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






 COAST GUARD READINESS: EXAMINING CUTTER, AIRCRAFT, AND COMMUNICATIONS 
                                 NEEDS

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

                                (113-26)

                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
                COAST GUARD AND MARITIME TRANSPORTATION

                                 OF THE

                              COMMITTEE ON
                   TRANSPORTATION AND INFRASTRUCTURE
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             JUNE 26, 2013

                               __________

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             COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

                  BILL SHUSTER, Pennsylvania, Chairman
DON YOUNG, Alaska                    NICK J. RAHALL, II, West Virginia
THOMAS E. PETRI, Wisconsin           PETER A. DeFAZIO, Oregon
HOWARD COBLE, North Carolina         ELEANOR HOLMES NORTON, District of 
JOHN J. DUNCAN, Jr., Tennessee,          Columbia
  Vice Chair                         JERROLD NADLER, New York
JOHN L. MICA, Florida                CORRINE BROWN, Florida
FRANK A. LoBIONDO, New Jersey        EDDIE BERNICE JOHNSON, Texas
GARY G. MILLER, California           ELIJAH E. CUMMINGS, Maryland
SAM GRAVES, Missouri                 RICK LARSEN, Washington
SHELLEY MOORE CAPITO, West Virginia  MICHAEL E. CAPUANO, Massachusetts
CANDICE S. MILLER, Michigan          TIMOTHY H. BISHOP, New York
DUNCAN HUNTER, California            MICHAEL H. MICHAUD, Maine
ERIC A. ``RICK'' CRAWFORD, Arkansas  GRACE F. NAPOLITANO, California
LOU BARLETTA, Pennsylvania           DANIEL LIPINSKI, Illinois
BLAKE FARENTHOLD, Texas              TIMOTHY J. WALZ, Minnesota
LARRY BUCSHON, Indiana               STEVE COHEN, Tennessee
BOB GIBBS, Ohio                      ALBIO SIRES, New Jersey
PATRICK MEEHAN, Pennsylvania         DONNA F. EDWARDS, Maryland
RICHARD L. HANNA, New York           JOHN GARAMENDI, California
DANIEL WEBSTER, Florida              ANDRE CARSON, Indiana
STEVE SOUTHERLAND, II, Florida       JANICE HAHN, California
JEFF DENHAM, California              RICHARD M. NOLAN, Minnesota
REID J. RIBBLE, Wisconsin            ANN KIRKPATRICK, Arizona
THOMAS MASSIE, Kentucky              DINA TITUS, Nevada
STEVE DAINES, Montana                SEAN PATRICK MALONEY, New York
TOM RICE, South Carolina             ELIZABETH H. ESTY, Connecticut
MARKWAYNE MULLIN, Oklahoma           LOIS FRANKEL, Florida
ROGER WILLIAMS, Texas                CHERI BUSTOS, Illinois
TREY RADEL, Florida
MARK MEADOWS, North Carolina
SCOTT PERRY, Pennsylvania
RODNEY DAVIS, Illinois
MARK SANFORD, South Carolina
                                ------                                

        Subcommittee on Coast Guard and Maritime Transportation

                  DUNCAN HUNTER, California, Chairman
DON YOUNG, Alaska                    JOHN GARAMENDI, California
HOWARD COBLE, North Carolina         ELIJAH E. CUMMINGS, Maryland
FRANK A. LoBIONDO, New Jersey        CORRINE BROWN, Florida
PATRICK MEEHAN, Pennsylvania         RICK LARSEN, Washington
STEVE SOUTHERLAND, II, Florida,      TIMOTHY H. BISHOP, New York
  Vice Chair                         JANICE HAHN, California
TOM RICE, South Carolina             LOIS FRANKEL, Florida
TREY RADEL, Florida                  NICK J. RAHALL, II, West Virginia
MARK SANFORD, South Carolina           (Ex Officio)
BILL SHUSTER, Pennsylvania (Ex 
    Officio)


















                                CONTENTS

                                                                   Page

Summary of Subject Matter........................................    iv

                               TESTIMONY
                                Panel 1

Vice Admiral John P. Currier, Vice Commandant, United States 
  Coast Guard....................................................     3

                                Panel 2

Ronald O'Rourke, Specialist in Naval Affairs, Congressional 
  Research Service...............................................    22
Steven P. Bucci, Ph.D., Director, Douglas and Sarah Allison 
  Center for Foreign Policy, The Heritage Foundation.............    22
Lawrence Korb, Ph.D., Senior Fellow, Center for American Progress    22

           PREPARED STATEMENT SUBMITTED BY MEMBER OF CONGRESS

Hon. John Garamendi, of California...............................    32

 PREPARED STATEMENTS AND ANSWERS TO QUESTIONS FOR THE RECORD SUBMITTED 
                              BY WITNESSES

Vice Admiral John P. Currier:

    Prepared statement...........................................    33
    Answers to questions from Hon. Duncan Hunter, of California..    37
Ronald O'Rourke, prepared statement..............................    41
Steven P. Bucci, Ph.D., prepared statement.......................    52
Lawrence Korb, Ph.D., prepared statement.........................    57

                       SUBMISSIONS FOR THE RECORD

Vice Admiral John P. Currier, Vice Commandant, United States 
  Coast Guard, responses to two requests for information from 
  Hon. Rick Larsen, a Representative in Congress from the State 
  of Washington..................................................    12
Lawrence Korb, Ph.D., Senior Fellow, Center for American 
  Progress, request to submit ``Rebalancing Our National 
  Security: The Benefits of Implementing a Unified Security 
  Budget''.................................................. \\

                         ADDITION TO THE RECORD

Lawrence Korb, Ph.D., Senior Fellow, Center for American 
  Progress, request to submit ``Building a U.S. Coast Guard for 
  the 21st Century''................................ \\

----------
\\ Task Force on a Unified Security Budget, Center for 
  American Progress, Rebalancing Our National Security: The 
  Benefits of Implementing a Unified Security Budget (October 
  2012) can be found online at: http://www.americanprogress.org/
  wp-content/uploads/2012/10/UnifiedSecurityBud- get.pdf.
\\ Lawrence J. Korb et al., Building a U.S. Coast 
  Guard for the 21st Century (June 2010) can be found online at: 
  http://www.americanprogress.org/wp-content/uploads/issues/2010/
  06/pdf/coast_guard.pdf.



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 COAST GUARD READINESS: EXAMINING CUTTER, AIRCRAFT, AND COMMUNICATIONS 
                                 NEEDS

                              ----------                              


                        WEDNESDAY, JUNE 26, 2013

                  House of Representatives,
          Subcommittee on Coast Guard and Maritime 
                                    Transportation,
            Committee on Transportation and Infrastructure,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 10:00 a.m., in 
Room 2167, Rayburn House Office Building, Hon. Duncan Hunter 
(Chairman of the subcommittee) presiding.
    Mr. Hunter. The subcommittee will come to order.
    The subcommittee is meeting today to review the Coast 
Guard's major acquisitions programs. The Coast Guard's effort 
to recapitalize its aircraft, vessels, and communications 
systems has suffered through some dark days. Fortunately, under 
the leadership of Admiral Papp and his predecessor, Admiral 
Allen, the program has turned the corner and the Service is 
finally taking delivery of new and improved assets in a cost-
effective manner.
    Unfortunately, just as the men and women of the Coast Guard 
are finally getting the new and improved assets promised to 
them nearly 20 years ago, the President is proposing a budget 
that will set the program back another 15 to 20 years. The 
President guts the Coast Guard's acquisition budget, cutting it 
by 42 percent below the current level. The President's request 
proposes to terminate or delay the acquisition of critically 
needed replacement assets. This will increase acquisition costs 
for taxpayers, place further strain on the Service's aging and 
failing legacy assets, exacerbate growing capability gaps, and 
seriously degrade mission effectiveness.
    As this subcommittee has continually highlighted, the Coast 
Guard currently operates tens and, in some cases, hundreds of 
thousands of hours short of its operational targets. This means 
assets are not there for the Service to conduct drug and 
migrant interdiction, protect our environment, secure our 
ports, or ensure the safety of our waterways.
    For instance, the Coast Guard reported that due largely to 
its failing legacy assets, it was forced to reduce hours spent 
conducting drug interdiction activities by 65 percent in recent 
fiscal years. The only way to reverse the decline in the Coast 
Guard's mission performance is to make the necessary 
investments to acquire new and improved assets.
    Unfortunately, based on the last couple of budget requests, 
it appears this administration refuses to make those 
investments. If that is the case, then it is time for the 
President to tell Congress what missions the Coast Guard will 
no longer conduct. It is simply irresponsible to continue to 
send our service men and women out on failing legacy assets 
commissioned over 50 years ago and expect them to succeed in 
their missions.
    I thank the witness for appearing today and look forward to 
your testimony.
    With that, I yield to Ranking Member Garamendi.
    Mr. Garamendi. Thank you, Chairman Hunter.
    And to all the witnesses that are appearing today, thank 
you very much for the testimony that you will soon be giving 
us.
    As we turn our attention this morning to focus once again 
on the status of the Coast Guard's long-range program to 
recapitalize its aging fleets of surface ships and aircraft and 
to improve its communications and intelligence technology for 
the 21st century, we are keeping in mind the extraordinary 
budget challenges that we are facing--``we'' are facing. It is 
not just the administration. It is this Congress as well.
    As we discovered during the subcommittee's April 16 hearing 
concerning the administration's fiscal year 2014 budget request 
for the Coast Guard, we are simply not providing the Coast 
Guard with the resources it needs to fulfill its many missions. 
Failing that, it is folly for us to believe the Coast Guard 
will be able to adequately maintain operations and, 
importantly, sustain the progress in its $29 billion 
recapitalization strategy, the largest such initiative in the 
Coast Guard's storied history.
    So the predicament we find ourselves in is not entirely the 
Coast Guard's making, nor can it be attributed to any one 
factor. And as you, Admiral Currier, will soon be testifying, 
at least from your written testimony, the Coast Guard is doing 
its utmost to wisely utilize the resources that are 
appropriated by this Congress to address the most pressing 
problems and priorities that you have.
    But the fact remains, if we continue on the same course we 
will accomplish little but to hollow out the capabilities of 
our guardians of the sea. And the warning signals are there. We 
are approaching that tipping point, and it is abundantly clear. 
The fiscal year 2014 budget requests for the acquisition 
construction improvement account is only $909 million. This is 
$600 million less than the funding levels authorized in last 
year's Coast Guard Maritime Transportation Act and $1.1 billion 
less than the $2 billion funding level recommended for the ACI 
account by the Navy League of the United States in the 2013 
maritime policy statement.
    Additionally, we are seeing certain acquisition programs 
prematurely terminated and the timetables for other programs 
pushed further into the future. Moreover, the Coast Guard now 
faces an imminent gap in operational capability as its aging 
legacy assets are pressed far beyond their service life. The 
new assets are going to be very late in arrival.
    Mr. Chairman, this is a very important hearing. I thank you 
for calling it. We have a lot of work to do. I look forward to 
the testimony. And I look forward to avoiding the hollowing out 
of the Coast Guard. Thank you. Yield back.
    Mr. Hunter. I thank the ranking member.
    Our first panel is one witness, Vice Admiral John Currier, 
Vice Commandant of the United States Coast Guard.
    Admiral, you are recognized for your statement.

