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



 
                         [H.A.S.C. No. 113-98]

         OPERATION AND MAINTENANCE WITHOUT OCO FUNDS: WHAT NOW?

                               __________

                                HEARING

                               BEFORE THE

                       SUBCOMMITTEE ON READINESS

                                 OF THE

                      COMMITTEE ON ARMED SERVICES

                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             SECOND SESSION

                               __________

                              HEARING HELD

                             MARCH 27, 2014



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                       SUBCOMMITTEE ON READINESS

                 ROBERT J. WITTMAN, Virginia, Chairman

ROB BISHOP, Utah                     MADELEINE Z. BORDALLO, Guam
VICKY HARTZLER, Missouri             JOE COURTNEY, Connecticut
AUSTIN SCOTT, Georgia                DAVID LOEBSACK, Iowa
KRISTI L. NOEM, South Dakota         COLLEEN W. HANABUSA, Hawaii
J. RANDY FORBES, Virginia            JACKIE SPEIER, California
FRANK A. LoBIONDO, New Jersey        RON BARBER, Arizona
MIKE ROGERS, Alabama                 CAROL SHEA-PORTER, New Hampshire
DOUG LAMBORN, Colorado               WILLIAM L. ENYART, Illinois
E. SCOTT RIGELL, Virginia            PETE P. GALLEGO, Texas
STEVEN M. PALAZZO, Mississippi
                Ryan Crumpler, Professional Staff Member
               Vickie Plunkett, Professional Staff Member
                         Nicholas Rodman, Clerk















                            C O N T E N T S

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                     CHRONOLOGICAL LIST OF HEARINGS
                                  2014

                                                                   Page

Hearing:

Thursday, March 27, 2014, Operation and Maintenance Without OCO 
  Funds: What Now?...............................................     1

Appendix:

Thursday, March 27, 2014.........................................    29
                              ----------                              

                        THURSDAY, MARCH 27, 2014
         OPERATION AND MAINTENANCE WITHOUT OCO FUNDS: WHAT NOW?
              STATEMENTS PRESENTED BY MEMBERS OF CONGRESS

Bordallo, Hon. Madeleine Z., a Delegate from Guam, Ranking 
  Member, Subcommittee on Readiness..............................     2
Wittman, Hon. Robert J., a Representative from Virginia, 
  Chairman, Subcommittee on Readiness............................     1

                               WITNESSES

Field, Lt Gen Burton M., USAF, Deputy Chief of Staff for 
  Operations, Plans and Requirements, United States Air Force....     7
Huggins, LTG James L., Jr., USA, Deputy Chief of Staff for 
  Operations, United States Army.................................     3
Mulloy, VADM Joseph P., USN, Deputy Chief of Naval Operations for 
  Integration of Capabilities and Resources (N-8), United States 
  Navy...........................................................     5
Walters, LtGen Glenn M., USMC, Deputy Commandant for Programs and 
  Resources, United States Marine Corps..........................     6

                                APPENDIX

Prepared Statements:

    Wittman, Hon. Robert J.......................................    33

Documents Submitted for the Record:

    [There were no Documents submitted.]

Witness Responses to Questions Asked During the Hearing:

    Mr. Scott....................................................    37

Questions Submitted by Members Post Hearing:

    Mr. Wittman..................................................    41


         OPERATION AND MAINTENANCE WITHOUT OCO FUNDS: WHAT NOW?

                              ----------                              

                  House of Representatives,
                       Committee on Armed Services,
                                 Subcommittee on Readiness,
                          Washington, DC, Thursday, March 27, 2014.
    The subcommittee met, pursuant to call, at 9:07 a.m., in 
room 2118, Rayburn House Office Building, Hon. Rob Wittman 
(chairman of the subcommittee) presiding.

 OPENING STATEMENT OF HON. ROB WITTMAN, A REPRESENTATIVE FROM 
         VIRGINIA, CHAIRMAN, SUBCOMMITTEE ON READINESS

    Mr. Wittman. I call to order the Subcommittee on Readiness 
of the House Armed Services Committee. And I want to welcome 
all of our members and our distinguished panel to today's 
hearing focused on ``Operations and Maintenance Without OCO 
[Overseas Contingency Operations] Funds: What Now?''
    This morning we have with us Lieutenant General James L. 
Huggins, Jr., Deputy Chief of Staff of the Army for Operations; 
Vice Admiral Joseph P. Mulloy, Deputy Chief of Naval Operations 
of Integration of Capabilities and Resources; Lieutenant 
General Glenn M. Walters, Deputy Commander of the Marine Corps 
for Program and Resources; Lieutenant General Burton M. Field, 
Air Force Deputy Chief of Staff for Operations.
    Gentlemen, thank you so much for joining us and thank you 
for your service to our nation. It really means a lot to us. 
Thank you.
    Since the terrorist attacks on 9/11 the U.S. military has 
deployed thousands of U.S. service members, Federal civilian 
employees, and contractors around the world in support of 
operations focused on counterterrorism, counterinsurgency, 
ballistic missile defense, and security assistance. The 
military services have also dedicated immense resources to 
repairing war-torn equipment, developing new technologies, 
modernizing the force, training units, and shoring up homeland 
defenses.
    The bulk of these activities have been paid for outside the 
normal Defense Department budget process through a yearly 
wartime Overseas Contingency Operations supplemental budget. 
OCO funding, as it is called, has played and will continue to 
play an essential role in military readiness.
    Most importantly, it supports our combat operations and our 
men and women in harm's way. It remains critical to protecting 
our forces as we draw down in Afghanistan and allowing them to 
successfully conduct their mission.
    OCO is essential for the retrograde of equipment from 
theater and the transition of security responsibility to Afghan 
national security forces. This need will be especially acute if 
a bilateral security agreement is signed with the government of 
Afghanistan.
    Some would characterize OCO as unnecessary after 2014. 
However, the fact of the matter is that the rapidly broadening 
scope of challenges now facing our military has led to the 
Department to become increasingly dependent on OCO to support 
enduring activities, activities beyond Afghanistan's borders 
that must continue after combat operations have ended.
    OCO funds a multitude of enduring, high-priority activities 
like building partner capacity, providing humanitarian 
assistance, conducting training exercises, and performing 
intelligence functions. We must find a way to migrate the 
billions of dollars in funding for these essential and enduring 
activities from the OCO to the base budget, which presents an 
enormous challenge that only becomes more difficult if 
sequestration continues to squeeze the base budget.
    Until we are able to do so, we have a responsibility to 
provide the necessary OCO resources to allow our troops to do 
the job we have asked them to do. However, that does not mean 
we will stop providing vigorous oversight of the OCO budget or 
that hard choices will not have to be made.
    I would now like to turn to our ranking member, Madeleine 
Bordallo, for any remarks that you may have.
    [The prepared statement of Mr. Wittman can be found in the 
Appendix on page 33.]

 STATEMENT OF HON. MADELINE Z. BORDALLO, A DELEGATE FROM GUAM, 
           RANKING MEMBER, SUBCOMMITTEE ON READINESS

    Ms. Bordallo. Mr. Chairman, thank you. And thank you for 
convening this hearing on a very important topic that will have 
significant impacts on the readiness of our forces as we wind 
down in Afghanistan.
    To all of our witnesses here today, thank you for your 
testimony and for your service to our great nation.
    Admiral Mulloy, I want to welcome you here today. Here we 
have another top leader in the Navy who got some early training 
out on Guam. And I know that our Guam Chamber of Commerce has 
appreciated your leadership on a number of issues and says 
hello.
    Since the terrorist attacks on the U.S. homeland on 
September 11, 2001, the Department of Defense has relied upon 
supplemental appropriations to pay for counterterrorism 
operations through the Overseas Contingency Operations, or OCO, 
budget. Since 2001 the Department has received nearly $1 
trillion in OCO funds to pay operations in Iraq, Afghanistan, 
and elsewhere in combating terror threats across the globe.
    OCO funds have been critical to funding current operations, 
but as the war in Afghanistan winds down we need to begin 
preparing for what the world will look like without OCO funds. 
OCO funds have been particularly used to fund certain readiness 
needs such as flying hours and steaming days, specialized 
training, and equipping service members for the 
counterinsurgency mission. The Army and the Marine Corps are 
particularly reliant upon these funds to pay for reset of 
equipment that is retrograding from theater.
    I hope that our witnesses will discuss how and when each of 
the services would move these readiness activities into their 
base budgets in the out-years and the extent to which the 
specter of sequestration complicates that effort. As the 
services begin to program for activities that have been paid 
for under OCO during the past decade, where do you take risk if 
they are not covered in the base budget?
    I also hope that our witnesses from the Army and the Marine 
Corps will talk about the risk to resetting their equipment if 
OCO funds dry out. And I would like to hear a good discussion 
on what equipment the Navy and Air Force have on resetting, as 
we rarely hear about their reset challenges.
    And I yield back, Mr. Chairman.
    Mr. Wittman. Thank you, Ms. Bordallo.
    We will now go to our witnesses.
    Lieutenant General Huggins, we will begin with you.

 STATEMENT OF LTG JAMES L. HUGGINS, JR., USA, DEPUTY CHIEF OF 
            STAFF FOR OPERATIONS, UNITED STATES ARMY

    General Huggins. [Off mike.]
    Mr. Wittman. If you could go ahead and get you to turn your 
microphone on? Thank you.
    General Huggins. Chairman Wittman, Ranking Member Bordallo, 
members of the subcommittee, thank you very much for the 
opportunity to come testify this morning here on the importance 
of the contingency funding along with my joint service 
partners. I am here to really emphasize the fact that the 
investment in your Army over the past 13 years, provided in 
large part by OCO, has ensured our success in both Afghanistan 
and Iraq as well as other contingencies around the world.
    Your support of the fiscal year 2014 Consolidated 
Appropriation Act and the Bipartisan Budget Act has also 
allowed the Army to begin to regenerate readiness, and these 
funds are critical for our training in the future; for 
contingency operations; as you both mentioned, the reset of our 
equipment; and to rebuild the readiness of the global 
contingency force, which we need to keep ready every day.
    Finally, on behalf of the Army and the over 155,000 
soldiers that are either forward-deployed or forward-stationed 
today, many of whom whose missions and training were funded by 
OCO, I would like to say thank you for your support.
    The OCO funding has been essential in enabling the Army to 
surge its manning, its equipping, and its training in a time of 
war, as well as sustaining the force in extended operations and 
then resetting that force after redeployment in order to, 
again, rapidly rebuild readiness for the nation, which will be 
also very critical to rebuild that readiness in the future as 
we become smaller.
    It has also permitted the Army to support our deployed 
joint force partners here at the table with us, as the Army 
serves as the executive agent for many title 10 logistics and 
support functions. And in my role as the Deputy Chief of Staff 
for Operations, Readiness, and Mobilization I can tell you I am 
concerned with the collective impact that a lack of Overseas 
Contingency Operations funding would have on our ability to 
rebuild readiness and then move towards a balance of the force 
as we restructure it in the future between readiness, 
modernization, and end strength or force structure. But I am 
also concerned, as we are doing missions around the world 
today, that it will impact our ability to support our sister 
services who are deployed alongside of us in many of the AORs 
[areas of responsibility] which you visited.
    The implications of not receiving OCO in a timely manner 
would force the Army to reprioritize its remaining base funds 
for the readiness of our deployed and deploying units only. The 
Army would be forced, similarly, as we did in fiscal year 2013, 
to absorb the reductions by reducing collective training of all 
units that don't have that deployed or--deployed mission.
    The Army has three specific concerns as we look at the 
future of OCO funding. The first is that, as leaders have 
testified many times both last year and this year, the Army 
will require overseas contingency funding for years to come--
approximately 3 years, by our estimate--to finish the reset of 
equipment when the last piece comes out of Afghanistan.
    The cost is estimated at about $9.8 billion and we have 
been given a little over 3 [billion] for funding for that this 
year. And again, that is going to go a long ways to, again, 
help rebuild our readiness down the road.
    And again, I just would say that this equipment that we are 
trying to retrograde to reset from Afghanistan in many cases is 
our most modern equipment, because we have had our best 
equipment forward. And it will be vital to the improvement of 
not just the active Army in the future, but all of our 
components, both the National Guard and Army Reserve.
    And the second concern is that OCO is the source of funding 
not only for our operations in Enduring Freedom, but also for 
many other operations and contingencies around the world: on 
the continent of Africa, missions such Observant Compass, 
Juniper Micron; in the CENTCOM AOR [United States Central 
Command area of responsibility], in addition to OEF [Operation 
Enduring Freedom] we have funded parts of Operation Spartan 
Shield in Kuwait as well as JTF [joint task force] Jordan. So 
it is more than just Afghanistan for many, as you both pointed 
out.
    If there is not an OCO appropriation the funding for these 
contingency operations, just as I said previously, will have to 
be absorbed into the base--and this is especially problematic 
during the times of a declining budget.
    And the last concern we have is the temporary end strength, 
which was agreed to by Congress and funded through OCO, allowed 
the Army to support the demands precipitated by two surges in 
Iraq and one surge in Afghanistan. It enabled us to maintain 
some level of dwell for our soldiers between many multiple 
back-to-back deployments.
    It has always been clear we would reduce that end strength, 
but it is going to take a little bit of time. As the chief just 
testified, we have accelerated our reductions so a move towards 
that 490,000 in the active force by 2015.
    The readiness in the Army for ongoing operations around the 
world and contingencies is critically dependent upon receiving 
Overseas Contingency Operations funding appropriations. The 
absence of that OCO would severely underman the Army readiness 
initiatives we have taken this year, thanks to the 2014 
appropriations, to start to rebuild that. It would, in my 
opinion, move us towards hollowness. And it would increase the 
risk both to our soldiers and to our mission for this nation.
    And I look forward to working with Congress to find a 
solution that will help the Army ensure that we remain the best 
Army in the world and be able to fully respond when the nation 
calls. Thank you very much.
    Mr. Wittman. Thanks, Lieutenant General Huggins. Thank you.
    Vice Admiral Mulloy.

