. As our 
military power potentially becomes less sustainable, it becomes 
less credible. We risk breaking commitments and losing the 
confidence of partners and allies of the defense industrial 
base, and, more importantly, of our men and women in uniform 
and their families.
    Now, that outcome is not inevitable. Working together, we 
can and must uphold the readiness and the health of the force 
at an affordable cost. To do that, as we have discussed in the 
past, we need three things. We need the certainty of a 
predictable funding stream, that is to say, a reliable top-
line. We also need the time to implement tradeoffs, tradeoffs 
in forestructure, modernization, compensation, and readiness, 
and we need the full flexibility to keep the force in balance.
    We simply cannot afford to postpone essential reforms to 
compensation, health care, and to the institution at large. 
These should be allowed to grow more gradually, and, in some 
cases, to shrink. We should stop pouring money into excess 
facilities and unwanted weapons systems, and real institutional 
reform is the only way to avoid repeating the mistakes of past 
drawdowns; and we do have experience in past drawdowns, and we 
do know where the mistakes await us.
    We have an opportunity and an obligation with this and any 
future budget to restore confidence. We have it within 
ourselves to stay strong as a global leader and a reliable 
partner. Thank you to members of this Committee for all you 
have done for our men and women in uniform in the past, and I 
look forward to taking your questions.
    [The prepared statement of General Dempsey follows:]

           Prepared Statement of GEN Martin E. Dempsey, USA,
                    Chairman, Joint Chiefs of Staff

                            i. introduction
    Chairman Ryan, Ranking Member Van Hollen, and distinguished 
Committee Members, it is my privilege to update you on the state of the 
US Armed Forces and to comment on the President's budget proposal for 
fiscal year (FY) 2014.
    This year's posture testimony comes in the context of extraordinary 
uncertainty. Our Nation is going through an historic fiscal correction 
to restore the economic foundation of our power. As resources decline, 
risks to our national security interests rise. A more competitive 
security environment compounds these risks, increasing the probability 
and consequences of aggression.
    This context calls out for our leadership. We can and must find it 
within ourselves to stay strong as a global leader and reliable 
partner. We must restore lost readiness and continue to make 
responsible investments in our Nation's defense.
               ii. strategic direction to the joint force
    A year ago, I established four priorities to help guide our Joint 
Force through this period of uncertainty. Our way forward must be 
rooted in a renewed commitment to the Profession of Arms. This means 
preserving an uncommon profession that is without equal in both its 
competence and its character. Along the way, we must keep faith with 
our Military Family. This means honoring the commitments we have made 
to our service members and their families. They deserve the future they 
sacrificed so much to secure.
    These two priorities serve as a source of strength for the Joint 
Force as we achieve our national objectives in current conflicts. This 
means achieving our campaign objectives in Afghanistan while 
confronting aggression toward America and its allies in all its forms, 
wherever and whenever it arises. It also means helping to secure the 
flow of commerce in the global commons, building the capacity of our 
partners, providing humanitarian assistance, and maintaining a credible 
nuclear deterrent.
    These three priorities enable us to understand and develop the 
Joint Force of 2020. Our ability to build the force we will need 
tomorrow depends on the decisions we make today. This is a defining 
period in a defining year. Ensuring our future military is unrivaled 
and sustainable requires the right mix between current capacity and new 
capabilities. We must recapitalize current equipment where possible and 
modernize capabilities that preserve our decisive advantages.
                      iii. joint force operations
    One thing has been certain over the last year--the Joint Force 
stood strong and responded to the Nation's call. After more than a 
decade of continual deployments and tough fighting, I remain humbled by 
the resilience and determination of our warriors.
    In the past year, our service men and women have simultaneously 
fought, transitioned, and redeployed from Afghanistan. Never before 
have we retrograded so much combat power and equipment while continuing 
combat operations. Our forces performed superbly, transitioning to 
Afghan security lead in areas comprising over 85% of the population. In 
the process, we redeployed over 30,000 US troops, closed over 600 
bases, and preserved Coalition cohesion. We were challenged by 
``insider attacks,'' but responded the way professional militaries do. 
We assessed and adapted. We reaffirmed our partnerships and moved 
forward jointly with more stringent force protection and vetting 
procedures.
    Transition continues. In the weeks ahead, the Afghanistan National 
Security Forces will assume operational lead across all of Afghanistan. 
This milestone represents an important achievement on the Lisbon 
roadmap, reaffirmed at the Chicago Summit in 2012. At the same time, 
the International Security Assistance Force will transition primarily 
to training and advising. We are also working with NATO and the Afghan 
government on options for an enduring presence beyond 2014 to reinforce 
Afghan security and maintain pressure on transnational terrorists.
    When I testified last year, the effects of the November 2011 border 
incident with Pakistan were still fresh, and tensions were as high as 
any time since the Osama bin Laden raid. Measured, but steady civilian-
military engagement with Pakistani leadership led to the reopening of 
the Ground Lines of Communication in July 2012. We are gradually 
rebuilding our relationship as reflected in the recent signing of a 
tripartite border document to standardize complementary cross-border 
operations--and will continue to do so with Pakistan's new leadership 
following its historic election last month.
    The Joint Force has been vigilant well beyond South Asia and around 
the world. We continue to help deter aggression and counter the 
increasingly bold provocations from North Korea and Iran. We are 
supporting Syria's neighbors in their efforts to contain spillover 
violence while providing assistance to help with refugees. And, we are 
ready with options if military force is called for--and can be used 
effectively--to secure US national interests in Syria without making 
the situation worse.
    Along with our interagency partners, we are also postured to 
detect, deter, and defeat cyber-attacks against government and critical 
infrastructure targets. We are part of interagency and multinational 
efforts to counter transnational crime. And, we remain relentless in 
our pursuit of al-Qa'ida and other violent extremist organizations, 
directly and through our partners. This includes al-Qa'ida-Arabian 
Peninsula (AQAP) in Yemen and, working with French and African 
partners, al-Qa'ida in the Islamic Magreb (AQIM).
    Finally, in the context of a ``new normal''--where the diffusion of 
power fuels insecurity and unrest--we continue to support reform across 
the Middle East and North Africa through military-to-military 
exercises, exchanges, and security assistance. We are also adjusting 
global force posture to reflect these risks in the context of our 
rebalance to the Asia-Pacific region.
                       iv. our joint force today
    We have an experienced, combat-tested force. Never has our nation 
sustained such a lengthy period of war solely through the service of an 
All-Volunteer military, which proudly celebrates its 40-year 
anniversary July 1st, 2013. Our warriors' will to win is undaunted, but 
the means to prepare to win are becoming uncertain. Military readiness 
is at risk due to the convergence of several budget factors. These same 
factors compound risk to the wellness of the Joint Force and our 
Military Family. As I testified in April, we need the help of our 
elected leaders to gain budget certainty, time, and flexibility.
    Few have borne more of war's burden than our Military Family. For 
twelve relentless years, our service men and women have answered our 
Nation's call with unsurpassed courage and skill. Many have fallen or 
been grievously wounded in the service of our Country. We honor them 
most by caring for their families and for those who have come home with 
wounds seen and unseen.
    We are unfailing in our praise for the sacrifices of our warriors 
in battle.
    But for so many of our veterans, returning home is a new type of 
frontline in their struggle. We cannot cut corners on their healthcare. 
We must continue to invest in world-class treatments for mental health 
issues, traumatic brain injury, and combat stress. Stigma and barriers 
to seeking mental health services must be reduced.
    Suicide is a tragic consequence for far too many. As a Nation, we 
have a shared responsibility to address this urgent issue with the same 
devotion we have shown to protecting the lives of our forces while in 
combat. The Department is working closely with our interagency partners 
and the White House to increase our understanding of the factors 
leading to suicide and how to best leverage care networks to keep our 
Veterans alive.
    The risks inherent to military service must not include the risk of 
sexual assault. We cannot allow sexual assault to undermine the 
cohesion, discipline, and trust that gives us strength. Therefore, 
working closely with the Secretary of Defense and Congress, we are 
examining the best ways to leverage additional education, training, and 
the Uniform Code of Military Justice. We are exploring every option, 
and we are open to every idea, that will help eliminate this crime from 
our ranks. As I testified last week, we are acting swiftly and 
deliberately to accelerate institutional change--to better protect 
victims, to prevent and respond to predatory and high-risk behaviors, 
and to ensure a professional work environment while at the same time 
preserving the right of the accused. We will not shrink from our legal 
and moral obligations to treat each other with dignity and respect.
    Future success relies on opening our ranks to all of America's 
talent. The Joint Chiefs and I have supported the expansion of service 
opportunities for women. This decision better aligns our policies with 
our experience in war, and it serves to strengthen the Joint Force. 
Consistent with the law, we also extended some benefits to the same-sex 
domestic partners of service members. We are implementing both 
initiatives deliberately across all Services to ensure we uphold 
essential standards, guard against potential risks, and avoid creating 
new inequities for other members of the Joint Force.
    Keeping faith with our Military Family will take a mutual 
commitment from fellow veterans and a grateful Nation. The next few 
years will define how we, as a Nation, view the 9/11 generation of 
veterans. America's future All-Volunteer force is watching.
    They are also watching as we inflict risk on ourselves. With $487 
billion in planned reductions already reflected in the Department's FY 
2013 budget, sequestration's additional cuts jeopardize readiness not 
only this year, but also for many years to come. We cannot fail to 
resource the war we are still fighting. At the same time, we cannot 
compromise on readiness in the face of an uncertain and dangerous 
future. Our Joint Force must begin to reconnect with family while 
resetting and refitting war-torn equipment. It must retrain on the 
full-spectrum skills that have atrophied while developing new skills 
required for emerging threats. There are no shortcuts to a strong 
national defense.
    When budget uncertainty is combined with the mechanism and 
magnitude of sequestration, the consequences lead to a security gap--
vulnerability against future threats to our national security 
interests. And, as our military power becomes less sustainable, it 
becomes less credible. We risk breaking commitments to our partners and 
allies, our defense industrial base, and our men and women in uniform 
and their families.
    This outcome is not inevitable. We can maintain the readiness and 
health of the force at an affordable cost, although this gets 
increasingly harder to do as uncertainty persists. But, we need help 
from our elected leaders to keep the force in balance and avert the 
strategic errors of past drawdowns. To this end, the Joint Chiefs and I 
continue to request your support for certainty, time, and flexibility.
    Most importantly, we need long-term budget certainty--a steady, 
predictable funding stream. While the passage of the FY 2013 
Appropriations Act provided relief from the Continuing Resolution, 
uncertainty over the FY 2014 topline budget and the full effects of FY 
2013 sequestration remains. Last month, we submitted an amendment to 
the FY 2014 President's budget that includes $79.4 billion for overseas 
contingency operations (OCO) to support Operation ENDURING FREEDOM--
mostly in Afghanistan--as well as finalizing the transition in Iraq. We 
also submitted a reprogramming request designed to offset our most 
critical FY 2013 shortfalls, especially in wartime funding. We 
appreciate your expedited review and support of both requests, which 
will bring important near-term budget certainty and help reduce our 
most urgent OCO shortfalls.
    Additionally, we need the time to deliberately evaluate trade-offs 
in force structure, modernization, compensation, and readiness to keep 
the Force in balance. We do not yet know the full FY 2013 impact in 
these areas as we make key decisions about FY 2014 and beyond. Finally, 
we continue to seek the full flexibility to keep the force in balance. 
Budget reductions of this magnitude require more than just transfer 
authority and follow-on reprogramming authority. Everything must be on 
the table--military and civilian force reductions; basing and 
facilities; pay and compensation; and the mix among active, Reserve, 
and National Guard units.
    There are no easy solutions, and no way to avoid sacrifices and 
risks as we work together to make the hard choices. But, the FY 2014 
budget proposal helps us rebalance and strengthen readiness through 
these hard but necessary choices. It enables us to lower manpower 
costs, reduce unneeded infrastructure, and shed ineffective acquisition 
programs while maintaining support for the responsible drawdown of our 
military presence in Afghanistan. It provides an equitable and 
practical 2014 military pay raise of one-percent while protecting 
important education, counseling, and wounded warrior programs. Proposed 
infrastructure reductions include a request for BRAC authorization in 
FY 2015, although any closures would take multiple years and not begin 
until 2016. We simply cannot afford to keep infrastructure and weapons 
we do not need without getting the reforms we do need.
                       v. a joint force for 2020
    The budget decisions we are making now will indicate whether we 
view our future Joint Force as an investment or an expense.
    America is unmatched in its ability to employ power in defense of 
national interests, but we have little margin for error. An unforeseen 
crisis, or a contingency operation, could generate requirements that 
exceed the capacity of our immediately available forces. We are able to 
deter threats, assure partners, and defeat adversaries when we do so 
from a position of strength.
    We remain strong--and our Nation is secure--because we treat being 
the best led, trained, and equipped force as a non-negotiable 
imperative.
    The secret to sustaining our strength with this or any future 
budget is simple--preserve investment in readiness, prioritize 
investment in people, and protect investment in decisive capabilities. 
Now, several months since the Joint Chiefs expressed deep concern about 
a readiness crisis, we continue to curtail or cancel training and 
exercises across all Services for units not about to deploy. The costs 
of recovering lost readiness are going up by the day. Inevitably, 
recovery in the years to come will compete with the costs of building 
Joint Force 2020.
    It is our people that make us the most capable military in the 
world. They are our best hedge against threats to our homeland and 
interests abroad.
    By 2020, we will require even greater technical talent in our 
ranks. But, developing technological skill must occur in concert with 
leader and character development. We must resist the temptation to 
scale back on education, including languages and cultural knowledge. 
Military service must continue to be our Nation's preeminent leadership 
experience. It is more important than ever to get the most from the 
potential and performance of every service member.
    Investing in people is not just about their development and 
readiness. It is also about the commitment we make to their families. 
Unsustainable costs and smaller budgets mean we must examine every 
warrior and family support program to make sure we are getting the best 
return on our investment.
    We need to reform pay and compensation to reduce costs while making 
sure we recruit and retain the best America has to offer. We must also 
balance our commitment to provide quality, accessible health care with 
better management and essential reform to get escalating costs under 
control. The FY 2014 budget would help control rising health care costs 
by initiating a restructuring of medical facilities to make them more 
efficient, without sacrificing quality or continuity of care, and by 
proposing fee adjustments that exempt disabled retirees, survivors of 
service members who died on active duty, and their family members. The 
Department of Defense is also working with Veterans Affairs to find 
efficiencies across health care systems.
    As we work to get the people right, we must also sustain our 
investment in decisive capabilities. The FY 2014 budget continues to 
fund long-term capabilities that sustain our edge against resourceful 
and innovative enemies, while maintaining critical investments in 
science and technology, and research and development programs.
    Emerging capabilities, once on the margins, must move to the 
forefront and be fully integrated with our general purpose forces. 
Special Operations Forces, for example, have played an increasingly 
consequential role over the past ten years. We have expanded their 
ranks considerably during this timeframe, and now we must continue to 
improve the quality of their personnel and capabilities.
    Closely linked are our intelligence, surveillance, and 
reconnaissance capabilities--from sensors to analysts. We will continue 
to rely on proven systems designed for the low threat environments of 
Iraq and Afghanistan. At the same time, we must also develop and field 
sensors designed to penetrate and survive in high-threat areas. They 
will expand our ability to access and assess hard-to-reach targets.
    This budget also sustains our investment in cyber, in part by 
expanding the cyber forces led by the U.S. Cyber Command. Despite 
significant investment and progress in the past year, the threat 
continues to outpace us, placing the Nation at risk. The FY 2014 budget 
increases funding for cyber security information sharing, but we need 
legislation to allow the private sector and U.S. interagency to share 
real-time cyber threat information--within a framework of privacy and 
civil liberty safeguards. In parallel, we must establish and adopt 
standards for protecting critical infrastructure.
    The development and integration of these emerging capabilities will 
by no means amount to all that is new in Joint Force 2020. They must be 
integrated with our foundational and impressive conventional force 
capabilities. The FY 2014 budget protects several areas where 
reinvestment in existing systems--such as the C-130, F-16, and the 
Army's Stryker combat vehicle--sustains our competitive advantage. All 
are backed by our asymmetric advantages in long-range strike, global 
mobility, logistics, space, and undersea warfare. And, they must be 
connected with a secure, mobile, and collaborative command and control 
network.
    This combination of increasingly powerful network capabilities and 
agile units at the tactical edge is a powerful complement to leadership 
at every echelon. It provides the basis to project both discrete and 
overwhelming power across multiple domains. It gives policymakers and 
commanders alike a greater degree of flexibility in how they pursue 
objectives.
    As we set priorities and implement reductions, we must rely more 
on--and invest more in--our other instruments of national power to help 
underwrite global security. Fewer defense dollars only adds to the 
importance of relationships among defense, diplomacy, and development. 
When the political and economic foundations of our bilateral 
relationships are under stress, our military-to-military ties can serve 
as a model of professionalism and restraint for foreign militaries, and 
often help provide a channel for continued dialogue. Advancing American 
interests not only requires integration across all instruments of 
national power, but it also requires that our international partners 
accept a greater share of the risk and responsibility. Some are more 
ready and willing to do that than others.
                             vi. conclusion
    Although I am confident the Joint Force today can marshal resources 
for any specific contingency, our goal is to be able to offer military 
options that restore and maintain readiness while putting US national 
security on a sustainable path to 2020 and beyond. To do this, we must 
recruit and retain the most talented people. We must invest in their 
competence and character so they can leverage emerging and existing 
capabilities in our defense. It is an investment our predecessors made 
in decades past. We must do the same.
    Our consistent first line of defense has been and always will be 
our people. They are our greatest strength. We will rely on our war-
tested leaders to think and innovate as we navigate the challenges and 
opportunities that lie ahead. We need to seize the moment to think 
differently and to be different. But, we cannot do it alone. We need 
the help of our elected officials to give us the certainty, time, and 
flexibility to make change. Otherwise, the cuts that have already 
diminished our readiness will only get deeper, and the risks we will 
have to accept in the years to come will only increase.
    We can and must stay strong in the face of declining budgets and 
rising risk. We must have the courage to make the difficult choices 
about our investments, about our people, and about our way of war. The 
Secretary's Strategic Choices and Management Review (SCMR) is helping 
to identify options and opportunities as we move forward in partnership 
with Congress.
    We have been down this road before. We can lead through this 
uncertainty and manage the transition to a more secure and prosperous 
future. I know your Nation's military leaders are ready--as is every 
single Soldier, Sailor, Airman, Marine, and Coastguardsman--to give 
their last breath to defend America and her allies.
    Please accept my thanks to this Committee and Congress for all you 
have done to support our men and women in uniform. Together, we serve 
our Nation.