  TESTIMONY OF VICE ADMIRAL JOHN P. CURRIER, VICE COMMANDANT, 
                   UNITED STATES COAST GUARD

    Admiral Currier. Thank you, Mr. Chairman, Mr. Garamendi, 
other members of the panel. I ask that my written testimony be 
entered into the record.
    Chairman Hunter, Ranking Member Garamendi, members of the 
subcommittee, good morning, and thank you for the opportunity 
to speak today.
    In our mission set, our men and women are amongst the most 
dedicated, well trained, and highly skilled in the world, and 
we owe them our very best efforts to continue to provide the 
support and the tools they need to execute maritime governance 
and sovereignty for our Nation. Not only do we owe the men and 
women of the Coast Guard the tools they need to do their job, 
we owe them an environment of trust. And I would like to take 1 
minute just to talk about that.
    We have respect. We have core values. But most importantly, 
we have trust in our workforce. In our business, trust is a 
priceless attribute. I can tell you from years past, being a 
helicopter pilot, that the trust that the crew holds when you 
are out on a hazardous mission is absolutely priceless, and it 
is essential to the accomplishment of the mission.
    When it comes to sexual assault, an issue that has received 
a lot of attention of late, we have been working this issue for 
a long time. It is a matter of trust in our workforce. I want 
to take the opportunity to assure you that the Commandant and I 
are wholeheartedly committed to eliminating the crime of sexual 
assault from the Coast Guard. It is our number one priority.
    But I know we are here today to talk about acquisition. Let 
me start by thanking you for the stalwart support of this 
subcommittee for our service and the accomplishments of our 
mission. The oversight and advocacy from this subcommittee has 
been essential to the remarkable progress we have made in our 
recapitalization efforts to date. The Coast Guard remains 
committed to sustaining our most critical frontline operations 
while funding our most needed acquisition projects.
    In the current fiscal environment, this requires difficult 
choices. With that in mind, we are balancing funding for our 
acquisition projects and operating budgets to address our 
highest strategic priorities in the areas we see as greatest 
risk.
    Our motivated men and women are already seeing the tangible 
benefits of our capabilities that have been introduced to the 
fleet through our recapitalization programs. A case in point, 
recently the crew of the Coast Guard cutter Bertholf employed a 
ship-based unmanned aerial vehicle to support the interdiction 
of a go-fast smuggling vessel. The Bertholf's crew orchestrated 
a seamless aerial surveillance that involved MPA fixed-wing 
aircraft, a ScanEagle UAS that was undergoing prototype 
testing, handed off to an armed helicopter, who handed off to a 
Long Range Interceptor who actually did the stop, the arrest, 
and the interdiction. Ended up yielding 600 kilos of virgin 
cocaine. This is exactly how the system should work, and we are 
very gratified to see this.
    The level of interoperability was simply not available with 
our legacy assets. It demonstrates how we apply these updated 
capabilities to defeat the threats in the offshore environment. 
And I would underscore the offshore environment is our area of 
greatest risk.
    A key element to our layered security regime is persistent 
presence in the offshore to deter, detect, to interdict, and to 
neutralize threats before they reach our shorelines.
    Completing acquisition of the National Security Cutters and 
development of an affordable Offshore Patrol Cutter fleet are 
critical to the Coast Guard's continued ability to address 
threats and protect national interests in the offshore maritime 
environment. Our mission set can be particularly challenging in 
some of the harsh environmental conditions in which we operate. 
Often the question can be asked, if not the Coast Guard, then 
who?
    We continue to enhance efficiency across the acquisition 
portfolio, building on our previous experience and 
incorporating lessons learned to minimize risk and maximize the 
affordability in our projects. We have achieved stability in 
cost and schedule across our largest programs, as evidenced by 
the recent fixed-price production contract on the sixth 
National Security Cutter, which was awarded at near the same 
price as NSCs four and five. This underscores the benefits of 
predictable funding and timely contract award. The on-time 
delivery of our six Fast Response Cutters, which are already 
successfully in service in the 7th District, the Miami/
Caribbean AOR, is further testament to our focus on 
implementing best practices across the acquisition portfolio.
    In the aviation fleet, we have recently accepted the 15th 
Maritime Patrol Aircraft, the HC-144, on budget and on 
schedule. We continue to sustain and upgrade the legacy rotary-
wing fleet with critical system enhancements that will equip 
aircrews with the capabilities necessary to execute our 
missions for the next decade-plus. Should they become 
available, we are very excited and poised to accept up to 21 C-
27J aircraft from the Air Force. The business case for 
assimilating these aircraft in the Coast Guard inventory is 
strong, with a potential of $500 million to $800 million in 
cost avoidance depending on how many airframes are made 
available.
    We recently completed the rollout of the Rescue 21 
communications system along our Atlantic, Pacific, and Gulf 
Coasts, as well as the Great Lakes, Hawaii and Puerto Rico. 
This provides digital selective calling and a digitally based 
communication system that includes radio signal location 
information for over 41,000 miles of our U.S. coastline. We are 
leveraging Rescue 21 capabilities to develop a system 
specifically tailored to the unique requirements of Alaska and 
our inland Western River System. The Coast Guard recently 
reached a milestone of 50,000 search and rescue cases using the 
Rescue 21 capability.
    We continue to improve and standardize our small boat fleet 
through the delivery of the Response Boat-Medium and Response 
Boat-Small and delivery of our new standard Over-the-Horizon-
IV, or OTH class IV cutter boat as a common boat deployed on 
all our cutters larger than the 110-foot patrol boat. Our 
strategy is to limit our ship-borne small boat assets to two, a 
7-meter and an 11-meter RB for standardization and universal 
use across the cutter classes.
    I am very proud of the work of our acquisition 
professionals. They perform hard work and thankless work often 
on each day to efficiently acquire the assets and capabilities 
we need to serve the Nation.
    We continue to work hard to make necessary reforms and 
realize efficiencies within the acquisition programs. Despite 
the significant challenges, we must continue the work we 
started on acquisition and mission support reform and keep our 
eyes fixed on the horizon.
    Our goal, which was set in 2006, was to become a model 
midsized Federal agency for acquisition process and results, 
and I truly believe we have achieved that goal. I believe that 
with predictable funding we can acquire these needed 
capabilities efficiently. Your support and predictable funding 
of these projects is absolutely critical.
    Clearly, we have to make difficult decisions moving forward 
in this environment. We will continue to make the best use of 
our resources and abilities to provide safe and effective 
conduct of our operations in the areas that we see of greatest 
risk to the Nation. To the best of our ability, we will 
recapitalize our cutters, boats, and aircraft to address 
current and emerging threats, particularly in the area of 
greatest risk capabilities-wise, as I said, in the offshore 
environment.
    Thank you again, sir, for the opportunity to testify today. 
And thank you for your steadfast support of our Coast Guard. I 
look forward to answering your questions.
    Mr. Hunter. Thank you, Admiral, for your testimony. I am 
now going to recognize Members for questions, starting with 
myself.
    This subcommittee, I know before I came here, the previous 
chairman, Chairman LoBiondo, had hearings about Deepwater and 
about the acquisition system for years now, about the 
deplorable state of Coast Guard legacy assets, the negative 
impact that those old assets and the inability to recapitalize 
them has had on performance. The Inspector General, the GAO, 
and the Coast Guard have all testified over the last few years 
that the continued reliance on aging and failing legacy assets 
is robbing the Coast Guard of its ability to conduct its 11 
statutory missions.
    The Commandant has testified that the Service needs over $2 
billion annually to rebuild its assets, to recapitalize. Over 
the last decade, Congress has worked closely with each 
administration to increase annual funding for the acquisition 
program in an effort to reach that goal, even working through 
the problems after Deepwater, getting those straightened out, 
and saying, OK, now we have a good way ahead.
    Unfortunately now this year, as we are finally, I would 
say, on a nice flat plain, making progress, the administration 
sends us a budget and capital investment plan that cuts our 
knees out from under us, that cuts the Coast Guard's knees out 
from under it. If the administration is prepared to underfund 
and delay the recapitalization of the Coast Guard's assets by 
another decade, then it needs to tell us, Congress, and it 
needs to tell you, the Coast Guard, which missions you will no 
longer be asked to do.
    My question is, out of your 11 statutory missions, which 
ones will the Service no longer be able to accomplish if 
funding remains the way it was this year? Without Congress' 
help, where you lose half of your recapitalization budget, and 
if your funding stays at $900 million a year going forward, and 
we are unable to put that money back in there, which missions 
are you not going to do?
    I am sure the Coast Guard has looked at this because over 
the last few years every report that I have read, the end of it 
says, the Coast Guard needs to reexamine which missions it 
chooses to do based on the real life--and not the Coast Guard's 
strategy but the real life and the reality of the lack of 
funding, things like the OPC. Do we need to look at the OPC? 
What does it really need to do? Does it need to be in sea state 
5? Does it need to be a smaller NSC? Or can we get by with 
having it be less capable? So things like that. What has the 
Coast Guard determined that its missions can be with the lack 
of funding that it is going to receive over the next decade 
based on funding this year?
    Admiral Currier. Thank you for that question, Mr. Chairman. 
I would say this: The Coast Guard is statutorily charged with 
11 missions, 11 core missions. They aggregate into maritime 
safety, maritime security, protection of the environment. We 
site our requirements to perform to a level of capacity across 
that 11-mission set. Depending on the resources that we 
receive, from an operational perspective in the near term, we 
can adjust capacity around the 11 mission capabilities that we 
have.
    But there are two issues here: One is what we do today and 
the other one is what we do tomorrow. Because there is a long-
term investment requirement to maintain the capacity to do 
capabilities in those 11 missions. So the two issues are: What 
are we doing today and how are we going to invest to ensure 
that we can do it tomorrow?
    I acknowledge the fact that there have been numerous 
reports, many of which have been oriented toward validation of 
the program of record that exists, and universally they have 
come out to date in support of the program of record as a 
reasonable approach. Given the economic times, the fiscal state 
of the economy, all the challenges that we are facing as a 
Nation, of which we fully recognize, we are not tone-deaf to 
that, we think that the current budget demands of us tough 
choices, tough choices on where we apply critical funds to the 
area we see as the highest level of risk.
    The highest level of risk has been identified in our 
portfolio as the offshore segment of our layered defense 
strategy. So we are driven to, we are required to make tough 
choices going into the future on what investments can we afford 
to and what will we make to maintain a capacity across our 11 
missions into the future?
    Quite frankly, were the recapitalization funding level to 
remain as it is into the future or be decremented, then that 
would require tough choices that put us in a situation where we 
will have to go back and say, there are areas that we can't 
perform in. And over multiple years, we will end up being a 
Coast Guard that looks different from today.
    Mr. Hunter. Where are those areas? The ones that you just 
mentioned, your last sentence.
    Admiral Currier. The administration and the Department this 
year--and the Department and Secretary Napolitano has been 
particularly supportive of us through this in our cutter 
recapitalization in particular--but what we have been asked to 
do is to accomplish a portfolio review which basically is to 
take what you described as the GAO findings and reassess where 
we are with our acquisition portfolio, apply it to our 
missions, and find out what we can do and what we can't do.
    Because each one of those mission areas are statutorily 
mandated, I don't feel that it is incumbent on us to say what 
we cannot do specifically capabilities-wise. Capacity-wise we 
can say we can only do so much. But this portfolio review is 
going to be designed to look at what we do mission-wise and 
look at how we are postured to provide that capacity both today 
and into the future. And I think the results of that portfolio 
review will start to answer the questions that you are asking.
    So it won't be the Coast Guard saying, we won't do this or 
we can't do this. It will be a combination of the 
administration and the Department and the Coast Guard coming to 
a rigorous analysis of, given the realities of funding into the 
future, what can and what can't we do?
    Mr. Hunter. When is that about portfolio review going to be 
completed?
    Admiral Currier. It has started. We have had meetings with 
OMB and the Department. So the effort started. We haven't 
totally agreed to when the product will come out. Part of it is 
dependent on the rigor that I described. We have models that we 