STATEMENT OF VADM JOSEPH P. MULLOY, USN, DEPUTY CHIEF OF NAVAL 
OPERATIONS FOR INTEGRATION OF CAPABILITIES AND RESOURCES (N-8), 
                       UNITED STATES NAVY

    Admiral Mulloy. Chairman Wittman, Representative Bordallo, 
and distinguished members of the subcommittee, thank you for 
this opportunity to appear before you today to discuss the 
Navy's use of Overseas Contingency Operation funds, or OCO, and 
the Navy's also enduring need for supplemental funds as you 
support the end of the war in Afghanistan and continue to 
support critical national security needs around the world in 
the Middle East area.
    OCO funding, in addition to our base budget, continues to 
play a critical role in maintaining the capability, capacity, 
and readiness of our Navy to support our combatant commanders 
in addition to meeting the missions of defense planning 
guidance. On any given day there are approximately 6,000 
sailors ashore and another 10,000 afloat throughout the CENTCOM 
area of operations. These sailors are conducting maritime 
infrastructure protection, explosive ordinance disposal, 
counter IED [improvised explosive device], contingency 
construction, cargo handling, cargo logistics, maritime 
security, civil affairs, base operations, and other forward-
presence activities--supporting special forces, among--and many 
other forces.
    For over 10 years OCO funding has allowed the Navy to 
operate at a wartime operational tempo throughout the Middle 
East. As the land war draws down, the Navy is uniquely 
challenged because our forces will continue to serve and 
provide presence in the CENTCOM region as boots on the ground 
actually move out of some countries.
    As we reduce our ground combat forces, intelligence, 
surveillance, and reconnaissance requirements will remain 
steady or even increase. Transportation and retrograde 
requirements are increasing as we prepare to ship cargo and 
equipment to come back home. Sustaining this long war fight has 
worn upon the material conditions of our ships and OCO funding 
has become a critical component of our ship maintenance 
program.
    Our afloat and expeditionary forces in the Middle East 
remain forward to defeat aggression. However, the demand for 
naval presence in the theater will remain high for the 
foreseeable future.
    As the Navy's resource officer, I am concerned that if the 
Navy remains at our current level of operations that it will 
not be sustainable within our baseline budget. We use OCO 
funding to reset our ships and equipment. Timing is based on 
when--timing is based upon when does the operations end, but 
equally important for our ships is the availability of the 
platforms and dry docks to actually reset them when they come 
back, so there is a critical timing element here as well as, in 
our reset we find for--that I will define later in terms of 
years.
    The capital nature of our assets of our ships make long-
term supplemental reset more critical to the Navy, as in the 
current fiscal environment, any transition from OCO to base at 
the current base top line, or worse, under sequester laws, 
would drive all of our bases down, and our limited budget will 
pressurize our already difficult decisions as we work to 
balance our force structure, modernization, and readiness. 
Without additional supplemental funding I am concerned that all 
three of these areas will suffer.
    We support the transition from OCO to base funding and will 
work with the administration and the Department of Defense as 
they develop transition options. However, it must be done in a 
progressive and responsible way to prevent destabilization of 
operations in the Middle East, an acceptable risk in our 
ability to fulfill our global missions, and have no dramatic 
impact upon our critical force structure and procurement 
accounts.
    I ask for Congress' continued support in sustaining OCO 
funding while we gradually and responsibly transition from OCO 
to base in our future years. Thank you again for this 
opportunity. I look forward to answering your questions.
    Mr. Wittman. Thank you, Vice Admiral Mulloy.
    Lieutenant General Walters.

 STATEMENT OF LTGEN GLENN M. WALTERS, USMC, DEPUTY COMMANDANT 
     FOR PROGRAMS AND RESOURCES, UNITED STATES MARINE CORPS

    General Walters. Good morning, sir.
    Chairman Wittman, Ranking Member Bordallo, and esteemed 
members, thank you for the invitation to appear before the 
subcommittee to discuss Overseas Contingency Operations budget 
and readiness.
    Can I borrow your speak slowly slide? Thanks.
    As the Marine Corps--inside joke, sir. Sorry. As Marine 
Corps Deputy Commandant for Programs and Resources it is my job 
to obtain the resources to ensure we remain America's crisis 
response force. That means marines deployed overseas, whether 
in Afghanistan, providing steady state presence, or training 
with our international allies, are ready. They will have the 
right equipment and the right training to accomplish their 
mission.
    My Commandant has tasked me with prioritizing our resources 
to support readiness as our top priority. We generate readiness 
through our operation and maintenance accounts.
    For operations supported by OCO, operations and maintenance 
supports of the Marine Corps--support the Marine Corps' 
incremental cost of combat operations to include training and 
equipment repair. The remaining OCO request covers 
infrastructure repair, equipment replacement, and temporary end 
strength above the baseline Active Duty force.
    However, as we wind down our operations in Afghanistan the 
size of our OCO budget will decrease. We will no longer need 
our temporary end strength but we will still need some funds to 
support our enduring activities and to complete the reset of 
our equipment for several years. Without an OCO budget we will 
be forced to take further risk in our equipment modernization 
and infrastructure sustainment programs in order to maintain 
near-term readiness.
    I look forward to answering any questions you have. Thank 
you.
    Mr. Wittman. Thank you, Lieutenant General Walters.
    We will now go to Lieutenant General Field.

  STATEMENT OF LT GEN BURTON M. FIELD, USAF, DEPUTY CHIEF OF 
STAFF FOR OPERATIONS, PLANS AND REQUIREMENTS, UNITED STATES AIR 
                             FORCE