    Chairman Ryan. Okay. Since we are keeping all of ourselves 
at three minutes, I will try and be as quick as I can here. 
Secretary Hagel, last week, the House passed the MILCON, the 
Military Construction Appropriations bill, by a vote of 421 to 
four. The Administration then released a statement of 
administration policy saying that, quote, ``Unless this bill 
passes the Congress in the context of an overall budget 
framework, meaning one that supports the president's plan to 
increase non-Defense discretionary spending, the president's 
senior advisors would recommend a veto,'' unquote.
    We are meeting the number that was requested by the 
Administration. Are you among the senior advisors recommending 
a veto on that bill? And then the second follow-up is, today, 
the House is marking up the DoD appropriations bill again, 
basically meeting the Administration's number. Are you going to 
recommend a veto of that as well?
    Secretary Hagel. First, Mr. Chairman, I have not been asked 
for my opinion on whether the president should veto the bill or 
not. My, as you know, responsibility is this department, and 
that is where I stay focused. If I am asked for my thoughts on 
the overall budget, then I will give them to him, but I have 
not been asked for those.
    Chairman Ryan. But if Congress passes appropriation bills 
hitting the numbers you are asking for, it is a good idea that 
they would be signed into law, would you not agree?
    Secretary Hagel. Well, the numbers that we have been asked 
for the Congress to give us, as you have noted, are our budget. 
But the president has to make a decision on the entire 
framework of the total budget.
    Chairman Ryan. One more, or two more, actually. 1:22 left. 
Okay, in April 2011, I recall the president putting out a 
speech where he mentioned the number that he was going to hit, 
487, for the Pentagon. Then in January 2012, Secretary Panetta 
announced the strategy review to comport to that number. This 
year, the budget says we are going to go $120 billion lower 
than the number that General Dempsey and Secretary Panetta came 
here and testified for, and now, you are engaging the strategic 
choices and management review.
    It seems to me that we have got here a budget-driven 
strategy, not a strategy-driven budget. I do not know how one 
can conclude other than that. That is point number one.
    Point number two, do you have any reactions you can give us 
with respect to any of the findings that you have had from this 
review? What are the new things that you can do without 
jeopardizing this mission to meet that 120 number you have put 
out there that does not contradict what last year General 
Dempsey and Secretary Panetta said was the bottom line, bargain 
basement, lowest number we could get to?
    Secretary Hagel. First, I have just testified, and have 
been testifying to this fact the last two months, that I 
support the president's Fiscal Year 2014 budget, as do all the 
senior uniform military leaders in the Department of Defense. 
We support that budget because we believe that the national 
security interests of this country can be fulfilled with that 
budget.
    The strategic choices management review was not about the 
2014 budget or reviewing that budget. That review was done 
based on sequestration, the reality of the numbers that we are 
dealing with as I have just noted and this committee knows; not 
hope, not possibilities, not budgets, not theory but reality, 
law, and what is the prospect, the possibility of sequestration 
continuing. Of course, as I have said, that will affect our 
strategic interests; that will affect operations. So what that 
review was about, not questioning the president's budget, but 
was to prepare, if we must, the Pentagon to deal with this new 
reality of sequestration and these numbers.
    Chairman Ryan. There is no justification of 120. It is a 
review of what might come to pass if these things occur.
    Secretary Hagel. That is right, because we cannot turn this 
big ship around in a month or two, as you know.
    Chairman Ryan. Well, since I am going to be enforcing the 
time limits, I better live by them. I will probably follow up, 
I have got some Afghanistan questions I wanted to ask you in 
writing about metrics in violence, but, Mr. Van Hollen.
    Mr. Van Hollen. Thank you, Mr. Chairman. Thank all of you 
for your testimonies. As a member of Congress who was one of 
the 426 who voted for the Military Construction and Veterans 
Appropriations bill, I fully support the president's or the 
White House recommendation to veto a legislation if it is in 
the context of adopting the House Republican budget because 
this chart shows exactly what the House Republican budget would 
do.


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]



    If you see the green-shaded items, the top one is Defense, 
the other are other security-related parts of the budget, they 
would increase those parts of the budget relative to the middle 
line, which is the 2013 sequester. How did they do that in 
their budget? By cutting things dramatically in other parts of 
the budget. So, that last bar, that is the funding for our 
kids' education, research at National Institutes of Health; 
they would cut that almost 20 percent below the sequester.
    So what the president is saying is, ``I want a budget plan 
and appropriation bills that meet all our needs.'' Yes, the 
Defense Appropriations bill and the president's is actually a 
little higher than the Defense bill coming out of the House. 
But he also understands we need to meet other important parts 
of our national requirements. And interestingly, the way to 
resolve this issue, Mr. Secretary, is for us to go to 
conference so we can resolve these, come to a negotiated 
settlement, which is why even Senator McCain has said that the 
refusal of our Republican colleagues to go to conference is, 
quote, ``insane,'' and, quote, ``incomprehensible.'' And he is 
not alone. I know a lot of our colleagues here wonder why, 
after all these years of complaining the Senate did not have a 
budget, that they refuse to go conference.
    So if we went to conference, we could actually resolve some 
of these issues, and then we could come together on a common 
plan for the country that funds our security requirements and 
funds our kids' education. And so I would suggest that we get 
on with that right away. Let us go to conference.
    I have a question about OCO because as I look at even the 
fiscal year 2014 OCO request, I actually see some items in 
there that I think are more associated with sort of peacetime 
defense than wartime defense. For example, there is some 
peacetime flying costs, as was testified to by the Chief of the 
Air Force, General Welsh. So I understand how the desire, as we 
reduce our footprint in Afghanistan, to try to provide 
flexibility, but we should not be doing that by putting in the 
OCO account things that really should be in the base account.
    My question relates to the OCO request from all of you, and 
from the president of the United States, the commander-in-
chief, and he has put forward a request in his budget; the 
House Republican budget exceeds that president's request by $5 
billion. And my question to you is, does the Administration's 
request reflect what you believe is necessary for our overseas 
wartime operations and for OCO account operations?
    Secretary Hagel. Well, what I believe, in consultation with 
our military leaders, that the budget that we presented, the 
president's budget, $526 billion baseline, $79 billion OCO, is 
the sufficient budget to carry out our strategic interests, and 
that is the budget that we have been testifying to, we have 
been explaining, we have been going into great detail as to why 
we believe what we believe.
    Mr. Van Hollen. General Dempsey, if I could just, on the 
record, does the OCO request that was made, in your judgment, 
satisfy our military requirements for OCO?
    General Dempsey. Yes, it does, but this year's request 
proved inadequate to the task. I mean, we have to have some 
understanding of trying to predict the future two years out. 
But yes.
    Mr. Van Hollen. But just to, your 2014 request, in your 
best judgment, reflects the needs?
    General Dempsey. Yes.
    Chairman Ryan. And as you know, the president's budget came 
three months late, so we had to put our own number up with 
their guidance. Mr. Price.
    Mr. Price. Thank you. Before that chart goes down, I would 
just point out to the members that those bottom four bars, all 
of them, all of them, are significantly higher domestic 
discretionary spending than they were '06/'08 level, so we have 
got a ways to go.
    I got a lot of questions. Mr. Secretary, I want to welcome 
and the General, and I hope I get to some numbers, but I want 
to talk very briefly about the issue of Syria. I would suggest 
to you that our whole strategy of leading from behind is not 
working there. The Russians continue to support President 
Assad, and Russia has reiterated its intent to provide an S-300 
air defense system to Syria. What would the U.S. do if Russia 
provides the S-300 to Syria?
    Secretary Hagel. Congressman, the president has asked the 
Department of Defense, be prepared for all options and 
contingencies that he may choose.
    Mr. Price. So what is our plan to mitigate that threat?
    Secretary Hagel. Well, we have contingency plans and 
options that I do not want to discuss in an open hearing, but 
the efforts that are ongoing to try to stop the violence and 
contain it from not allowing it to get into a regional 
conflict, which it is already spilling over into the borders, 
as you know, of Israel and Jordan and Iraq, and working with 
the Russians, working with others, working with our allies. I 
was in Belgium last week, met with NATO ministers of defense, 
with the British, with the French, worked with our partners on 
this.
    Mr. Price. We just want to encourage you, Mr. Secretary, to 
make certain that we are mitigating the threat to Israel 
significantly, and I want to move on because I have got a short 
amount of time.
    Secretary Hagel. And we are, by the way.
    Mr. Price. The Senate Democratic budget that has been 
touted here, and we are interested in going to conference; we 
need to set some parameters before we get there. Otherwise, it 
is just a free-for-all that does not accomplish anything. But 
the Senate Democratic budget provides no funding, no funding, 
for OCO or GWAT after Fiscal Year 2015. Do you anticipate that 
there are going to be any U.S. troops in Afghanistan after 
2015?
    Secretary Hagel. Well, the president has made it very clear 
that we are transitioning out of a lead combat role in 
Afghanistan to a post-2014 role. But we will have presence in 
Afghanistan. He has said that. That is his policy.
    Mr. Price. So the fact of the matter is the Senate 
Democratic budget does not take into account the president's 
own policy as it relates to Afghanistan.
    Secretary Hagel. I do not speak for the Senate Democrats.
    Mr. Price. But if they do not have any money, then there is 
no money to support the troops that the president proposes to 
be there.
    Secretary Hagel. We have not submitted a budget request for 
2015, we will, or any other years, we have not requested 
funding.
    Mr. Price. The GAO provided information that states that 
the assessment by the Department of Defense on the appropriate 
mix of military and civilian personnel has yet to be done 
adequately. Are you planning on moving forward with that review 
and recommendation?
    Secretary Hagel. What review are you referring to?
    Mr. Price. The GAO, Government Accountability Office.
    Secretary Hagel. But I am not certain what you mean by the 
adequate mix of civilians and military personnel.
    Mr. Price. Their contention is that there has not been an 
accurate assessment of the appropriate mix of military and 
civilian personnel capabilities in your strategic workforce 
plan. Is that going to be included?
    Secretary Hagel. Well, we assess that all the time. The 
review of mix and balance, and it is skills, it is people who 
understand the jobs; there is always that factor that plays out 
in everything we do to carry out all of our strategic interests 
and our operations.
    Mr. Price. Thank you. Thank you, Mr. Chairman.
    Chairman Ryan. Mr. Yarmuth.
    Mr. Yarmuth. Thank you, Mr. Chairman. Mr. Secretary, 
General Dempsey, welcome. Thank you for your testimony. I think 
many of us would agree that sequestration is a terrible policy, 
and that we are all suffering, to a certain extent, the 
consequences of that.
    I would like to talk about briefly one thing that has come 
to my attention very recently, which I am sure is of interest 
to you. And I visited, a couple weeks ago, the Neural Science 
Center at the University of Louisville, where they are doing 
some incredible research into spinal injuries, and met a young 
guy named Rob Summers who was paralyzed in a 2006 accident, 
paralyzed from the neck down, could move one finger. Now, after 
going through the program, that they have developed at the 
University, he has full mobility above his waist; he can move 
his toes, his ankles, his knees, his hips; has sensation 
throughout his legs; and, actually, has taken steps by himself.
    The researchers in charge of that project are very, very 
concerned because of cuts at NIH due to sequestration; they 
have already had to lay off some researchers. They have had to 
cut back in certain areas. And they are very much concerned 
about the impact on this program, which obviously could have 
incredible benefits for our wounded warriors who have 
sacrificed so much. So I am very concerned, also as the Ranking 
Member, that we need to do more to create a balanced approach, 
go to conference, and accommodate many of these priorities that 
we have.
    In my area, because of sequestration, more than 8,000 
civilian Defense Department employees have received furlough 
notices, 725 National Guard military technicians as well. 
Obviously, a great impact on their families and on the regional 
economy. Our civilian DoD and National Guard employees are 
going to have to have to sacrifice even more if the sequester 
is not replaced. Should they be preparing for nine more years 
of furloughs?
    Secretary Hagel. Two answers to your two questions. First, 
on the facility, and the reference you made to traumatic brain 
injuries and the research that is going on in the programs, our 
budget for 2014 protects all of those programs, Wounded 
Warriors. In fact, General Dempsey and I, this morning, both 
spoke at a traumatic brain injury conference that is being 
hosted at DoD. So we are fully committed to those programs and 
the funding of those programs. We are committed because it is 
the right thing to do, and we owe it to these men and women and 
their families.
    Second, we will continue to carry out all the programs and 
efforts that you have just talked about.
    Mr. Yarmuth. Thank you. I will yield the remaining 15 
seconds to the Ranking Member.
    Mr. Van Hollen. Thank you, my colleague. If I could just 
show you this chart in response to Mr. Price's statement. What 
this shows: the green bars are the growth in non-security 
discretionary spending since 2001. As you can see, much slower 
than the red bars, which is the growth in security spending, 
including Defense. And I would emphasize that the red bars do 
not include the costs of the war. Those do not include OCO 
accounts. So this gets back to the earlier conversation we were 
having about making sure we meet all our priorities in this 
country. I would also point out that this was the 13th day that 
the Senate Democrats have tried to go to conference on the 
budget, so----