use that were the same models basically that set the force 
structure for Deepwater and our acquisition strategies to date. 
And we need to run the data through those models to come up 
with the effect on mission and the acquisition portfolio.
    So it is not just an arbitrary scan and cuts based on less 
than a rigorous analysis that is statistically based. It kind 
of goes back to what you were saying about, what do we really 
need for sea state 5? How many cutters do we need there? Show 
me the empirical case for that. And that is what we will be 
generating.
    Mr. Hunter. Great. Would you come back after you have 
completed that rigorous analysis?
    Admiral Currier. Absolutely. Yes, sir.
    Mr. Hunter. Thank you, Admiral.
    Mr. Garamendi is recognized.
    Mr. Garamendi. Mr. Chairman, following on your line of 
questions, if this budget scenario continues--this is, I think, 
the second year or maybe even the third year in which we have 
seen these kind of stresses placed on the budget, the 
acquisition budget, and now with sequestration on the 
operational budgets--we are going, this committee is going to 
have to seriously consider modifying the mission of the Coast 
Guard. And that is where this is headed.
    And you have raised that question, Mr. Chairman. And we 
really need to get into this in detail. The last question that 
you raised or the last few questions you have raised is 
imperative. I would hope it comes soon so that we can spend a 
good portion of our time in the remaining session this year to 
really get at that.
    And we need to understand the implications of it. Just this 
week, the Senate is dealing with border security in the 
immigration bill. And they have approved or are about to 
approve an amendment--I think they did approve an amendment 
that would add $46.3 billion to border security on the Mexican 
border. We have a lot more border than Mexico. We have all of 
the maritime border, which is increasingly being used for 
immigrants. I think there are many cases that the Coast Guard 
can talk about.
    It seems to me that as we go through this immigration 
issue, and if, in fact, we are going to spend $46 billion on 
border security on the land, we need to think seriously about 
the rest of the border. And we also need to think seriously 
about threats to, let's just call it nuclear threats. We are 
projected to spend some $5 billion on an east coast missile 
defense site which assumes that Iran is going to send a missile 
our way, which would then assume that Iran disappears from the 
map.
    However, the more likely event is to use the ports. If we 
are going to have a nuclear threat, it is not likely to come 
from a missile. It is likely to come from a container. So that 
brings us back to the role of the Coast Guard.
    Where I am headed here, Mr. Chairman, is that we, as the 
deciders--to use a word from the previous administration--as 
the people that are going to make these decisions, we need to 
think about this in a holistic way. The National Defense 
Authorization Act that passed off the floor of the House added 
$2.6 billion for unknown airplanes, materials, and supplies for 
the Afghan National Army. We would never let the Coast Guard 
have $2.6 billion without explaining to us in detail how they 
are going to spend it down to the last pencil and bolt. But we 
have allocated $2.6 billion to the Afghan National Army in 
unspecified use.
    The problem is here. The problem is among the 535 of us 
that are making, frankly, some very irrational decisions. And 
we need to really think seriously about how we are going to 
deal with this.
    Admiral, I think, to go back to you, beside my 
pontification here, you and the Coast Guard are going to have 
to explain to us how you are going to carry out the missions, 
the statutory missions that you are faced with given the fact 
that the Congress of the United States, together with the 
administration, is downsizing the Coast Guard. So what can be 
done? And we need to understand completely the implications of 
that. So when will you have that done?
    Admiral Currier. Sir, I think, as I said to the chairman, 
the portfolio review is going to reveal those answers. It is 
going to establish a position from the administration, the 
Department, and the Coast Guard on, given levels of funding, 
what we will be able to do and what we will not be able to do.
    I think a basic, if you don't mind, just a very brief 
understanding of how we operate, especially in the context of 
the threat that you described, is probably important. We have 
developed post-9/11 a very sophisticated layered strategy for 
the defense of our coastline and ports. It doesn't start 5 
miles off the beach. It starts in foreign ports. It starts with 
IMO-type agreements on security regimes in foreign ports and 
our inspection of those ports. It depends on intelligence from 
all-source throughout the U.S. Government and international 
partners on what are the anomalies on a container? What are the 
anomalies on a ship? And then it depends on a layered strategy 
for defense that starts offshore, because our goal would be to 
hold the threat away from our coast, to near shore, and to in 
the port.
    And I would tell you, in that layered strategy, which has 
proved to be quite effective, the weak link at this point is 
our offshore capability, and that translates to the NSC and 
OPC. So what we are saying is, we have laid out an acquisition 
strategy that has recapitalized successfully, and our in-the-
port, to a large extent, our in-the-port capability, our near-
shore coastal, and our overseas capability in partnership with 
other Government agencies and other nations is strong. It is 
the offshore capability that our ships present that are having 
the greatest decline in capacity and capability.
    Mr. Garamendi. So the bottom line of that is that the 
entire strategy has a serious flaw. That is, you are missing 
one of the key assets.
    Admiral Currier. Well, what it will show you, sir, is that 
as we are under fiscal duress like everyone else is in the 
Federal Government, we are going to make triage-like choices to 
go to that area of highest risk and spend the critical capital 
that we receive. And right now, that is why we are emphasizing 
the procurement of the NSCs and then the OPC follow-on. And we 
are fully, fully aware that the OPC program needs to be 
affordable.
    Mr. Garamendi. If I am not mistaken, for the National 
Security Cutters, the next one out is going to get delayed. Is 
that correct?
    Admiral Currier. We have long-lead funding for seven, and I 
have no information that there will be delays in follow-on 
cutters.
    Mr. Garamendi. So seven. How about eight?
    Admiral Currier. Eight? We don't have long-lead funding 
identified for eight, which would, if that were to be the case, 
result in about a year's delay and some cost increase.
    Mr. Garamendi. Given the way in which the budget is going, 
and without a significant change on our part and the 
administration's, you are headed into a long-term budget that 
is headed down. Will you be able to in that budget provide for 
the eighth cutter?
    Admiral Currier. Yes, sir, I believe we will. But it is 
going to be at great cost. And it is, as I said, it is a triage 
exercise.
    Mr. Garamendi. Well, this goes back to what the chairman 
was saying in his statement, is that we need to fully 
understand what the future is going to be here, and we need to 
have that in detail.
    Admiral Currier. Yes, sir.
    Mr. Garamendi. Because we are basically operating on 
yesterday's plan, which is not consistent with the current 
reality. And my point to us, the 535 of us, is that we are 
making choices here about where to allocate the resources 
available for the United States Government. And, frankly, in my 
view, some of those choices are nonsense. And I made two 
points, $2.6 billion this coming year for the Afghan National 
Army to buy something. Mostly, I think it is probably to open 
another account in Qatar for the Karzai government.
    Let's move on. I yield back.
    Mr. Hunter. Thank the ranking member.
    I would like to recognize the former chairman of the 
subcommittee, Mr. LoBiondo.
    Mr. LoBiondo. Thank you, Mr. Chairman.
    I have a couple of questions, Admiral, but before I do that 
I want to just say, after having the opportunity to chair this 
subcommittee for 12 years, the budget that was sent to us is so 
separated from reality.
    I am a little bit concerned. I am agreeing with Mr. 
Garamendi here. I don't know how much we agree on. But this is 
so shortsighted. And this is out of your lane. You have got to 
take what comes down from the top. But for the record, do we 
not remember what happened on September 11? Do we not remember 
on September 10 the Coast Guard had no homeland security really 
to deal with? And on September 11, everything was ramped up and 
we knew that we had to have the Coast Guard prepared? And yet 
we are spending money in areas, as Mr. Garamendi said, that 
nobody can keep track of. And the few dollars extra that we 
could use for the Coast Guard to be prepared, the most 
underrecognized and underappreciated Service that there is, 
this is absurd. It is totally absurd. Almost a 50-percent cut 
in acquisitions, takes us back to the 1990s? What are we doing? 
When will we wake up? I had to get that off.
    Admiral, in the last session, Mr. Larsen and I teamed up 
together and saw reform of the Coast Guard acquisition, and we 
worked with the Service to really get things back on track. I 
think we have made a great deal of progress. But I remain 
concerned that a few of the assets delivered to date are still 
not performing anywhere close to expectations. For example, one 
of the reasons Deepwater proposed to replace 12 High Endurance 
Cutters with the National Security Cutters was that the Service 
would be able to get significantly more days away from the port 
with the NCS. Central to doing so was a crew rotation concept 
which the Service has yet to formalize.
    The Coast Guard and Maritime Transportation Act of 2012--
Mr. Garamendi, this may answer one of your questions--prevents 
the sixth National Security Cutter from becoming ready for 
operations until the Service submits to Congress how the first 
three National Security Cutters will achieve the goal of 225 
days away from home port. What is the plan for achieving 225 
days away from home port? And when will you implement that 
plan?
    Admiral Currier. Thank you, Mr. LoBiondo, for that 
question. And also, thank you for your support over the years 
for our acquisition processes. You have been a great champion 
of our cause, and we truly appreciate that.
    To get to the crew rotation concept, which is what you are 
describing, the baseline of the legacy assets, the 378-foot 
cutter, was 185 days away from home port. The goal of the new 
program, the National Security Cutter, was 225 in some 
documents, 230 in other documents for the goal of days away 
from home port.
    We bring new cutters on, a new class of cutters. We have 
had a few growing pains, but not anything that is out of the 
norm for the Navy's experience or our previous experience. So 
where we are today is we will home port three cutters or we 
have home ported the first three cutters in Alameda, 
California. Those cutters are scheduled for dry dock 
availabilities over the next couple of years to do some 
configuration enhancements that were identified later in the 
class that need to be retrofitted, to do some maintenance, and 
basically we will be in dry dock for a period of time. Those 
are the three cutters.
    Once those cutters are out of dry dock, we will have them 
in Alameda. We will marry up the extra crew. We will have the 
shore plant facility to run a full-scale evaluation on CRC. The 
goal of CRC is 230 days away from home port. In the interim, 
until then, the cutters that exist, the National Security 
Cutters will average across the fleet 210 days away from home 
port. So we are 20 days short of the eventual goal now.
    In the interim, until 2017, late 2017, which is when we 
will be able to fully implement the evaluation of CRC, we will 
be 210 days until then and then 230 days following. So the end 
of 2017 is when we will fully implement the 230-day crew or 
cutter requirement.
    Mr. LoBiondo. Well, 2017 is a long ways off.
    Mr. Chairman, I have another related question from the 
Inspector General. But recognizing my time, I will wait for 
round two.
    Mr. Hunter. Thank the gentleman.
    Mr. Larsen is recognized for 5 minutes.
    Mr. Larsen. Thank you.
    Admiral, section 220 of the Coast Guard Maritime 
Transportation Act of 2012 requires the Commandant to maintain 
the approved program of record for the acquisition of 180 RB-Ms 
unless the Commandant transmits to the committee documentation 
justifying a smaller acquisition. And as you know, the budget 
outlines a smaller acquisition, but we haven't received the 
justification for that smaller acquisition, the one that we 
specifically asked for.
    So have we missed that? Has the Coast Guard submitted the 
justification as it requires? And if we have not, when will we 
receive that written justification?
    Admiral Currier. Thank you, Mr. Larsen, for that question, 
and also for your support over the years as well.
    As you know, the RB-M program is fantastically successful 
for us. It had a long developmental----
    Mr. Larsen. I would argue right now it is only \17/18\ 
successful.
    Admiral Currier. Say again? I am sorry.
    Mr. Larsen. It is only \17/18\ successful. That is, you 
have stopped acquisition at 170 when we told you 180.
    Admiral Currier. Yes, sir. I will be happy to answer that.
    Mr. Larsen. Yeah.
    Admiral Currier. We have gone back and we have revalidated, 
because of the capabilities of this small boat, against our in-
shore threats and vulnerabilities. And we feel that due to the 
capabilities and capacities of this boat, which far exceed what 
we expected, that we feel, given the tough choices we are 
forced to make in this budget environment, that 170 is the 
proper number. That has been agreed to by our Assistant 
Commandant for operations, who sets the requirements for the 
Service. That will be coming forth in the acquisition program 
baseline review for the RB-M, which is in process now.
    Mr. Larsen. When do we expect to see that, though?
    Admiral Currier. I will have to get back to you for the 
record on that, sir.
    [The information follows:]