    General Field. Chairman Wittman, Ranking Member Bordallo, 
thank you for the opportunity to provide you with an update on 
your Air Force and how we use OCO funding.
    Today your Air Force is engaged globally, supporting 
combatant commander requirements and executing national 
strategy as prescribed by the 2012 Defense Strategic Guidance. 
Much of our engagement is supporting Operation Enduring 
Freedom, and that is all funded by OCO.
    In fiscal year 2014 the Air Force is executing about $16.6 
billion in OCO funding. OCO represents 13 percent of the total 
Air Force discretionary budget, and that means we are heavily 
reliant on OCO.
    In general we apply OCO to three different appropriations: 
operations and maintenance, or O&M procurement; and military 
personnel. Most of the funding goes to O&M so I am going to 
start there.
    In fiscal year 2014 our OCO appropriation exceeded $10 
billion. In addition, with the BBA, thank you for providing us 
with an additional $2.8 billion that we are allowed to put 
toward flying hours, readiness, and weapon system sustainment.
    Overall, that OCO funding O&M funding is about 20 percent 
of our total O&M budget. And again, it indicates a heavy 
reliance on OCO funding for readiness and day-to-day operations 
in the United States Air Force.
    Within the $10 billion of OCO O&M, $2.8 billion is funding 
321,000 flying hours in support of OEF. Now, unlike most of our 
colleagues, most of our airmen are not stationed inside of 
Afghanistan.
    While we do have 5,000 airmen and multiple hundreds of 
airplanes in that region, most of them are in bases surrounding 
Afghanistan, which provides a great advantage to the commander 
there. But bases like Ali Al Salem, Al Udeid, Al Dhafra, 
Thumrait, and Manas are all funded by OCO.
    This leads to a second major O&M expense, which is the $2.7 
billion in base operating support for these bases. This 
includes the housing, dining, sanitation, utilities, operation 
and maintaining of vehicles and support equipment, as well as 
the comm [communications] and security required to operate a 
base.
    We also fund with OCO the airlift transportation required 
for OEF. In fiscal year 2014 $2.2 billion was allocated to 
inter- and intra-theater airlift, air medical evacuation, and 
commercial tenders.
    Finally, all of our weapon systems supporting OEF have to 
be maintained. In fiscal year 2014 we used $1.8 billion in 
weapon system sustainment cost, and that primarily consists of 
aircraft and engine depot inductions driven by increased 
aircraft utilization rates.
    And it also includes contract logistic support needed for 
assets in theater. For example, two-thirds of our RPA, remotely 
piloted aircraft, requirement is funded by OCO.
    In addition, fiscal year OCO--2014--fiscal year 2014 OCO 
funds fund nearly $3 billion in procurement, which includes 
replenishment of the aircraft, missiles, ammunition, and other 
equipment that need to be reset.
    Finally, we use about $860 million in personnel cost, which 
includes the man-days we use to leverage our Guard and Reserve 
forces. As you know, the Air Force heavily relies on our Guard 
and Reserve forces, and without their participation we couldn't 
do what we do today.
    We are still formulating the fiscal year 2015 OCO request 
but it is going to basically be categorized as reset, 
retrograde, and enduring requirements. Like all services, the 
Air Force anticipates OCO funding will be needed for a couple 
years to reset both in procurement for asset recapitalization 
and O&M funding for equipment repair.
    In addition, we are carefully planning retrograde, which is 
going to include conducting detailed cost-benefit analysis to 
determine what should and should not be retrograded. And that 
planning is ongoing, just like the other services.
    So you are familiar with retrograde and reset but you may 
not be familiar with the potential for enduring requirements. 
These requirements are a particular concern to the Air Force 
because we have indications that both Air Force airmen and 
platforms will be in high demand in CENTCOM and in other 
theaters even when combat operations end, regardless of how 
many boots are on the ground in Afghanistan.
    For example, I recently polled all of the COCOM [combatant 
command] J3s [joint staff operations] and asked them what their 
future requirements for Air Force airmen will be. Every one of 
them said their requirements were going up, not down--to 
include CENTCOM.
    So what does that mean? It obviously always means ISR 
[intelligence, surveillance, and reconnaisance], it always 
means fighters, and it always means bombers. Those come with a 
requirement for airlift; they come with a requirement for 
refueling; they come with a requirement for command and 
control; and they also come with a requirement for personnel 
recovery.
    In CENTCOM those bases I mentioned earlier that aren't in 
Afghanistan but are OCO-funded will be the enduring presence 
that CENTCOM will rely on to--in the future. It is likely they 
will remain regardless of the outcome of operations in 
Afghanistan.
    So we may label the continued deployment or associated base 
operation support as a baseline requirement, an OCO 
requirement, or whatever requirement, but if required, we need 
to resource it.
    We have already in fiscal year--in this current President's 
budget proposal shown how dire we are in the baseline budget. 
We are going to cut over 20,000 airmen and 500 aircraft without 
moving any base--any OCO into the baseline.
    With the funds required for operating those bases in the 
region--again, Ali Al Salem, Al Udeid, Al Dhafra, Thumrait, any 
other residual requirement in Afghanistan--we would have a very 
difficult challenge moving that into the baseline.
    So despite these challenges, we emphasized readiness with 
your BBA [Bipartisan Budget Act of 2013] funding and we do 
appreciate that, and that will help reverse the long downward 
trend of readiness and our ability to meet the strategy. That 
recovery will take a while, though.
    If we don't receive appropriate OCO or baseline funding we 
will be forced off that recovery path and the readiness will 
likely get worse. The reason is OCO reset, retrograde, and 
enduring requirements are mostly O&M bills. We will have to tap 
into our baseline O&M funds to pay those bills.
    Now, what happens then? We hit our flying hour program; we 
hit our readiness; we hit our weapon system sustainment.
    We saw in fiscal year 2013 what happens when sequestration 
and basically budget cuts forced us into steep and sudden cuts. 
We stood down 31 fighter squadrons, for example, and those 
fighter squadrons didn't fly for--fighter and bomber and C-2 
squadrons didn't fly for 3 months and we are still trying to 
recover from that 3-month non-flying period.
    If we are forced to put the OCO into our baseline budget we 
are going to have to make similar cuts for an extended period 
of time in the future. That means that we will be basically--do 
our best to be ready for requirements now and have little to no 
reserve for anything that might come up suddenly that we hadn't 
anticipated.
    So thank you again for the opportunity to talk to you today 
and I look forward to your questions.
    Mr. Wittman. Very good. Thank you so much, Lieutenant 
General Field.
    I am going to defer my questions and go to the ranking 
member, Ms. Bordallo, for her questions.
    Ms. Bordallo. Thank you, Mr. Chairman.
    My first question would be, I guess, for each of our 
service representatives here today.
    Please describe your service's efforts to migrate enduring 
requirements into the base budget, and how does your service's 
fiscal year 2015 base budget request reflect efforts to return 
to a non-OCO budgetary world? What specific functions have you 
moved from OCO to base and how challenging has sequestration 
made that task? And what is most at risk?
    We will start with you, General.
    General Huggins. Thank you, Ranking Member Bordallo. I 
would have to start out that probably the biggest challenge is 
the unknown of the future fiscal environment, in terms of 
whether 2016 will be full sequestration or where are we at. We 
understand that is the law of the land and that is where we are 
looking, but it does make it programmatically difficult for us 
to project how we will migrate those funds.
    We have done some of that already, most specifically in the 
area of equipment that we reset. Many of the items that have 
come to the Army as a result of the war in terms of mine-
resistant ambush-protected vehicles, the MRAPs, and our 
critical ISR assets, which are invaluable on the battlefield, 
those have migrated into the base in terms of reset and ability 
to project or sustain their--in our inventory. So we are 
holding on to the best of those pieces of equipment, moving 
them into the base.
    We will follow a very similar model as we look at, as 
General Odierno has mentioned, as we look at the targets based 
upon the future environment that we will shrink the Army to, 
following the same methodology in terms of migration of funds 
into this. We do see it as the way of the future; it is just a 
matter of the fiscal uncertainty in terms of how quickly or how 
much we can do year by year, ma'am.
    Ms. Bordallo. I understand.
    General Huggins. Thank you.
    Ms. Bordallo. Admiral.
    Admiral Mulloy. Yes, ma'am. Having been the budget officer 
for 4\1/2\ years, I have seen this develop. I would say to you 
in this budget right now the Navy has moved, working with the 
Office of Secretary of Defense, a couple areas--one has been 
flying hours, but only the baseline. The Navy operates at a 
readiness model of--we do a cycle readiness model of what is 
called 2.5, so pilots are ready, they get ready, they deploy, 
and they move up and down in the cycle.
    And we fund the Marine Corps, which all the Marine Corps 
aviation is funded in the Navy budget--everything from 
procurement of airplanes through flying hours. They pay for the 
people. They are funded at 2.0 because of their readiness 
model. The Commandant is always ready as that middle fighting 
face.
    So they are funded that and they are funded what we call 80 
percent of training and readiness matrix. When they deploy the 
MEUs [Marine Expeditionary Units], the ARG [Amphibious 
Readiness Group], and the carriers are funded at a baseline 
flying to where they are maintain ready. But that is not what 
is expected forward.
    So we fund the base to be able to go forward but the moment 
they get in the Middle East there is an operation of--they are 
at 125 percent of flying when they are anywhere in the Middle 
East, but if they are in Afghanistan it is 188 percent of 
this--they are not getting a lot more training but they are 
doing a lot more flying, so none of that has migrated to the 
base. What we find is that the CENTCOM and the Joint Staff and 
the National Command Authority expects aircraft carriers and 
ARGs to fly at higher levels when they go forward than what we 
are funded for in the base.
    But we have bought 80 percent back in the base that 10 
years ago, because of peacetime training offsets between OSD 
[Office of the Secretary of Defense] and the Hill, they said, 
``Hey, when you go forward, you cross the date line, you go 
through Straits of Malacca, almost everything is in OCO.'' 
Well, we walked that back to baseline and then flying.
    But there is a substantial amount--more than $1 billion of 
flying--that is still going on, which the Chairman of the Joint 
Staff will tell you is enduring and the CNO [Chief of Naval 
Operations] will tell you is--it is enduring but who is going 
to help me pay for it?
    In steaming we have basically moved also--we operate in 
what we call steaming days per quarter. When you are deployed, 
51 to 90 days is paid under way of the base budget; and when 
you are homeported it is 24 days. Well, we have been basically 
able to go from 45 and 20 to--from fiscal year 2016 and out--to 
51-24. Once again, we set the baseline to be ready to be around 
the world at a level.
    Right now we operate 58 to 63 days a quarter. You know, the 
steaming of the ships for the ARGs, the steaming of the 
carriers, and extra ships are all in--those extra days are OCO, 
once again. It is a supplemental, and the--as the Air Force 
general pointed out, what is the new order out there? What is 
the expectation?
    When we go to CENTCOM, we go to EUCOM [United States 
European Command], we go to AFRICOM [United States Africa 
Command], well they could go down but I am going to still 
demand 58 or 63 days out of my ships and I am funded at 51-24. 
And that difference is the support of Congress to give me that 
extra money, and so there is that.
    And of these overseas bases, the one base is Djibouti. We 
have moved the baseline money for that base as an enduring Navy 
EA [executive agent] that we fund that and that is now in our 
base. However, all the operations out of Djibouti, whether it 
is the Marine Corps operations, all the ships you see in the 
Middle East, once again, 51-24--anything beyond that, any 
flying beyond that, the Army guards that maintain the security 
over there, that is all in OCO.
    So HOA operations--Horn of Africa operations--are in OCO. 
The base itself in Djibouti is in my base because we have said 
that is an enduring.
    But the support I provide at Al Eisa, the base support for 
the Marine Corps aviation, the Navy EOD [Explosive Ordnance 
Disposal], and teams in part of Bahrain, that is in OCO. Fujir 
and some other places that we support special forces are in OCO 
also, because we have to have that determination what is the 
enduring presence.
    So those are the big risk areas. And the other one is in 
reset. We get tremendous support for ship maintenance and 
aviation maintenance but we get about 80 percent of our 
baseline is for ships, but ships actually wear--on a model, 
they wear out just being at sea.
    So we are dependent upon OCO and it is about $1.4 billion. 
I need to get it back in the base.
    But there are other areas of--we have--and we appreciate 
the support of Congress. Our reset of our ships--for the ships 
that deployed from 2006 to 2011 that did extra steaming we 
never--and we cut short their availabilities, we have had to go 
in and say, ``The next time that boat comes due we need to go a 
dry dock avail. We need to open up all the tanks and fix 
things.'' And for the last 2 years we had great support from 
Congress.
    When the 2015 comes you will see there is a ship reset, and 
that is somewhat unique. This will be the third year. And that 
needs to go for about 5 more years because it takes 8 years to 
work through the fleet.
    All the ships come due. Their next what we call ``selected 
restricted availability'' needs to be a docking restricted 
availability because I have to go in and do the maintenance on 
the ship that was cut short because it was in Norfolk, it was 
in Guam, somewhere it had to go. So therefore, underway now, we 
never did all that completion. It is about $1.4 billion--pardon 
me, $1.8 billion, but it needs to be over a number of years to 
be able to add that to the ship maintenance account.
    So those are the risks we take. It is the enduring, the 
present, and we have done some OCO to base, but I will tell 
you, the specter of the BCA [Budget Control Act] of the lower 
caps would dramatically--even without that it would be hard to 