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    Mr. Yarmuth. And it is a real dollar, not a nominal number.
    Mr. Van Hollen [continuing]. These are, yeah, these are 
real dollars. So these are constant dollars, real.
    Chairman Ryan. Mr. Lankford.
    Mr. Lankford. Thank you. And gentlemen, thank you for being 
here. I know, Secretary Hagel, in your testimony you mentioned 
that a budgetary situation permits us to end the furloughs 
early. You would strongly prefer to do so. Obviously, all of us 
would as well. There are a lot of families that are affected 
that had nothing to do with this, and I know you all are 
working hard to be able to resolve some of this. What I want to 
ask is, what are some of those factors that you are looking for 
to be able to deal with the maximum of 11 days that are left 
for civilians, to be able to resolve that? Have you made 
additional requests? And what are we doing to try to resolve 
that at this point?
    Secretary Hagel. Well, we continue, and I may ask the 
comptroller to respond here very briefly to any specific 
programs, but let me answer your question this way: we continue 
to look for ways, as I noted in my statement, as we cut 
nonessential services, overheads, consolidations, continue to 
try to find savings. These are big numbers, though, that we are 
talking about.
    Mr. Lankford. Have you looked at unobligated balances?
    Secretary Hagel. We are looking at everything. That was 
part of the strategic review, by the way. And we do not know 
what is going to happen in the next three and a half months. 
That is part of the uncertainty we are living with. So what the 
comptroller has got to do is he has got to deal with, the only 
reality we have right now is the sequestration is going to 
continue to be the law of the land, and we are going to have to 
comply with it. So if we can find ways, if that shifts in some 
way, then we will obviously put the focus on pulling those 
furloughs down, if we can.
    Mr. Lankford. Will there be additional requests back to the 
Appropriations Committee for reprogramming authority? In the 
days ahead, would you expect that at this point?
    Secretary Hagel. Well, I will give a general answer, and 
then I will let comptroller. First, we really need your help on 
getting this current $9.6 billion reprogramming accomplished 
because it gives us some flexibility, and flexibility is key 
here. Bob, do you want to add anything?
    Secretary Hale. Yes, I anticipate that if we lose any 
sources in this current reprogramming, we will, if we have 
time, go back and ask for additional reprogramming. And just to 
add briefly, one of the major items is just how much the war 
costs in the next three months, and there is still some 
uncertainty. If we can find a way to minimize those, I think we 
will have a better chance of ending furloughs early, and I 
certainly hope to.
    Mr. Lankford. Terrific. I would also request of you, as 
much as possible, and I know it is not all possible especially 
with the speed of what is happening, allow local bases and 
posts to be able to make decisions about how that is 
implemented, rather than any top-down model that comes to them. 
But a lot of those local leadership, and the people and the 
civilians that are working there to find the efficiencies.
    I want to ask one question as well. Last year, Secretary 
Panetta, when he was here, we talked about the reductions plan. 
Over the next five years, there is 120,000 uniformed personnel 
reduction, but there was only a 15,000 reduction over the next 
five years in the civilian workforce. I asked Secretary 
Panetta, and actually Secretary Hale is the one who responded 
to this one at that point, said, ``Why the discrepancy in the 
two numbers?'' And the question was, ``There was not enough 
time.'' And expected, by the time we got to this year, there 
would be a response of what we are looking at as a 
recommendation of reductions in civilian workforce over the 
next five years. Where does that stand at this point?
    Secretary Hagel. Well, obviously, I am going to let 
Secretary Hale respond to what he said, but go back very 
quickly to flexibility given to the managers and the people in 
charge of the bases. We are giving them as much flexibility as 
we can give them with some guidance from the top for the very 
reasons you mentioned.
    Secretary Hale. We have about a 5 percent reduction of 
civilian employees built into this five-year plan. It is 
heavily dependent on BRAC because that is where those civilians 
work. And if we cannot close any of the bases, we will not be 
able to make those reductions. But if you give us authority to 
do it, then we will be able to achieve the reduction.
    Mr. Pascrell. So the assumption would be that bases would 
be closed within the next five years that would achieve that?
    Secretary Hale. By the fifth year, fourth and fifth year 
out, yes, we would have begun to achieve some of the civilian 
reduction. The base might not be closed, but we would be 
drawing down the civilians. And we are depending critically on 
it in order to achieve those reductions.
    Mr. Van Hollen. Thank you. Mr. Pascrell.
    Mr. Pascrell. Mr. Secretary, thank you for your service to 
your country. Let us get to the crux of the issue that Mr. 
Yarmuth has touched upon. Having been co-chair of the traumatic 
brain injury caucus for the last 14 years, I am very, very 
concerned about how DoD, before you got there, handled the 
situation with one out of five veterans of Operation Enduring 
Freedom and Operation Iraqi Freedom estimated to experience a 
possible traumatic brain injury that Congress has done, I 
believe, a yeoman's task in educating the DoD. We have 
continued, on a bipartisan basis, to emphasize the importance 
of this issue, and we have made funds available for the 
identification and treatment of brain injuries in our soldiers.
    In 2007, the Congress gave the Department of Defense $900 
million to increase access, treatment, and research for 
traumatic brain injury and post-traumatic stress disorder. In 
2008, my colleagues and I put in place protections for the 
troops in the fiscal year 2008 National Defense Authorization 
bill requiring cognitive screenings of soldiers pre-deployed 
and post-deployed. We do that for football players going on the 
field in high schools, and soccer players, and tennis players, 
and we did not do it for our troops. We said we were going to 
do it by an act of Congress.
    Evidence seems to point to the fact that this law has yet 
to be fulfilled, as members of the Armed Forces still have not 
been consistently given a post-deployment cognitive screening 
in order to identify any possible brain injury. What are you 
doing to ensure that service members are receiving consistent 
pre- and post-deployment cognitive screening as Congress has 
required by law?
    Secretary Hagel. Congressman, I can tell you I have been at 
the DoD a little more than three months now, and this is as 
high a priority as we have. We have a lot of high priorities: 
getting this sexual assault scourge dealt with, an entire 
inventory. This one, though, is as high up as we have. And I 
have instructed all of our leaders, all of our people, all of 
our programs to make this a priority. We are doing that, we are 
committed to do it. I know we have not done it all. I know we 
are behind. I know we need to do more. But you have my 
assurance and my commitment that this will continue to be done.
    General Dempsey. If I could add, Congressman, I have 
deployed three times, and in the units under my command, there 
has been a full accounting for that legislation, meaning we are 
screening pre and post. Now I will go back and answer your 
question more fully for the record, but we have done other 
things with the money you have given us. We have hired 12,000 
health care professionals. We have been directed to go back and 
rescreen cases that were previously closed, and we are about, 
on average, about 90 percent complete with that effort. So I 
think we are doing better than you have just reported, but let 
me prove it.
    Mr. Pascrell. Thank you, I yield back.
    Chairman Ryan. Mr. Ribble.
    Mr. Ribble. Thank you, Mr. Chairman. Thank you, Secretary 
Hagel. I am over here. The requirement for the Defense 
Department to produce auditable financial statements was 
legislated over 20 years ago. We are now hearing we are not 
going to get an audited statement until 2017. If you and the 
Department cannot tell us how you are spending money, how do we 
accurately budget and appropriate money?
    Secretary Hagel. Your question is an absolutely legitimate 
question. I am going to ask the comptroller to respond 
specifically, but let me first say this. For the reasons you 
just noted and others, the accountability of our spending, and 
of our programs, and of our management is essential to 
everything we do. It is essential to any institution. And we 
are making progress on this. We are fulfilling the mandates of 
Congress. We are not there yet. I am going to ask Hale to go 
into more of the specifics on to what will be available in 2014 
on statements, and then what is auditable by 2017.
    Last point I would make on this, and I do not know if the 
comptroller will say this, but this is another consequence, and 
I do not blame sequestration for this, but the comptroller's 
office and all our financial people inside of DoD, all across 
the globe where we have facilities, are spending a huge amount 
of their time on sequestration, on reprogramming, on going back 
and reviewing everything. Now, this is not an excuse for not 
having auditable statements.
    Mr. Ribble. Now they had 19 years prior to that.
    Secretary Hagel. No, I am saying it is not an excuse. But 
the priority has not always been there. I know Secretary 
Panetta put a priority on it; obviously he knows something 
about these kinds of things. He was absolutely committed to it, 
as I am. Now let me, if I can, Congressman ask the comptroller 
to get a little more specific.
    Secretary Hale. We do know where we are spending the money. 
We do 150 million accounting transactions a year. If 1 percent 
of them were wrong, a million and a half would be wrong. We 
would have massive mispayments that just are not occurring. 
What we cannot do is document it, and sometimes our business 
practices are not tight enough to survive audit. We have got to 
fix that, and we are doing it on an interim basis. We are not 
waiting for 2017; by 2014, and I think we will make this, we 
are going to have audit-ready statements for the budget, which 
is the key part of most concern to you. So we have been 
pressing hard. I have worked this personally, it is important 
to me, we owe it to you, and we will do our darndest to get 
there. But getting rid of sequestration would help a lot, and 
so, thank you, Mr. Secretary, for that point.
    Mr. Ribble. Thank you for that. General Dempsey, just one 
quick question: Will you achieve your campaign objectives in 
Afghanistan by the end of 2014?
    General Dempsey. Yes.
    Mr. Ribble. Thank you, and I yield back.
    Chairman Ryan. All right, Ms. Castor.
    Ms. Castor. Thank you, Mr. Chairman, and welcome, 
gentleman. Thank you for your outstanding service to the 
country. Let me start by saying the Defense Department and the 
services are giving greater attention to the problem of sexual 
assault in the military, and hopefully taking greater action to 
address the problem, and I thank you for that. But after 
decades of many assurances, and after a couple of years where 
we have seen a 37 percent increase in the number of sexual 
assaults, now 26,000 cases over the past two years, it is time 
to change this status quo, and empower the prosecutors to do 
some things, some innovative things, that are different than 
the current change of command.
    I will leave it at that because this is a hearing on the 
impact of having no budget, and the sequester on our national 
defense. And there has been a national dialogue, I think, on 
the harm the sequester is causing to jobs and the economy, 
medical research and innovation, Head Start, our ability to 
invest in infrastructure in this country, but I do not think we 
have had that same dialogue on the impact of the sequester on 
our national security. I certainly hear it at home from the 
folks at U.S. Central Command, and Special Operations Command, 
and MacDill Air Force Base, and we do not like the fact that 
civilians are going to be furloughed because of some arbitrary 
budget policy. But there are some challenges here.
    Now without a budget, our Republican friends who complained 
for many years that the Senate would not pass the budget now 
will not go to negotiate a budget. It has been 81 days since a 
budget was passed, and they will not proceed to conference. And 
that is going to cause great problem and angst over the coming 
days, and months, and years.
    The other problem is many of my Republican friends want the 
sequester; they want the cuts across the board, and they have 
rejected the Democratic replacements for the sequester. So this 
is going to have serious consequences. I want you to now drill 
down and be specific, and focus on Special Operations, in 
particular, because the threats to our national security have 
evolved over the past decades. We are not as involved in 
conventional warfare; the threats are unconventional. In the 
past, the former commander, Admiral Olson, said, ``We are 
focused on quality in special ops.'' And now commander, Admiral 
McRaven, said, ``We want to grow the force.'' And you have 
said, General, ``We need to grow special operations, and 
personnel, and our capabilities.'' But what is the sequester 
going to do to our ability to invest in Special Operations 
forces and confront the unconventional threats facing our 
country?
    General Dempsey. Yeah, I think could, first of all, 
Congressman, thanks for the support you give to MacDill. I 
spent two great years there myself commanding CENTCOM, and we 
always felt very much at home in that community. So thanks for 
that.
    The effort we have got to look at the impact of 
sequestration will present some very stark and uncomfortable 
choices, some of which can be mitigated by flexibility. Meaning 
if we can get about a third of what we need, however that much 
turns out to be, whether it is full sequestration or something 
less, if we can get about a third or 30 percent of it out of 
institutional reform and compensation health care changes, then 
we can have an impact on the force, the combat power of the 
force; that is probably manageable. If we cannot, then it will 
not be manageable. You will find that we will have to make some 
choices that will put us at a disadvantage, and we have not 
been at a disadvantage in a very long time as the United States 
Armed Forces.
    Special Forces is one of the three areas that in last 
year's budget and in this year's budget, we have advantaged. 
Advantaged, meaning we have not taken the reductions that we 
have in other parts of the force, the conventional force. But 
if we got to full sequestrations, if this becomes an annual 
effort, at some point we will have to slow the growth of 
Special Forces.
    Chairman Ryan. Thank you. Mr. Rokita. Mr. Rokita, will you 
yield me five seconds?
    Mr. Rokita. I yield to the Chair.
    Chairman Ryan. Let me remind the committee that this 
Committee marked up and passed the Sequester Replacement Act. 
It passed on the floor two times last year. Cuts in other areas 
of government to prevent the sequester from taking place this 
year. Our budget does the same. The sequester was requested by 
the president in the Budget Control Act negotiations and is now 
law. Mr. Rokita.
    Mr. Rokita. I thank the Chair, I thank the Secretaries and 
the General for being here today. A question about military 
staff sizes to the General: By the end of March 2010, I have 
that 1.4 million service members on active duty were being led 
by 950 generals and flags. That is one for about every 1,500 
troops. And from 2000 to 2010, the number of general flags, 
officers, increased 8 percent, while active duty and strength 
only grew 3 percent. Why the discrepancy? Why are your flags 
and generals growing so much faster than your men?
    General Dempsey. Well, two things. First of all, we grew 
the number of flags in response to requirements. So when you 
stand up an architecture of command and control interact in 
Afghanistan, it was stood up external to, or in addition to, 
the existing structure.
    Mr. Rokita. So we could expect the number to go back down?
    General Dempsey. Yeah. If you are asking me, do I think we 
need to reduce the number of generals and flag officers, the 
answer is yes.
    Mr. Rokita. Okay, thank you. Also, I will go to the 
Secretary please, Defense News, the magazine, recently said 
that U.S. military commands grew by 15 percent from 2010 to 
2012. And your predecessor said we need to reduce those 
numbers. And, in fact, OSD and the Joint Staff, for example, 
grew by 1,300 people in 2010 to 4,200 people in 2012, a 230 
percent increase. Can you explain that, when your predecessor 
said it should be going down?
    Secretary Hagel. Well, I will ask the Chairman to respond, 
as well. But my response is this: Those numbers are going to 
come down. In fact, one of the things that we took a very hard 
look at during the review in the last three months was this 
issue. And so those numbers will come down in every category, 
and that will be one of the products of the review that we have 
just completed and we are looking at now.
    Mr. Rokita. So when would you expect the decrease?
    Secretary Hagel. Well, we will be making those decisions 
here this year.
    Chairman Ryan. General?
    General Dempsey. Yeah, the Joint Staff grew because of the 
disestablishment of joint forces command, then the absorption 
of some of the manpower in Suffolk under the flag of the Joint 
Staff. But the Secretary has given us some pretty clear 
marching orders that if we are going to reduce the force, we 
are going to start at the top.
    Mr. Rokita. Okay. And by when?
    General Dempsey. I will defer to the Secretary of Defense.
    Mr. Rokita. Okay. And you said they were going to make a 
decision soon.
    General Dempsey. What I said was, ``We will be making those 
decisions this year.''
    Mr. Rokita. Okay.
    Chairman Ryan. Thank you. Mr. McDermott.
    Mr. McDermott. Secretary Hagel, General Dempsey, I was a 
Vietnam-era serviceman. I was a psychiatrist who dealt with 
people coming back from the war. And I would ask the unanimous 
that be entered into the record, an op-ed by General Eikenberry 
and David Kennedy; they assert that the American public and the 
military are drifting apart at this time.
    Chairman Ryan. Without objection.
    Mr. McDermott. And my concern is, you go down to my office, 
you will see the faces of all the people who have died from the 
state of Washington on the wall. You walk around these 
buildings, there is only about four or five places where that 
happens, because it is easy to forget who has been over there, 
who is fighting since we went to the volunteer Army. And we 
have, at the same time, had increases of suicides, and all 
kinds of things on military bases and in the veteran community 
afterward, with TBI and with PTSD. We did not see TBI in 
Vietnam because nobody survived. If they went through something 
like that, they died. But now we are able to keep them alive, 
and we have a whole new cadre of problems.
    And I wonder, as you look at the budget that you are 
looking at now, how you think we could do a better job in not 
only sending people prepared to go to war, but also to return. 
I mean, people sent to Iraq did not where they were going. They 
had no background whatsoever in the population they were going 
into. They were just thrown in there, just like those recruits 
were in the Vietnam War. And then when we bring them back into 
our society, we have been very bad at getting them jobs and 
housing, all the things that somebody would think if you had 
served the country, the country would reward you with when you 
came home. When they came home from the Second World War, we 
handed them free college education. That is where the greatest 
generation came from, was that class of 1949 had all been 
educated because we said, ``Our vets are coming home; here is 
an education.'' We do not do that anymore.
    And what I am looking at is wondering about your own 
thinking, both of you, in terms of the larger problem of 
keeping the American public involved in the issue of going to 
war.
    Secretary Hagel. Congressman, thank you. This obviously, as 
you have known, and over the years done, could take days and 
days, and weeks and weeks to respond. But, in the interest of 
time I will give you this response. So many pieces to what you 
just noted. I think we have done a far, far better job as a 
society, as a country, of being able to delineate the war from 
the warrior as these young men and women come back, assimilate 
back into society, all the things that are required in order 
for that successful transition. Imperfect, front page of USA 
Today is about, you may have seen it, the story of a young man 
who cannot get a job. The country has failed him. He went and 
served. I mean, we know those stories. We are not doing enough, 
I get that. We will do more.
    But compared to when I flew into Travis Air Force Base on 
December 4, 1968, after a year in Vietnam in '68, 48 hours 
later, you were out on the street. You had a Class A uniform. 
You had travel money home and some expense money, and that was 
it. That was it. So we have come a long way. One of the big 
differences is, and I will stop here, and I used to give 
speeches on the Senate floor about this during the peak of the 
Iraq War and the Afghanistan War. The disconnect, which you 
just said, 1 percent of our population in this society pays the 
price. They make all the sacrifices, they bear all the burden, 
they do all the dying. And I am a supporter of the all-
volunteer service, by the way. I do not think we could ever go 
back, nor do we want to, for a lot of reasons. It is the most 
professional Armed Forces ever. They are better trained, better 
led, better equipped.
    But here is the point: How do you integrate that in a 
better way so there is more appreciation, more understanding? I 
think the people of this country, though, do very much 
appreciate the service of our men and women. We need to do 
more.
    Chairman Ryan. Thank you. Ms. Walorski.
    Mrs. Walorski. Thank you, Mr. Chairman. Mr. Secretary, good 
to see you again. Thank you for your leadership role on this 
issue with sexual abuse in the military, and for your support. 
And also to you, General Dempsey, great to see you. So, you 
know, I sit on the Armed Services Committee, which is where I 
saw you folks last. And I have worked hard in my role on Armed 
Services to provide a workable replacement to sequestration. We 
have talked about it as a committee. We have proposed bills as 
well. I am concerned that the president's 2014 budget seriously 
underestimates and underfunds costs in certain areas, and then 
makes trade-offs in other areas. For example, I do not believe 
we should be shutting down bases, considering shutting down 
bases, or paying for spending on the backs of our military 
members.
    But the question I have is, the DoD budget has already 
sustained significant funding cuts, and faces potential 
additional cuts in the future. So at what point do these cuts 
endanger our national security? And it is a question to either 
of you. And then my second question is, is there a particular 
funding amount or percentage cut that you believe to be a red 
line when it comes to this issue of national security? Thank 
you.
    General Dempsey. I will start, and then the Secretary will 
take the bulk of the question. But in terms of, can we identify 
a point at which we put the security strategy at risk? Yeah, I 
think we will be. I think we will be able to identify that 
point through the results of the SecDef's SCMR, Strategic 
Choices Management Review.
    One thing I would point out: when we did the future year 
defense plan for 2014, when we did it three years ago, four 
years ago, the top line was going to be $598 billion. This 
year, $526 billion. If we go to full sequestration, it will be 
$474 billion. This is not the deepest cut in our history. It is 
the steepest by a wide margin, and that is what makes it so 
difficult.
    Secretary Hagel. I would add just a couple of things. One 
of the points that the Chairman made to answer your question in 
his opening statement, he said something to the effect that one 
of the effects of sequestration and what we are going through, 
and may well continue to go through for some years, I think he 
said, ``It is going to be more costly to recover lost 
readiness.'' Now that is a factor here that often gets lost or 
never gets any attention. And that is a big part of, I think, 
your question, the answer to your question, when you say, 
``Well, at what point do we know?''
    Mrs. Walorski. Do we, Mr. Secretary, do we have a funding 
amount? Is there a red line for when we get to that point that 
we, as congressional members here, and also the American people 
that are vested in our military, is there a red line to say, 
``When we get to this point, our national security is in 
trouble?''
    Secretary Hagel. Well, this is not just a numbers business, 
as you know. Again, I go back to the review. I have asked, in 
this review, all the different scenarios: at $150 billion over 
the next 10 years, $250 billion reduction over the next 10 
years, or the $500 billion over the next 10 years, which is now 
law, as the Chairman reminded us. And sure, it is going to cut 
into our readiness. Sure, it is going to cut into our 
operations. I noted that in my testimony, as did the Chairman. 
There is no question about it. It is doing it right now. When 
you go through the inventory of things that we are having to do 
now, the chiefs of all the services, cut training, essentially 
eliminate training, deployments, stand down squadrons. Now, 
what we are doing is we are putting everything forward to 
protect our current readiness requirements, our strategic needs 
now. But there is going to be a cost that is coming in right 
behind that.
    Chairman Ryan. Thank you. Mr. Cicilline.
    Mr. Cicilline. I thank you, Mr. Chairman. And thank you, 
General and Mr. Secretary, for being here, and, of course, for 
your service to our country. I think the uncertainty of us not 
having a budget adds to the difficulties that we are facing in 
dealing with the very serious financial challenges in our 
country. And I think the only way that we can ensure that we 
meet our solemn obligation to our men and women in uniform, to 
ensure that they have access to all the things they need, not 
only to complete the mission, but all the things that they need 
when they return is to be sure we have a budget. And the 
priorities warrant a thoughtful and careful budget process, not 
a budget process fraught with needless uncertainty and 
partisanship.
    And I hope your testimony today will inspire further 
engagement in the Congress to develop a serious set of 
solutions for our nation's fiscal challenges, and, most 
importantly, motivate our Republican leaders to appoint 
conferees so that we can really get to the work of completing 
this budget process. For some reason, although there is been a 
lot of clamor about the importance of a budget and adopting a 
budget, there seems to be no interest, at least from the 
Republican House leadership, to actually appoint conferees, 
which is necessary to complete that process. And I thank you 
for furnishing us with the kind of uncertainty and examples of 
the uncertainty that come from not having a budget. And I hope 
it will inspire them to do that.
    I think it is particularly important, when you look at what 
Mr. Van Hollen identified in the beginning of this, that there 
is an effort here by going through appropriations in defense, 
military construction, and homeland security that will 
essentially result in very, very substantial additional cuts in 
non-discretionary spending and non-defense spending above and 
beyond the cuts of sequestration, which will have, obviously, 
very serious impacts.
    But I just want to ask you to spend a few moments here, if 
you would, to address the Department's investment in programs 
that can help realize sustainable budgetary savings while 
approving efficiencies, accountability, and readiness. For more 
than a decade, the Department and Congress have collaborated on 
efforts to implement item-unique identification strategies. 
This technology, as you know, allow for permanent marking of 
equipment with unique identifications to ensure the efficient 
management and a real accounting of the resources the 
Department possesses. And we have a great company in my 
district, A2B Tracking in Portsmouth, Rhode Island, has really 
been a leader in this work. But a Department logistics item-
unique identification taskforce in March of 2011 estimated that 
full implementation of this policy could result in savings 
between $3 billion and $5 billion every year, beginning in 
2017.
    But there has been some, I think, difficulties with 
implementation of this. So I would like to know where that 
stands, whether the sequestration cuts will adversely impact 
this implementation which has the potential to produce real 
savings, improve efficiencies, bring greater accountability and 
transparency to the Department.
    Secretary Hagel. Congressman, I am going to respond 
generally, and then very quickly ask for the comptroller's 
specific comment on this. One of the things that we are focused 
on, have to be focused on, is accomplishing the objective that 
you just noted. We have to; we do not have any choice. We 
should be doing it anyway, whether sequestration or not, for 
the reasons everyone understands. We are doing it. Let me get 
the comptroller to be more specific about your question.
    Secretary Hale. Well, I am afraid the comptroller's going 
to have to go do some research to be more specific. I am not 
real familiar, but we will get back to you. Let me just add 
though, we have done a lot of things, some small, TRANSCOM, 
shipping on 40-foot containers rather than 20, that has saved 
us some money; grouping together cellphone contracts in the 
Navy, to bigger items, terminating more than 30 weapon systems 
that we felt were of lower priority in past efforts to reduce 
our costs. And we are going to do it again, as the Secretary 
has directed. And we are all committed to it.
    Mr. Cicilline. Thank you.
    Chairman Ryan. Thank you. Mr. Nunnelee.
    Mr. Nunnelee. Thank you, Mr. Chairman. Thank you, Mr. 
Secretary, for being here. General. I recently had the 
privilege to meet with a group of Mississippians that came up 
for an honor flight, World War II veterans. I met them at the 
World War II memorial; it was a very emotional experience. And 
one of the takeaways I had from that, here is a group of men, 
and there were actually a couple of women World War II veterans 
in the group, it is a group of men and women that were part of 
the greatest mobilization to defend freedom in the history of 
the world. And while they went to place they had never heard 
of, their families were back home doing two things: building 
the tools necessary for the war effort, and also buying bonds 
necessary to fund the war effort.
    One of the things that keeps me awake at night is the fear 
that if we were to have a repeat of that, that we could not 
afford to put together that kind of mobilization, because we 
could not afford it. And I do not think my fears are alone. The 
former chairman of the Joint Chiefs of Staff said the greatest 
threat to our national security is our debt. And we are going 
to be bumping up on a debt ceiling that is statutory, but our 
real debt ceiling occurs when creditors will no longer be 
willing to lend us money at interest rates we can afford. Are 
my concerns justified? And is our ability to defend freedom 
limited by our ability to fund it?
    Secretary Hagel. I think the quick answer is yes. I think 
Admiral Mullins' comments, and I recall when he said them, I 
agree with. A nation's economic strength is the underpinning of 
all their liberties and preservation of security. And you 
cannot disconnect the two, as you know.
    Mr. Nunnelee. All right. And then maybe a final question: 
How do you go about planning for the uncertainty and the 
difficulty of a reduced budget? We have just passed, out of 
Appropriations, the defense markup on defense. Previously, you 
had a request for equipment, helicopters, airplanes, tanks, et 
cetera, and that has been diminished. What process do you use 
to make those decisions and plan?
    Secretary Hagel. You mean reducing those efforts?
    Mr. Nunnelee. Yes.
    Secretary Hagel. Well, it is a long process, but the 
services have their budgets. We have the component overseas, 
the services on accountability, responsibility for managing the 
Pentagon. That is the larger office of the Office of Secretary 
of Defense. It is five undersecretaries; the comptroller is one 
of them. Another one that is key to this is the undersecretary 
for acquisitions. And then in consultation with the chairman 
and the chiefs of the services, with input from the nine 
combatant commanders, I mean, it works through that. Then the 
budget, obviously, is an underpinning dynamic of this because 
if you do not have the money, you are not going to be able to 
buy the weapons.
    Mr. Nunnelee. Thank you.
    General Dempsey. Could I, really briefly, sir?
    Mr. Nunnelee. Okay.
    General Dempsey. We have three responsibilities as a 
military: deter enemies, assure our allies, and then defeat if 
deterrence fails. And as we map the force we have to those 
three responsibilities, it allows us to see how big we think it 
needs to be.
    Chairman Ryan. Thank you. Mr. Jeffries. And again, I ask 
members not to ask their questions near the end of their three-
minute time so that we can try to get the answers to comport 
within that time as well so everybody else can get a chance. 
Mr. Jeffries.
    Mr. Jeffries. Thank you, Mr. Chairman. Thank you to the 
witnesses for your testimony, your presence here today, as well 
as, of course, your great service to this country. Am I correct 
in my understanding that if you look at the United States's 
military spending, and then you compare that to the military 
spending of the next 10 highest spending countries from a 
defense perspective, that the United States, from a budgetary 
standpoint, exceeds the spending of those 10 countries that 
fall behind us?
    Secretary Hagel. The military budgets? Defense budgets?
    Mr. Jeffries. Yes.
    Secretary Hagel. I think that is right. I think that is 
correct.
    Secretary Hale. I suppose it might be 13, but you are 
right. The gist of it is correct.
    Mr. Jeffries. So certainly a national security is of 
tremendous concern. It is a top priority, I think, for all of 
us on both sides of the aisle. But it will be useful for me if 
either the General or you, Secretary Hagel, could provide some 
context for why that level of spending is necessary in terms of 
the threats that we need to be prepared to guard against 
relative to what other countries, including in that list China, 
and Russia, and others do combined.
    Secretary Hagel. Let me make a general comment, and then I 
know Chairman Dempsey wants to answer this as well. Well, 
first, you have to analyze the national security strategic 
interests of your country. What does it take to assure that 