        The revised Response Boat-Medium (RB-M) Acquisition 
        Program Baseline Review is in internal routing/
        clearance within the Coast Guard with approval and 
        forwarding expected during the fourth quarter of 2013.

    Mr. Larsen. And I appreciate it. You and your team, it has 
been great working with the subcommittee here over the last 
several years to get things in order. And I do appreciate that. 
It just seems to me that if we don't get that justification 
report that we had asked for in the 2012 act until after you 
have fully completed the acquisition of 170 and terminated the 
program, that starting the program over again to get the 
additional 10--or more if the committee so decides--we will 
have all the startup costs, again, adding more to the program. 
So it can be seen in my eyes that you are terminating a program 
before we get the justification report, and then it is too late 
to go to 180. Do you see how I can see that?
    Admiral Currier. Yes, sir. I see that. And I could do two 
things. First of all, get back for the record, and you in 
particular, on the projected delivery of the acquisition 
program baseline change. And then I will get you preliminary 
documentation from our operations directorate that states the 
clear justification for 170. So you can review that in advance.
    Mr. Larsen. The sooner the better.
    Admiral Currier. Yes, sir.
    [The information follows:]

        The Coast Guard has reanalyzed the Response Boat-Medium 
        (RB-M) fleet size and determined that 170 boats will be 
        sufficient to meet the operational need. A revised RB-M 
        Acquisition Program Baseline (APB) is in routing within 
        the Coast Guard with approval and forwarding expected 
        during the fourth quarter 2013.