bring all this in base.
    But what ties the hands, I believe, of DOD [Department of 
Defense] and it somewhat ties the hands of Congress unless you 
take action is if the caps don't come up we will always be up 
against that ceiling. So if I bring OCO into base, what comes 
out of the base then? Because there isn't the flexibility for 
the Secretary of Defense to ask for more, and without concerted 
action on the Hill, if you don't raise the top line you are 
going to drive potentially all of us further into our base 
accounts, which would be procurement and readiness.
    Ms. Bordallo. Thank you, Admiral, for making that very 
clear.
    General.
    General Walters. Yes, ma'am. Thank you for the question.
    We follow the Navy on the depots. Our aircraft are done in 
Navy depots.
    We also have our own depots. We have tried to fund our base 
budget to an enduring requirement, or what we think our 
enduring requirement will be. We think we have done that in 
2014 and we think that we have done that in 2015.
    Just to scope it for you, our O&M account in 2014 is 
slightly less than $9 billion. About 40 percent of that is in 
OCO. So if we have to move all that in the base--and I know all 
of that doesn't need to be moved into the base because we will 
draw down operations as we drive on--but we are still going to 
need the OCO for the reset 2, 3 years.
    It is a matter of phasing. Even if you brought all the 
equipment out today, if you put it on a ship today and 2 months 
later it got here, I still don't have the capacity in the 
depots to push it all through, so it is a phasing issue there.
    We have tried to migrate our training in there. Our field 
maintenance we have tried to put in our budget.
    But as with all the other services, as we look at a 
sequestered level in 2016 and out, what comes out is either our 
modernization accounts or our force structure. I think we have 
taken all the risk we can in the force structure end of the 
business. We don't want to get any smaller. I don't think the 
nation, as a steady state requirement for us, can afford to 
have us any smaller.
    Our budgets, as we moved some of these enduring 
requirements in the POM [program objective memorandum] process 
we have, in our budget at least, reduced our procurement 
accounts by at least 30 percent. What does that mean? That 
means we are a ready force now but we see a time in the future 
when a future Commandant will have a--hard choice of either 
having a fully trained or a fully equipped marine on the 
battlefield, and that is what we are facing, and sequestration 
just exacerbates the problem.
    Ms. Bordallo. Thank you. Thank you, General.
    General Field.
    General Field. Yes, ma'am. That is a great question.
    Over the past couple years the Air Force has done its best 
to migrate almost all of the flying hours that are not directly 
related to CENTCOM and OEF out into the baseline budget. We had 
some crossing of the beams there for a while and I think we 
have cleaned that up.
    In addition to that, we are funding our weapon system 
sustainment to 80 percent. Now some of that this year is with 
that OCO funding that you all provided, and we are grateful for 
that. But in the out-years we are looking to fund that at 80 
percent out of our baseline unless BCA comes back, and that 
will be cut again.
    So that is the primary things that we moved from OCO into 
the baseline.
    I think it is important also to remember that even with the 
BBA--and like all the other services, we are deeply grateful 
for the BBA--but even with the BBA in fiscal year 2014 that is 
about a $5.3 billion cut to the United States Air Force. And we 
have little clarity on what is going to happen after--from 2016 
and beyond other than the fact remains that BCA is still the 
law of the land.
    So we have a problem. We are already cutting 20,000 airmen; 
we are already cutting 500 aircraft. We have already seen the 
effects of a severe cut like sequester had on us last year. And 
as I just described, we have enduring requirements over--around 
the globe that are increasing.
    So at the end of the day we are going to have to either cut 
back on those requirements around the globe, which means that 
our ability to assure our allies and partners and deter 
potential adversaries is going to be at risk, or we are going 
to have to take that exactly as described from before, either 
out of some procurement program, which means our future 
viability is at risk; or our readiness, which means our airmen 
are going to be trained less and less ready when they arrive in 
battle; or both most likely.
    So the fact of the matter remains is that without this 
increased funding we will not be able to do anywhere what you 
are asking us to do today.
    Ms. Bordallo. I thank all of you gentlemen for being very 
clear on this.
    And I do have a couple other questions but right now I 
yield back to you, Mr. Chairman.
    Mr. Wittman. Thank you, Ms. Bordallo.
    And then we will now go to Mr. Scott.
    Mr. Scott. Thank you, Mr. Chairman.
    General Field, I represent Robins Air Force Base, and I 
would like to hear your thoughts on the curtailment of the OCO 
funding and the impact that it will have on the depot 
operations.
    General Field. Yes, sir. Again, I think, as everybody has 
described, we have been using OCO money to reset the equipment 
that we have been using in these operations in Enduring Freedom 
and before that in Iraqi Freedom, and so those are continuing. 
This year we used some of that BBA OCO funding that you allowed 
us to use in weapon system sustainment, which is directly 
applicable to our depot systems, which you have at Robins Air 
Force Base, and we continue--we are committed to maintain as 
much funding as possible to that--the weapon systems 
sustainment program.
    Right now that is at 80 percent and we are projecting that 
at--to remain at 80 percent and maybe higher as we see how 
that--how that goes. But if the BCA comes back we are going to 
have to reduce that funding below that, and that will be 
problematic in terms of having aircraft available to both 
operate in areas around the globe and to train with.
    Mr. Scott. What percentage of the funding for depot 
maintenance is coming from OCO right now?
    General Field. Sir, I will have to get back with you on 
that.
    Mr. Scott. Okay.
    [The information referred to can be found in the Appendix 
on page 37.]
    General Field. But ultimately we are going to--our intent 
is to move that and WSS [weapon system sustainment] into the 
baseline.
    Mr. Scott. Okay. Are there any particular areas of 
sustainment that will be hit harder than others?
    General Field. Sir, I think with--if we have to move the 
OCO into the base and we have those resources now required from 
our baseline, I think we will have across-the-board problems 
with every major weapon system that we have and in the other 
equipment that we use to equip our airmen to do their job in 
the battlespace.
    Mr. Scott. You talked about the 500 aircraft, 20,000 
airmen--that is the approximate reduction in the President's 
budget. That is about a 40 airmen per aircraft. Is that typical 
across the Air Force?
    General Field. Sir, what we did was we--when we went into 
this--to this planning effort we decided that we were going to 
have a couple guiding principles, and one of the guiding 
principles is if we were going to cut the tooth we were going 
to cut the tail. And so in the case of like the A-10, when we 
cut 283 aircraft out of our--out of our service, we are going 
to--we were able to take--we were planning on taking the 
personnel and the sustainment tail that goes with that. That 
allowed us to take cuts that were, while nobody likes this 
decision, gave us the least risk and the most payback. So we 
are able to get $4.3 billion by taking away the entire A-10 
fleet using this tooth and tail model.
    And then we were also looking across the board at where we 
were overmanned in personnel and looking to see what the effect 
would be is if we reduced that level. The problem is that part 
of our manning structure is based on what we normally do, and 
right now when you look across the globe both in OEF, in 
Africa, what is going on in Europe, and the requests out of the 
Pacific, we are actually required to do more than we are manned 
to do, and that is how we ended up with overages in personnel 
areas. But we are going to have to look at cutting all of that.
    Mr. Scott. I am extremely concerned about the A-10 drawdown 
and the pace at which it is being drawn down and the gap, then, 
between that drawdown and when new aircrafts will be available. 
I recognize it is an older platform. It is also an extremely 
effective platform.
    But no matter how good the F-35 is going to be, we can't 
have it in one place--in more than one place at one time, and 
if we draw down the A-10 over 24 months and it is 7 to 8 years 
before the F-35 is actually coming off the assembly line in 
adequate numbers, that seems to me to leave a gap in 
capabilities, but I understand there are extremely tough 
decisions to be made.
    General Field. Yes, sir. You want me to explain our 
rationale on the----
    Mr. Scott. Please.
    General Field. So the cuts from--to our budget were 
extremely onerous, I guess you would say. We had to take a--
figure out exactly what we were going to do to cut billions and 
billions and billions and billions of dollars out of the 
budget, and how to do that and maintain as much capability for 
our nation as possible.
    So we looked at what we provide the joint force, because at 
the end of the day it is not the Air Force that does the 
fighting; it is all of us together that do that. And so what we 
provide to the joint force is air superiority; we provide them 
precision attack; we provide ISR; we provide command and 
control of our air assets; and we provide mobility.
    And so we went through each one of those mission areas. Our 
chief talked to the chiefs--the rest of the Joint Chiefs and 
other COCOMs and he asked them exactly how--where they were--
what they were expecting of the Air Force in terms of air 
superiority, which enables movement and prevents movement of 
the enemy, in terms of precision attack, in terms of the 
ability to get to the fight fast and to get to move around the 
battlefield rapidly, in terms of ISR [intelligence, 
surveillance, and reconnaissance], to know what is going on and 
what happened in the latest fight.
    And after those discussions we looked throughout our 
portfolios and we looked at where we would provide the most 
bang for the buck in this particular case in precision attack, 
both in the deep fight, in strategic attack, and also in second 
echelon in areas right where we are--our men and women on the 
ground are joined at battle. And so we looked at who provides 
CAS [close air support].
    And right now we have over seven platforms that provide 
CAS. We provide CAS with bombers; we provide CAS with fighters; 
we provide CAS with RPAs [remotely piloted aircraft]. And when 
we looked at--we put that into campaign models we found that if 
we replaced the A-10 with F-16s or another platform, that the 
impact of that on the campaign model, for example in Korea, was 
minimal to none.
    And so we made that decision along with that guiding 
principle of tooth-to-tail to take the A-10 out of the 
inventory. Now we will take--we will move that over a 5-year 
period, and we are--and there is a lot of moving pieces behind 
that.
    But I will tell you that there is nobody--and I am first in 
line--that likes this decision. We do not like this decision. 
It is just the other decisions to come up with that much money 
are worse, and the A-10 can't do what those other platforms we 
would have to cut can do.
    So, for example, as an example, trying to get that much 
money out of the B-1 would require us to retire the entire 
fleet, and the B-1 is our only airplane that can employ the 
JASSM [Joint Air to Surface Standoff Missile] between now and 
2020 or 2019. Or we could take 350 F-16s out of the inventory; 
that is roughly about 14 squadrons worth of fighters. And those 
fighters can do CAS, they can do second echelon attack, and 
then they can do deeper strikes that can affect the future 
battlefield and different parts of enemy action and will.
    Or we could go into readiness accounts again and then we 
could make our Air Force less ready and less able to respond 
when called, and we are already at that point right now.
    So none of these decisions were palatable. None of them 
were good. All of them were very hard to make. And at the end 
of the day, that is why we decided on the A-10 versus some 
other area.
    Mr. Scott. Thank you.
    Mr. Wittman. Thank you, Mr. Scott.
    We will now go to Mr. Barber.
    Mr. Barber. Well thank you, Mr. Chairman. And I want to, 
before I begin my questions, thank you for leading us on that 
CODEL [congressional delegation] last week to Afghanistan--very 
informative. And once again, it reinforced my understanding of 
how dedicated our troops are in the face of very difficult 
circumstances in Afghanistan.
    Gentlemen, I want to thank you all for being here today, 
but more importantly, I want to thank you for your leadership 
and the many years of service you have given to our nation. I 
represent thousands of men and women in the Air Force at Davis-
Monthan Air Force Base and at Fort Huachuca down in Cochise 
County in the Army garrison, and I am very proud to have that 
role.
    Before I ask a question of General Huggins I want to go 
back to what was being discussed just before my turn came, and 
that is the A-10.
    General, I understand this was a tough decision. They are 
all tough decisions, and I think the irresponsible decision 
that Congress made to impose sequestration and these cuts on 
our Department of Defense are really the villain of the piece, 
so we need to deal with it. I have opposed sequestration. We 
will hope that we can come back and do something about that.
    But I want to associate myself with my colleague who just 
asked the question about the A-10. I really think that it is 
putting our troops in danger, quite frankly. Yes, I understand 
other platforms are available--the F-16, for example.
    But when I talk to the Army personnel down at Fort Huachuca 
they don't say, ``I wish the F-16 would show up,'' they say 
when the ugly warthog shows up they are having a much better 
day. And they understand, as we all do, that that is the best 
aircraft right now to provide close air support, flying low, 
flying slow, making sure that the enemy is running and our 
troops are protected, and I really hope that we can find a way 
to reconsider this decision until we have platforms in place 
that really will prevent the gap that we are going to be seeing 
as the divestment goes forward.
    We are going to continue to press the Air Force and the 
Secretary to make sure that we reconsider this decision, 
because I think it really does put our troops in jeopardy.
    I would like to turn now to talking about the Army, and 
Fort Huachuca in particular, General Huggins. Fort Huachuca is 
a wonderful place. I don't know if you have visited it, but if 
you haven't it is a fantastic facility--one of our national 
assets in terms of national security, I believe.
    The civilians and service personnel who work there I 
believe have and will continue to serve a vital role in the 