those interests are protected, starting with the homeland of 
your country? I mean, that is, as the General said, that is the 
first priority of any nation's defense structure, is the 
security of their country. Then you build out from there. What 
does it require? I do not need to go much beyond pick up a 
newspaper today, and you go down through The New York Times, 
The Washington Post, Wall Street Journal, and the inventory of 
problems in the world that are threats to us. They come 
different ways. They come from cyber; they come from nuclear 
threats; they come from terrorism; they come from conventional 
forces; they come from economic threats. And so you assess what 
your requirements are to defend your country. And then, based 
on that assessment, then you flesh what the requirements are 
going to be and the resources in order to defend your country. 
General?
    General Dempsey. It is a great question. It is the question 
we are asking ourselves in this choices review, is what do we 
want to be able to accomplish? And at what level of effort, 
what capability and how much of it so it can rotate?
    Our force is generally present in places like Korea and 
Europe. It is rotational, and then we keep a capacity for 
readiness at home as a hedge against future uncertainty. We 
have global responsibilities, and we want to provide the 
president, the commander-in-chief, with options. I mean, you 
could convince yourself, ``Well, really all you need is about 
25 nukes. And if anybody tries to interfere with your 
interests, we will just nuke them.'' But that is not who we 
are. So we need options along a spectrum of conflict. But this 
is a much longer question to be answered.
    Mr. Jeffries. Thank you.
    Chairman Ryan. Ms. Hartzler.
    Mrs. Hartzler. Thank you, Mr. Chairman, and thank you, Mr. 
Secretary, and General, it is great to have this conversation 
with you. And I certainly am a big supporter of our national 
defense. Believe me, there is only a few things we should be 
doing here in Congress, and one of them is to provide for the 
common defense. And I, like you, have been very concerned with 
the cuts to the defense over the years, especially with the 
impact of sequestration. Certainly, in my district, 
representing Whiteman Air Force Base and Fort Leonard Wood, 
yeah, that is very concerning to us with the layoffs of 
civilians, as well as the reduced flying training hours, and 
the other issues we have been talking about, lack of 
modernization and reset.
    But, having said that, I wanted to visit with you today 
about a report that Senator Coburn has put out. I just wondered 
if you had seen this. And this is on wasteful spending in the 
Department of Defense. And this is very concerning to me 
because I believe it undermines my efforts and a lot of our 
colleagues' efforts here to advocate for more defense spending 
when they have identified $67.9 billion in what they think is 
wasteful spending. That could certainly be put better towards 
helping advance the new long range strike-bomber, or getting, 
you know, more weapons to our soldiers.
    Some of the things they have identified is that the Navy 
recently funded research concerning the behavior of fish to 
teach us about democracy, and developed an app for the iPhone 
on how to pick the best time to take a coffee break. The Air 
Force Office of Scientific Research funded a study examining 
how to make it easier to produce silk from wild cocoons in 
Africa and South America. And there was this study that was 
done by that same office to try to determine the color of a 
dinosaur, the first, perhaps, bird that flew.
    And I just wondered, what are you doing to address the 
examples of ways, I believe there was a video produced called, 
``The Grill Sergeants,'' where you did barbecue grilling by the 
drill sergeants. It is very frustrating to me that this is 
going on at the same time we are trying to advocate for more 
defense dollars. So have you seen the report, and if so, what 
are you doing to address the waste?
    General Dempsey. Well, I have not seen the report. And I 
have never appeared before any body of Congress and argued that 
we could not find a way to be good stewards of the nation's 
resources. We will look for the report. I will be interested to 
see whether we put it in there or somebody else put it in there 
when it became part of the bill.
    Secretary Hale. I am familiar with the report. Let me say, 
I am not going to defend some of those. Sometimes you get into 
the details, and these do not sound quite as bad as Senator 
Coburn described it, but I think there is room for paring of 
waste. I will say it was $69 billion, I think, over 10 years; 
about two-thirds of it was cuts in civilian personnel, and he 
did not really identify how to do that. As I have told you 
before, one way to do it is to let us close bases and get rid 
of the civilians we do not need. You may notice a theme. And so 
if we are going to make some of these big changes that were 
suggested in there, we are going to need your help.
    Chairman Ryan. Mr. Pocan.
    Mr. Pocan. Thank you. And thank you, gentleman, thank you 
for being here and for your service. Let me ask two questions, 
different questions. Let's put them both out there to save a 
little time. General, one of the comments you made in your 
presentation that really concerned me, especially when we are 
talking about the sequester and the effects of sequester, the 
fact that our House leadership refuses to appoint conferees. 
So, once again, you know, we may not have a budget for this 
country, a road map. The words you used were, ``We are less 
ready every day.'' And that should concern every single person 
about preparation, some of the things you are having to scale 
back. Could you just talk a little more about what that means 
with the current sequester, and what that could mean down the 
road if the sequester continues?
    And then the second question, Secretary, for you. I am 
concerned, and perhaps, I could say, skeptical of the drone 
program. I know the president has now assigned some guidelines 
that the Department of Defense is going to be more involved. I 
was just hoping you could address a little bit what role you 
are playing in the development and implementation of those 
plans, specifically to ensure that there could be zero 
civilians who are involved, as well as what oversight Congress 
might have in that.
    General Dempsey. Readiness is the most challenging thing to 
articulate. Most of what we do has some constituency in 
Congress and Washington D.C., weapons systems, bases, people. 
Readiness is the hardest one to articulate because there is no 
huge constituency for it. You only know you need it when you 
need it.
    Let me use a basketball analogy. Right now, about a third 
of the force is training at the individual level. They are not 
training as big units. And so if it were a basketball team, we 
are doing individual drills, but we are not scrimmaging. And 
when you do not scrimmage before you go into the game, it 
generally does not have a very good outcome. And so I am 
uncomfortable that we are cancelling rotations to our training 
centers, which is where we do our scrimmages. And that is all 
services.
    Secretary Hagel. Just very briefly on your question 
regarding drones, I support strongly the president's policy and 
the speech he gave. And much of that was about more 
transparency and oversight. We do have oversight now, the 
Congress does and the intelligence committees. What we do, in 
every way, is legal. Drones are a very key factor in our 
security inventory. It is always a responsible use, wise use. 
Factoring in one of your examples, civilian casualties, 
collateral damage, is this the right thing to do, laws, 
relationships with other countries.
    So I think what the president did here, and I was co-
chairman of the president's Intelligence Advisory Board the 
last four years, and it is something we recommended to him 
often, is a little more transparency. But the two titles of 
authority that are used, he specifically mentioned Title 10, 
which is the authority that is in our Constitution, in our law, 
as you know under DoD, and then Title 50, which is covert 
action, which usually the CIA or intelligence; both are 
necessary for the security of this country.
    Chairman Ryan. Thank you. Mr. Rigell.
    Mr. Rigell. Thank you, Mr. Chairman, and Secretary Hagel, 
thank you for your service, General Dempsey and Secretary Hale. 
Secretary Hale, I would like to really direct this question to 
you. If there is universal agreement on anything, it is that 
sequestration is unwise. And we, as Americans, can do better 
than that. And it seems like there are two principal drivers to 
it. One is the top-line funding, of course. And then the other 
part of it that creates so much inefficiency is this, you know, 
the cuts are universally applied. Now the top-line part is a 
high hurdle; I am not going to try to get into that right now. 
But on how they are uniformly applied, I would like to delve 
into that just a bit.
    I know you have got over $9 billion reprogram in the works, 
right? As we were marking up the NDAA the other night, 
actually, the other morning, ended up around 2:00 a.m. in the 
morning, one of my colleagues introduced an amendment that 
would give DoD about $20 billion of running room on that. I 
would like to hear your views on that. I voted no, to be clear 
here, because it did not seem like that much discretion without 
congressional oversight was wise or prudent. But I was 
intrigued by the idea, and in this time remaining, please if 
you would expand on that, please.
    Secretary Hale. I would like to see you take the limits off 
entirely, and here is why. You would still have full oversight. 
Every time we do a reprogram, it has to be submitted to all the 
committees who can only do it if every committee approves. I 
have never understood why you need a separate limit on the 
amount, especially in the environment as uncertain as this one. 
But if you will not do that, I would certainly prefer, it is 
around now $7.5 billion, something significantly higher. I will 
say again, I think you would have the oversight you need, and 
full oversight, even without transfer authority limits.
    Mr. Rigell. Well, is the reprogram that is in the works 
now, does that reflect the full source of consternation within 
DoD, or is there more that you are looking at right now that 
you are going to need to come back to us on and work through?
    Secretary Hale. We are just about at the legal transfer 
authority, only $200 million short of it in that reprogram. So 
we do not have any more flexibility. But yes, we have some 
remaining problems, particularly in the Army, of local [spelled 
phonetically] shortfalls, that we are working actively right 
now. We are not going to be able to do it through 
reprogramming, unfortunately.
    Mr. Rigell. Well, I have got just maybe 40 seconds or so 
left, but Mr. Secretary, I would be open, and I do not speak 
for my colleagues, of course, but for a wiser path of saying if 
we are expecting to be under sequestration or sequestration-
type levels for the foreseeable future, and I am trying to 
avert that, I would be open to any type of wise alternative 
that would give you more running room.
    Secretary Hagel. Thank you, Congressman. Flexibility is, as 
we have said throughout this hearing, absolutely key. And your 
point about more running room is part of that flexibility. We 
are going to most likely need that, depending on what happens 
here. But if this plays out the way it appears it is going to 
play out, at least for the remainder of fiscal year 2013, then 
we are going to have to continue to make these tough choices, 
and we are going to need more flexibility.
    Secretary Hale. Thank you. Mr. Blumenauer.
    Mr. Blumenauer. Thank you, Mr. Chairman. Secretary Hagel, 
it is a pleasure to have you here. We are excited that somebody 
with your background in business, in government, in the 
military, is in the position you are to make these tough 
choices. And I really appreciate, General Dempsey and 
Undersecretary Hale, what you have said. You are coming to 
Capitol Hill, for instance, urging health care reform and base 
closures. Congress has never met a base that it wants to close, 
which is why we have a Base Closer Commission, because we want 
to have it both ways, you know. You know, you look at savings 
with PXs, and people go ballistic, and you get stuffed back 
where you are dealing with readiness issues. And I appreciate 
your patience.
    I would request, in a written form at some point, a little 
analysis on nuclear weapons. It is mind-boggling to me that we 
are looking at upwards of three-quarters of a trillion dollars 
over the next 10 years that the Administration was forced to 
deal with some upgrades. And we have far more than we need, and 
we are spending a miniscule amount, less than 1 percent, 
decommissioning. And I would really love an explanation for why 
we have to have this level of expenditure when you are talking 
about major other initiatives that are before us.
    But the question I would put to you, Mr. Secretary, now, 
for perhaps a reaction, deals with environmental stewardship of 
the Department of Defense. I have been impressed with the 
progress that has been made for a sustainable military. I have 
been impressed with the recent guidance in terms of facilities. 
That is really terrific, and I hope it can be put into effect. 
But there is also the element, the Department of Defense is the 
largest generator of superfund sites in America. There are 10 
other members of the Committee who have superfund sites in 
their district that have yet to be cleaned up. I am dealing 
with one in the Willamette River in Portland, Oregon that was a 
staging area for the Navy for three wars, and there is serious 
pollution that is, in part, the responsibility of the federal 
government.
    And I would like to know what we can look forward to. I 
know it is tough times and I am willing to go the extra mile 
with you on things that you have requested, and maybe a few 
that you have not. But I hope that we are not backing away from 
the responsibility of the Department of Defense for pollution 
that is across the country in every state, and many of them in 
our districts.
    Secretary Hagel. I can assure you the Department of Defense 
is not going to back away. We have not backed away. We will 
continue to fulfill the commitments we have made, and those 
commitments are based on our obligations and responsibilities, 
you are exactly right. As you know, the superfund sites, I 
think, is administered out of the EPA. We fund part of that; 
part of that, a good part of that, is due to us, the DoD, over 
the years. It goes back pre-World War II. I mean, I do not have 
to tell you. So we will continue to make those funds available, 
continue to work with the superfund administrators. 
Specifically, if you have something, let us know, we will 
respond.
    Chairman Ryan. Thank you. Ms. Blackburn.
    Mr. Blumenauer. Thank you, Mr. Chairman.
    Mrs. Blackburn. Thank you, Mr. Chairman. And thank you all 
for being here with us. I represent Tennessee's Seventh 
District; Fort Campbell is in that district. And, of course, we 
have the wonderful 101st, the 160th, and the Fifth Division. 
And when I am on post and when I am talking with many of our 
men and women in uniform, a couple of different things come up. 
They all have to do with readiness, and I appreciate your 
comments about loss readiness. And I think one of the lessons 
we learned through the '90s is when you do these drawdowns, and 
not carefully, there are consequences to pay.
    But looking at Europe, and this is one of the things that 
people are talking about now in my district, they are looking 
at the forestructure that we have there in Europe, and they are 
concerned this may go away. So I want to talk with you about, 
and just have you, Mr. Secretary, I have told them if I ever 
got a chance to ask you, I would ask you, so here we go. What 
purpose does this serve, to have that permanent force there? 
And what is it there for? Is it there to counter Russia? Is it 
there to make it better, easier to serve as a launch point to 
get to other parts of the world? If we had another Benghazi-
style crisis somewhere North Africa, or Israel, or the Middle 
East, how would we handle it if we did not have a place like 
Europe to go from? How badly would it impair a commander's 
options, or degrade his ability to respond if we did not have 
it? And, you know, just talk to me about Europe for about a 
minute. And I have got one other comment to add once you do, 
so----
    Secretary Hagel. Well, I will be very brief, and I am going 
to ask the General to respond, too, because this has been his 
whole life. Just very briefly, I think you listed a number of 
reasons why we need forward-deployed forces. It is force 
projection, of course; that is the whole point of the 
rebalancing Asian Pacific. It is time, it is schedules, it is 
options. Benghazi, a good example, the Congress continues to 
ask a lot of questions about what happened in Benghazi. Why 
were we not there? Could we have been there? What was the time? 
It is clearly in our national security interests to have that 
forward-deployed option because if you do not have it, then the 
only option you have is you bring them out of the United 
States. And you cannot respond. The world is too hair-
triggered; it is too fast; it is changed. We do not have any 
options. And so things happen like that. So I think your list 
of questions actually was a list of answers as well.
    General Dempsey. I have nothing to add.
    Secretary Hagel. That is the first time the General has 
ever said he had nothing to add.
    Mrs. Blackburn. Well, and I will just say the Flying Hours 
Program, I have worked with the Committee to add in the funds 
to continue that. I was very concerned about the loss of 500 
aviators, and I would just ask you all to work with Army to be 
certain that that program continues in 2014.
    Secretary Hagel. Thank you.
    Mr. Van Hollen. Thank you. Ms. Lee.
    Ms. Lee. Thank you very much. Thank you, Secretary Hagel, 
General Dempsey, and Undersecretary Hale for your leadership 
and for being here today. I wanted to ask a couple questions, 
one relating to the end of the war in Afghanistan. We know that 
the timetable now is 2014, but what do you see or foresee as 
future involvement after 2014? And as it relates to military 
personnel and contractors, and what do you see Congress' role 
in that effort, in terms of our responsibility to authorize or 
to appropriate?
    Secondly, I was glad to hear the answer about audit the 
Pentagon. For years, I have been working on issues around 
waste, fraud, and abuse, and what I learned was that the 
Pentagon has missed all these deadlines as it relates to the 
audit. And so I am going to ask, I hope it is not too 
redundant, but have you projected any savings from this audit 
that hopefully will be completed pretty soon?
    And finally, just a little bit about the Overseas 
Contingency Operations Fund, that really has exploded beyond 
any reasonable measure of what a contingency fund should be. I 
think now you are asking, what, for $5 billion above the 
request that the House Armed Services Committee has provided? 
And so why are we not projecting major savings from ending the 
war in Afghanistan if, in fact, this contingency fund continues 
to explode?
    Secretary Hagel. Congresswoman, I will try to be very brief 
because I know we have all got time issues here. I will start 
with OCO. That $5 billion additional, that did not come from 
our request. That was a congressional addition to what we 
requested, $79 billion. That represents $10 billion less than 
what the request was last year. I was in the Senate for most of 
the Iraq-Afghanistan War. And we financed those two wars almost 
entirely, all the time, to emergency supplementals. That is 
where, really, it came from. And now, we are going to be 
bringing that back down for the very reasons you know and 
others.
    In addition to that, however, why do you still need it if 
you are coming out? Then I will get to your post-2014 question. 
We have still got over 60,000 troops there; we are bringing out 
a couple thousand a month to get down to 34,000 troops by, I 
think, February of next year. A huge amount of equipment that 
we have got to get out, we have got to do something with that 
equipment as we consolidate bases. All these are huge costs to 
us. It is not as easy as getting out as we did in Iraq when you 
just come right down to the desert, load everything up on the 
ships. This is a whole different ballgame. So those are 
additional costs.
    What do I see after 2014? The president has laid out that 
we will have a trained assistant advise mission after that. We 
will have a presence there.
    Chairman Ryan. Thank you. Mr. Williams.
    Mr. Williams. Yes, I want to thank all of you for being 
here. I appreciate your patriotism. My question is being 
directed to you, Mr. Secretary. Fort Hood is in my district, 
and they are doing a fantastic job. A lot of people in my 
district ask, do you think that America should be the number 
one superpower in the world?
    Secretary Hagel. I believe, and I always have, that America 
must maintain its superiority in every way to maintain our 
national security.
    Mr. Williams. Do you feel that our enemy is fierce today?
    Secretary Hagel. Our enemy is very fierce today.
    Mr. Williams. Do you think our friends trust us?
    Secretary Hagel. I think we have partners, we have allies, 
we have relationships that are all built around common 
interests. That is not new; that is the history of the world. 
And those common interests that forge those relationships, the 
era of coalitions of common interests came after World War II 
when we built all those coalitions, NATO, so on and so on. And 
we will need them even more so in the 21st century.
    Mr. Williams. We have talked a little bit about the 
president's budget, that you are aware that it came to us very 
late in this cycle.
    Secretary Hagel. Yes.
    Mr. Williams. And are you also aware that sequestration, 
which we talk about all the time, was the idea of President 
Obama?
    Secretary Hagel. Well, I am going not going to get into the 
politics of whose idea it was.
    Mr. Williams. I just want to make sure you are aware. I 
want to make sure you are aware of that.
    Secretary Hagel. I have got a responsibility to run the 
Pentagon, not to get involved in politics.
    Mr. Williams. All right. Okay. I just want to make sure you 
are aware of that. And I also would ask you, it is been widely 
reported that some DoD components had identified sufficient 
spending cuts such that they would not have needed to furlough 
their civilian workforce during that 11 days. I know you have 
got reports in the Navy and Air Force that gave you some other 
options. My question is why did you choose to go to the wide 
furloughs rather than implement cuts to activities that you had 
been advised on that you could have gone another way, thus 
creating pain with the public and creating, really, havoc with 
some of the communities?
    Secretary Hagel. Well, if you were here for my opening 
statement, I noted that decision and why, but I will repeat it. 
We have looked at every possible area we can cut, and I listed 
some of them, and we can give you an entire list of them. I 
would be very happy to do that. I got to the point where, we 
started with the possibility of 22 days of furloughing. The 
decision I made was finally 11. It was the last thing we wanted 
to do. This was in coordination with all our commanders, all 
our senior leaders, because I could not take the readiness 
issue down any further than where it was. We would have to cut 
more into our readiness and our force protection of our people, 
and I could not do that.
    Mr. Williams. Okay. Last question, I have never been able 
to understand, why do we compare ourselves to other countries 
as far as amount of missiles, you name it? Why do we compare 
ourselves to them? Why do we not set the standard? If we are 
going to be the superpower in the world, why do we want to come 
to their level? Why do we not just want to be America?
    Secretary Hagel. Well, I am not sure what you mean.
    Mr. Williams. Well, we talk about bringing missiles down to 
a certain level, doing this, we are worried about a budget of 
another country; I do not see how that plays into our defense.
    Chairman Ryan. We will have to leave it at that just 
because the votes on the floor, 11-54 left. Mr. Huffman.
    Mr. Huffman. Thank you to all the witnesses. I will be 
quick. Secretary Hagel, I was a big fan of your work in the 
Senate, your bipartisan work on nonproliferation, and 
continuing into your time when you were out of office working 
on sensible ways to right-size our nuclear arsenal to address 
21st century needs instead of Cold War and bloated nuclear 
arsenal. So that is the big-picture question I want to ask you 
about. In the post-Cold War era, at a time when we are 
struggling to address our long-term debt and deficits, we still 
have a huge nuclear arsenal, even with the progress we have 
made in the START treaty numbers, 1,550 deployed nuclear 
weapons. Some estimate as much as $52 billion a year to 
maintain that arsenal, and we will be being asked to pay for 
modernization of it all.
    In light of all of that, can we afford this type of a 
nuclear arsenal in this day and age, and do we need it? Or can 
we move back towards something more like the great report that 
you did in May of 2012 with Global Zero where you envisioned a 
nuclear arsenal closer to 900 total weapons deployed in a very 
different way?
    Secretary Hagel. Well, I think it is been the goal of every 
president of the Unites States since the advent of nuclear 
weapons. Recognizing every president has realized, as I have, 
and I think most Americans, that the nuclear deterrence has 
been as important a part of keeping our freedoms as anyone 
thinks since World War II. Ronald Reagan, if you remember in, I 
think it was 1986, turned to Gorbachev, and said, ``Let's get 
rid of all the nuclear weapons.'' And I recall that vividly. 
And a lot of people gulped, ``Is he crazy?'' Every reduction in 
our nuclear armament has come as a result of a treaty, in a 
commiserate reciprocal reduction. You ask yourself, well, how 
many missiles and how many nuclear warheads do you need to 
defend yourself? How many times do you have to blow up the 
world?
    I mean, I believe strongly in a strong nuclear deterrence, 
strongly. And I also believe that Ronald Reagan and every 
president we have had, Democrat or Republican, asked the right 
questions. This president is asking the right questions. Your 
numbers that you mentioned was a result of a treaty with the 
Russians, I think in 2010, that Congress approved, the Senate, 
with the president. I think that makes sense. If we can find 
ways to reduce the threat to mankind but still protect 
ourselves, is that not what we should be doing?
    Mr. Huffman. Thank you.
    Chairman Ryan. Thank you. Let's leave it at that. Mr. 
Calvert.
    Mr. Calvert. Thank you for your service. I am going to 
submit a couple questions for the record, but I just want to 
get a couple of points in real quickly. When it comes to BRAC, 
I think you probably know, even though we are discussing BRAC, 
there is probably not a stomach for voting for it. And I would 
hope we can work together to maybe closely more define what a 
BRAC process is. I think, too, we may need to add the National 
Laboratories and NASA centers to it also. If we are going to do 
it, let's just do it all.
    One thing, to be specific, electronic health records. We 
asked the Department of Defense some time ago to get that done. 
It would create efficiencies and save a lot of money. You know, 
Kaiser in California, has gone to digitized health records a 
long time ago. And we asked, it is been God knows how many 
years now, five years ago. What is the hold up?
    Secretary Hagel. Well, first, DoD and VA will be 
interoperable by the end of this year in the transferring of 
all of our paper back and forth. This is a long story. As you 
know, five years' worth and a lot of money's worth, but let me, 
in the interest of time, just hit a couple of important points. 
The seamless interoperable of those two systems, they do not 
have to be the same systems, just interoperable. As long as 
they are talking to each other, and we can accomplish getting 
paper records out of DoD over to VA, over to their claims, and 
that is being done, it will be done. That is one part of it.
    The backlog at the VA is not a DoD-result problem. About 4 
percent of that backlog is our piece. And that is mainly 
because Secretary Shinseki made a decision, which I think he 
was right, a couple of years ago to start including all the 
Vietnam veterans and everybody prior to Iraq and Afghanistan, 
and the veterans that were produced the most two wars, we had 
electronic records.
    When I was in Vietnam, I mean, you have got maybe your 
folder. It is all paper records, so they have been flooded with 
this stuff. We have been working very closely with them. A lot 
of glitches, a lot of issues, absolutely. But I have got to be 
responsible for the modernization of our systems for DoD. That 
is not mutually exclusive from the VA. We work very closely. I 
just offered more manpower. We have people over in the VA, and 
we have got them all over. And the VA just accepted seven more 
of our people, which I am glad they have done. So, yes, a lot 
of issues, a lot of problems, but we are getting there, and we 
will get there.
    Mr. Calvert. Thank you.
    Chairman Ryan. Thank you. Ms. Lujan Grisham.
    Ms. Lujan Grisham. Thank you, Mr. Chairman. Thank you very 
much for being here today, Mr. Secretary and General. I 
appreciate that, too. And I was not playing on talking about 
this, and I will be brief, but I want to echo what my colleague 
just talked about, and I appreciate your response on veterans' 
issues, the backlog, and electronic medical records. And with 
all the different proprietary records in the private sector, it 
is clear that having a single system is not going to work, that 
we have to find utility programs that will make them all 
interoperable. And I just had a veterans' forums, and I will 
tell you that every single complaint was having access and 
following their record trail, and making sure that they are 
getting adequate and quality care, and that that is seamless. 
So I appreciate that, and appreciate your diligence.
    I quickly want to go to contracting, and I want to have you 
just talk to me a little bit about the impact sequestration is 
having on defense contractors, and their ability to stay 
staffed and meet any of these demands. I have got negative job 
growth in significant defense contracting in my district. I 
represent Albuquerque in New Mexico, and it is a real 
challenge.
    Secretary Hagel. Well, again, within the limits of our time 
here, contractors are going to be and are being severely cut 
employees. Just as we are having to take a hit with our 
civilian workforce, there is no way around it. I mean, when you 
are putting off contracts and forcing them out into the future, 
and because you have less resources you cannot go forward with 
making commitments.
    Ms. Lujan Grisham. Are you concerned about their ability to 
have capacity when you do need them as a result of this?
    Secretary Hagel. Absolutely. Of course. The chairman talked 
about that, and we all know that.
    Ms. Lujan Grisham. And to also meet your goals for 
disadvantaged groups such as veterans and women, and to make 
sure that you are meeting those goals that you set aside to 
encourage that entrepreneurship and those kinds of 
relationships?
    Secretary Hagel. It is all affected.
    Ms. Lujan Grisham. Any suggestions that you have in the 
interim, since the power rests here, about what we do in a 
district like mine to sure up these relationships and these 
private businesses?
    Secretary Hagel. My suggestion is, as the chairman, and the 
ranking, and all the members of Congress know, is if we could 
get some clarity, some certainty, some flexibility on a budget.
    Ms. Lujan Grisham. You have my support to that.
    Secretary Hagel. Thank you.
    Ms. Lujan Grisham. And thank you very much.
    Chairman Ryan. Last but not least, Mr. McClintock.
    Mr. McClintock. Thank you, Mr. Chairman. My constituents 
had one question; they would want me to direct it to you, 
General Dempsey. And it involves the rules of engagement that 
have placed our young men and women under the most 
unprecedented constraints, I think, in the history of a 
battlefield. The point was brought home to me at a veterans' 
lunch a couple of years ago in Nevada City where I was talking 
to a young man who just returned from Iraq, as well as a 
veteran of Patton's Third Army. And I asked the young man about 
the rules of engagement, and the look of relief crossed his 
face, like, ``Thank God somebody is asking.'' He says, ``They 
are terrible; they will not let us fight back. If we are shot 
at, we have to identify ourselves, and first yell at them to 
stop shooting at us. If it is at night, we have to shine a 
light at them. If the fire is coming from anywhere in the 
vicinity of a village, we are not allowed to return fire. We 
are not allowed to pursue insurgents into a mosque.'' He says, 
``I had a buddy who did that. The insurgents were released; my 
buddy was demoted for breaking the rules of engagement.''
    I turned to the veteran and I said, ``Well, what were the 
rules of engagement in Patton's Third Army?'' And he says, 
``Well, we did not really have any rules of engagement. They 
told us to kill Germans, and that is what we did.'' And I said, 
``Well, if a German squad escaped into a church, would you have 
pursued them into the church?'' ``Oh, heavens no,'' he says, 
``we would have blown up the church.'' And my question is, can 
we look any of these young servicemen and women in the eye and 
tell them that we back them with the full might and fury of our 
country when we have placed them in harm's way? And that we 
gave them the battlefield discretion that has been given to 
every generation of fighting men since the beginning of this 
republic?
    General Dempsey. It is never been, despite what the veteran 
told you from World War II, it is never been the tradition in 
our country to use force indiscriminately. And the rules of 
engagement are reviewed by the commanders in the field with 
great frequency. The particular form of conflict in which we 
find ourselves now, where what truly hangs in the balance is 
the support of the population, and less so, killing a 
particular number of insurgents, requires us to be particularly 
careful about the use of force. But one thing I can assure you, 
no man or woman who we sent into previously Iraq and now 
Afghanistan, ever is hamstrung in their ability to protect 
themselves. And so some of what you are referring to, I have 
seen it myself, I have heard it myself, a good bit of it is 
misinformation.
    Mr. McClintock. Well, I would suggest that if World War II 
were conducted in the same manner as we have conducted our 
affairs in Afghanistan, that war would still be going on.
    Chairman Ryan. Thank you. This was a fast-moving hearing. I 
wish we had more time, but I appreciate your indulgence. Thank 
you, Secretaries, for coming. Thank you, General. This hearing 
is adjourned.
    [Questions submitted for the record and their responses 
follow:]