    Mr. Larsen. Great. Thanks.
    On the Arctic, with regards to the Arctic policy strategy 
that you released last month, indicates a need for increasing 
maritime domain awareness in the Arctic. And what sort of 
resources does the Coast Guard plan on acquiring to improve 
that domain awareness in the Arctic?
    Admiral Currier. Domain awareness in the Arctic is going to 
be a partnership effort. There is not going to be any 
unilateral organization service agency that is going to be able 
to come up with the resources to exert domain awareness or a 
realtime picture of what is going on in the Arctic. But in 
combination with the State of Alaska, with NOAA, with our 
partner component agencies, and the Department of Defense, I am 
confident--and I can't discuss it higher than the M-class 
level--but I am confident that we can demonstrate today a high 
level of maritime domain awareness in the Arctic. So I think we 
are on a good track with that.
    Mr. Larsen. Now that you have the strategy, I know that the 
DOD has its strategy. In my office, we are going to put more 
time into looking at what it takes to implement that strategy. 
And we look forward to working with you on that.
    Then finally on Offshore Patrol Cutter, OPC, can you give 
me yet and the committee yet an exact date when you will down-
select from eight to three?
    Admiral Currier. Yes. We will down-select to three by the 
end of this fiscal year. The target is the end of this fiscal 
year. And then that will be for a preliminary design contract.
    Mr. Larsen. Right.
    Admiral Currier. And then there will be another year or so 
before we do the actual selection of the single cutter that 
will be the OPC.
    Mr. Larsen. Right.
    Admiral Currier. So the end of the fiscal year will be the 
contract down-select for three candidates that will produce 
preliminary contract design. And then a year later--and that is 
a softer date--will be the actual award of the contract for the 
Offshore Patrol Cutter.
    Mr. Larsen. So if I may, Mr. Chairman, so the end of the 
fiscal year is a hard date?
    Admiral Currier. It is a target, sir.
    Mr. Larsen. OK.
    Admiral Currier. And it is in good faith. I can't tell you 
it is a hard and fast date. But indications are at this point 
that we will meet that target.
    Mr. Larsen. Yeah. OK. Thank you.
    Thank you, Mr. Chairman.
    Mr. Hunter. Thank the gentleman.
    I would like to welcome and recognize the newest member of 
the subcommittee, from South Carolina, Mr. Sanford.
    Mr. Sanford. No questions.
    Mr. Hunter. No questions.
    Ms. Hahn is recognized for 5 minutes.
    Ms. Hahn. Thank you, Mr. Chairman, Ranking Member 
Garamendi. Really appreciated the remarks that have been coming 
out of this committee this morning. I, of course, am one of 
those, since I represent the Port of Los Angeles, which is 
right next to the Port of Long Beach, the largest port complex 
in this country, I have long said the Coast Guard is certainly, 
you know, the line of defense when it comes to our Nation's 
coasts and waters.
    But for me, particularly, the port complex, I still am one, 
which I will always go on record saying, I believe our Nation's 
ports are still one of our more vulnerable entryways into this 
country. I have never been happy with the fact that, even 
though Congress passed a law after 9/11 to inspect our 
containers 100 percent, we are nowhere close to that. We have 
now all sort of just decided to accept the fact that we are 
inspecting 2 to 3 percent of our containers. And we are more of 
this at-risk, the layered strategy of defense, which makes me 
uncomfortable. We have 5,000 men and women that work on our 
docks on a daily basis. There are about close to a million 
people probably just close to the proximity of Long Beach and 
the L.A. ports. If there was something to happen at that port, 
loss of lives, but certainly would absolutely disrupt this 
Nation's economy and potentially the global economy if 
something happened.
    So I am all about really completely, I hope we can increase 
the funding for our Coast Guard men and women who we really do 
depend on to protect us.
    You know, last time we had a committee hearing with my 
friend Peter Neffenger, vice admiral--he used to be the captain 
of the Port at Los Angeles--he testified that the Coast Guard's 
cutter fleet was approaching between 40 and 50 years. And 
because of its age, it was becoming less reliable and suffering 
more casualties, forcing the Coast Guard to cut down on its 
patrol hours over the last 5 years. In fact, according to a 
report by the Inspector General of the Department of Homeland 
Security, patrol and flight hours have decreased somewhere 
between 8 and 12 percent.
    So can you talk to this committee a little bit about your 
aging fleet and how that has reduced the Coast Guard's 
operational capacity and how sequestration might, on top of 
that, added to that problem, and how does that impact you?
    And I will throw in my other question. You know, I am very 
concerned about the Panga boats that are a huge threat, 
certainly out on the west coast. Unfortunately, we lost a great 
Coast Guard member when the Halibut was rammed by a Panga boat, 
Chief Petty Officer Terrell Horne. I am really worried about 
that. I am worried about that from a security standpoint, its 
human trafficking potentials, drug potential. And let me know, 
if you can tell this committee what our strategy is in light of 
everything to address that issue.
    So both those. Your aging fleet, sequestration, and can you 
give us some comfort on your strategy for the very dangerous 
Panga boat epidemic that is rising.
    Admiral Currier. Thank you for those questions, ma'am.
    I will start with the aging fleet. We have three classes of 
cutter, basically. We have a patrol boat which is being 
replaced by the FRC. The OPC Medium Endurance Cutter class, and 
then the larger class of cutter, the offshore, the National 
Security Cutter. And where our gaps are, as I have explained, 
really are tiered. We are in good shape in shore with the 
patrol boats. And you see that every day in Los Angeles, L.A./
Long Beach. We are in OK shape for now for our medium class of 
cutter, which the OPC is designed to replace.
    Where our gap is in our larger ships, the ones that patrol 
the Bering Sea, offshore CONUS, the eastern Pacific, the 
western Caribbean, drug engagement, migrant engagement. This is 
where our most serious gap is at this point.
    Our aviation fleet is in reasonable shape. And I will 
hopefully talk later a little bit about the C-27 and what that 
might mean to us.
    As we move into the budget environment that we are in, we 
continue to focus on our greatest area of risk from a 
capabilities perspective, and that is the National Security 
Cutter, funding that ship, which is a fundamental enhancement. 
It is 8 ships for 12 ships, the older ones that we are laying 
up, but it is a huge enhancement in capability. As I explained 
before, the Bertholf's case with the UAV and the helicopter and 
the fast interdiction boat the Over-the-Horizon RB, and the C4 
capability is just something we have never had before. It 
enhances our effectiveness.
    But that is where the gap is. The gap is in the offshore. 
And the National Security Cutter is the key to that. The 
Offshore Patrol Cutter will be the next critical acquisition, 
and we have talked a little bit about that.
    Sequestration effect on mission. I would never tell you 
that sequestration would have an effect of being a drop in 
missions, like we are going along fine and then all of a sudden 
we are not doing a mission. It is an erosive effect. All right?
    I will give you an example. While we will never compromise 
our ability to do search and rescue and the most critical law 
enforcement missions, there is a reduction in our ability to 
put steel on target for certain areas like counternarcotics in 
the eastern Pacific. We have less ship days, less aircraft 
days, fewer days down there. And they are part of a system, 
they are intertwined, because you have to have a surface asset 
to do the interdiction.
    My concern over the long term in sequestration is that that 
erosive effect will start to get to some of those missions that 
we have been doing and we will see a reduction in our ability 
to interdict drugs and criminal activity and even migrants to a 
certain extent.
    To get to southern California, our number one operational 
priority now is an operation called Baja Tempestad, which is 
run between L.A. to San Diego, OK, because that is where we see 
the Panga threat. That Panga threat actually you have seen 
landings as far north as Monterey, which is amazing considering 
it is an open boat. So what we have done is, we have put a 
block down there with our assets in leadership of component 
agencies like Border Patrol, Customs and Border Protection, the 
local, State, and Federal law enforcement agencies down there, 
and I think that focus is showing great yield. We are 
interdicting. We are stopping.
    Some are getting through. But I think Baja Tempestad is a 
real success story, and it shows not only our agility but the 
agility of the Department of Homeland Security to put a block 
in place where there is an emerging crisis.
    As they become more effective in shutting down the land 
border, you are going to see the end run in the maritime 
because there is little resistance to that. And it is incumbent 
on us to make sure that we allocate resources accordingly to do 
the block there. And it also is the case on the Texas side, to 
be perfectly honest, Brownsville.
    So I don't think sequestration to this point has affected 
Baja Tempestad, but it is affecting our overarching ability to 
put steel on target for some of these mission areas.
    I hope that answers your question.
    Mr. Hunter. The gentlelady's time has expired.
    Like to recognize Mr. Young for 5 minutes.
    Mr. Young. Thank you, Mr. Chairman. I will make this short. 
And I do apologize for being late.
    Admiral, I see in your budget you have got $8 million 
acquisition funding to initiate a survey and design activity 
for a new polar icebreaker. But that was in 2013. Now in 2014, 
I see there is only $2 million. It is my understanding the 
Coast Guard's 5-year capital investment plan included an 
additional $852 million for fiscal year 2014 for acquiring the 
ship. I was told that the Coast Guard anticipated awarding a 
construction contract for that ship within the next 5 years and 
taking delivery of the ship within a decade. Are we still on 
the track for the 5-year program?
    Admiral Currier. Yes, sir, we are. And I would say that the 
acquisition construction of an icebreaker first of class, only 
of class likely is a very complex undertaking.
    Mr. Young. Don't take too long to answer these questions. I 
want to ask you a question. Admiral Papp and I have discussed 
this for years.
    Admiral Currier. Yeah, we are on track.
    Mr. Young. In 1980, we had the last study about leasing the 
vessel. Because I still don't think Congress is going to 
appropriate a billion dollars, approximately a billion dollars 
to build an icebreaker. I mean, that is something I would like 
to have a request, maybe I will request the Coast Guard to look 
into the possibility of leasing a vessel that is American 
built, because we need those icebreakers in the Arctic. You 
know, we had the Operation Arctic Shield. You did what you had. 
Less iron on the ground.
    But the Arctic is the future. And we are way behind. I 
can't get people to understand that. But I can see this 
Congress at this time and a later time appropriating a billion 
dollars to build an icebreaker. We did this once 38 years ago 
with the Polar Star and I think the Polaris and the Healy.
    Which reminds me, Admiral, where is the status of the 
Polaris and the Polar Star now? Are they totally scrapped? Or 
are they going to be fixed? Are they going to be operational?
    Admiral Currier. Polar Star is underway as we speak. Just 
finished refit. It is fit for sea and is actually going to the 
ice to get some experience for the crew in the northern tier 
before they deploy to McMurdo next year. The Polar Sea is in 
caretaker status. It is cold iron, we would call it called, 
tied to a pier in Seattle, and we are trying to determine what 
the future is for that ship. The Healy is a full-up midlife 
ship. It is a science ship, as you know, and is executing its 
scheduled missions.
    Mr. Young. Well, again, have you looked, has the Coast 
Guard looking at the refitting cost of the--I believe it is the 
Polaris--versus waiting now, according to this, 15 years before 
we have an icebreaker at sea?
    Admiral Currier. Well, we have--the Healy is midlife. We 
have got a long-term availability for her. The Polar Sea or the 
Polar Star is--got 7 to 10 years of life left in her, and the 
Polar Sea--to refit the Polar Sea, I think that was one of your 
questions.
    Mr. Young. Yes.
    Admiral Currier. Would be about 3 years and about $100 
million to bring that from coal iron back to a 7- to 10-year 
life left.
    Mr. Young. What I am trying to get across, according to the 
schedule, the 5-year schedule and a decade, that is 15 years, 
at least, and that is probably optimistic if you build a new 
ship, and I would like to have the Coast Guard look at the 
possibility of getting all three of the older icebreakers 
operational so they can be dispersed in the Arctic, and 
secondly, look at the cost-benefit ratio of a icebreaker that 
could be leased at a cheaper rate, I believe, than you can 
getting one built and get it in the field sooner. Because I 
really think, China is all up there, as you know, and Russia is 
up there. Everybody is fooling around in the Arctic but the 
United States, and I just think it is time that--and it is our 
responsibility to fund you, but I think it is time that the 
Coast Guard maybe think out of the box a little bit, take those 
three ships, get them operational, and make sure they can do 
the job until, if you are going to build one and we appropriate 
the money for it, or you lease or it, or whatever it is, so we 
can have a full force of Arctic activity up there, because like 
I say, China is up there.
    I don't know whether you have done this or not. I am about 
out of time. Have you looked at the type of vessels now are 
trespassing across that Arctic area in the Northwest Passage, 
what they are carrying?
    Admiral Currier. Yes, sir. We have a pretty good awareness 
of what is going on up there. On the Russian side, the North 