Army's intelligence and signal operations. Many of those 
service members work at the Army's Intelligence Center of 
Excellence, NETCOM [United States Army Network Enterprise 
Technology Command], and the 9th Army Signal Command 
headquarters, and they provide an important capability to 
operational requirements and contingency missions around the 
world. Secretary Hagel has rightly said that he wants to 
identify and pursue cybersecurity and cyber warfare as one of 
the DOD's top priorities, and I couldn't agree more.
    General, special missions like the one housed at Fort 
Huachuca have many operational requirements that blend their 
daily operations and maintenance with overseas contingencies. 
Could you tell us what impact you foresee Army--on Army 
intelligence and signal communities who have relied in the past 
on OCO funding to cover costs of many of its operations and 
maintenance?
    General Huggins. Thank you very much, and thank you for 
your words on Fort Huachuca. I have been there and I would 
agree with you.
    I would tell you that specifically in terms of the intel 
functions first, before the cyber, last year about $54 million 
in OCO was pushed into Fort Huachuca to support multiple 
operations--you know, most importantly the Foundry 
[Intelligence Training] Program. We provide reach-back 
capability for the commanders that are forward.
    I was fortunate enough to be the regional south commander 
in Afghanistan a few years ago when many of you visited, and we 
rely on not just Huachuca but many other installations where 
the intel center provides this reach-back capability by--what 
they fondly say, they keep no MI [military intelligence] 
soldier at rest, even in reset back at home station. They are 
training on a forward-deployed mission and looking at real-
world intelligence scenarios to help the commanders forward on 
that.
    So we have invested in OCO at Fort Huachuca in the past and 
continue to see the need to do so in the future, really to help 
our commanders, our soldiers that are forward doing the 
contingency missions.
    In terms of the cyber piece, I would only add it is 
probably the one of only two probably growth areas in the Army. 
As we look forward we are--obviously sequestration is tough.
    We have gone to a majority of the force and said, ``Hey, if 
you can remain neutral you probably have grown,'' but cyber 
certainly is. I agree that is a critical mission set and we 
have got a great new Army cyber commander who is working with 
U.S. Cyber Command to try and put our force structure together 
to meet the real-world requirements.
    Thank you, sir.
    Mr. Barber. Thank you, General.
    I yield back.
    Mr. Wittman. Thank you, Mr. Barber.
    We will now go to Mr. Enyart.
    Mr. Enyart. [Off mike.]
    Mr. Wittman. Okay. Thank you.
    We will go ahead and go through a second round of 
questioning.
    And, Ms. Bordallo.
    Ms. Bordallo. Thank you very much, Mr. Chairman.
    Admiral Mulloy, you know where--I am very interested in a 
certain part of the operation here and I want to ask you, how 
does the Navy's base budget cover the focus on the Pacific 
region and would that focus be jeopardized by losing OCO 
funding?
    Admiral Mulloy. Ma'am, there are some parts of OCO that 
supply some of the operations that support the intelligence 
function but generally the Pacific focus, which has been there 
in the Navy for over 80 years, is base-funded. But the risk 
is--we have is, you might say is, rising tides and lowering 
tides to level all boats.
    The risk to the Pacific would be if the requirements may 
not go away. I mean, we have to maintain our ships and we have 
to look where we are operating steaming, but if we have to 
swallow some further enduring into our base it competes with 
the entire base, and as I think all the witnesses have pointed 
out was, you have to focus your procurement accounts, your 
modernization accounts, and your other readiness accounts.
    So in many cases is, our focus would still be on the 
Pacific but if I have to lower the base for the entire Navy it 
will have a ripple over there. It still is our primary focus; 
it has been since the--obviously the 1930s when we moved the 
fleet to the Pacific, and then shortly after in 1944 Guam has 
become a central point out there also. And it was before that, 
but even more so since then.
    Those are areas we don't want to go but we have to look at 
trying to bring that enduring requirement for the Navy. If the 
combatant commanders don't come down and the top line doesn't 
go up we will be squeezed, and that will affect everyone.
    And that is obviously very much a tremendous concern, and 
our CNO has always said is, ``Warfighting first, be ready, and 
operate forward,'' are his three mantras, which is that basis 
of the Navy. We are operating forward and we will continue to 
do that.
    In the whole discussion we have always maintained our base 
metrics funded. It comes back again as to what do we have to do 
enduring--that is considered enduring--that the COCOMs consider 
enduring but the Navy's trying to figure out is it really 
enduring in this world, and we think it really is. And the 
Pacific will always be there for us but it is pressure on them 
indirectly.
    Ms. Bordallo. Thank you. Thank you, Admiral.
    General Huggins and General Walters I guess, if you could 
just--given the recommended changes in force structure in 
fiscal year 2015 budget, how confident are you that we are 
bringing home equipment that is really needed by the new force 
structure? And also, in a perfect world how many more years of 
OCO funding do you think is needed to get to the 100 percent 
reset completion? How would you complete reset if OCO funding 
were curtailed or eliminated?
    Just very quickly, either one of you?
    General Huggins. Thank you, ma'am. Again, back to the other 
comments, if it were curtailed we would have to absorb it in 
the base because we vitally need that equipment that is 
forward, as we have said, some of our most modern.
    We will prioritize it in that sequence as we bring it back 
in as we look to balance a lot of that equipment as it provides 
lethality, you know, mobility, and then protection for our 
soldiers in terms of our platforms. So what we are trying to do 
is find the best mix, and that is why we have slimmed down our 
mine-resistant ambush-protected vehicles and--to say we are not 
going to keep all of them but we will keep the absolute best of 
that and sustain that in it.
    So we will have to go through some prioritization. Again, 
the--would like to be able to keep more, but we have been given 
tough choices, ma'am.
    Ms. Bordallo. General.
    General Walters. Yes, ma'am. To date we just crossed the 80 
percent mark on our equipment in Afghanistan that we have 
retrograded. It has not all been reset; only about half of that 
has been--gone through reset.
    Our intent is to bring it--bring all that equipment out. We 
don't think we have any excess. There are going to be some 
disposed-of items that have been, through enemy action, 
rendered not viable to reset.
    How long are we going to need reset? Because of the timing, 
the phasing, and how long we can get it back here, our best 
prediction is 2 to 3 years. We are going to need OCO to reset.
    How important is reset? If we can't get it--if we can't get 
the equipment reset in the timeframe I just described we will 
have units that don't have the equipment and won't be ready to 
deploy at a future date--2017 would be a good date to think 
about that, yes, ma'am.
    Ms. Bordallo. Thank you. Thank you, General.
    Before I yield back my time I just want to go on record to 
thank Chairman Wittman for leading a few members here from the 
HASC [House Armed Services] Committee to a CODEL in Afghanistan 
and parts of Africa. And I was so very proud--we all were--to 
see our American troops who are training the African security 
forces and for the very harsh conditions that they are having 
to endure, especially the heat. And they did it all with a 
smile on their face, and we were all so very proud of our 
troops and I just want to go on record just saying that.
    And, Mr. Chairman, I yield back.
    Mr. Wittman. Thank you, Ms. Bordallo.
    Mr. Scott, would you like another round of questions?
    Mr. Scott. I will try to be brief out of respect for the 
witnesses, but the Rapid Innovation Fund is one of the other 
things I had questions about, and with the changes in the OCO 
funding Rapid Innovation Fund, if each of you could speak 
briefly to what type of impact that you will have on getting--
that will have on getting new weapon systems to your troops?
    General Huggins. Thank you very much. Obviously I think 
this has been an asymmetric event we developed over the past 13 
years of this war, and one that we are very interested in terms 
of how we are going to continue that.
    Inside the Army, we continue to leverage two entities. One 
is called the Asymmetric Warfare Group, which is in our TRADOC 
[United States Army Training and Doctrine] Command, and the 
other is the Rapid Equipping Force, which currently works for 
headquarters DA [Department of the Army] but will transition 
this year to TRADOC. It is very hard to program funds for those 
because whether we are leveraging commercial-off-the-shelf 
technology or whether we are working through research and 
development to develop our own niche capability, you just can't 
figure out when you might hit that breakthrough.
    The chief has us taking a look at how we might look even 
further into the future. I think you spoke together 2 days ago 
about the Army of 2025 and that technological advance we are 
trying to look for as an excursion he has asked our Training 
and Doctrine Commands, most specifically our Army Research and 
Capabilities Integration Command, to take forward because we do 
recognize that as a key way forward.
    The bill will have to compete as we look at our RD&T 
[research, development, and test] and our modernization, and 
is, again, it will be impacted by sequestration, but the chief 
has asked us to hold off a portion of it so we can continue to 
look to the future so we don't outrun our headlights for that 
matter, sir.
    Admiral Mulloy. Sir, for the Navy the Rapid Innovation Fund 
provides some of funds that we--from OSD that we compete for 
under the G-1 process, or what the Navy calls Speed the Fleet 
also. I would say is that concerns each and one--concerns us is 
about that is one source.
    But the other, I would say, is the more important source is 
the continued from this committee and the other committees is 
under the above-threshold reprogrammings. Many items come in, 
we are trying to say was, ``Hey, I want to put on''--I will 
give you an example.
    Just this past week tremendous support last year to put 
Griffin missiles and Mark-38 guns on our patrol combatants in 
the Middle East to provide security for all of our forces going 
to and from the Straits of Hormuz. This past week our LCSs 
[littoral combat ships] over there shot and went I think it was 
nine for nine on Griffin missiles at target barges, which 
simulate other countries' ships moving through the area.
    The support of the committees to allow us to reprogram in 
and make missiles and guns available on ships over there to 
continue these upgrades are important, so it is two part. We 
are concerned about OCO, but it is also the ability to move 
funds with--that we planned 24 months in advance but we need to 
say is, ``I really need to be here.''
    And so I would say is that is even bigger for us is your 
continued support for above-threshold reprogrammings and that 
omnibus to come is really important and is directly documented 
on the ability of our PC [patrol craft] commanders to have 
better guns, better communications and missiles in a high-
threat environment in the Straits of Hormuz.
    General Walters. Sir, I will echo my compadres' concern. If 
we have learned nothing in the last 12 years of war it is that 
we do need to turn inside the enemy. Even an unsophisticated 
enemy can come up with things that can deter us from 
accomplishing our mission or harm American citizens.
    We do not have a process that allows us to turn inside in 
the normal process. We need rapid innovation, whether it is 
developing the TTPs [tactics, techniques, and procedures] or 
getting something commercial-off-the-shelf or getting something 
rapidly to the fleet as a threat emerges. IEDs are a perfect 
example of that. You can build to protect and then they can 
adjust, and you have to innovate and continue to protect.
    So it is very, very important that we have the flexibility 
to do that inside the normal budgeting process. Having that 
kind of fund available so that we can rapidly get it, I have 
seen on my time in the Joint Staff we have gotten things to the 
combatant commanders and our commanders and troops in the field 
in 8 weeks. You cannot do that through the normal process, so 
we need to have access to the dollars and the authorities to 
use those to counter what we find in the world today.
    General Field. They have pretty much taken it all, 
Congressman. I will go first next time, yes. Basically, it does 
provide us an opportunity to get things out very quickly, and 
we have been able to take advantage of that over the past few 
years. The residual, though, is turning those programs into 
programs of record and having the continuing funding to sustain 
them in the long term.
    Mr. Scott. But if OCO goes away and we don't make an 
adjustment on the other side of the equation it is going to 
slow the process, isn't it?
    Okay. Thank you.
    Mr. Wittman. Thank you, Mr. Scott.
    Gentlemen, I want to ask a few overarching questions. 
Looking specifically at the current request for OCO in fiscal 
year 2015, so there is no detailed request there, what are your 
funding level assumptions going forward as to how you would 
execute the contingency operations overseas after October 1? 
And do you have in mind a fiscal year 2015 OCO number in order 
to be able to do that?
    And I will like each of your perspectives on that.
    General Huggins. Thank you, Mr. Chairman. This year we went 
with--we were--our top line $46 billion across MILPERS 
[Military Personnel] and across our OMA [Operation and 
Maintenance, Army], in terms of OCO funding. Our projection 
would be less. We can only go off of what historically we have 
spent in the past.
    As I talked to you we had--our end strength issue, as we 
continue to draw down, our--this year about $2.5 billion. As we 
continue to reduce the force that number should come down for 
2015 in terms of OCO.
    I spoke about the reset. Overall we see about $9.8 billion. 
I think this year we have put in about $3.6 billion, $3.5 
billion to work that critical reset to rebuild that readiness. 
I think those are the base figures.
    We could go into pretty exhaustive details if I went 
through the operations which you just saw in Africa, which are 
funded in OCO, which our assumption is, and just as General 
Field and others have said, the demand continues to come--go 
forward. I mean, it is pretty unstable and we support the 
priorities that the Joint Staff gives us.
    And I see the continent of Africa very similar if not 
busier in the future. So those fundings at that level between 
not just Chad but many other countries there.
    And then, you know, we still have our deterrence piece in 