         Questions Submitted for the Record From Chairman Ryan

                            secretary hagel
Afghanistan
    1. Recently we have seen several high-profile Taliban attacks. The 
Afghanistan NGO Safety Office reported that Taliban attacks are up 47 
percent from this time last year. Do you consider this increase in 
attacks significant? Why has the military stopped publishing data on 
the volume of enemy attacks? What metrics are you using to determine 
whether we're making progress? Is there a level of violence that would 
necessitate revising the current drawdown plans?
    2. In FY 2013, the Department of Defense faced a $12 billion 
shortfall in funds available for prosecution of the war in Afghanistan. 
Please quantify the contributing factors to this shortfall. What steps 
were taken in preparing the FY 2014 war funding request to ensure there 
would not be another shortfall in FY 2014?
                            general dempsey
Defense Efficiencies
    3. In response to a question from Mr. Rokita, General Dempsey 
testified that a significant factor in the increase in the number of 
civilians employed by the Joint Staff was due to the disestablishment 
of Joint Forces Command and the absorption of civilian employees from 
JFCOM into the Joint Staff. One reason cited for closing JFCOM was to 
reduce costs. Please provide an itemized estimate of the savings 
achieved by disestablishing JFCOM net of any costs that were assumed by 
other elements of the Department of Defense.
    4. General Dempsey's prepared statement noted that given recent 
budget reductions ``everything must be on the table'' and specifically 
noted that included civilian force reductions. Please specify what 
additional statutory authorities DOD need to efficiently reduce the 
size of its civilian workforce.