Sea route they call it, there is all kinds of activity over 
there. On our side, it has been generally to mineral 
exploitation in Alaska or the offshore drilling. But there is 
also cruise ships and some other things that are going on up 
there, ecotourism, and we have full visibility of that.
    Mr. Young. All right. My time is up, but just, you know, I 
would appreciate it if we maybe think out of the box and I know 
I have had this argument with every admiral for the last 40 
years. I know you like to own steel, but sometimes it is not 
very efficient.
    Thank you, Mr. Chairman.
    Mr. Hunter. Thank the gentleman from Alaska.
    Mr. Garamendi is recognized for 5 minutes.
    Mr. Garamendi. I have great confidence in the gentleman 
from Alaska taking care of the ice cutter--the icebreakers. If 
only we could give you a opportunity for a, maybe--yes, we 
would have to change the rules, wouldn't we, so that you could 
have your own little program up there.
    Mr. Young. Oh, I am willing to secede from the Union right 
now for an earmark.
    Mr. Garamendi. And then you could be emperor of the North.
    I would like to move to the aircraft issue, and 
specifically, most of us on this committee also serving on the 
Armed Services Committee, so the issue of the C-27 comes up, 
and if we could have a discussion about the C-27, the 
acquisition for the Maritime Patrol Aircraft program seems to 
be moving from acquiring a new plane to acquiring the C-27s.
    Where are you with the C-27s? What is the status of these 
negotiations with the Air Force? We can probably have something 
to do with that if you are basing this whole program on the C-
27s. Let's talk about it.
    Admiral Currier. OK, sir. At the risk of giving too long an 
answer, I apologize in advance, but----
    Mr. Garamendi. Take your time.
    Admiral Currier. Our program of record was for the HC-144, 
which is a CASA is the name of the aircraft. We have 18 of them 
funded. We have 15 delivered, and we are--we have funding for 
18 aircraft, 17 mission pallets, so you have got basically a 
cargo aircraft that in it has a very sophisticated sensor 
package. We were forced--would be forced to take a strategic 
pause in that acquisition in fiscal year 2014, and subsequently 
we would have to re-examine the affordability of the aircraft, 
vis-a-vis, the whole acquisition portfolio.
    What became available or likely will become available is 
the C-27J, which is a cargo aircraft that the Air Force 
operates that is--there are 14 in existence and 7 being 
delivered. The NDAA, last year, carved out seven for the Forest 
Service for firefighting activity, and we feel that leaves 14 
of these aircraft potentially available for the Coast Guard, 
and it would be a mil-to-mil transfer. In other words, it is 
not like transferring to a civilian agency. It is much easier. 
You sign basically a form, and it transfers to our Service.
    It comes, they are very low time airframes, actually was a 
finalist candidate for the MPA originally, OK. It comes with 
SATCOM, radar, some of the things that we need to do our jobs. 
There are a couple of minor--some sensors that would have to be 
added to the aircraft, but we will be able to use it right 
away. So this is 14 aircraft that, depending on how many we 
get, could be up to $750 to $800 million cost avoidance if we 
are able to execute this deal.
    Where it is now, it is in the Air Force's court. We are on 
record. The Secretary Napolitano talked to Secretary Hagel. We 
are on record for 14 to 21. If we took all of those aircraft 
on, we would probably stop our acquisition of the MPA, focus on 
operationalizing these aircraft and have that class of aircraft 
bought out, so----
    Mr. Garamendi. The current acquisition program is for what 
kind of plane?
    Admiral Currier. The current----
    Mr. Garamendi. And who makes it?
    Admiral Currier. It is called a CASA the generic term for 
it, HC-144, twin-engine transport-type aircraft with an 
embedded sensor package. The original program of record was 36.
    Mr. Garamendi. Right.
    Admiral Currier. We bought or funded for 18.
    Mr. Garamendi. Basically halfway there.
    Admiral Currier. So we would stop at halfway, we would take 
on the C-27 to complete that capabilities requirement.
    Mr. Garamendi. Right.
    Admiral Currier. What it would give us is two classes of 
aircraft in the medium range.
    Mr. Garamendi. Where I am going, I understand, you would 
have two different airplanes you would have to maintain, so you 
have got some issues having to do maintenance and so forth. 
There is going to be a kickback from whoever is manufacturing 
that plane, the CASA. Who manufactures the CASA?
    Admiral Currier. It is made by a company called Alenia, and 
they are an overseas company, but----
    Mr. Garamendi. It is a foreign company that is 
manufacturing the CASA.
    Admiral Currier. Oh, no, CASA, the original aircraft is 
made by a European company. I thought you were asking about the 
C-27J. They are also made----
    Mr. Garamendi. No. They are on the ground or flying, one or 
the other. I just wondered where the kickback comes. When 
somebody loses 18 aircraft, we hear about it, but it is a 
foreign company that does that. Thank you.
    So you are going to save some $700 to $800 million if we 
carry this out.
    Admiral Currier. It could be $500 to $750 million or so.
    Mr. Garamendi. OK. And what we need--what I need to know 
and perhaps the committee also is, is that is this moving 
slowly or are there speed bumps or other problems that might 
cause this to go off track?
    Admiral Currier. I don't foresee any at this point. The 
decision has to be made by the Secretary of the Air Force 
basically and with the concurrence of the Secretary of Defense. 
We have signaled strongly that we are ready to accept them at 
any time.
    Mr. Garamendi. My personal opinion, it is a really good 
idea to acquire those, and whatever modifications are 
necessary, put those into the budget so that gets done.
    Admiral Currier. Yes, sir.
    Mr. Garamendi. Potential savings of three-quarters of a 
billion dollars is significant, and I know there is going to be 
some kickback coming from whoever doesn't have that contract to 
manufacture the remaining 18. I think we can handle that. So, 
if you will let us know. I know that, I don't know, four of us 
that are up here on the Armed Services Committee, and I think 
we are aware of the potential problems here.
    I have no further questions.
    Mr. Hunter. Mr. LoBiondo is recognized for 5 minutes.
    Mr. LoBiondo. Thanks again, Mr. Chairman. I have a followup 
question, Admiral, tagging onto the first one, but before I do, 
I am just--I am sorry. I got to continue my rant a little bit 
about this budget.
    What I don't think most people understand is in addition to 
the acquisition problem that we have, that we are decimating 
the Coast Guard's leadership for the future. I have the honor 
of representing the only Coast Guard recruit training center in 
the Nation. For years and years and years, the throughput was 
about 5,000 recruits. If I'm not mistaken, I think this year it 
is going to be about 2,000. I think it is damaging morale, and 
I think the officer corps that we rely on for the experience 
and the expertise and the motivation for the younger ones is 
just going to be gutted here, so from every aspect we look at 
this these are intangibles that you can't measure. These are 
intangibles that you can't read on a spreadsheet somewhere 
about what it is going to mean, so I don't know what we can do 
about this, but I am pretty cranked up over it and I am--so it 
won't be the last I have to say.
    Admiral, the second part of the question, the first part 
was about the days at sea. Both the DHS Inspector General and 
the GAO have raised concerns that the National Security Cutters 
delivered to date do not meet planned capability.
    Now, when we talked about how these would be laid out, we 
focused a lot on capability because we knew we would have one 
shot at doing this right. They have noted that without Unmanned 
Aircraft Systems on the National Security Cutters, the National 
Security Cutters are no more capable than the 40-year-old High 
Endurance Cutters that they are replacing.
    So, as we are squeezed down with acquisitions, it is 
important that what we do have out there in acquisitions have 
the maximum capability.
    What is the status of the Service's plans to acquire UAS or 
other capability for the National Security Cutter and fill the 
current capability gap and when will the National Security 
Cutter be outfitted with UAS?
    Admiral Currier. Thank you, sir, for that question. 
Specifically to the National Security Cutter, we have UAS on 
board the Bertholf now. We are running a test. That is the 
ScanEagle. It is a small lightweight but very capable UAS that 
is being tested today as we speak. Earlier, I described a case 
where they had great success.
    The second UAS that might conceivably be used with a 
National Security Cutter is the Navy Fire Scout program, which 
we are very close to. As you know, sir, originally we had our 
own program for UAS for the National Security Cutter, but about 
6 years ago we decided to go with the Navy to let them do the 
science on this thing. They have proved the concept of this 
thing in Afghanistan and in theater in the Persian Gulf, and I 
hold great promise that as it is developed we will be able to 
adapt it to the National Security Cutter. I don't have a time 
for you because we don't control the program. In the interim, 
we will use that small, lightweight, highly capable UAS package 
on the National Security Cutter and it will fill probably 70 
percent of the mission that we would have--we will eventually 
use Fire Scout for.
    The third thing we are doing UAS-wise is the Guardian 
Predator project we have going with CBP. We are supporting 
them. General Atomics makes that aircraft. I have met with 
them, their chief engineer, to talk about what marinerzation 
means and what tailoring that aircraft would require for Coast 
Guard use, very productive meeting, and I think that we are 
eventually going to have that class of UAS supporting the 
cutter offshore as well. So, there is progress being made, sir.
    Mr. LoBiondo. Mr. Chairman, if I could, I think that the 
capability component of these National Security Cutters is key 
and I just hope that the Coast Guard isn't using the Navy, sort 
of, to slow walk what we are able to do here. There ought to be 
some way we can try to have some inquiries or get this jacked 
up, because if you have no idea, then that means we are years 
away, and I just don't think that is acceptable.
    But I thank you and I yield back.
    Mr. Hunter. Thank the gentleman. I have a question for the 
record, and I will just, just if you could update us on the 
Response Boat-Smalls, that program, we talked about having a 7-
-- you talked about an 11-foot RB and a smaller RB; is that 
right?
    Admiral Currier. Well, sir, we are talking about a little 
bit of two different things, OK. The 7- and 11-meter RBs are 
the cutter boats.
    Mr. Hunter. Meter RBs.
    Admiral Currier. They go on the ships, and we are going to 
go to two classes of them for all kinds of reasons, economy, 
effectiveness of maintenance and all that. The RB-S is actually 
the in-port boat, and we are evaluating the fleet size on them 
and we are recapitalizing them as is required. Twenty-five feet 
long, very successful, you see them everywhere in the United 
States. So there are two distinct classes of boats.
    Mr. Hunter. Is that program being cut significantly, the 
Response Boat-Small program?
    Admiral Currier. The Response Boat-Small program is not 
being cut as a result of budgetary pressure. We are 
reevaluating our need for the number of those boats based on 
our experience post-9/11 on what we really need to do the port 
security job, so adjustments to that fleet size will be based 
on operation requirements, not budgetary pressure.
    Mr. Hunter. OK. Admiral, thank you. Thank you for your 
service and thank you for your time. There are no further--oh, 
Ms. Hahn you have more questions? I would like to recognize Ms. 
Hahn. We do have a second panel we need to get through as well.
    Ms. Hahn. OK. Thank you. I will be brief. Just a quick 
change of subject because you did touch on it in your 
statement, and as you know, the ineffective handling of sexual 
assault cases has plagued the military recently and there has 
been a huge push to make some major reforms in this area, so 
obviously, sitting here looking at all the men showing up for 
this hearing, has the Coast Guard made any changes to how it 
deals with sexual assault cases? And could you tell us what 
specific policies has the Coast Guard implemented?
    Admiral Currier. Yes, ma'am. We recognized this problem 
about a year ago and it became the object of focus for the 
Service. Subsequent to that, there is a film called ``The 
Invisible War,'' which I am sure you are familiar with. It has 
become a banner headline, but I will tell you that we have a 
Service-level strategy, a senior executive working group that 
tiers down into working groups. We have overhauled our 
training, we have overhauled our messaging, we have overhauled 
our system of accountability for not only perpetrators but for 
commanders that have environments that are perhaps permissive. 
They are held accountable as well. We are in lockstep with the 
Department of Defense and the other military services, and we 
are cooperating with Congress and the Department and the 
administration. Universally, this was held as a problem. This 
behavior is a crime, it is a breach of trust, and we are 
committed to eradicating this behavior from the Service because 
it is a matter of trust, and as I said in my opening statement, 
that is a priceless attribute that we have in the military.
    Ms. Hahn. Thank you.
    Mr. Hunter. Does the gentlelady yield back?
    Ms. Hahn. Yes.
    Mr. Hunter. OK. Admiral, thank you for your time and your 
testimony and your service.
    Admiral Currier. Thank you, Mr. Chairman.
    Mr. Hunter. I would like the second panel to come forward, 
please.
    Our second panel of witnesses include Mr. Ronald O'Rourke 
of the Congressional Research Service; Dr. Steven Bucci. Did I 
say that right?
    Mr. Bucci. Bucci.
    Mr. Hunter. Bucci. Director for Douglas and Sarah Allison 
Center for Foreign Policy of the Heritage Foundation; and Dr. 
Lawrence Korb, Senior Fellow at the Center for American 
Progress.
    Mr. O'Rourke, you are now recognized.