Kuwait, which is also overseas contingency funding. So those 
are there and then, you know, we team with the Navy in terms of 
Guantanamo Bay, which I think those costs are also there.
    And then those are the typical ones most associate with, 
but we have also got Patriots in Turkey with supporting 
operations, which is, you know, vital to building our 
partnership capacity. And we have got a JTF [joint task force] 
headquarters in Jordan, as I said, which is, again, trying to 
help stabilize a situation which would be not in our best 
interest to go in the other direction.
    Thank you, sir.
    Mr. Wittman. Vice Admiral Mulloy.
    Admiral Mulloy. Congressman, I would say is if you looked 
ahead you would find is the Navy and all your OCO budgets have 
generally been one of the lower one because we have our base 
budget does a lot of our forward deployment. But I will also 
tell you, if you looked at it we have also had the least change 
over the last couple years because, as I mentioned before, as 
people come out we still have to be out there and operating at 
the same basic levels.
    So in many cases, if you looked in a crystal ball you would 
find that there is maybe a determination of troops on the 
ground. I mean, for us it is 1,000 IAs [Individual Augmentees] 
of our great reservists being mobilized; it is the combat pay 
for that period; it is the SEALs [sea, air, land] and the EOD 
teams and other people and Seabees over there that will be 
determined on the boots on the ground.
    But that is still just a very small percent--less than 10 
percent of my OCO request. The largest part of it is all those 
operations forward in the Middle East that support everything 
from Western Africa through probably Eastern Africa all the way 
through to the Middle Eastern area, and that will remain 
largely the same and/or support as we continue to go ahead.
    How we will handle it in October is--the concern would be 
is if there is not a bridge supplemental or some other event 
invoked here is cash flow, where I would have a substantial 
amount of my fleet operations, my fleet commanders would have 
to do that. It would come back to the ones you have seen 
before--deferred ship maintenance, other areas--because I have 
to fund that presence of the 32 ships in the Middle East, the 
54 in the Western Pacific.
    Nothing changes on 1 October compared to 30 September. 
Nothing changes the airplane pilots taking off of the George 
H.W. Bush who is flying over Afghanistan. That plane and the 
Afghans don't know it is 1 October. I need to fund it, and that 
is what is going to continue on.
    And I have a risk, and I think the Army has the largest 
risk--we all have risk of cash flowing, but ours is 
substantial; theirs is even more because that doesn't stop. So 
it is important to think about a solution, and I have certainly 
seen some discussions between the Hill and the White House 
about perhaps a bridge fund or 3 months of it saying, ``Where 
do we go?''
    But I will tell you that my budget will look very much in 
2015 like it did in 2014 when we--when that finally settles, 
sir.
    Mr. Wittman. Very good.
    Lieutenant General Walters.
    General Walters. Yes, sir. It would be perfect if both 
budgets came over simultaneously and we could balance them. We 
are not that.
    I understand the Department's position of awaiting 
decisions on what our commitment is going to be to Afghanistan. 
The Commandant's commitment is that if we have people, much 
like every other service, none of us are going to send people 
in harm's way without funding them correctly.
    I share the same concerns on cash flowing because I 
understand the risk that we take. We can't recover from those 
activities if we have to cash flow it because contracts don't 
get let, you know, readiness falls off. If you give up $10 of 
readiness it costs you $20 to get it back, and those are all 
things that we are worried about.
    We are providing Special-Purpose MAGTF-CRs [Marine Air-
Ground Task Force Crisis Response]. Those are in OCO right now. 
The one we have in Moron, if you remember, in December was the 
one that went down to Sudan and evacuated our American citizens 
there.
    We provide some of our embassy reinforcement marines that 
in the last 3 months have been used 8 times, in the last years 
30 times to reinforce our embassies. As we bring this Marine 
Security Guard additional capability on board, all that is in 
OCO. All that is going to have to--we are not going to not do 
it, so it just puts a burden on the people on this side of the 
table as we try to get it right, sir.
    Mr. Wittman. Lieutenant General Field.
    General Field. Yes, sir. So we ask our combatant commanders 
to do a lot, and what they are primarily concerned with is 
preventing conflict, and if there is conflict to end it as 
quickly as possible.
    But a lot of their planning is revolved around the 
prevention of conflict, and whether it is in the Pacific, the 
Middle East, Africa, or now in Europe, that is what they are 
focused on doing. And the Air Force pays for a lot of that out 
of baseline. Operations in Africa; what we are doing to assure 
our allies in Europe today; moving units into the Pacific on a 
rotating basis, whether it is continuous bomber presence in 
Guam or F-22s to Kadena in Okinawa, Japan, or whether it is F-
16 squadron into the Republic of Korea; those are all out of 
our baseline funding.
    As I mentioned earlier, even if we withdraw completely out 
of Africa, the Middle East remains kind of an interesting 
region for us. Iran looms large for our partners over there and 
they are worried about Iran.
    There is instability across that region right now, as we 
all know, both in Syria, Egypt, and other countries. And those 
allies we have made commitments to and I think our commanders 
over there would like to keep those bases open to assure those 
allies, provide them the support that they need, build those 
partnerships. Those are, you know, a lot of bases that are 
coming out of OCO funding, and if we have to fund those out of 
our baseline it will be very, very difficult to do.
    Mr. Wittman. Very good.
    Gentlemen, I think you have laid out in a very specific way 
what would happen if we don't have OCO funds going forward into 
fiscal year 2015. And there is a lot that has been said about 
whether we will or will not have a bilateral security agreement 
[BSA] in Afghanistan, and if we do we know that there will be 
some level of continued operations there; if we don't then 
essentially there will not be.
    And that then begs the question about what percentage of 
OCO funding in that realm, fiscal year 2015--what percentage of 
OCO funding would you estimate would go toward supporting 
operations in Afghanistan and what percentage would be other 
enduring missions that would occur regardless of what happens 
or whether or not we have a BSA in Afghanistan post-2014 or 
not?
    General Huggins.
    General Huggins. Thank you, Mr. Chairman. I am looking at 
the crystal ball. I mean, the ``if'' is very prominent in this 
discussion.
    Historically, because you look back, probably about 25 
percent of our top line was OCO. And if you would allow me to 
continue to say, I would--whatever that enduring presence would 
be, if I could reach forward and assume that the reset of that 
equipment stays within that one, which I have spoken about the 
numbers, I really have to take a guess at about somewhere 
around 10 percent.
    And again, we think we will have the people issue in 
balance, depending on what that final number goes--depending on 
full sequestration or not, by 2017 hopefully--by fiscal year 
2017. So that really dictates about 3 more years to try and 
take a hard look at it, which matches up with our equipment 
timeline.
    You know, that said, I just--as you have all seen, I just 
don't know what the rest of the world is going to look like. 
But if I just isolate it to Afghanistan, as you asked, that 
would be my best assumption, sir.
    Mr. Wittman. Okay. Very good.
    Vice Admiral Mulloy.
    Admiral Mulloy. Yes, sir. To the change in Afghanistan, it 
is probably--since I don't know what the final numbers are I 
can't give you an exact percent, but for the Navy it is still 
under 10--it would be under 10 percent. We would have to use 
exact numbers.
    As I said before was, we have been probably for a very 
large service a very small percent of the 13 years of--from 
DERF [Defense Emergency Response Fund] to COW [Cost of War] to 
OCO. It has all moved on. The Navy has been a small percent 
because our baseline has been to operate forward. But it is 
that edge.
    However, 90 percent of that is still required because we 
have never changed what we use the Navy for, and if we draw 
down rapidly, as we said before, I very think that it would do 
nothing but actually go up for the Navy for a short period of 
time as you withdrew, but our presence over there is largely at 
sea. We do have smaller bases and others, but that is why when 
people count on us being there.
    So that is the risk we have is that I may have been the 
smallest OCO but I am the--I am probably the longest affected 
that it doesn't go away from me unless we stop world operations 
differently. The Air Force and the Navy do a lot on our base 
that the COCOMs count on, and that, I think, is a long-term 
issue and I greatly support your particular vision, and the 
entire committee's interest is understanding how the Department 
of the Navy operates as the symbiotic relationship goes on as 
he prepares people in Pendleton and around the world and to go 
forward on my ships and his aircraft are all joined firmly at 
the hip, but we are very much leveraged in this right now for a 
long-term solution.
    Mr. Wittman. Very good.
    Lieutenant General Walters.
    General Walters. Yes, sir. So you asked specifically on 
what would 2015 look like.
    Mr. Wittman. Yes.
    General Walters. Our request, as we are shaping up right 
now, about 35 to 40 percent of that would be for our over end 
strength above our baseline. About 30 percent of that would be 
for what we would--if you make an assumption on our footprint 
in Afghanistan, about 30 percent with that and about another 30 
percent would be reset. And the last little single-digit 
percent would be for training to prepare to go there.
    Mr. Wittman. Lieutenant General Field.
    General Field. Yes, sir. Again, I outlined before the basic 
construct of where to keep those. We are going to need the 
money for that.
    But it all depends on what happens inside of Afghanistan. 
You know, like you said, we only have about 5,000 airmen in 
there. Obviously that will draw down regardless of what will 
happen, but the support from outside the country going into the 
country, if it has to remain at a base the flying time remains 
the same so it will be a reduction but it just depends on how 
much effort we are going to be putting into Afghanistan in 
2015, and we just don't know that answer yet.
    Mr. Wittman. Very good.
    Let me wrap up with this. It sounds like from what you all 
are saying--and I am trying to get a picture here about where 
we are going forward. Obviously we have that indeterminate 
element of what is ultimately going to happen in Afghanistan, 
but that being said, there is a fair portion of OCO that is 
part of enduring requirements, enduring mission, a percentage 
of it that is part of the operations there within Afghanistan.
    I know you all have worked to try to get the enduring 
mission elements back into a baseline budget, again keeping in 
mind, too, that there is some flex there because you are not 
sure about where we ultimately end up with in Afghanistan. That 
being said, I still--it still appears to me--and I want you to 
confirm this--it still appears to me that we are at a point, 
because we don't have a figure for fiscal year 2015--and again, 
that is based on trying to gather some information--that even 
if we are out of Afghanistan it doesn't appear to me as though 
we will be able to fully integrate the needed dollars from OCO 
back into a baseline budget so there is still going to be a gap 
there.
    Now, I know it is hard to estimate what that gap is, but it 
appears to me as though there is still going to be a gap--in my 
mind a significant gap--in what you all must be doing as part 
of your requirements, your enduring mission, that we are going 
to have to address in one way or the other as far as that 
bridge goes. And I want to make sure that I am correct in 
stating that particular situation and I just want to get your 
comments and a yes or no on that.
    General Huggins. Mr. Chairman, yes. I agree with your 
comments. And furthermore, with the appropriation or not, we 
are still funding or we are still resourcing. As we said, 
whether it will come out of the base or not, I mean, as I said, 
I--no one knows the difference between 30 September and 1 
October. I am going to continue to do that.
    I can obviously be more efficient if I can leverage more 
time in that measure, but you are correct, sir.
    Mr. Wittman. Okay.
    Vice Admiral Mulloy.
    Admiral Mulloy. Yes, sir. Yes, sir. As you point out, OCO 
for the Navy is in--is in four parts. There is the clearly 
operating forward OCO-related; there is what I call my 
baseline--the ship maintenance, some aviation depot 
maintenance, any CC [combat control] maintenance, and some 
operations of Seabees that is in my base, I have to get that 
back; there is the reset.
    But there is this enduring component, which is a 
substantial amount--$2.5 billion to $4 billion a year--of which 
the combatant commanders expect us to operate forward, but that 
is a new normal for me and that has to be discussed.
    So of those four components, only one goes away with 
Afghanistan. The other three exist. And the only one that is a 
temporal is about 5 years for ship maintenance to come away for 
the reset, but the base of ship maintenance--the $1.4 billion a 
year--that has to be funded to go back from 80 to 96 percent 
funding in ship maintenance.
    Mr. Wittman. Very good. Thank you.
    Lieutenant General Walters.
    General Walters. Sir, I will be short. You are spot on.
    Mr. Wittman. Okay. Very good. Thank you.
    Lieutenant General Field.
    General Field. Sir, I agree, you are exactly correct. We 
don't have enough money in our baseline budget to do what we 
are asked to do now. We don't have enough money to do what we 
are asked to do now and prepare to do something like it in the 
future unless we have more resources.
    Mr. Wittman. Good.
    Gentlemen, thank you.
    Ms. Bordallo, any--Mr. Enyart, any questions?
    Gentlemen, thank you so much for joining us today. We 
appreciate first of all your service to our nation. Please 
provide our thanks to all the men and women that serve under 
you and thank them for the great service they provided this 
nation and the sacrifice of their families. We deeply 
appreciate what you do.
    We have got some challenges ahead. The world around us, as 
we know, is not a safer place and you all do a spectacular job 
in both a strategically challenged environment and a resource-
challenged environment, so we deeply appreciate that.
    Please continue to stay in touch with us to give us your 
perspective as we move forward to try to address these critical 
issues.
    Thanks again, and our subcommittee is adjourned.
    [Whereupon, at 10:34 a.m., the subcommittee was adjourned.]