     Questions Submitted for the Record From Hon. James Lankford, a
         Representative in Congress From the State of Oklahoma

                secretary hagel and undersecretary hale
Defense Management
    In response to my question, Under Secretary Hale testified that the 
planned reduction in DOD's civilian workforce ``is heavily dependent on 
BRAC.'' The DOD civilian workforce has increased 17% since 2001. During 
that same time period, no new domestic bases were established and DOD 
executed BRAC 2005 which was arguably more extensive than all four 
previous BRAC rounds combined as it involved 24 major base closures, 24 
major realignments, and 765 minor closures and realignments. The 
evidence does not suggest that BRAC necessarily leads to a smaller 
civilian workforce. Given the compressed time available for the 
hearing, I wanted to provide you an opportunity to explain this seeming 
discrepancy.

       Questions Submitted for the Record From Hon. Bill Flores,
          a Representative in Congress From the State of Texas

                            secretary hagel
    I. Recommendations adopted in the Executive Order stated that 
Coastal and Marine Spatial Planning will require ``significant initial 
investment of both human and financial resources,'' \1\ and in early 
2012 the National Ocean Council noted that federal agencies had been 
asked to provide information about how ``existing resources [can] be 
repurposed for greater efficiency and effectiveness'' in furtherance of 
the National Ocean Policy.\2\
---------------------------------------------------------------------------
    \1\ See Page 43, Final Recommendations of the Interagency Ocean 
Policy Task Force (``Final Recommendations''), released July 19, 2010, 
available at http://www.whitehouse.gov/files/documents/
OPTF_FinalRecs.pdf.
    \2\ See Draft National Ocean Policy Implementation Plan, National 
Ocean Council, released January 12, 2012, Page 5, available at http://
www.whitehouse.gov/sites/default/files/microsites/ceq/
national_ocean_policy_draft_implementation_plan_01-12-12.pdf.
---------------------------------------------------------------------------
    In addition, DOD and Joint Chiefs of Staff representatives are 
currently serving on newly-formed Regional Planning Bodies created 
under the Executive Order in regions including the Northeast.\3\
---------------------------------------------------------------------------
    \3\ See http://northeastoceancouncil.org/wp-content/uploads/2013/
04/Membership-Roster-NE-RPB1.pdf.
---------------------------------------------------------------------------
    Q: Please describe how many DOD and Joint Chiefs of Staff resources 
and personnel have been directed toward activities specifically in 
support of the National Ocean Policy to date, the specific activities 
that they have been engaged in, and how many resources and personnel 
are being requested to support such activities in the FY 2014 budget 
request.
    Please describe the DOD and Joint Chiefs of Staff response to the 
National Ocean Council inquiry about the repurposing of existing 
resources, and any actions that DOD and the Joint Chiefs of Staff have 
taken or plan to take in this regard.
    II. Section 6(b) of Executive Order 13547\4\ that established the 
National Ocean Policy in July 2010 requires ``[e]ach executive 
department, agency, and office that is required to take actions under 
this order shall prepare and make publicly available an annual report 
including a concise description of actions taken by the agency in the 
previous calendar year to implement the order, a description of written 
comments by persons or organizations regarding the agency's compliance 
with this order, and the agency's response to such comments.'' \5\
---------------------------------------------------------------------------
    \4\ See http://www.whitehouse.gov/files/documents/2010stewardship-
eo.pdf.
    \5\ Federal entities required to take actions pursuant to Executive 
Order 13547 include members of the National Ocean Council, comprised of 
the Departments of State, Defense, Interior, Agriculture, Health and 
Human Services, Commerce, Labor, Transportation, Energy, Homeland 
Security, and Justice, the Administrators of the Environmental 
Protection Agency and National Aeronautics and Space Administration, 
the Chairs of the Council on Environmental Quality, Federal Energy 
Regulatory Commission, and Joint Chiefs of Staff, the Directors of the 
Office of Management and Budget, National Intelligence, the Office of 
Science and Technology Policy, and the National Science Foundation, the 
Under Secretary of Commerce for Oceans and Atmosphere (NOAA 
Administrator), the Assistants to the President for National Security 
Affairs, Homeland Security and Counterterrorism, Domestic Policy, 
Economic Policy, and Energy and Climate Change, and a federal employee 
designated by the Vice President.
---------------------------------------------------------------------------
    Q: Pursuant to this requirement, have DOD and the Chairman of the 
Joint Chiefs of Staff--both members of the National Ocean Council--
prepared and made publicly available any such annual report for 
calendar years 2010, 2011, or 2012? If so, please describe the findings 
and contents of such reports, and if not, why has this not occurred?
    III. The recommendations adopted by the National Ocean Policy 
Executive Order state that effective implementation will require 
``clear and easily understood requirements and regulations, where 
appropriate, that include enforcement as a critical component.'' \6\ In 
addition, the Executive Order requires federal entities including DOD 
and the Chairman of the Joint Chiefs of Staff to implement the policy 
to the fullest extent possible.
    At the same time, the National Ocean Council has stated that the 
National Policy ``does not establish any new regulations or restrict 
any ocean uses or activities.'' \7\
---------------------------------------------------------------------------
    \6\ See Page 30 at http://www.whitehouse.gov/files/documents/
OPTF_FinalRecs.pdf.
    \7\ See http://www.whitehouse.gov/administration/eop/oceans/faq.
---------------------------------------------------------------------------
    What if any commitment can you make that DOD and its affiliate 
branches will not issue any regulations or take any actions having a 
regulatory impact pursuant to the National Ocean Policy, including 
Coastal and Marine Spatial Planning?

       Questions Submitted for the Record From Hon. Luke Messer,
         a Representative in Congress From the State of Indiana

                            secretary hagel
Question Series #1--National Guard Facilities, Muscatatuck Urban 
        Training Center (MUTC) in Butlerville, IN
    The Muscatatuck Urban Training Center, which is located in my home 
district, is a 250-acre campus and 180-acre reservoir with urban 
infrastructure consisting of 1,560 training structures, including a 
school, hospital, dormitories, light industrial structures, single-
family type dwellings, a dining facility and administrative buildings 
totaling approximately 850,000 square feet of floor space. 
Additionally, the training area includes an extensive, 1,866-foot 
underground utility tunnel system and over 9 miles of road. This 
installation provides a critical service for preparing National Guard 
soldiers, Department of Defense civilian personnel, and U.S. State 
Department personnel for deployments to Afghanistan and other locations 
through simulations and immersion experiences, as well as other 
training opportunities for first responders, law enforcement and 
homeland security personnel.
    Question: The Vibrant Response 13-2 Northern Command exercise--held 
at the Muscatatuck Urban Training Center--is the largest homeland 
security exercise conducted annually. This exercise brings together 
over 8,000 people across 22 states to test and evaluate our ability to 
respond to a nuclear detonation in an urban environment. The exercise 
will run from July 21 to August 23, 2013, with incidents on July 30 and 
August 10.
    The Vibrant Response exercise is an excellent opportunity to 
experience the unique capabilities and environment the National Guard 
has designed to prepare the U.S. military for combat and humanitarian 
operations in urban environments, and also to witness our whole-of-
government response to major humanitarian disasters.
    1. On May 7th, the entire Indiana Congressional Delegation sent you 
a letter inviting you to come to Indiana to observe the Vibrant 
Response 13-2 Northern Command exercise which runs from July 21 to 
August 23. If you are unable to attend, would you consider a site visit 
to personally observe the joint training programs at Muscatatuck Urban 
Training Center and Camp Atterbury?
Background on Civilian-Military Training at Camp Atterbury (CA) and 
        Muscatatuck Urban Training Center
    Camp Atterbury and Muscatatuck Urban Training Center have been 
supporting integrated civilian--military training since July 2009. The 
programs were created in response to a need to prepare civilian 
personnel for overseas deployment in support of U.S. military missions. 
Prior to these programs, the ability to bring together civilian and 
military interagency teams for pre-deployment training was stymied 
because programmatic and systemic obstacles.
    In January 2010, the Department of Defense initiated the Civilian 
Expeditionary Workforce (CEW) program to provide civilian personnel 
with ``real world'' training prior to deployment to a conflict area. 
This joint, pre-deployment training and mobilization program plays a 
critical role in preparing civilians to work side-by-side with military 
personnel in support of humanitarian, reconstruction, and combat-
support military missions. In June 2009, the State Department initiated 
its own integrated civilian-military training program for the purpose 
of providing its personnel with individual mobilization and situational 
training.
    Questions: 1. While the Civilian Expeditionary Workforce (CEW) 
program initially was stood up to support our military missions in Iraq 
and Afghanistan, as we draw down in Iraq and Afghanistan won't there 
still be will be a need for an integrated civilian-military workforce 
to support operations globally?
    2. The current programs in place which have the needed partnerships 
established and are fully operational and coordinated provide the 
Department of Defense and the Department of State a platform to build 
an enduring, global program upon. Do you think that the Department of 
Defense/Department of State Integrated Civilian-Military Training 
program has value and, if so, is it worthy of expansion of its scope to 
meet global needs?
Question Series #2--DOD Broadband Spectrum, Spectrum Scarcity 
        Background
    In 1993, 1997, 2004 and 2012, Congress addressed spectrum scarcity 
in the commercial mobile industry by requiring spectrum assigned to the 
federal government to be reallocated to the FCC for private sector use. 
The enormously successful spectrum management policy approach has been 
to have the federal entities clear the spectrum, reallocate the 
spectrum to the FCC, and then to make the spectrum available for 
exclusive use via competitive bidding (i.e. auctions). Spectrum 
scarcity has reemerged and now exists in the wireless industry and the 
industry is in dire need of additional spectrum to meet the data and 
video driven uses by consumers, especially those with smart phones and 
tablets.
    Questions: 1. Secretary Hagel, you have actual expertise in these 
spectrum issues and in the commercial mobile industry having formed 
Vanguard Cellular Systems, Inc. in 1984. To what extent do you intend 
to utilize your spectrum experience when it comes to the management of 
the enormous amount of spectrum that is currently assigned to the 
Department of Defense?
    2. On March, 20, 2013, then FCC Chairman Genachowski advised NTIA 
that the FCC intended to auction the licenses in the 1695-1710 band and 
1755-1780 band as early as September 2014.The Spectrum Act of 2012 
requires that the 2155-2180 band be licensed by February 2015. Recent 
estimates indicate that the auctioning of the 2155-2180 MHz band alone 
would yield $ 3.6 billion, but auctioned together with the 1755-1780 
MHz, the yield would be $12 billion. Can we be assured that DOD will 
take all steps necessary to clear this 1755-1780 band, so that it can 
be auctioned with the 2155-2180 band?
    3. Do you believe that the opportunities for clearing and 
reallocating to the private sector spectrum currently assigned to the 
Department of Defense and other federal entities have been totally 
exhausted, with spectrum sharing between federal agencies and 
commercial users being the only alternative to spectrum scarcity? Or do 
you believe that there are still opportunities for spectrum currently 
assigned to federal agencies to be reallocated to the FCC for private 
sector use?

    [Response to questions submitted for the record follow:]
                         congressman cicilline
    Question: What's the Department's status with implementing item-
unique identification (IUID) markings? Will sequestration cuts 
adversely impact IUID implementation?

    Answer: The Department continues to make progress in the 
implementation of IUID markings. It is tracking the marking of both 
legacy and newly procured items by class of supply. Currently, almost 7 
million legacy and over 14 million new contract receipt items are 
marked. Each Service developed plans of actions and milestones to track 
progress. In addition, an IUID system indicator field is included in 
the Department's inventory catalog system. This helps facilitate the 
identification of assets requiring the IUID mark and trigger the 
inclusion of the required IUID contract clause. Finally, the Department 
is revising its policy governing the implementation of the IUID marking 
to reflect the current approach.
    Sequestration and the budget uncertainty in FY14 and beyond may 
impact progress in the following manner:
    1. Reduced ``opportunistic IUID marking'' on legacy assets based on 
slower induction rates into the depots, since this is the approach most 
widely used by the Services to mark assets in inventory.
    2. Reduced ``dedicated marking teams'' for legacy assets because 
this implementation is being accomplished mainly through contractor-
supported efforts and associated funding may be impacted.
    3. Potential delays in IUID IT system enhancements due to budget 
prioritization.
    The Department remains committed to the importance of IUID marking, 
but future efforts will need to be weighed against other mission 
priorities based on future years' budgets.
                   congressman messer to secdef hagel
Question No. 1: Muscatatuck Urban Training Center (MUTC) in 
        Butlerville, Indiana
    Question: The Muscatatuck Urban Training Center, which is located 
in my home district, is a 250-acre campus and 180-acre reservoir with 
urban infrastructure consisting of 1,560 training structures, including 
a school, hospital, dormitories, light industrial structures, single-
family type dwellings, a dining facility and administrative buildings 
totaling approximately 850,000 square feet of floor space. 
Additionally, the training area includes an extensive, 1,866-foot 
underground utility tunnel system and over 9 miles of road. This 
installation provides a critical service for preparing National Guard 
soldiers, Department of Defense civilian personnel, and U.S. State 
Department personnel for deployments to Afghanistan and other locations 
through simulations and immersion experiences, as well as other 
training opportunities for first responders, law enforcement and 
homeland security personnel.
    The Vibrant Response 13-2 Northern Command exercise--held at the 
Muscatatuck Urban Training Center--is the largest homeland security 
exercise conducted annually. This exercise brings together over 8,000 
people across 22 states to test and evaluate our ability to respond to 
a nuclear detonation in an urban environment. The exercise will run 
from July 21 to August 23, 2013, with incidents on July 30 and August 
10. The Vibrant Response exercise is an excellent opportunity to 
experience the unique capabilities and environment the National Guard 
has designed to prepare the U.S. military for combat and humanitarian 
operations in urban environments, and also to witness our whole-of-
government response to major humanitarian disasters.
    On May 7th, the entire Indiana Congressional Delegation sent you a 
letter inviting you to come to Indiana to observe the Vibrant Response 
13-2 Northern Command exercise which runs from July 21 to August 23. If 
you are unable to attend, would you consider a site visit to personally 
observe the joint training programs at Muscatatuck Urban Training 
Center and Camp Atterbury?

    Answer: I appreciate the Indiana Congressional Delegation's 
thoughtful invitation to visit Muscatatuck Urban Training Center and 
Camp Atterbury to observe the annual Vibrant Response exercise. 
However, due to other commitments, I will be unable to observe this 
year's exercise.
    I agree that the Vibrant Response exercise is an excellent 
opportunity to visit Muscatatuck and observe firsthand the whole-of-
government response to a simulated complex weapon of mass destruction 
catastrophe in the homeland. I look forward to taking advantage of a 
future opportunity to do so.
                   congressman messer to secdef hagel
Question No. 2: Background on Civilian-Military Training at Camp 
        Atterbury (CA) and Muscatatuck Urban Training Center
    Question: Camp Atterbury and Muscatatuck Urban Training Center have 
been supporting integrated civilian--military training since July 2009. 
The programs were created in response to a need to prepare civilian 
personnel for overseas deployment in support of U.S. military missions. 
Prior to these programs, the ability to bring together civilian and 
military interagency teams for pre-deployment training was stymied 
because programmatic and systemic obstacles.
    In January 2010, the Department of Defense initiated the Civilian 
Expeditionary Workforce (CEW) program to provide civilian personnel 
with ``real world'' training prior to deployment to a conflict area. 
This joint, pre-deployment training and mobilization program plays a 
critical role in preparing civilians to work side-by-side with military 
personnel in support of humanitarian, reconstruction, and combat-
support military missions. In June 2009, the State Department initiated 
its own integrated civilian-military training program for the purpose 
of providing its personnel with individual mobilization and situational 
training.
    1. While the Civilian Expeditionary Workforce (CEW) program 
initially was stood up to support our military missions in Iraq and 
Afghanistan, as we draw down in Iraq and Afghanistan won't there still 
be will be a need for an integrated civilian-military workforce to 
support operations globally?
    2. The current programs in place which have the needed partnerships 
established and are fully operational and coordinated provide the 
Department of Defense and the Department of State a platform to build 
an enduring, global program upon. Do you think that the Department of 
Defense/Department of State Integrated Civilian-Military Training 
program has value and, if so, is it worthy of expansion of its scope to 
meet global needs?

Answer
    1. The need for an integrated civilian-military workforce is driven 
by the requirements of the Combatant Commanders and in fact the 
Civilian Expeditionary Workforce currently supports the world-wide 
needs of all Combatant Commanders. Further, the portability and 
transferability of the Iraq and Afghanistan pre-deployment training and 
mobilization can be adapted to meet global requirements based on 
identified needs and requirements. This gives Combatant Commanders 
greater contingency manning flexibility.
    2. The Department of Defense sees great value in the Integrated 
Civilian-Military Field Training Program that it conducts in 
partnership with the Department of State. The Atterbury-Muscatatuk 
field training portion of the course is consistently praised by its 
graduates and has certainly proven its worth in Afghanistan. The 
potential to expand this training course globally depends on a 
statement of need from both the State Department and Combatant 
Commanders. The genesis of the current training course at Atterbury-
Muscatatuk was contingency operations in Afghanistan. Future 
contingencies will in all likelihood require civilian federal agencies 
and military personnel to serve side-by-side. If so, there is a high 
potential this need will once again be identified.
                           congressman messer
Question No. 3: Spectrum Scarcity Background
    In 1993, 1997, 2004 and 2012, Congress addressed spectrum scarcity 
in the commercial mobile industry by requiring spectrum assigned to the 
federal government to be reallocated to the Federal Communications 
Commission (FCC) for private sector use. The enormously successful 
spectrum management policy approach has been to have the federal 
entities clear the spectrum, reallocate the spectrum to the FCC, and 
then to make the spectrum available for exclusive use via competitive 
bidding (i.e. auctions). Spectrum scarcity has reemerged and now exists 
in the wireless industry and the industry is in dire need of additional 
spectrum to meet the data and video driven uses by consumers, 
especially those with smart phones and tablets.
    1. Question: Secretary Hagel, you have actual expertise in these 
spectrum issues and in the commercial mobile industry having formed 
Vanguard Cellular Systems, Inc. in 1984. To what extent do you intend 
to utilize your spectrum experience when it comes to the management of 
the enormous amount of spectrum that is currently assigned to the 
Department of Defense?