  TESTIMONY OF RONALD O'ROURKE, SPECIALIST IN NAVAL AFFAIRS, 
    CONGRESSIONAL RESEARCH SERVICE; STEVEN P. BUCCI, PH.D., 
DIRECTOR, DOUGLAS AND SARAH ALLISON CENTER FOR FOREIGN POLICY, 
   THE HERITAGE FOUNDATION; AND LAWRENCE KORB, PH.D., SENIOR 
              FELLOW, CENTER FOR AMERICAN PROGRESS

    Mr. O'Rourke. Chairman Hunter, Ranking Member Garamendi, 
distinguished members of the subcommittee, thank you for the 
opportunity to testify today on Coast Guard acquisition. 
Chairman Hunter, with your permission, I would like to submit 
my statement for the record and summarize it here in a few 
brief remarks.
    The Coast Guard's fiscal year 2014 5-year acquisition plan 
has about one-third less funding than last year's plan. That is 
the largest reduction in a 5-year plan that I have seen in many 
years, and it has occurred in the absence of any change in the 
Coast Guard's strategic environment that might substantially 
reduce Coast Guard mission demands. The plan's average funding 
level of $1 billion a year will likely require the Coast Guard 
to reduce procurement rates, which would increase unit costs, 
lengthen replacement times and possibly compel the Coast Guard 
to further extend the lives of aging platforms. The likely 
eventual result would be a smaller and/or older Coast Guard 
with less mission capacity than called for in the program of 
record.
    In this sense, the plan raises a fundamental question for 
Congress about the Coast Guard's ability to recapitalize its 
assets in a timely manner and adequately perform its statutory 
missions in coming years. It also raises a potential oversight 
question for Congress concerning year-to-year stability in DHS 
budget planning and the reliability of DHS budget projections.
    In assessing the Coast Guard's future needs, it can be 
noted as a starting point that although the program of record 
force would have considerably more capacity than the legacy 
force, the Coast Guard has estimated that the program of record 
force would nevertheless have substantial capacity gaps for 
performing six of the Coast Guard's 11 statutory missions in 
coming years. If funding limits lead to a Coast Guard that is 
smaller and/or older than the program of record force, these 
mission gaps would be greater still.
    It is not clear that past annual amounts of Coast Guard 
acquisition funding are necessarily the most appropriate guide 
to what the funding level should be in coming years since the 
Coast Guard has entered a period during which it is seeking to 
replace multiple classes of assets that in past budget years 
were not yet in need of replacement.
    A reliance on past funding levels as the sole guide to 
future funding levels could short-circuit the policymaking 
process, limit options available to policymakers and hamper 
their ability to alter the composition of Federal spending over 
time to meet changing Federal needs.
    In seeking potential alternative guides to future Coast 
Guard acquisition funding, comparisons with the Navy are 
potentially illuminating. These comparisons suggest that if the 
Coast Guard's acquisition account were made proportionate to 
Navy procurement funding, the account might total about $3.5 
billion a year. That figure might be discounted to account for 
the expensive platforms procured by the Navy. Discounting it by 
a third or a half, for example, would produce a figure of $1.7 
to $2.3 billion a year for the AC&I account. The Coast Guard 
for its own part has testified that recapitalizing the 
Service's assets on a timely basis would require up to $2.5 
billion a year. A level of $1 billion a year, the Coast Guard 
has testified, would almost create a death spiral.
    The Navy makes substantial use of multiyear procurement and 
block buy contracting to reduce ship and aircraft procurement 
costs. The Coast Guard, in contrast, is not using these 
contracting mechanisms. The difference between the Navy's 
substantial use of multiyear procurement and block buy 
contracting and the Coast Guard's nonuse of these mechanisms is 
striking. The nonuse of these mechanisms by the Coast Guard in 
past years may in some cases represent lost opportunities for 
reducing Coast Guard acquisition costs.
    Moving forward, current Coast Guard programs that might be 
considered candidates for multiyear procurement or block buy 
contracting include the NSC program, the OPC program and the 
FRC program.
    These points lead to a number of potential options for 
Congress. I will just mention four. One would be to encourage 
or direct DHS to program a certain minimum amount of funding 
each year into the AC&I account. Another would be to provide 
the Coast Guard with greater autonomy from DHS in determining 
the funding level for the AC&I account. A third would be to 
encourage or direct DHS and the Coast Guard to use multiyear 
procurement and block buy contracting where appropriate, and 
fourth would be to reduce the Coast Guard's statutory missions 
to narrow the future potential gap between Coast Guard mission 
requirements and projected Coast Guard capacity for performing 
them.
    These options underscore the point made earlier, that the 
fiscal year 2014 plan raises a fundamental question for 
Congress about the Coast Guard's ability to recapitalize its 
assets in a timely manner and adequately perform its statutory 
missions in coming years.
    Mr. Chairman, this concludes my statement. Thank you again 
for the opportunity to testify, and I look forward to the 
subcommittee's questions.
    Mr. Hunter. Thank the gentleman.
    Dr. Bucci is recognized.
    Mr. Bucci. Mr. Chairman, Mr. Ranking Member, Members, I 
thank you for having me here. I will let you know the comments 
I make are my own and not to be construed as official positions 
of the Heritage Foundation.
    Prior to joining the Heritage Foundation, I did spend 30 
years as a military officer in the Army Special Forces and then 
was a Deputy Assistant Secretary of Defense for Homeland 
Defense where I was DOD's plug into the Department of Homeland 
Security and worked extensively with the Coast Guard.
    I really want to thank you for the opportunity to be here, 
and I am not going to be redundant with my colleagues on some 
of the specifics, and I believe the committee is probably just 
as expert as I am on many of these details, but I have to tell 
you, the Coast Guard is a key natural security asset. It is not 
a secondary force. It is one of the key players in defending 
our country, and right now, regardless of what we say or do 
here, they are being given an expanding mission set in the 
midst of contracting assets and resources.
    The Coast Guard, to their credit, uses imagination and 
innovation to accomplish the mission on a pretty regular basis. 
They also have not yet learned how to work the Washington 
system, asking for twice as much as you think you need because 
you know you are only going to get half of that. They actually 
ask for what they think they might be able to get by with and 
then it still gets cut in half.
    The Coast Guard is never more in character as a military 
organization than at budget time. They get their orders, they 
are given their assets, they salute and then they go out and 
try and do their mission or die trying, and I think it is 
incumbent on the Congress, particularly, because unfortunately, 
I think the administration doesn't seem to get this. There is a 
lot of precious young men and women out there who are putting 
their lives on the line in vessels and aircraft that are in 
many cases older than they are, and while that may be OK in 
some situations, the ones the Coast Guard goes into, that is 
not an acceptable situation.
    I will touch on one specific thing, not to pile on with Mr. 
Young too much, but with the icebreaker fleet. The Coast Guard 
study says for them to operate in the Arctic and in Antarctica, 
they need three medium and three heavy icebreakers. Right now 
they have got the one medium and the two heavies, which 
frankly, don't work. I think we should go beyond his idea of 
leasing icebreakers and give them an exemption to the Jones Act 
and let them lease some standing icebreakers that are not U.S. 
made because we really need to have this capability. It is 
embarrassing, not too different than riding on the Russian's 
rocket ships to get up into space now, that we have to ride 
behind Russian icebreakers to resupply the McMurdo Research 
Station in Antarctica. I just find that somewhat ironic.
    Right now, Congress, if it does not act to correct the 
chronic underfunding of the Coast Guard's fleet revitalization 
plan, we are going to continue to ask those young men and women 
to put their lives at risk while they protect our country. The 
maintenance costs of this aging fleet are getting way out of 
hand and are going to suck the air out of the very small 
revitalization funding we already have, and that has to be 
turned around.
    The Coast Guard continues to perform its missions 
admirably, and they will find it increasingly difficult to keep 
up that pace as their assets begin to deteriorate further. So I 
would ask the Congress to fulfill its constitutional 
responsibility to provide for the common defense by making a 
commitment, and I think this committee is making that 
commitment, to fund them at a level that meets the needs of the 
Service, in some cases in excess of what the Service itself is 
asking for.
    Thank you, and I look forward to your questions.
    Mr. Hunter. Thank you. Dr. Korb is recognized for 5 
minutes.
    Mr. Korb. Thank you very much, Mr. Chairman, Ranking Member 
Garamendi. I appreciate the opportunity to come. I also 
appreciate the opportunity, sir, to be on a panel with such 
other distinguished people.
    My association with the Coast Guard goes back to the 1960s 
when I worked with them as a naval officer off the coast of 
Vietnam. The interesting thing, they still have a lot of same 
ships that they had back then. I also spent 4 years teaching at 
the Coast Guard Academy. Admiral Papp was there, but he didn't 
take a course from me, so I guess that is probably one reason 
why he got ahead.
    And I worked with them when I was in the Reagan 
administration on the War on Drugs and a couple of times when I 
went to Iraq and I saw them working there, and I think that is 
a key thing. People forget just how much they do. They don't 
realize that they have all of these missions.
    Now, and it has become clear to me that over the years, one 
of their problems is their motto theoretically is ``Always 
Prepared,'' but their unofficial motto seems to be, ``We can do 
more with less.'' And if you go back and you take a look, for 
example, when sequestration came up, Secretary of Defense 
Panetta said that, if we have sequestration, the Navy will be 
back where it was before World War I. If you ask the Coast 
Guard, they will say, well, give us less money, we will just do 
the best we can. They don't really, I think, make it clear to 
the Congress and the public the jeopardy they are in.
    Now, it has become clear in the testimony today that the 
Coast Guard has some management problems, but they pale in 
comparison to the Department of Defense. I have in my written 
testimony, which I would like to put into the record, an 
article by Senator McCain on April 26th of this year, and in it 
he said the Pentagon turns ``billions of taxpayer dollars into 
weapons systems that are consistently delivered late, flawed, 
and vastly over budget--if, that is, these systems are 
delivered at all.'' He mentions the fact that the Air Force 
alone canceled a weapons system, the Expeditionary Combat 
Support System, after spending a billion dollars. That is 
larger than the whole Coast Guard acquisition budget.
    So what are we going to do? We all agree that they need 
more money. What we need is a unified national security budget. 
The Coast Guard has to be taken into account when the executive 
and legislative branches decide where to allocate scarce 
resources for national security.
    For example, as has been mentioned by Congresswoman Hahn 
and Mr. Garamendi, the whole question about port security 
versus missile defense. If you take a look, what we spent on 
missile defense since I was in Government, is over $200 
billion, and a lot of scientists tell us it still does not even 
work very well. What are we spending on port security? And, as 
Congressman Garamendi mentioned, if I am going to send a 
nuclear weapon to the United States, it is much less likely 
that I am going to launch a missile with a return address. It 
is much more likely that I am going to bring it in through the 
port. But yet, we take a look at what the Coast Guard budget is 
compared to the Department of Defense, you take a look and you 
compare the Coast Guard budget to that of the Navy in terms of 
the number of people plus what we spent on procurement.
    The Littoral Combat Ship, which Senator McCain also 
criticizes in this article, it costs more than your National 
Security Cutters and has one-third the range, and yet we don't 
get an opportunity to make those tradeoffs between the Coast 
Guard and the other armed services. I would like to, with the 
committee's consent, to put our unified national security 
budget into the record because we go over that over every year 
to show you could do those things. \1\
---------------------------------------------------------------------------
    \1\ ``Rebalancing Our National Security: The Benefits of 
Implementing a Unified Security Budget,'' by the Task Force on a 
Unified Security Budget of the Center for American Progress, can be 
found online at: http://www.americanprogress.org/wp-content/uploads/
2012/10/UnifiedSecurityBudget.pdf.
---------------------------------------------------------------------------
    Now, let me conclude with two other things that the Coast 
Guard needs to do in addition to making these tradeoffs. Number 
one, the Commandant needs to be a member of the Joint Chiefs of 
Staff. When you had the hearing on sexual assault, I noticed he 
was at the table. Get him at the table all the time. They have 
all of these national security missions. You have just added 
the head of the National Guard to the Chiefs, put the 
Commandant there, too.
    The other thing is, they are going to need the equivalent 
of a Service Secretary in the Department of Homeland Security, 
someone like the Secretary of the Army, Navy, or Air Force who 
can come here and speak up for them.
    And then the final thing I would say is, Secretary Panetta 
and Secretary Hagel both asked Armed Services Committees to do 
something about the escalating cost of personnel benefits.
    Well, the committees have not done anything about that this 
year, but they also impact the Coast Guard because they have to 
go along with whatever the Department of Defense does. Thank 
you very much.
    Mr. Hunter. Thank you, Doctor. Thank all of you for being 
here today. Let me ask you, Mr. O'Rourke. Why do you think they 
haven't done multiyear procurements if they are authorized to 
do so?
    Mr. O'Rourke. It is a good question, Mr. Chairman. I have 
asked that myself. It is not clear to me why it is not 
happening. One possible contributor might simply be a lack of 
awareness of the mechanism. The use of multiyear procurement 
and block buy contracting has grown in DOD in recent years and 
it could simply be that the Coast Guard has not caught up with 
that.
    Mr. Hunter. Most shipbuilders do multiyear procurement.
    Mr. O'Rourke. That is right. In fact, all three of the 
Navy's year-to-year shipbuilding procurement programs are now 
under either multiyear procurement contracting or block buy 