      
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                           A P P E N D I X

                             March 27, 2014

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              PREPARED STATEMENTS SUBMITTED FOR THE RECORD

                             March 27, 2014

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[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


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              WITNESS RESPONSES TO QUESTIONS ASKED DURING

                              THE HEARING

                             March 27, 2014

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              RESPONSE TO QUESTION SUBMITTED BY MR. SCOTT

    General Field. In Fiscal Year 2014, approximately 21 percent of the 
total funding for organic and contract depot level maintenance for 
weapon system sustainment comes from OCO. In addition, approximately 26 
percent of the Air Force's Fiscal Year 2014 Flying Hour Program (FHP) 
funding projected to pay for depot level reparables will be funded 
using OCO dollars.   [See page 14.]
?

      
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              QUESTIONS SUBMITTED BY MEMBERS POST HEARING

                             March 27, 2014

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                   QUESTIONS SUBMITTED BY MR. WITTMAN

    Mr. Wittman. How dependent are you on OCO for day-to-day 
operations? How will the dependence change after the majority of, or 
possibly all, combat troops are out of Afghanistan?
    General Huggins. The Army is critically dependent on OCO to support 
the day-to-day war fighting demands of Operation Enduring Freedom 
(OEF). After the departure of all U.S. troops from Afghanistan, the 
Army must continue to satisfy Combatant Commanders' operational 
demands, such as Operation Spartan Shield, Integrated Air and Missile 
Defense, and other overseas missions. Current U.S. National Security 
Policy dictates a sizeable U.S. troop presence in key regions to 
support U.S. vital interests and those of our allies. Many of these 
requirements are paid for from OCO.
    Mr. Wittman. Please describe your service's efforts to migrate 
enduring requirements into the base budget? How challenging has 
sequestration made that task? What is most at-risk?
    General Huggins. The Army will rely upon Overseas Contingency 
Operations (OCO) funding for any follow on missions in Afghanistan 
following the conclusion of Operation Enduring Freedom (OEF). The scope 
of other operational missions such as Operation Spartan Shield and the 
on-going Integrated Air and Missile Defense (IAMD) mission in the 
Persian Gulf would cause great pressure on the base budget activities 
that must continue to man, train, and equip a ready force. Efforts have 
been made to partially fund some of these requirements in the base 
budget; however, the continuing fiscal uncertainty has put the Army in 
a position of having to balance supporting current operations and 
building readiness.
    Mr. Wittman. How does your service's FY15 base budget request 
reflect efforts to return to a non-OCO budgetary world? What specific 
functions have you moved from OCO to base?
    General Huggins. Army's FY15 base budget reflects efforts to return 
to a non-OCO budgetary world by an increase in base funding for 
operational tempo as a result of the reduction of OCO deployed units. 
In FY15, a reduction in the number of Brigade Combat Teams (BCTs) and 
Combat Aviation Brigades (CABs) drives a base funding request increase 
of $73.0M and $134.0M, respectively.
    The Army continually reviews our OCO budget/request for enduring 
capabilities that should transition to the base budget and has 
attempted to allocate base funding for those capabilities. The FY15 
funding levels do not allow transitioning capabilities from OCO to base 
without creating unacceptable risk to current base funded programs due 
to Defense discretionary funding caps established in law. In FY15, we 
will continue to request OCO funding for enduring capabilities 
currently funded through OCO.
    Mr. Wittman. How would your overall readiness be affected by the 
elimination of OCO? What training would be curtailed? What 
infrastructure would be affected? How would ability to maintain 
equipment and fully staff units be affected?
    General Huggins. Terminating Overseas Contingency Operations (OCO) 
funding too early would have very serious consequences to the Army's 
ability to rebuild and sustain readiness. Many of the Army's enabling 
capabilities are funded in OCO to include such activities as commercial 
satellite airtime, enduring portions of the Criminal Investigation 
Command's (CID) Deployable Forensics Labs, contract MEDEVAC, and 
Contractor Logistics Support. The Army is still reliant on OCO funding 
to support portions of forward deployed unit costs, such as those 
involved in Operation Spartan Shield and the on-going Integrated Air 
and Missile Defense (IAMD) mission in the Persian Gulf, as well as 
significant network operations costs. There are enduring capabilities 
such as comprehensive Soldier and family fitness activities that 
engender resilience throughout the force. Elimination of OCO funding 
would force the Army to find offsets within base funding to support 
these actions.
    From the readiness perspective, the training of next deploying 
units is funded via OCO. This training is non-negotiable. If OCO is 
prematurely removed the Army must accept additional risk by curtailing 
or eliminating decisive action training for non Army Contingency Force 
(ACF) units, and potentially even reducing training for units in the 
ACF as well, to offset the bill. Equipment maintenance would also 
suffer as the Army would focus all maintenance on the next deploying 
and deployed forces creating additional risk in our other formations 
and creating a backlog of reset and other depot maintenance activities 
which eventually must be cleared.
    While the elimination of OCO funding would not directly impact Army 
infrastructure accounts, these accounts would most likely suffer 
indirectly as a result of the need to reduce base accounts in order to 
offset critical activities formerly supported by OCO. This would result 
in reduced construction of new projects as well as an overall 
degradation of facilities with authorized repairs only addressing base 
life, health and safety concerns.
    Finally, without the 2.5 billion dollars in FY15 OCO for the non-
enduring above 490,000 end strength, the Army would have to take 
drastic personnel actions, such as halting all Permanent Change of 
Station moves, jeopardizing re-organization and unit readiness. The 
Army would cut contracts for service and support resulting in unit 
manning issues due to borrowed military manpower offsets and a 
corresponding skills mismatch as a result of the cuts. The impact to 
our civilian workforce would be particularly painful and would include 
hiring freezes, continuing the talent drain among our workforce of 
continued presence and readiness support.
    Mr. Wittman. Without the support of OCO, at what point in time 
would the force return, in large measure, to full-spectrum readiness?
    General Huggins. The Army would be forced to delay the return to 
full-spectrum readiness beyond FY19 if funding for Overseas Contingency 
Operations (OCO) were reduced below levels necessary to prepare units 
for deployment. Supplemental funding for OCO is the primary source that 
provides mission focused resources to our deployed and deploying Army 
units as well as equipment reset following combat operations. The Army 
uses OCO to ensure that base funding for core readiness activities 
(full-spectrum and/or Decisive Action in support of Unified Land 
Operations--DA/ULO) remains focused on building contingency response 
capabilities in support of the Combatant Commanders (CCDR). Since 2001, 
OCO has supplemented some, but not all of the costs associated with 
manning, equipping, sustaining, and training Army forces for deployment 
which forced the Army to mortgage core readiness to support Counter-
Insurgency (COIN) combat operations.
    Currently, the Army is trying to rebuild core readiness to conduct 
DA/ULO. This multi-year plan began in 2012 with the first DA/ULO 
training center rotation in over 7 years. Based on the current funding 
plan, the Army anticipates that it will regain balance across the force 
and full-spectrum readiness by between FY19-21. If OCO were eliminated, 
the Army would be forced to revert to mortgaging core readiness to 
support global demand for Army forces, which would delay achieving 
force-wide full-spectrum readiness beyond FY19-21.
    Mr. Wittman. How dependent are you on OCO for day-to-day 
operations? How will the dependence change after the majority of, or 
possibly all, combat troops are out of Afghanistan?
    Admiral Mulloy. The Navy's OCO funding can be split into four 
parts: increased operating tempo for flying and ship operations or 
operating forward, enduring requirements, reset, and Afghanistan 
operations. Navy funds the increased operating tempo required of our 
aircraft and ships in the Middle East through OCO. The Combatant 
Command and the Joint Staff expect increased flying and ship operations 
above baseline levels when deployed to the Middle East. Additionally, 
Navy funds some remaining enduring requirements through the OCO, which 
include air and ship depot maintenance above 80 percent, base support 
operations for several locations in the Middle East, and operating 
support for expeditionary units. Lastly, Navy funds the reset or repair 
of equipment, aircraft, and ships returning from theater. Reset of 
these items, primarily the ships, will take up to five or six years to 
be completed due to the scheduling of maintenance activities.
    Once the Afghanistan operations end, the Navy will have three parts 
of their OCO funding requirements remaining. The enduring requirements, 
listed above, combined with the increased flying and ship operations 
above baseline levels when deployed to the Middle East would result in 
a substantial amount of OCO dependence after the majority of combat 
troops leave Afghanistan. These activities currently require up to 
$4.0 billion in OCO funding per year. Additionally, the Navy OCO reset 
requirements are currently estimated to total $2.2 billion over the 
next five to six years.
    Mr. Wittman. Please describe your service's efforts to migrate 
enduring requirements into the base budget? How challenging has 
sequestration made that task? What is most at-risk?
    Admiral Mulloy. Navy has been working to transition OCO funded 
enduring activities to baseline over the last few years. Enduring 
aviation and ship depot maintenance baseline requirements have been 
funded to at least 80% in baseline since FY11 and FY12, respectively.
    Navy has funded all enduring flying hour operations in baseline for 
several years. Increased operating tempo required of our aircraft and 
ships in the Middle East continue to be OCO funded. For the foreseeable 
future, the Combatant Command and Joint Staff expect continued 
increased flying and ship operations above baseline levels when 
deployed to the Middle East.
    Navy has also funded enduring Djibouti base operating support costs 
in baseline vice OCO beginning in FY13.
    Navy will require OCO funding for some remaining enduring 
requirements. This includes aviation and ship depot maintenance above 
80 percent, ship operations to fully support operational requirements, 
base support operations for several locations in the Middle East, and 
operating support for expeditionary units. Without OCO funding, these 
enduring requirements, combined with the increased flying and ship 
operations above baseline levels when deployed to the Middle East, 
would result in the need for an additional $2.5-4.0 billion per year in 
baseline funding.
    The Navy continues to work with the Office of the Secretary of 
Defense (OSD) to identify and plan the possible transition of enduring 
requirements from OCO funding to the baseline.
    If the Navy remains at our current level of operations, it will not 
be sustainable within our base budget alone. The capital asset nature 
of our ships makes longer-term supplemental reset funding more critical 
to the Navy. In the current fiscal environment, any transition from OCO 
to base at the current base topline, or worse under sequestration 
levels, would drive our base down, pressurizing already difficult 
decisions as we work to balance between force structure, modernization, 
and readiness. Without additional supplemental funding, all three will 
suffer. For readiness specifically, we could be forced to delay 
maintenance activities for our ships and aircraft, reducing their 
operational availability and service life. Training could be reduced, 
preventing ships and aircraft from being ready and available for 
contingency operations.
    Mr. Wittman. How does your service's FY15 base budget request 
reflect efforts to return to a non-OCO budgetary world? What specific 
functions have you moved from OCO to base?
    Admiral Mulloy. Navy has been working to transition OCO funded 
enduring activities to baseline over the last few years. Enduring 
aviation and ship depot maintenance baseline requirements have been 
funded to at least 80% in baseline since FY11 and FY12, respectively.
    Navy has funded all enduring flying hour operations in baseline for 
several years. Increased operating tempo required of our aircraft and 
ships in the Middle East continue to be OCO funded. For the foreseeable 
future, the Combatant Command and Joint Staff expect continued 
increased flying and ship operations above baseline levels when 
deployed to the Middle East.
    Navy has also funded enduring Djibouti base operating support costs 
in baseline vice OCO beginning in FY13.
    Navy will require OCO funding for some remaining enduring 
requirements. This includes aviation and ship depot maintenance above 
80 percent, ship operations to fully support operational requirements, 
base support operations for several locations in the Middle East, and 
operating support for expeditionary units. Without OCO funding, these 
enduring requirements, combined with the increased flying and ship 
operations above baseline levels when deployed to the Middle East, 
would result in the need for an additional $2.5-4.0 billion per year in 
baseline funding.
    The Navy continues to work with the Office of the Secretary of 
Defense (OSD) to identify and plan the possible transition of enduring 
requirements from OCO funding to the baseline.
    Mr. Wittman. How would your overall readiness be affected by the 
elimination of OCO? What training would be curtailed? What 
infrastructure would be affected? How would ability to maintain 
equipment and fully staff units be affected?
    Admiral Mulloy. Navy is committed to providing ready forces 
forward. OCO currently pays for operations in excess of baseline 
requirements in support of Operation Enduring Freedom (OEF), reset of 
forces employed in OEF, and for some baseline readiness requirements. 
Sudden elimination of OCO, rather than a progressive reduction that 
continues to recognize valid supplemental requirements, would 
pressurize the Navy budget in all three areas:
      Shifting baseline readiness requirements currently funded 
by OCO to baseline, even with an orderly reduction, will require 
additional hard choices in procurement, modernization, and readiness 
impacting the capacity and capability of the Fleet. It will extend the 
risk Navy is currently taking in shore infrastructure as well.
      Continued high demand for Naval forces may require 
supplemental funding above baseline post-OEF.
      Timeline for reset of Navy ships is dependent upon the 
requirement to complete some of the work in drydock. Drydock 
maintenance is normally scheduled in 6-8 year cycles and is constrained 
by drydock availability and the time needed to conduct this 
maintenance. Navy requires some reset funding through 2020.
    Mr. Wittman. Without the support of OCO, at what point in time 
would the force return, in large measure, to full-spectrum readiness?
    Admiral Mulloy. A significant amount of baseline readiness 
requirements are currently leveraged in OCO. Given the magnitude of OCO 
funding (e.g., approximately $10B for Navy in FY14), its elimination 