    Answer: I fully intend to apply my spectrum experience with full 
commitment to balance national security and economic goals in the 
implementation of U.S. spectrum management policy. In that regard, I am 
already actively working with the Department of Commerce's National 
Telecommunications and Information Administration (NTIA), other 
Administration partners, the FCC, and industry in support the 
President's goal to make 500 MHz available for commercial mobile 
broadband use.
    In terms of how much of this scarce resource is available to DOD, 
the perception of ``enormous'' amounts of spectrum being available to 
DOD is relative. Based on the United States Frequency Allocation chart, 
and using the strict interpretation of the allocations, one will find 
in spectrum between 225 and 3700 MHz 18% federal exclusive use, 33% 
non-federal exclusive use, and 49% federal/non-federal shared use. 
Within spectrum allocated for exclusive federal use, the majority of 
the spectrum is shared between DOD and all of the other federal 
agencies, across a wide array of systems, performing a multitude of 
varied missions, often with very different technologies.

    2. Question: On March, 20, 2013, then FCC Chairman Genachowski 
advised NTIA that the FCC intended to auction the licenses in the 1695-
1710 band and 1755-1780 band as early as September 2014. The Spectrum 
Act of 2012 requires that the 2155-2180 band be licensed by February 
2015. Recent estimates indicate that the auctioning of the 2155-2180 
MHz band alone would yield $ 3.6 billion, but auctioned together with 
the 1755-1780 MHz, the yield would be $12 billion. Can we be assured 
that DOD will take all steps necessary to clear this 1755-1780 band, so 
that it can be auctioned with the 2155-2180 band?

    Answer: DOD understands the desire to bring the 1755-1780 MHz to 
market rapidly, particularly with industry's desire to pair the band 
with 2155-2180 MHz. To that end, DOD actively supports interagency 
processes for repurposing spectrum for commercial broadband purposes 
that entail both sharing and relocation possibilities. The Department 
has significant concerns with the FCC's proposed auction timeline, 
since it presents a very risky possibility of being required to 
``clear'' operations from the 1755-1780 MHz or compress operations into 
the 1780-1850 MHz without the necessary accommodation of comparable 
spectrum and funding, which are both required by statute.
    The Department's concerns are heightened when expectations seem to 
be that DOD can simply alter assignments or protection requirements, in 
turn its operations, to clear the 1755-1780 MHz band, in spite of the 
findings from analysis done thus far. These findings indicate that both 
complete relocation or total compression of federal operations into the 
70 MHz between 1780-1850 MHz have major challenges associated with 
them, if either one is attempted without proper accommodation.
    The Department is prepared to support a balanced solution to 
address just the 1755-1780 MHz band, as desired by industry, but 
remains certain that such a short-term solution without assured long-
term status of the remaining 70 MHz will put warfighting capabilities 
at further risk. The analysis findings highlight that a realistic and 
balanced solution will likely need to include a combination of sharing, 
relocation, and some compression. An approach that considers such 
combination of strategies and that takes into account national security 
and economics could reduce the total relocation costs for federal 
agencies and lessen demands for comparable spectrum.

    3. Question: Do you believe that the opportunities for clearing and 
reallocating to the private sector spectrum currently assigned to the 
Department of Defense and other federal entities have been totally 
exhausted, with spectrum sharing between federal agencies and 
commercial users being the only alternative to spectrum scarcity? Or do 
you believe that there are still opportunities for spectrum currently 
assigned to federal agencies to be reallocated to the FCC for private 
sector use?

    Answer: This question is best answered by NTIA, the federal 
spectrum regulator. DOD is a user of spectrum that gets assigned by 
NTIA based on need, taking into account all other federal agencies' 
requirements. However, the increasing demand for this invaluable, 
finite resource for both commercial use and federal missions indicates 
the importance of evaluating all alternatives, including spectrum 
sharing. Consistent with the national economic and security goals of 
the President's 500 MHz initiative, DOD supported and continues to 
support interagency processes for repurposing spectrum for commercial 
broadband purposes that entail both sharing and relocation 
possibilities.
    From a DOD perspective, both sharing and relocation decisions pose 
potential risks. While no decision to repurpose spectrum is ``risk 
free,'' the risks can and must be managed. To date the interagency 
efforts the Department has been involved with, have identified ?400 MHz 
of federally allocated spectrum for potential commercial broadband use. 
The Department is committed to continuing its strong working 
relationship with government and industry partners to develop equitable 
spectrum repurposing solutions to make more spectrum available for 
commercial use without impact to national security and other agencies' 
missions.
                  congressman calvert to secdef hagel
Question No. 4: DOD Civilian Workforce
    Question: In our challenging fiscal environment, I am concerned 
that the Department of Defense is not tracking the size of the civilian 
workforce as effectively as it can. I have heard official and 
unofficial testimony while under my Defense Appropriations Subcommittee 
``Hat'' to the effect that DOD has difficulty managing the civilian 
workforce which has increased in size by 114,000 employees (17 percent) 
since 2001. Specifically, the very high proportion of retirement 
eligible employees and the difficulties in terminating employees who 
are not performing has raised some red flags. A former service 
secretary has told us that it was easier to shrink the size of the 
force by tens of thousands of uniformed personnel than to fire a single 
civilian employee.
    In addition, the Government Accountability Office (GAO) reports 
that the Department of Defense has yet to include an accurate 
assessment of the appropriate mix of military and civilian personnel 
capabilities in its strategic workforce plan. Its latest strategic plan 
from March 2012 cites 22 mission critical, civilian personnel 
occupations. However, the report had only conducted competency gap 
analyses for 8 of the 22 occupations identified. The GAO also reports 
that the DOD has neglected to provide full data on the mix of military, 
civilian, and contractor workforces. Of the 11 groups reporting, only 
two provided the proper data while nine provided partial or no data.
    1. Do you share these concerns about the constraints on your 
ability to manage your department effectively?
    2. When can we expect an accurate assessment of your military and 
civilian personnel capabilities as part of your strategic workforce 
plan?
    3. Can you describe the process for terminating employment for a 
civilian employee who is underperforming?
    4. Are there legislative measures that Congress can take to assist 
the department in managing the civilian workforce in a more cost 
effective manner?
Answer
    1. I do not share the concerns attributed to a former service 
secretary. The Department's managers and commanders have a wide variety 
of tools and authorities to incentivize and shape their civilian 
workforce. The execution of large shifts in any sector of the 
Department's workforce requires thoughtful planning. The high 
proportion of retirement eligible employees is very concerning as is 
the on-going, unjustly negative characterization of public service. 
Further, it is a mischaracterization that it is hard to terminate a 
poorly performing civilian. It is no harder and requires no more 
documentation than to cancel a poorly performing contract, or release a 
military member for an infraction. The burden of proof is appropriately 
high for all of these actions to guard against arbitrary, retaliatory, 
or capricious actions.
    2. The Department is committed to a comprehensive Strategic 
Workforce Plan (SWP) that helps address the demographic (talent, 
competency, education, skill) make-up of its civilian personnel 
inventory. As part of a continuous process to improve the accuracy and 
relevancy of the SWP, the Department is maturing its competency 
modeling process and skill gap analysis. That said, let me assure you 
that the Department's programming and planning processes consider the 
balance of capabilities and the Department's ``sourcing'' of functions 
and work between military and civilian personnel, as well as contracted 
services. The Department's Total Force is sized and structured based on 
the capabilities necessary to implement the national military and 
security strategies of the United States as well as delivering the 
readiness and support to organize, train, and equip a force capable of 
executing operational plans in support of those strategies. The 
Department aligns its workforce (both in size and structure) to mission 
and, as such, justifies the current size or possible reductions/
increases to that workforce based on mission workload rather than 
competency or skills gaps. The FY14 budget request reflects a balanced 
workforce that decreases spending on military personnel, civilian full-
time equivalents, and spending for contract services. It reflects a 
carefully coordinated approach based on the Department's strategy and 
policy that balances operational needs and fiscal reality.
    3. The Department is subject to Office of Personnel and Management-
established rules for removing employees for unacceptable performance. 
Generally, under the government-wide rules for a performance-based 
action, an employee must clearly be put on notice of their unacceptable 
performance as well as the consequences of unacceptable performance, 
and be provided an opportunity to improve their performance to an 
acceptable level. If after the opportunity to improve, the employee's 
performance continues to be unacceptable in a critical job element, the 
employee is given written notice of proposed removal, which includes an 
opportunity for the employee to respond to the proposal orally and/or 
in writing. Upon conclusion of consideration of the employee's 
response, the employee may be removed and appeal rights charged in the 
employee's status.
    4. Congress could assist the Department with better total force 
management by repealing the requirements in section 955 of the FY13 
National Defense Authorization Act and instead requiring a future 
year's defense plan that reflects the Defense Strategic Guidance, given 
on-going fiscal pressures, risk, required readiness, and a rebalancing 
of the total force--active duty, guard, and reserve military, 
government civilians, and contracted services.
                  congressman calvert to secdef hagel
Question No. 5: Electronic Health Record
    Question: In the 2008 NDAA, Congress mandated that DOD to jointly 
develop and implement electronic health record systems or capabilities 
to allow for full interoperability of personal health care information, 
and to accelerate the exchange of health care information between the 
Department of Defense (DOD) and the Department of Veterans Affairs (VA) 
by September 2009. DOD and the VA were initially on board with that 
plan. Now, this past February, it was announced that instead of 
building a single integrated electronic health record (iEHR), both DOD 
and VA will concentrate on integrating VA and DOD health data by 
focusing on interoperability and using existing technological 
solutions. This is unacceptable. The creation of a single electronic 
medical health record is not rocket science and private industry, which 
services many more people than DOD and VA, has been able to implement 
electronic medical health records.
    My questions for you are:
    1. Why, after four years of being on board with the concept, are 
DOD and the VA moving away from the single electronic medical health 
record?
    2. Is DOD partnering with private industry health providers to 
implement a plan to solve this problem?
    3. Do you have any data comparing the long-term cost savings of a 
single electronic medical health record vs. interoperability? Would you 
expect that a single electronic medical health record would provide 
more savings than interoperability?

    Answer: Thank you for the opportunity to discuss with you and the 
committee DOD perspectives on the healthcare record system. The 
questions that you asked are reasonable and the answers follow:
    1. Why, after four years of being on board with the concept, are 
DOD and the VA moving away from the single electronic medical health 
record?
    DOD and VA are committed to jointly establishing standards-based 
healthcare data interoperability through a single electronic medical 
health record since Congress directed the establishment of the 
Interagency Program Office (IPO) in 2008. Since that time, DOD and VA 
also initially agreed to modernize their respective healthcare 
management systems to equip clinicians with state-of-the-art clinical 
decision support through the joint development of a single healthcare 
management system. Based on concerns by my predecessor regarding the 
viability of the joint development approach, DOD and VA reconsidered 
the joint development and VA subsequently declared its commitment to 
modernizing its legacy VistA system. Following an internal DOD review, 
I issued a memorandum on May 21, 2013, reasserting DOD's commitment to 
working with VA to establish healthcare data interoperability and 
separately directing a competitive acquisition to modernize DOD's 
healthcare management systems. DOD continues to remain committed to a 
seamless integration of electronic medical health data based on 
standards-based healthcare data interoperability with VA, independent 
of the healthcare management system acquired by each respective 
Department.
    2. Is DOD partnering with private industry health providers to 
implement a plan to solve this problem?
    The DOD/VA IPO is working with the Department of Health and Human 
Services' Office of the National Coordinator for Health Information 
Technology (IT) to establish and implement national health IT 
standards. Through this effort, the Departments seek to establish 
interoperability of healthcare data with private industry health 
providers, many of whom provide direct care to Service Members, their 
dependents, and our Nation's veterans.
    3. Do you have any data comparing the long-term cost savings of a 
single electronic medical health record vs. interoperability?
    The Director, Cost Assessment and Program Evaluation (CAPE), 
performed analyses in 2010 and 2013 to determine the optimal approach 
for DOD, including lifecycle cost estimate comparisons between 
candidate solution approaches. My May 21, 2013, memorandum directing a 
competitive acquisition enables DOD to review and evaluate the costs 
and benefits of potential electronic healthcare record solutions, 
including the possibility of acquiring an evolved VistA, based upon 
responses to a forthcoming request for proposal. DOD remains committed 
to establishing standards-based healthcare data interoperability with 
VA, regardless of the outcome of our healthcare management systems 
modernization effort.
    4. Would you expect that a single electronic medical health record 
would provide more savings than interoperability?
    The DOD path of pursuing a competitive acquisition to consider 
commercial- and Government-developed solutions offers a technical and 
cost advantage for DOD. Regardless of the outcome of the competition, 
DOD is required to establish healthcare data interoperability based on 
national standards to permit healthcare data exchanges with private 
healthcare providers. Interoperability with the numerous electronic 
healthcare management systems utilized by private healthcare providers 
is essential since they provide 65 percent of the healthcare received 
by Service Members and their dependents. The competitive acquisition 
approach to modernizing our healthcare management system as an effort 
separate from, but closely tied to, establishing healthcare data 
interoperability, will provide DOD with the flexibility to evaluate 
potential options and acquire the most capable solution to serve our 
Service Members and their dependents for the best value to the American 
taxpayer.
                  congressman calvert to secdef hagel
Question No. 6: BRAC
    Question: Given our fiscal challenges and continually evolving 
military requirements, the Base Realignment and Closure (BRAC) process 
can provide us another way to address the Department of Defense's 
extensive footprint and its associated costs. Knowing that this process 
can become a political quagmire, is there a way the Department of 
Defense can come up with a methodology for executing a BRAC system that 
allows for a simpler and speedier process?

    Answer: While the request for BRAC authorization can become mired 
in politics as you suggest, the BRAC process itself represents a grand 
political compromise that makes military value the primary 
consideration and is structured to be free from political influences. 
BRAC is recognized as the only fair, objective, and proven process for 
closing and realigning installations because it includes a sound 
analytical process, an independent Commission review, an ``All or 
None'' review by the President and Congress, and a legal obligation and 
date certain for completion. Therefore, the BRAC process is 
comprehensive and thorough and, as such, it takes time to do it 
properly.
                   congressman flores to secdef hagel
Question No. 7: National Ocean Policy
    Question: Recommendations adopted in the Executive Order stated 
that Coastal and Marine Spatial Planning will require ``significant 
initial investment of both human and financial resources,''\1\ and in 
early 2012 the National Ocean Council noted that federal agencies had 
been asked to provide information about how ``existing resources [can] 
be repurposed for greater efficiency and effectiveness'' in furtherance 
of the National Ocean Policy.\2\ In addition, DOD and Joint Chiefs of 
Staff representatives are currently serving on newly-formed Regional 
Planning Bodies created under the Executive Order in regions including 
the Northeast.\3\
---------------------------------------------------------------------------
    \1\ See Page 43, Final Recommendations of the Interagency Ocean 
Policy Task Force (``Final Recommendations''), released July 19, 2010, 
available at http://www.whitehouse.gov/files/documents/OPTF--
FinalRecs.pdf.
    \2\ See Draft National Ocean Policy Implementation Plan, National 
Ocean Council, released January 12, 2012, Page 5, available at http://
www.whitehouse.gov/sites/default/files/microsites/ceq/national--ocean--
policy--draft--implementation--plan--01-12-12.pdf.
    \3\ See http://northeastoceancouncil.org/wp-content/uploads/2013/
04/Membership-Roster-NE-RPB1.pdf.
---------------------------------------------------------------------------
    1. Please describe how many DOD and Joint Chiefs of Staff resources 
and personnel have been directed toward activities specifically in 
support of the National Ocean Policy to date, the specific activities 
that they have been engaged in, and how many resources and personnel 
are being requested to support such activities in the FY 2014 budget 
request.
    2. Please describe the DOD and Joint Chiefs of Staff response to 
the National Ocean Council inquiry about the repurposing of existing 
resources, and any actions that DOD and the Joint Chiefs of Staff have 
taken or plan to take in this regard.