contracting, all three of them, and so, as I said in my 
testimony, the difference between the Navy's substantial use of 
these mechanisms and the Coast Guard's nonuse of them is 
striking.
    Multiyear procurement can save upwards of 10 percent on the 
cost of what you are buying, and especially if we are going 
into a tighter budget environment there is more reason than 
ever to perhaps consider using them.
    Now, there are reasons why you might not want to use 
multiyear procurement or block buy contracting, and you have to 
consider carefully whether you want to do it or not, but if you 
decide that it is appropriate, it can offer savings at a time 
when apparently the Coast Guard needs those savings more than 
ever.
    Mr. Hunter. You also noted that the Coast Guard can 
successfully, or if it wants to successfully conduct all of its 
missions, then it needs to have--it needs to acquire more 
boats, more assets. So the question then is, if they don't get 
the money to acquire more assets, what does that mean for its 
ability to conduct its mission and in what way do you think the 
Coast Guard should change its mission set?
    Mr. O'Rourke. That is right. In fact, I think it is worth 
remembering, as I mention in my opening statement, that the 
program of record force itself is not capable of fully 
performing all the Coast Guard's statutory missions as the 
Coast Guard has estimated. The force that would be needed to do 
that could require up to 60 percent more cutters and up to 90 
percent more aircraft than what is included in the program of 
record force. So the POR force is already somewhere short of 
what the Coast Guard has calculated would be needed to perform 
the Service's statutory missions in coming years.
    If you fall short of the POR force, you are only making 
those mission shortfalls even greater. Multiyear procurement 
and block buy contracting can, at the margin at least, help the 
cost Coast Guard afford a larger force for a given amount of 
money. For example, the OPC program is currently estimated at 
$12.1 billion. If you are able to save somewhere between 5 and 
10 percent of the procurement costs on that program, then you 
are looking at saving somewhere between $600 million and $1.2 
billion, which can go some way toward buying OPCs or other 
platforms that the Coast Guard is interested in getting.
    Mr. Hunter. Thank you, Mr. O'Rourke.
    Mr. Garamendi is recognized.
    Mr. Garamendi. Mr. O'Rourke, in your written testimony, you 
spent some time on the C-27. The thing that I am curious about 
is that there is a potential savings here of some three-
quarters of a billion dollars. Is that savings--and this is a 
question, I think, more for us on our side, but it seems to me 
that any savings are not going to be plowed back into the other 
acquisition programs for the Coast Guard but rather disappear 
into the black hole of the larger budget for the U.S. 
Government.
    Mr. O'Rourke. As I look at the Coast Guard's 5-year 
acquisition plan, it appears to me that the Coast Guard's 
budget already banks on receiving those C-27s. They have 
already taken the credit for it. You will have an avoided cost 
if you don't buy the remaining 18 HC-144s, so that is like a 
$40 million or $50 million airplane, so that is several hundred 
million dollars in avoided procurement costs, but the Coast 
Guard's 5-year acquisition plan already appears to take credit 
for that by zeroing out the HC-144 line for the remainder of 
the program. The Coast Guard is referring to it as a pause, and 
it is a pause in the sense that they are waiting to see whether 
they get the 14 to 21 C-27s. If they don't, that requirement 
rolls back into the Coast Guard's 5-year plan and you are 
looking at another bill for several hundred million dollars 
that currently is not reflected in the 5-year plan.
    Mr. Garamendi. Thank you. I understand that, and even more 
completely because of your answer, but where I wanted to go is 
that it appears to me that the Coast Guard is getting no 
credit, that is, does not have the ability to repurpose, reuse 
that $700-plus million to fund its other programs. It looks to 
me like they are simply taking a short--the budget is coming up 
short even though they are shaving $700 million, potentially 
saving $700 million.
    Mr. O'Rourke. The removal of the money for the HC-144s 
represents about one-third of the total reduction in funding 
that we see in this plan versus the 5-year plan from last year.
    Mr. Garamendi. Here is----
    Mr. O'Rourke. It is about $900 million that they have taken 
away.
    Mr. Garamendi. For those of us on the policy side of this, 
it seems to me that we need to provide a significant incentive, 
in this case, for the Coast Guard and perhaps also for other 
services that if they are able to, in this as we see here, find 
a way to save three-quarters of a billion, then they ought to 
be able to take that three-quarters of a billion and apply it 
to other acquisition programs that are short of money. It 
appears to me that is not the case here and therefore there is 
little incentive, even though the Coast Guard seems to be doing 
it, to find those kinds of savings.
    Just something for us to consider and for you to ponder, 
given your role, so that there is this incentive built into the 
system that save money and then you can use it elsewhere.
    I will let it go at that.
    And I think this is again for the members of this committee 
that serve on the Armed Services Committee, is to make sure 
that those planes are transferred. I mean, we can do that. We 
have that power, transfer the planes, shut up, get on with it, 
and I would recommend that we do that.
    I want to go to Mr. Korb and your question about a unified 
budget, which has been the subject of much of what I talked 
about here, is that we are not considering the overall defense 
or national security. We are looking at it in a segmented and 
disjointed way, and it seems to me to be two ways to get at 
that. You are suggesting one of them, which is the placement of 
a member of the Coast Guard in the Department of Defense's 
program; that is, sitting there with the other generals and 
admirals. Good idea.
    There is also another problem, and that is the organization 
of the House of Representatives and perhaps the Senate, which 
you didn't talk to. This committee--the Coast Guard is 
specifically in the T&I Committee, Transportation and 
Infrastructure, and therefore disconnected in policy and 
similarly disconnected in the appropriation process.
    Now, we can send a Coast Guard admiral to sit over at the 
Joint Chiefs of Staff, but unless you take the next step, which 
is the organization of the House of Representatives, it ain't 
going to count much.
    So, I guess more than anything else, I am really talking 
about us in almost everything I have said today. It is how we 
view the world.
    Mr. Korb, would you care to comment? You chose not to do 
that, and I appreciate your deference to us, but----
    Mr. Korb. I think both the administration and the Congress 
need to do it. Before we unified the Department of Defense, you 
used to have a committee that dealt with the Navy and another 
the War Department and then you created Armed Services. I think 
the administration needs to take the lead in this through OMB 
by having a unified national security budget that looks at, if 
you will, offense, which is the Department of Defense, defense, 
which is Homeland Security, and development, which is State 
Department; it needs to look at them all together. And we have 
done it for the last 8 years. We have taken the amount that the 
Bush administration and now the Obama administration says it 
wants for all 3, and we show how you can get more bang for the 
buck, if you will, by looking at these things together. And I 
would suggest that if they take the lead, then the Congress, 
like you have a Budget Committee, would have a national 
security committee that looks at all of those things together 
and suggests some of the trade-offs, some of which we have 
discussed today. And you are not going to go over your budget. 
In other words, we take whatever amount that you put in your 
budget and we say this is a way you can get more security.
    For the money, the average age of Navy ships is like one-
third of that of the Coast Guard, so at some point you might 
sit down and say, well, maybe we ought to give the Coast Guard 
a newer ship and the Navy one less ship, or you take an 
aircraft out or whatever, whatever it might be, and I think 
that would help, we would get more security for whatever amount 
the money that you are willing to spend.
    Mr. Garamendi. Thank you for that. Mr. Bucci, you are from 
an organization known to be fiscally conservative. Could you 
comment on this issue?
    Mr. Bucci. Well, I----
    Mr. Garamendi. Recognizing that you are not speaking for 
the organization.
    Mr. Bucci. I do. While I agree in the general principle, I 
think probably a good interim step might be to look at the 
Department of Homeland Security's budget, which has gone up 
recently while the Coast Guard, which frankly, no offense to 
any of the other wonderful organizations within DHS, the Coast 
Guard is by far the most efficient and useful and necessary for 
national defense of any of the constituent parts of DHS, their 
budget has consistently gone down. So perhaps before we try and 
merge the budgets of the Department of Defense with chunks of 
DHS, we get DHS to sort of synchronize their own budget 
internally and give a little bit more of the assets to one of 
their parts that is really pulling a lot more weight than they 
might otherwise do.
    Mr. Garamendi. Just, Mr. Chairman, you have been very 
generous with my time, but just one final comment. If we would 
look at the Department of Homeland Defense budget, it is boots 
on the ground that seem to be far more important than ships on 
the sea. Am I correct?
    Mr. Bucci. Right now, given the debate we have been having 
for the last couple of weeks, Congressman, I would say you are 
absolutely right.
    Mr. Garamendi. I yield back the 3 minutes and 6 seconds 
beyond the 5 minutes, Mr. Chairman.
    Mr. Hunter. Ms. Hahn is recognized for 5 minutes.
    Ms. Hahn. Thank you, Mr. Chairman.
    Mr. Korb, you are speaking obviously, you know, a theme 
that I have been talking about since 9/11, which I think our 
ports are very underfunded when it comes to our homeland 
security and you mention in your testimony that the likelihood 
of a nuclear weapon being smuggled through an American port by 
an unfriendly nation is much greater than facing a nuclear 
launch from one of these countries simply because they don't 
want to have a return address for fear of a severe response.
    But instead of allocating more resources to our port 
security, Congress increased funding for an east coast missile 
defense system most experts have described as being wasteful 
and has cut critical port security programs. The Port Security 
Grant program has been cut by 75 percent since 2009, and the 
Coast Guard saw a $300 million cut in the latest Homeland 
Security appropriations bill from its 2013 enacted level.
    You have touched on this a little bit. Just again for this 
committee and all those who are listening, what are the 
consequences? Not just to our ports, but to our country and 
possibly to the global economy if we fail to adequately address 
our Nation's port security? I just want to hear it one more 
time.
    Mr. Korb. Well, as I put in, the consequence would be 
severe if in fact you have someone--it is not just a nation 
with nuclear weapons like an Iran or North Korea. A violent 
extremist group, you know, that could smuggle one in that they 
got because we didn't control nuclear proliferation, the 
consequences to the country would be severe and then everybody 
would be saying, well, gee, why don't you do anything about 
port security. And our point--and we have been doing this, you 
know, since 2004, said look, you just tell us how much money 
you are willing to spend on national security, OK. It was 
higher, and then after sequestration might be lower. Let's--you 
can't buy perfect security but let's do some cost-benefit 
analysis to make sure that we, you know, get the most bang for 
whatever buck we are going to spend.
    And I understand people are concerned, they want east coast 
missile sites. Well, the head of the Strategic Command is 
saying, well, we don't need them. Well, if you are going to put 
money into that, why don't you, instead of putting it into 
that, put it more into port security. I mean, that is the type 
of thing that we are trying to do. And again, because the Coast 
Guard itself, and you know, doesn't come up, they don't have a 
political spokesman like Secretary Panetta saying, oh, my 
goodness, you got sequestration, we will be back to where we 
were in 1916, nobody pays attention to that. They need someone 
to get out and make the point that you are, somebody like a 
Secretary Panetta or something that can say, look, ladies and 
gentlemen, let me tell you, of course, you have cut this by 
this amount which you just mentioned. This is what you are 
risking. Then I think they would get more political support for 
it, but in my association with them over the years, they don't 
do that. It is always we can do more with less.
    Well, I told them what I used to teach there, that is what 
you are going to get, and you have got to be more, more 
dramatic about it. And so I think that is what I would urge 
them to do, and again, it is not just the Congress, the 
administration should do that before they send their budget up. 
Even if you don't have a national security committee, there 
should be OMB or someone looking at those things together much 
like we look at the, you know, the four military services 
together.
    Ms. Hahn. Well, thank you. I know we are always looking at 
how to fund things and trying to find extra or dedicated 
revenue stream. One of the things that, Mr. Chairman, I have 
suggested and something I think we could at least look at is 
the customs money, customs fees that comes into the customs 
districts. It is based on containers and because it is about 
commerce, but I would argue that every container that comes 
into our ports certainly represents commerce, but they also 
represent risk. They represent risk to security, they represent 
risk to our environment, they represent risk to the 
infrastructure, whether it is the terminals and the wharves or 
the highways and the bridges when they are being carried to 
their final destination. We have been using that money, 
obviously, for other things, just like we have been using the 
harbor maintenance tax for other purposes, but I think we ought 
to look at where this money is actually coming in to our ports, 
why it is being collected and whether or not we might look at 
trying to redirect some of those funds back to the ports where 
they are collected for the purpose of securing and certainly 
maintaining the infrastructure for our national security.
    I yield back my time. Thank you.
    Mr. Hunter. I thank the gentlelady, and also, I would throw 
in there that it is probably, if you are checking cargo on 
American soil it is probably too late. You have got to have 
this cargo checked at its ports as they leave port of origin to 
come to the United States.
    If there are no further questions, does the gentlelady have 
any further questions? Then I thank the witnesses for their 
testimony and the Members for their participation, and this 
subcommittee stands adjourned.
    [Whereupon, at 11:50 a.m., the subcommittee was adjourned.]
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