would require a review of the overall Navy portfolio in order to ensure 
we continue to deliver ready forces forward that are properly 
maintained and trained. Without OCO or other additional funding, such a 
review would likely find that Navy could not return to full spectrum 
readiness without a significant reduction in the size of the force. 
Full spectrum readiness includes the right capacity and right 
capability of ready forces.
    In contrast, with PB15 funding, continued OCO and implementation of 
the Optimized-Fleet Response Plan (O-FRP) across the FYDP, Navy would 
recover both the capability and capacity for full-spectrum readiness, 
but still face high risk in executing at least two Defense Strategic 
Guidance mission areas.
    Mr. Wittman. How dependent are you on OCO for day-to-day 
operations? How will the dependence change after the majority of, or 
possibly all, combat troops are out of Afghanistan?
    General Walters. The majority of Marine Corps OCO funding supports 
the incremental costs of combat operations, equipment and 
infrastructure repair, equipment replacement, military pay for 
mobilized reservists, deployed pay and allowances, and end-strength 
above the baseline active duty force (182.7K in FY15). However, as the 
Marine Corps transitions from Operation Enduring Freedom in Afghanistan 
to steady state operations, including forward presence and crisis 
response, some of the activities currently funded via OCO will likely 
migrate to the baseline to support enduring missions and requirements. 
The Marine Corps currently estimates this amount to be between $200 and 
$450 million. This represents approximately 8 to 11 percent of our 
total FY 2014 OCO request of $4.0B.
    The $700 million realigned from baseline to OCO in FY 2014 by the 
Congress in the 2014 Omnibus Appropriations Act is also an enduring 
requirement, and is reflected in the FY15 budget as such.
    Mr. Wittman. Please describe your service's efforts to migrate 
enduring requirements into the base budget? How challenging has 
sequestration made that task? What is most at-risk?
    General Walters. The Marine Corps has made modest gains in its 
efforts to fund enduring requirements in the baseline, but will face 
challenges to migrate the requirements identified above as 
sequestration has resulted in reduced top lines for all the Services. 
The ability to continue to fund missions with OCO has enabled the 
Marine Corps to limit further reductions in operation and maintenance 
and procurement accounts (infrastructure sustainment and equipment 
modernization) in order to support a ready and capable force.
    As the Marine Corps transitions from Operation Enduring Freedom in 
Afghanistan to steady state operations, including forward presence and 
crisis response, some of the activities currently funded via OCO will 
likely migrate to the baseline to support enduring missions and 
requirements. The Marine Corps currently estimates this amount to be 
between $200 and $450 million. This represents approximately 8 to 11 
percent of our total FY 2014 OCO request of $4.0B. Examples of enduring 
requirements include CENTCOM AOR operations and presence, redeployment 
of forces post OEF, intermediate and operational maintenance 
requirements as equipment is deployed in support of non-OCO missions, 
commercial satellite bandwidth, and information system requirements.
    The $700 million realigned from baseline to OCO in FY 2014 by the 
Congress in the 2014 Omnibus Appropriations Act is also an enduring 
requirement, and is reflected in the FY15 budget as such.
    Mr. Wittman. How does your service's FY15 base budget request 
reflect efforts to return to a non-OCO budgetary world? What specific 
functions have you moved from OCO to base?
    General Walters. The Marine Corps has made modest gains in its 
efforts to fund enduring requirements in the baseline, but will face 
challenges to migrate the requirements identified above as 
sequestration has resulted in reduced top lines for all the Services. 
The ability to continue to fund missions with OCO has enabled the 
Marine Corps to limit further reductions in operation and maintenance 
and procurement accounts (infrastructure sustainment and equipment 
modernization) in order to support a ready and capable force.
    As the Marine Corps transitions from Operation Enduring Freedom in 
Afghanistan to steady state operations, including forward presence and 
crisis response, some of the activities currently funded via OCO will 
likely migrate to the baseline to support enduring missions and 
requirements. The Marine Corps currently estimates this amount to be 
between $200 and $450 million. This represents approximately 8 to 11 
percent of our total FY 2014 OCO request of $4.0B. Examples of enduring 
requirements include CENTCOM AOR operations and presence, redeployment 
of forces post OEF, intermediate and operational maintenance 
requirements as equipment is deployed in support of non-OCO missions, 
commercial satellite bandwidth, and information system requirements.
    The $700 million realigned from baseline to OCO in FY 2014 by the 
Congress in the 2014 Omnibus Appropriations Act is also an enduring 
requirement, and is reflected in the FY15 budget as such.
    Mr. Wittman. How would your overall readiness be affected by the 
elimination of OCO? What training would be curtailed? What 
infrastructure would be affected? How would ability to maintain 
equipment and fully staff units be affected?
    General Walters. The majority of Marine Corps OCO funding supports 
the incremental costs for combat operations, pre-deployment training, 
equipment repair and replacement, and manpower above the baseline 
active duty force (182.7K in FY15). As the Marine Corps transitions 
from Operation Enduring Freedom in Afghanistan to steady state 
operations, including forward presence and crisis response, some of the 
activities currently funded via OCO will likely migrate to the baseline 
to support enduring missions and requirements. The Marine Corps 
currently estimates this amount to be between $200 and $450 million. 
This represents approximately 8 to 11 percent of our total FY 2014 OCO 
request of $4.0B. The $700 million realigned from baseline to OCO in FY 
2014 by the Congress in the 2014 Omnibus Appropriations Act is also an 
enduring requirement.
    If OCO funding is eliminated, baseline funding remains at the 
Bipartisan Budget Act (BBA) or Budget Control Act (BCA) levels, and 
mission requirements remain constant, the Marine Corps will be fiscally 
driven to a 175K force. This will place additional stress on the force 
resulting in a 1:3 dwell for steady state operations and posing risk at 
the Major Combat Operation (MCO) level as it becomes an ``all in'' 
operating environment. To ensure we maintain the Marine Corps' number 
one priority of a ready and capable force, the Marine Corps will take 
additional risk in equipment modernization and infrastructure 
sustainment which, over the long term, will have a detrimental impact 
to overall institutional readiness.
    Mr. Wittman. Without the support of OCO, at what point in time 
would the force return, in large measure, to full-spectrum readiness?
    General Walters. The Marine Corps is the Nation's expeditionary 
readiness force and will continue to prioritize near term readiness to 
ensure forward deployed forces and those Marines poised for crisis 
remain ready. However, without the support of OCO and the compounding 
effect of the Bipartisan Budget Act (BBA) or Budget Control Act (BCA) 
funding levels across the FYDP, the Marine Corps will be fiscally 
driven to a 175K force. This will place additional stress on the force 
resulting in a 1:3 dwell for steady state operations and posing risk at 
the Major Combat Operation (MCO) level as it becomes an ``all in'' 
operating environment. To ensure we maintain the Marine Corps' number 
one priority of a ready and capable force, the Marine Corps will take 
additional risk in equipment modernization and infrastructure 
sustainment which, over the long term, will have a detrimental impact 
to overall institutional readiness.
    Mr. Wittman. How dependent are you on OCO for day-to-day 
operations? How will the dependence change after the majority of, or 
possibly all, combat troops are out of Afghanistan?
    General Field. The Air Force is heavily reliant on Overseas 
Contingency Operations (OCO) funds for day-to-day operations. In Fiscal 
Year 2014 (FY14), we anticipate spending over $10 billion in operations 
and maintenance (O&M) OCO funding, primarily for flying hours, 
transportation, Weapon System Sustainment (WSS), and base operating 
support for Air Force-supported bases in the CENTCOM area of 
responsibility (AOR).
    The Air Force anticipates significant enduring requirements in the 
CENTCOM AOR, regardless of combat operations or troop levels in 
Afghanistan. For example, the Air Force-funded base operating support 
is almost entirely for bases outside Afghanistan, which will likely 
remain a critical element of our future force posture in CENTCOM. In 
addition, we anticipate the Air Force will be required to maintain a 
rotational presence at these bases. The base support, flying hours, and 
WSS will have to be funded by continued OCO (or supplemental) or a 
baseline increase. If this does not occur, aircrew flying training, 
depot throughput, and weapon system repair capabilities would be 
significantly impacted and jeopardize our ability to meet our 2023 
readiness goals.
    Mr. Wittman. Please describe your service's efforts to migrate 
enduring requirements into the base budget? How challenging has 
sequestration made that task? What is most at-risk?
    General Field. The Air Force is focused on maximizing our full 
spectrum readiness requirements. We are currently executing our flying 
hour and Weapon System Sustainment (WSS) programs to maximum capacity 
to meet mission and training requirements (including OCO missions). As 
OCO missions decline, funding for our flying hour and WSS programs will 
require additional baseline funding to return to full spectrum 
readiness training as we will continue to execute the same number of 
flying hours and depot maintenance levels. We have incrementally 
increased our OCO to base funding request for WSS in our Fiscal Year 
2015 (FY15) Future Year Defense Program (FYDP) to account for this 
enduring requirement. Programmed increases start in FY16 by 
approximately $1 billion to $1.5 billion a year to get to 80 percent of 
the WSS requirement. This is the only action the Air Force has made to 
transfer OCO to base. This goes away if we have to maintain Budget 
Control Act funding levels in FY16 and out.
    Mr. Wittman. How does your service's FY15 base budget request 
reflect efforts to return to a non-OCO budgetary world? What specific 
functions have you moved from OCO to base?
    General Field. The Air Force is focused on maximizing our full 
spectrum readiness requirements. We are currently executing our flying 
hour and Weapon System Sustainment (WSS) programs to maximum capacity 
to meet mission and training requirements (including OCO missions). As 
OCO missions decline, funding for our flying hour and WSS programs will 
require additional baseline funding to return to full spectrum 
readiness training as we will continue to execute the same number of 
flying hours and depot maintenance levels. We have incrementally 
increased our OCO to base funding request for WSS in our Fiscal Year 
2015 (FY15) Future Year Defense Program (FYDP) to account for this 
enduring requirement. Programmed increases start in FY16 by 
approximately $1 billion to $1.5 billion a year to get to 80 percent of 
the WSS requirement. This is the only action the Air Force has made to 
transfer OCO to base. This goes away if we have to maintain Budget 
Control Act funding levels FY16 and out.
    The Air Force does not anticipate significant change in the CENTCOM 
requirement. Operations over the last 20 years (OSW, ONW, Balkans, 
Libya, Poland, Lithuania, Jordan, plus humanitarian ops) suggest the 
demand for Air Force capabilities will remain high even after combat 
ops cease. If combatant commander (CCDR) demand does not decrease, the 
Air Force will need additional top-line funding to the baseline budget 
or supplemental funding to continue operations to support CCDR 
requirements. If the Air Force has to fund these requirements in the 
baseline budget without additional funding, we will be faced with a 
sequester-like effect on Air Force readiness; the Air Force will likely 
stand down units, have zero units ready for emergent crises, have 
insufficient units ready for steady state operations (e.g. non-support 
TSP/TSC), and not be able to sustain our airfields and bases.
    Mr. Wittman. How would your overall readiness be affected by the 
elimination of OCO? What training would be curtailed? What 
infrastructure would be affected? How would ability to maintain 
equipment and fully staff units be affected?
    General Field. The Air Force relies on Overseas Contingency 
Operations (OCO) funds to adequately resource our Weapon System 
Sustainment (WSS) accounts. WSS is a critical component of our overall 
readiness, encompassing depot maintenance, contract logistics support 
(CLS), and sustainment engineering. WSS directly impacts fleet 
availability and the ability of our front line units to generate 
aircraft at a rate that can support our flying hour program, and, 
hence, our ability to train for the full spectrum of operations called 
for in the defense strategy.
    The elimination of OCO funding would significantly impact Air Force 
full-spectrum readiness. Should OCO funding not be made available in 
future budgets and without an equivalent increase to the Air Force's 
topline, depot throughput and weapon system repair capabilities would 
be significantly impacted and jeopardize our ability to meet our 2023 
readiness goals.
    In addition, the Air Force needs adequate flying hours to generate 
trained and ready aircrew. We anticipate continued deployment 
requirements in the CENTCOM area of responsibility even after combat 
operations end, and if the Air Force is compelled to resource these 
flying from its baseline flying hour program (vice OCO or supplemental 
funding), readiness will significantly degrade.
    Finally, operations, sustainment, repair, maintenance, and 
construction of some overseas infrastructure and real property assets 
are funded through OCO. The elimination of OCO funding would greatly 
reduce the ability of the Air Force to provide engineering capabilities 
and services to the combatant commanders and limit their ability to 
generate combat power. An alternate funding source, or migration of 
these costs to the Air Force base budget and an equivalent increase to 
the Air Force topline, will be required.
    Mr. Wittman. Without the support of OCO, at what point in time 
would the force return, in large measure, to full-spectrum readiness?
    General Field. The recovery time depends on the level of continued 
Overseas Contingency Operations (OCO) mission demand and whether the 
Air Force is funded at Budget Control Act (BCA) levels in future years. 
If the Air Force continues to deploy for rotational presence missions 
in CENTCOM, but does not receive associated OCO or supplemental funding 
for flying hours, readiness will not recover.
    In addition, the Air Force must fund our Weapon System Sustainment 
(WSS) accounts to at least approximately 80 percent of total 
requirements to meet our readiness recovery goals by 2023, and we are 
reliant on OCO funds to meet this 80 percent funding level. Therefore, 
the recovery of our full-spectrum readiness within a reasonable time 
frame is highly doubtful without OCO funding or some other supplemental 
funding mechanism or baseline funding increase.
    Under the Bipartisan Budget Act, our WSS accounts are funded to at 
least 80 percent of the total requirement for Fiscal Years 2014-15 
(FY14-15). However, OCO funding for WSS is not assumed in FY16-19, 
meaning if we are held to BCA level funding, our WSS accounts will be 
funded to approximately 70 percent of the total requirement through 
FY19. This equates to a $1.5-2.5 billion shortfall in WSS funding each 
fiscal year, which significantly jeopardizes our ability to meet our 
full-spectrum readiness goals within the next decade.

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