    Answer: Both DOD and the Joint Chiefs of Staff designated 
representatives to each of the nine proposed or constituted Regional 
Planning Bodies (RPB). Such personnel were assigned this additional 
duty based on existing military duties or federal civilian job 
performance objectives, which include working in various interagency 
forums as well as engaging in strategy and policy planning activities. 
DOD personnel are supporting the National Ocean Policy at multiple 
levels, including:
     Regional Planning Bodies (13 individuals/additional 
duties),
     multiple interagency working groups (seven individuals/
additional duties),
     the Ocean Resources Management Interagency Policy 
Committee and the Ocean Science and Technology Interagency Policy 
Committee (two individuals/additional duties),
     senior policy representative (two individuals/additional 
duties), senior executive representatives (two individuals/additional 
duties).
    The Navy is serving as the federal co-lead for the South Atlantic 
and Gulf of Mexico regions, even though neither of these regions is a 
formal RPB yet. A Navy officer has also been detailed to the National 
Ocean Council staff for the past three years. Moreover, DOD and the 
Joint Staff established an Executive Steering Group (ESG) comprised of 
flag/general officers and senior civilian personnel to provide 
leadership and guidance for ocean policy matters arising from any 
issues or questions that may arise while the regional planning bodies 
carry out activities consistent with the National Ocean Policy. The ESG 
is comprised of 32 flag/general/SES members and supported by 86 staff 
members. Working in support of ocean policy is within the current 
assignments and subject matter portfolios for all of these DOD 
personnel. They meet and engage on issues on an as-needed basis, 
consistent with the pace and range of issues raised by the National 
Ocean Council and regional planning bodies.
    DOD and the military services do not have accounting lines for 
National Ocean Policy activities in the FY 2014 budget. Furthermore, 
DOD is not requesting additional personnel to support National Ocean 
Policy activities. In response to the National Ocean Council's request 
regarding how DOD is furthering the National Ocean Policy, the 
Department identified existing mission areas that align with and 
support the goals and objectives of the policy. By leveraging these 
appropriate mission objectives with those of other agencies, DOD is 
supporting and contributing to the goals and objectives defined by 
Executive Order 13547, Stewardship of the Ocean, Our Coasts, and the 
Great Lakes. For example, DOD informed the National Ocean Council that 
it is concerned about climate change for multiple reasons, and that sea 
level rise must be planned for and adapted to at multiple bases that 
are located in the coastal zone. The Department specifically said that 
it would leverage the work of the Strategic Environmental Research and 
Development Program (SERDP), which estimates the potential effects of 
sea level rise.
                   congressman flores to secdef hagel
Question No. 8: National Ocean Policy
    Question: Section 6(b) of Executive Order 13547\4\ that established 
the National Ocean Policy in July 2010 requires ``[e]ach executive 
department, agency, and office that is required to take actions under 
this order shall prepare and make publicly available an annual report 
including a concise description of actions taken by the agency in the 
previous calendar year to implement the order, a description of written 
comments by persons or organizations regarding the agency's compliance 
with this order, and the agency's response to such comments.''\5\ 
Pursuant to this requirement, have DOD and the Chairman of the Joint 
Chiefs of Staff--both members of the National Ocean Council--prepared 
and made publicly available any such annual report for calendar years 
2010, 2011, or 2012? If so, please describe the findings and contents 
of such reports, and if not, why has this not occurred?
---------------------------------------------------------------------------
    \4\ See http://www.whitehouse.gov/files/documents/2010stewardship-
eo.pdf.
    \5\ Federal entities required to take actions pursuant to Executive 
Order 13547 include members of the National Ocean Council, comprised of 
the Departments of State, Defense, Interior, Agriculture, Health and 
Human Services, Commerce, Labor, Transportation, Energy, Homeland 
Security, and Justice, the Administrators of the Environmental 
Protection Agency and National Aeronautics and Space Administration, 
the Chairs of the Council on Environmental Quality, Federal Energy 
Regulatory Commission, and Joint Chiefs of Staff, the Directors of the 
Office of Management and Budget, National Intelligence, the Office of 
Science and Technology Policy (OSTP), and the National Science 
Foundation, the Under Secretary of Commerce for Oceans and Atmosphere 
(NOAA Administrator), the Assistants to the President for National 
Security Affairs, Homeland Security and Counterterrorism, Domestic 
Policy, Economic Policy, and Energy and Climate Change, and a federal 
employee designated by the Vice President.

    Answer: DOD and the Chairman of the Joint Chiefs of Staff submitted 
materials to the White House Council on Environmental Quality (CEQ) and 
the White House Office of Science and Technology Policy (OSTP) for 
2010, 2011, and 2012 for inclusion in the Federal Ocean and Coastal 
Activities Report (FOCAR). DOD provided CEQ and OSTP with material for 
the 2012 report in August 2012. DOD reported on the activities of the 
Office of Naval Research, Naval Ocean Sciences, Applied Ocean Research, 
National Oceanographic Partnership Programs (NOPP), Marine Mammal, 
Oceanography, and Geospatial Information and Services programs.
                   congressman flores to secdef hagel
Question No. 9: National Ocean Policy
    Question: The recommendations adopted by the National Ocean Policy 
Executive Order state that effective implementation will require 
``clear and easily understood requirements and regulations, where 
appropriate, that include enforcement as a critical component.''\6\ In 
addition, the Executive Order requires federal entities including DOD 
and the Chairman of the Joint Chiefs of Staff to implement the policy 
to the fullest extent possible. At the same time, the National Ocean 
Council has stated that the National Policy ``does not establish any 
new regulations or restrict any ocean uses or activities.''\7\ What if 
any commitment can you make that DOD and its affiliate branches will 
not issue any regulations or take any actions having a regulatory 
impact pursuant to the National Ocean Policy, including Coastal and 
Marine Spatial Planning?
---------------------------------------------------------------------------
    \6\ See page 30 at http://www.whitehouse.gov/files/documents/OPTF--
FinalRecs.pdf.
    \7\ See http://www.whitehouse.gov/administration/eop/oceans/faq.

    Answer: In order to comply with environmental laws, such as the 
National Environmental Policy Act (NEPA), the Marine Mammal Protection 
Act (MMPA), the Endangered Species Act (ESA), and the Coastal Zone 
Management Act (CZMA), the Department engages in numerous environmental 
planning activities while executing its title 10 mission. Relative to 
its title 10 mission, DOD and its components are regulated entities and 
do not issue regulations or take actions that have regulatory impact 
pursuant to the National Ocean Policy. The U.S. Army Corps of Engineers 
does exercise regulatory responsibilities under title 33 (Corps Civil 
Works / Regulatory mission) in navigable waters, but does not report to 
the Secretary of Defense for these activities. The U.S. Army Corps of 
Engineers will continue to operate under its existing authorities, and 
any new regulations would be issued on a case-by-case basis independent 
of the National Ocean Policy.
                    congressman rice to secdef hagel
Question No. 10: Survivor Benefits
    Question: Secretary Hagel, I would like to ask you about Survivor 
Benefits for members of the Guard and Reserve who die while performing 
their primary mission on an Inactive Duty Training (IDT) status. My 
understanding is that there is a longstanding inequity in the 
calculation for survivor annuities of reserve personnel killed while 
performing inactive duty training and this concerns me. The families of 
anyone who perishes while wearing the uniform--whether on an IDT status 
or active duty status--deserves to have their survivor benefits 
calculated with consistency and equity.
    A hypothetical based on current law could be the way Survivor 
Benefits Plan (SBP) would be calculated for two Air Force Majors, both 
with 18 years of service. Let's assume Major A is on Active Duty orders 
and Major B is a reservist on IDT status. If both Major A and Major B 
are piloting a T-38 and that T-38 is involved in an unforeseen incident 
that results in the deaths of both Major A and Major B--SBP annuity 
payments for Major A and Major B will be calculated differently, 
despite being killed in the same incident. The surviving spouse of 
Major A would receive an annuity of $2,908 per month, while the 
surviving spouse of Major B would receive an annuity of just $969 per 
month. This type of inequity for the families of a loved one who 
perished while serving their country is wrong and needs to be corrected 
and fixed for those who have died and those who may die.
    1. What efforts has the Department of Defense made to end this 
survivor annuity inequity between Active Duty orders and IDT status?
    2. Are you aware of a bill I authored with Rep. Jason Chaffetz--
H.R. 1770--that would provide the necessary legislative fix for this 
inequity? This bill would also include retroactive payments for the 98 
families who had loved ones die while assigned an IDT status and have 
been receiving either a reduced or no annuity. According to a 
Congressional Budget Office (CBO) score in the 112th Congress, this 
legislation would have a cost of $12 million over the 10-year budget 
window--$1 million in retroactive payments and $11 million in future 
annuity payments. This bill is also being heavily supported by the 
Military Coalition, which as you know, includes 33 uniformed services 
and veterans associations representing more than 5.5 million current 
and former servicemembers and their families and survivors.
    3. Would the Department of Defense support the efforts of HR 1770, 
including the retroactive payments for the 98 families?
    4. Will the Department of Defense officially request that Congress 
find a legislative fix to this inequality between IDT and Active Duty--
either in future budget submissions or other means? If so, will the 
Department of Defense assist the Congress to identify an acceptable $12 
million offset in Department of Defense mandatory/direct spending?

    Answer: We are aware of the concern you raise and of the bill you 
co-sponsored, H.R. 1770. The Department does not support H.R. 1770 and 
believes the retroactive provision in the bill could create significant 
unintended consequences.
    At this time, we are complying with current law regarding the 
Survivor Benefit Plan (SBP) and acknowledge the differences in the 
annuity calculation. The Services are currently reviewing the 
discrepancy between Active Duty and Inactive Duty Training (IDT) 
survivor annuities and will make a recommendation to me on whether or 
not to maintain status quo. If we conclude a change is necessary to 
address this issue, we will submit a request for legislation.
                     chairman ryan to secdef hagel
Question No. 11: Afghanistan
    Question: Recently we have seen several high-profile Taliban 
attacks. The Afghanistan NGO Safety Office reported that Taliban 
attacks are up 47 percent from this time last year. Do you consider 
this increase in attacks significant? Why has the military stopped 
publishing data on the volume of enemy attacks? What metrics are you 
using to determine whether we're making progress? Is there a level of 
violence that would necessitate revising the current drawdown plans?

    Answer: The Department of Defense (DOD) assesses the level of 
violence in Afghanistan using data from many data sources, including 
reports from the International Security Assistance Force (ISAF) and the 
Intelligence Community. DOD neither uses ``Afghanistan NGO Safety 
Office (ANSO)'' data, nor does it have insight into ANSO's methods of 
collection, level of fidelity, impartiality, or accuracy. The ISAF 
metric that appears to be most similar to the ANSO ``Armed Opposition 
Group attacks'' metric is Enemy Initiated Attacks (EIAs). Between 
October 1, 2012, and March 31, 2013, ISAF reported no change in EIA 
levels when compared to October 1, 2011, through March 31, 2012.
    The Department no longer uses nationwide EIA totals, and historical 
comparisons of these totals, as a main metric of success in 
Afghanistan. In the past, ISAF public reporting and media coverage of 
the conflict in Afghanistan relied too heavily on EIA reporting as a 
``scoreboard'' for progress. DOD's primary assessment of the conflict 
in Afghanistan, the semi-annual report to Congress on ``Progress Toward 
Security and Stability in Afghanistan,'' draws from a wide array of 
security, governance, and economic metrics that provide a more 
comprehensive picture of the overall situation than the total number of 
EIAs. These metrics include: improvised explosive device events, direct 
fire attacks, high-profile attacks, complex attacks, indirect-fire 
attacks, civilian casualties, Afghan National Security Force (ANSF) 
capability ratings, ANSF operational reporting, ANSF facilities 
construction and maintenance, ANSF funding, ANSF recruitment, GDP 
growth rates, population polling, international community donations to 
Afghanistan, Afghan government budget execution rates, school 
attendance, economic infrastructure build, cell phone usage, counter-
narcotics indicators, health indicators, and many other metrics and 
indicators. A tally of EIAs is not now, nor was it ever, the most 
complete measure of the campaign's progress. At a time when more than 
80 percent of EIAs are happening in areas where less than 20 percent of 
Afghans live, this single facet of the campaign is less relevant in 
evaluating progress against the insurgency.
    There is no pre-set level of violence that would necessitate 
revising the Department's plans to execute President Obama's direction 
announced in February 2013 that the United States reduce force levels 
in Afghanistan by 34,000 personnel by February 2014--a level one-half 
the size of U.S. forces in Afghanistan at the time of the announcement. 
This timeline provides support to the ANSF through two crucial Afghan-
led fighting seasons, as well as assist the ANSF during the 2014 
election period, the success of which is critical to the long-term 
stability of Afghanistan. The pace and size of this drawdown of U.S. 
forces is consistent with the recommendation of Commander, ISAF to draw 
down in a manner that protects our forces and maintains the gains of 
the past two years. These drawdown plans are based upon a comprehensive 
analysis of the situation in Afghanistan, of which violence levels are 
only one of many factors considered.
                     chairman ryan to secdef hagel
Question No. 12: Afghanistan
    Question: In FY 2013, the Department of Defense faced a $12 billion 
shortfall in funds available for prosecution of the war in Afghanistan. 
Please quantify the contributing factors to this shortfall. What steps 
were taken in preparing the FY 2014 war funding request to ensure there 
would not be another shortfall in FY 2014?

    Answer: The Department is experiencing higher-than-expected costs 
in FY 2013 war spending because operating tempo in Afghanistan and 
transportation costs are higher than anticipated when preparing the war 
budget 2 years ago. The Department estimates a $7 to $10 billion 
shortfall for FY 2013, and continues to refine this estimate based on 
operational needs. The contributing factors include greater than 
expected requirements for:
     In-theater maintenance providing organizational and 
intermediate level maintenance repairs on various air, ground, and 
support equipment;
     The Logistics Civil Augmentation Program providing 
operational support to the warfighter and other support personnel in 
the form of food preparation, power generation, and other basic life 
support functions;
     Base communications throughout the U.S. Central Command 
area of responsibility for network operations, satellite communication 
bandwidth and transmissions, air traffic control landing system 
support, and teleconferencing;
     Base and facilities operations, transportation and storage 
of perishable foods in theater, air operations, and other activities 
that sustain vital mission capability; and
     Military operations including increases in the number of 
flying hours being flown, changes in Military Service mix, e.g., less 
Marine Corps but more Army, and other operating tempo changes;
    In preparing the FY 2014 Overseas Contingency Operations (OCO) 
request, the Department made every effort to ensure all anticipated war 
costs are included and reflects the most current military assumptions 
available for FY 2014.
                      chairman ryan to gen dempsey
Question No. 13: Defense Efficiencies
    Question: In response to a question from Mr. Rokita, General 
Dempsey testified that a significant factor in the increase in the 
number of civilians employed by the Joint Staff was due to the 
disestablishment of Joint Forces Command and the absorption of civilian 
employees from JFCOM into the Joint Staff. One reason cited for closing 
JFCOM was to reduce costs. Please provide an itemized estimate of the 
savings achieved by disestablishing JFCOM net of any costs that were 
assumed by other elements of the Department of Defense.

    Answer: The disestablishment of JFCOM provided an estimated savings 
of approximately $292M for FY12 and $1.9B for FY12-FY16. See below for 
details:

                                             [Dollars in thousands]
----------------------------------------------------------------------------------------------------------------
                   Program                       FY12        FY13       FY14       FY15       FY16       Total
----------------------------------------------------------------------------------------------------------------
Operating Forces (USA)......................          $8        $18        $28        $39        $39        $132
Operating Forces (USN)......................    $120,626   $127,887   $135,144   $138,066   $140,363    $662,086
Admin & Service-Wide Activities (USN).......     $23,265    $29,477    $29,978    $30,488    $31,006    $144,214
Operating Forces (USAF).....................      $6,546     $8,639     $8,836     $9,059     $9,213     $42,293
Operating Forces (SOCOM)....................      $1,861     $3,179     $2,235     $2,292     $2,347     $11,914
Admin & Service-Wide Activities (DIA).......     $16,313    $17,926    $18,300    $18,872    $18,628     $90,039
Admin & Service-Wide Activities (OSD).......     $15,800    $31,349    $26,966    $24,985    $25,410    $124,510
Personnel & Command Support Equipment (USN).      $3,998     $3,395     $4,581     $9,996     $9,423     $31,393
Electronics & Telecommunications Equipment          $917       $931       $937       $951       $967       4,703
 (USAF).....................................
Major Equip (DIA)...........................        $900          0          0          0          0        $900
Major Equip (OSD)...........................     $20,604    $25,123    $20,432    $20,151    $19,282    $105,592
Operational System Development (USAF).......      $3,319     $4,011     $4,068     $4,124          0     $15,522
Advanced Technology Development (OSD).......     $54,215    $61,868    $62,816    $63,984    $66,374    $309,257
Advanced Component Development & Prototypes      $13,177    $15,886    $16,090    $16,281    $16,971     $78,405
 (OSD)......................................
Management Support (OSD)....................     $42,493    $43,465    $39,994    $37,126    $36,627    $199,705
Operational System Development (OSD)........     $17,481    $19,674    $19,629    $20,203    $21,097     $98,084
                                             -------------------------------------------------------------------
      Total.................................   *$341,523   $392,828   $390,034   $396,617   $397,747  $1,918,749
----------------------------------------------------------------------------------------------------------------
*The savings of $292M for FY12 was calculated by taking the $341,523 referenced above and subtracting the $49M
  the Joint Staff received in FY12 from Resource Management Decision 703A2 (JFCOM Disestablishment Costs).

                      chairman ryan to gen dempsey
Question No. 14: Defense Efficiencies
    Question: General Dempsey's prepared statement noted that given 
recent budget reductions ``everything must be on the table'' and 
specifically noted that included civilian force reductions. Please 
specify what additional statutory authorities DOD need to efficiently 
reduce the size of its civilian workforce.

    Answer: No additional statutory authorities are needed to reduce 
the size of the DOD Civilian workforce. Civilian reduction in force 
regulatory guidance is contained in Title 5, Code of Federal 
Regulations, Part 351. The Secretary of Defense has the authority to 
decide whether or not a RIF is necessary, and when the RIF will take 
place.
               chairman ryan to secdef hagel, usd(c) hale
Question No. 15: Defense Management
    Question: In response to my question, Under Secretary Hale 
testified that the planned reduction in DOD's civilian workforce ``is 
heavily dependent on BRAC.'' The DOD civilian workforce has increased 
17% since 2001. During that same time period, no new domestic bases 
were established and DOD executed Base Realignment and Closure (BRAC 
2005 which was arguably more extensive than all four previous BRAC 
rounds combined as it involved 24 major base closures, 24 major 
realignments, and 765 minor closures and realignments. The evidence 
does not suggest that BRAC necessarily leads to a smaller civilian 
workforce. Given the compressed time available for the hearing, I 
wanted to provide you an opportunity to explain this seeming 
discrepancy.

    Answer: The BRAC 2005 focus was realignment and consolidation of 
infrastructure, not on closures necessitated by force structure 
reductions. A more appropriate comparison of the BRAC requested in the 
FY 2014 President's Budget is to BRAC 93/95. The focus for those BRAC 
rounds was on shedding excess Cold War infrastructure of which 
generated approximately 36,000 civilian full-time equivalent 
reductions.
    The BRAC requested in the FY 2014 President's Budget will allow the 
DOD to rightsize and align its infrastructure to the needs of its 
evolving force structure, which is critical to ensuring that limited 
resources are available for the highest priorities of the warfighter 
and national security. The BRAC authorization is required to meet the 
fiscal limitation of statutory spending caps, while providing important 
assistance to affected communities.

    [Whereupon, at 2:55 p.m., the committee adjourned subject 
to the call of the Chair]

                                  
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